Short-Term TSLA Price Movements - 2016

[roblab]

.... the God tells them man can not cause harm to the Earth so they are just fine. I am seriously not trying to offend anyone. I am repeating what they tell me. They are resistant to change so they will stick with what they know. The Bible and the ICE.

Just for interest, most people stick to things they don't know, the Bible being one of the main ones.

Revelation 11:18, time of the end, second coming, etc. God's counselors, the 24 elders, are telling Him, "It is time to destroy those that destroy the earth." For those religious ones, this is pretty plain that man is capable of destroying the earth, and it seems to be a fairly large no-no.

 

[MitchJi]

Elon said Tesla can produce 1 billion PowerPacks in 15 to 20 years. Many of us know Tesla will build hundreds of Gigafactories. This long-term vision can affect the near term valuation.

The fud/misinformation that the profit margin is negligible can equally effect the short term valuation. EM and JB both said greater than 15% which is:
1. More than negligible.

2. Clearly a low figure.

 

[vgrinshpun]

The land around the current Gigafactory1 footprint is hilly, not suited for another building. The increase that you mention is already underway, in the addition of a mezzanine, that is, three floors instead of two in some areas within the original footprint. The mezzanine adds about 40 % in floor space (approximately 14 million square feet instead of the original 10 million).

The car factories in Asia and Europe will best be served by Gigafactories in those parts of the World. Eventually, Tesla will need to build a car factory and a Gigafactory in the USA East Coast and perhaps a truck factory (in Texas?).

I was not referring to increased utilization within the currently planned footprint by adding the mezzanine. I was referring to the increase of the factory footprint and exchange with Andrea James in which Elon confirmed that they do have space to enable this expansion at the Nevada Site. The topic was discussed in the context of higher than anticipated demand (looks like recurring theme with Tesla, doesn't it?) for stationary storage.

Here is the exchange during the Q1 2015 ER call (with my highlights):

Elon Reeve Musk - Chairman & Chief Executive Officer

Yeah. I mean, clearly, given the very high demand that we're seeing for Tesla Energy products, we're actually trying to figure out if we can go from like our current production target of like 35-gigawatt hours at the cell level and 50 at the pack level in our Nevada plant to maybe 50% more than that or even higher because just the sheer volume of demand here is just staggering. We could easily have the entire Gigafactory just do stationary storage.

Andrea Susan James - Dougherty & Co. LLC

Right. So, you have some capacity. I think you've said maybe 15% of your capacity might be reserved for stationary storage. Maybe I've read that in an article somewhere, I'm not sure.

Elon Reeve Musk - Chairman & Chief Executive Officer

A 15-gigawatt hours or a third of the 50-gigawatt hours that targeted at the pack level.

Andrea Susan James - Dougherty & Co. LLC

Okay.

Elon Reeve Musk - Chairman & Chief Executive Officer

So the 15% is the 15-gigawatt hours or roughly 30%.

Andrea Susan James - Dougherty & Co. LLC

Okay. And you might add now – maybe you're looking at doing another 50% and growing the capacity 50%. You have the space, I guess, there in Nevada to do that.

Elon Reeve Musk - Chairman & Chief Executive Officer

We do. I don't want to make that a prediction, but that seems like the thing we should do. So, we're investigating that. It seems like the logical thing to do. So we're going to probably try to do that. Yeah, because, like, we're fairly confident at this point like so that the entire Gigafactory output could just do stationary storage. I mean it's like, wow, okay. Well, we need to make cars too, so we're just trying to make the factory bigger. That's like the total logic. It's lot more complicated than that.

Andrea Susan James - Dougherty & Co. LLC


But given the choice between making – sorry, then I'll get off. Thank you so much for your time. But given the choice between making a pack for a car and making a pack for a stationary storage application, how do you pick which one gets the priority?

Elon Reeve Musk - Chairman & Chief Executive Officer

Well, I guess, we'd pick cars because we got this whole other plant here in Fremont making cars. So, cars will get the priority. Yeah. That would be a logical priority. And yeah, but I mean, it really feels like, man, the stationary storage demand is just nutty. Like worldwide, it's just crazy.

 

[Gerardf]

Tomorrow might be a volatile day :

Top oil countries fail to reach deal on production freeze

"The world's top oil producers walked away from a marathon negotiating session on Sunday without an agreement to freeze crude production, a failure that could spook investors and send tremors through the oil market."

 

[VanE]

Oil-Freeze Talks End in Failure Amid Saudi Demands Over Iran

The Doha talks didn't result in a deal. This will result in a big oil drop tomorrow, possibly dragging TSLA with a bit. Hopefully TSLA will be able to get back up later in the week.

 

[vgrinshpun]

I am amazed that the world expecting anything else from these negotiations. May be, just may be, TSLA will finally show independence from this oil pricing war freak-outs. Let's keep our fingers crossed.

I wish somebody with good reputation for serious polling gets polling data among those 400K who put reservation for Model 3 as too how their decision to actually put eventual order for the car could be affected (if at all) by the price of gasoline at that time (which is, BTW is non synonymous with the price of oil).

 

[Papafox]

I was not referring to increased utilization within the currently planned footprint by adding the mezzanine. I was referring to the increase of the factory footprint and exchange with Andrea James in which Elon confirmed that they do have space to enable this expansion at the Nevada Site. The topic was discussed in the context of higher than anticipated demand (looks like recurring theme with Tesla, doesn't it?) for stationary storage.

Here is the exchange during the Q1 2015 ER call (with my highlights):

Tesla may indeed choose to grow the footprint of Nevada's gigafactory because the process of obtaining another building permit is so easy and so quick in Storey County, Nevada, and because the company has already acquired additional land, just in case.

 

[dc_h]

Regarding the Doha meeting, the shorting oil, hrdging Tesla thread is informative and will likely prove profitable for some tomorrow.

 

[Oil4AsphaultOnly]

I'm not as worried about TSLA being coupled with oil prices. I think the day that the global markets realize that a crash of oil prices due to over supply is actually better for the global economy, is the day of reckoning for those oil companies (Exxon is still worth $350 Billion). Oil supply as a proxy for energy demand (and thus health of the economy) has been going on for too long. With the strength of renewable energy, I think that we should see the de-coupling pretty soon (if not tomorrow or next week). That being said, I think we've already seen TSLA de-coupled from oil (the past few weeks). The only factors left to move TSLA are short-covering, FCF announcement, capital raise, and/or new factory.

 

[vgrinshpun]

Tesla may indeed choose to grow the footprint of Nevada's gigafactory because the process of obtaining another building permit is so easy and so quick in Storey County, Nevada, and because the company has already acquired additional land, just in case.

Another plus is availability of experienced construction management team familiar with the specific GF requirements.

 

[doctoxics]

I was not referring to increased utilization within the currently planned footprint by adding the mezzanine. I was referring to the increase of the factory footprint and exchange with Andrea James in which Elon confirmed that they do have space to enable this expansion at the Nevada Site. The topic was discussed in the context of higher than anticipated demand (looks like recurring theme with Tesla, doesn't it?) for stationary storage.

Here is the exchange during the Q1 2015 ER call (with my highlights):

Not clear that Elon was saying an increase in the footprint. Check out the Gigafactory thread with aerials and the land currently owned by Tesla. There does not appear to be a flat area for another building of any size. Perhaps Tesla will buy more suitable land in the same industrial park; that is a possibility.

 

[dc_h]

I'm not as worried about TSLA being coupled with oil prices. I think the day that the global markets realize that a crash of oil prices due to over supply is actually better for the global economy, is the day of reckoning for those oil companies (Exxon is still worth $350 Billion). Oil supply as a proxy for energy demand (and thus health of the economy) has been going on for too long. With the strength of renewable energy, I think that we should see the de-coupling pretty soon (if not tomorrow or next week). That being said, I think we've already seen TSLA de-coupled from oil (the past few weeks). The only factors left to move TSLA are short-covering, FCF announcement, capital raise, and/or new factory.

Its not just that oil is a proxy for TSLA or other economic processes, but that financial assets need to make an orderly retreat from oil. There was great pain when steel receded in importance. The temptation to blame Japan and Korea was huge, though most damage to the steel industry was from plastics and ceramics, not foreign steel. US Steel is less than 1% the market value of Facebook. If Exxon went from 300bn market value to 3bn in less than a decade the regional impact will be even worse than what's happening in the coal sector today.

 

[AudubonB]

Elon said Tesla can produce 1 billion PowerPacks in 15 to 20 years...

Reference please? I'm not doubting you; I just haven't seen that.

 

[Rarity]

A problem with an increase in GF1 footprint is that GF2 probably won't have the land available to match its size. Already, GF1 will have the largest footprint of any building in the world.

 

[vgrinshpun]

Not clear that Elon was saying an increase in the footprint. Check out the Gigafactory thread with aerials and the land currently owned by Tesla. There does not appear to be a flat area for another building of any size. Perhaps Tesla will buy more suitable land in the same industrial park; that is a possibility.

Absolutely clear.

This exchange at the ER came after reports that Tesla bought more land at the Site. What would be the reason to buy additional land?

 

[techmaven]

Absolutely clear.

This exchange at the ER came after reports that Tesla bought more land at the Site. What would be the reason to buy additional land?

My initial take was for wind farms and solar arrays. But that's just a first impression, I didn't really look into it.

The expansion of the Gigafactory 1 in terms of floor room was confirmed by that Storey County executive. We don't know how much bigger it can be, but obviously just adding 1 floor to the whole thing could provide another 8 GWh of production capacity if it can be linearly scaled that way. Basically another whole phase.

I'm not sure it makes sense to start on Gigafactory 2 already in any real way... instead, I think they need to move the timeline of the additional phases of the Gigafactory 1 up dramatically. Ideally, the first phase of the Gigafactory comes online for cell production at full capacity next summer and then another full phase in early 2018. Then each additional phase every 6-9 months. They haven't even finished the entire shell of the first phase. We want to see them well underway at 14-21 GWh of production in 2018.

I think once they have 2 phases of the Gigafactory 1 up and running, that's the right time for planning Gigafactory 2.

There are also some intermediate steps... like they could set up a battery pack assembly plant in Asia to take Panasonic's output of cells and make Model S/X and/or Tesla Energy products for Asian and European markets. Also, it might make more sense to have Tilburg do more heavy lifting, maybe shipping gliders to Tilburg and let them do final vehicle assembly. That way some parts that supplied by vendors in Europe don't need to be shipped to the U.S. and then back.

If we assume the Panasonic plants can make 8 GWh of cells (no reason to doubt that) and realistically the Fremont factory can handle 400,000 cars, they will need a new factory before they need another Gigafactory. They can probably max out the Fremont factory with about 3 phases of Gigafactory 1 online + Panasonic's Osaka plants.

 

[drinkerofkoolaid]

Oil falling 5-10% will force a lot of speculators to sell oil based assets. Eventually speculators will fully divest from oil based assets. The money raised from these sales will need to go somewhere.

 

[dc_h]

Oil falling 5-10% will force a lot of speculators to sell oil based assets. Eventually speculators will fully divest from oil based assets. The money raised from these sales will need to go somewhere.

That is already happening. In 1980 the 10 largest companies were IBM, ATT, Exxon, Std Oil of Indiana, Schlumberger, Shell, Mobil, Std Oil of California, Atlantic Richfield and GE. Despite all the consolidation, only Exxon remains in the top 10 and it is number 4, with Berkshire, Facebook and Amazon likely to pass it in the next year and GE and Wells Fargo not far behind. By 2020 not a single Oil company will be in the top 10.
It's important, as a country, to understand the winners and losers and the impact on each. Migrating skills, even for highly trained chemists and geologists is not always going to be easy. We're rooting for Tesla here (mostly anyhow) and most are pro renewable. Understanding that real people, not just the Koch brothers are on the other side of history, means that policies that help the transition and help people transition legacy skills and knowledge, are important to managing resistance to change. Basically teamwork on a really big scale, and that is not something I've noticed a lot in our political system of late.
Regardless of my longwinded response, we're likely to see a down market tomorrow. It will be interesting to see if TSLA breaks from oils tomorrow.

 

[BobSk]

Reference please? I'm not doubting you; I just haven't seen that.

Sorry I can't remember the source. I read too much stuff every week. I think someone mentioned that it's from a new Elon interview. There are two parts in that statement: 1. the world needs 1 billion Powerpacks to achieve sustainable energy (solar+wind); 2. Tesla can produce them in 15~20 years. The first part is true based on the past Tesla presentations and back on the envelope calculation, it's around 1~2 billion packs. The second part, based on Elon's past interviews, I wouldn't be surprised that he thinks/plans to build that many Powerpacks in that time frame.

 

[doctoxics]

Absolutely clear.

This exchange at the ER came after reports that Tesla bought more land at the Site. What would be the reason to buy additional land?

Elon said that the roof was not enough solar and that additional panels would go on the surrounding hills. Additional land was also needed for security. Show a building site on the Tesla property around the Gigafactory to make your point.