Short-Term TSLA Price Movements - 2016

[Johan]

Completely unreasonable assumption. They have publicly stated a few times recently that their pack costs are about $200 per kWh. Also that would mean that there is zero margin on their powerpacks which sell for $250 per kWh (please don't anyone post the foolishness that they are selling powerpacks for zero profit)!

It might not be accurate to use either of those figures ($200 or $250) for powerwall costs because it normally costs more to produce and sell a smaller product.

He just stated they sell for $470/kWh! (94000/200)

 

[Johan]

What's your point please?

My point is you said zero margin. I say if they sell for $470/kWh the margin is healthy regardless of if cost to Tesla is $200 or $250/kWh.

 

[vgrinshpun]

Completely unreasonable assumption. They have publicly stated a few times recently that their pack costs are about $200 per kWh, and it's a safe bet that's a high figure. Also that would mean that there is zero margin on their powerpacks which sell for $250 per kWh (please don't anyone post the foolishness that they are selling powerpacks for zero profit)!

It might not be accurate to use either of those figures ($200 or $250) for powerwall costs because it normally costs more to produce and sell a smaller product.

Please read my post again and head to the Tesla Energy page to verify data in it. They price powerpack at $470/kWh, so forget about $250/kWh tweeted a while ago by Elon.

I would appreciate a link to Tesla publicly stating that their pack cost is $200 per kWh.

 

[MitchJi]

My point is you said zero margin. I say if they sell for $470/kWh the margin is healthy regardless of if cost to Tesla is $200 or $250/kWh.

Thank you for pointing that out. I thought Vlad posted powerwalls not powerpacks.

 

[ggies07]

Anyone else notice changes to the Tesla Homepage? It now says "charging" instead of "supercharge" and "energy" instead of "tesla energy" you can now configure powerpacks online and get a quote. It also mentions that powerpacks can be for "large homes" ... Now back on topic.

interesting....very interesting...

 

[anticitizen13.7]

I think the Model X program and the concern about the Model X program are both on a nominal trajectory thesis wise.

U.S. customers in the Model X forum awaiting production and delivery have noted that their projected delivery date has slipped a month or two: Production delay

What is unclear is whether this is due to components shortages, or production batch allocations for the European market. I would strongly caution people not to draw any conclusions either way until more specific information is available.

 

[tanner]

Sorry, I thought Vlad posted powerwalls not powerpacks.

Well, it's 468.75/kWh for the powerwall too....

 

[EinSV]

My point is you said zero margin. I say if they sell for $470/kWh the margin is healthy regardless of if cost to Tesla is $200 or $250/kWh.

Wow. Had no idea that they could make anything more than a modest margin on Powerpacks. Very good news for TSLA. Will be interesting to see if the stock moves now or waits until sales ramp.

 

[MikeC]

So they almost doubled the price announced at the reveal last year, from 250 to 470?

 

[tanner]

Wow. Had no idea that they could make anything more than a modest margin on Powerpacks and Powerwalls. Very good news for TSLA. Will be interesting to see if the stock moves now or waits until sales ramp.

It likely won't move much until we hear HARD (delivery/installation) numbers... Didn't move on new MS, won't move much now.

 

[EinSV]

It likely won't move much until we hear HARD (delivery/installation) numbers... Didn't move on new MS, won't move much now.

Probably right. Market seems to be in a "show me" phase with TSLA.

 

[Johan]

So they almost doubled the price announced at the reveal last year, from 250 to 470?

I imagine they didn't just make up the number. I suppose they've done proper market research.

 

[techmaven]

We really don't know how often Tesla sells PowerPacks at these prices. For all we know, the big Hawaii and AMS projects might not be sold anywhere near what they showed on the website... instead, these could be just be prices to start the conversation.

 

[anticitizen13.7]

Also, there are some indications that the QA process for Model X is still encountering bumps: Losing faith in Tesla this week

Summary: Tesla told a customer that their Model X would be delivered in the last week of March. The customer completed paperwork, only to have the delivery canceled, and then canceled TWO more times. After a month, still no delivery. Elon Musk personally responded to a tweet about the situation, citing the need for some components in addition to more stringent QA processes.

Until stories like this stop getting posted, I wouldn't assume that everything is just fine in Model X production.

People who are getting their cars are generally happy though: Model X April Deliveries

I believe that production problems will eventually be sorted out. The timing may not be to the liking of traders and short term investors.

 

[LargeHamCollider]

I imagine they didn't just make up the number. I suppose they've done proper market research.

$470 is a lot cheaper than $660 which is the next best price I've seen (though I didn't search too exhaustively).

There's little point in selling something for more than 30% less than your nearest competitor if you're not demand constrained. Tesla Energy is winning on price by a wide margin even at $470/kWh and probably winning on design and quality too.

 

[vgrinshpun]

I think that this needs to sink in, but my read that Tesla Energy going for a sizable margin for PowerPacks is a very good sign. I highly doubt that when Elon tweeted $250/kWh price for the PowerPack shortly after the Tesla Energy reveal he did not know what the their cost is. Based on additional information revealed at the ER call following the Tesla Energy reveal Elon also mentioned that this ($250/kWh) price will initially (while battery cells are sourced from Panasonic's factories) allow for a small margin, with gross margin increasing to approx 25% once GF is producing cells.

Based on the now revealed pricing of $470/kWh we can conclude that they really confident in the demand, enough so to aim for the gross margin of 88% right out of the gate, with the potential increase to a whopping 168% once they reduce their costs after scaling production at the GF from $250/kWh to 0.7 x 250 = $175/kWh.

This is REAL news, folks, really GOOD news.

 

[30seconds]

Will be very interesting if they guide or answer question regarding powerpack margins at CC.

Now witness the cash flow power of this fully robotized and operational Gigafactory!

 

[Julian Cox]

I think that this needs to sink in, but my read that Tesla Energy going for a sizable margin for PowerPacks is a very good sign. I highly doubt that when Elon tweeted $250/kWh price for the PowerPack shortly after the Tesla Energy reveal he did not know what the their cost is. Based on additional information revealed at the ER call following the Tesla Energy reveal Elon also mentioned that this ($250/kWh) price will initially (while battery cells are source from Panasonic's factories) allow for a small margin, with gross margin increasing to approx 25% once GF is producing cells.

Based on the now revealed pricing of $470/kWh we can conclude that they really confident in the demand, enough so to aim for the gross margin of 88% right out of the gate, with the potential increase to a whopping 168% once they reduce their costs after scaling production at the GF from $250/kWh to 0.7 x 250 = $175/kWh.

This is REAL news, folks, really GOOD news.

True. Shhhh. BTW. There is another detail of Tesla Energy that is non-obvious. The cash flow implications and cell purchasing and inventory efficiencies it delivers to the business as a whole - which are stellar.

As for Model X - its all good. The good news and the worrying news. It will be fine when it needs to be and it will worry people beforehand. Nice and predictable. My biggest worry about a Model X is that I might really want one. The big difference being that I would never rush out and buy the first of a new car so I have no reason to care about early adopter issues. Believe me I am more mainstream and conservative than anyone that has ever encountered an issue with a Tesla product and there are loads more of me in this respect than there is of you. The main bulk of customers are the silent majority - always true of the early days of any new technology.

 

[GregRF]

Tesla stated that although their line is capable of producing 2,000 vehicles per week, guidance was that they were targeting to produce 1,600-1,800 vehicles per week sometime in 2016

At the same time didn't they say they were planning on combining S and X into one assembly line (BIW)? In the last CC they refused to talk about the production set up and this combination. As far as we know there is an S BIW line capable of 1000+ per week and an X line that is supposedly at 750 ramping up to 1000, and it is possibly this line that is capable of the 2000 at full production rate.

It has been awhile since they quoted that 1600-1800 number, things may have changed.

 

[Drax7]

A Weather Prediction Supercomputer has no control over what the weather will be. It can't put additional effort and resources into meeting a prediction of sunshine on July 4th if it spots some difficult clouds on the horizon. Big difference in forecasting power.

Of course, and with a few days of overtime they can get above the lower limit.
So why predict a shortage this early was my response to the Hog calculation.