Short-Term TSLA Price Movements - 2016

[anticitizen13.7]

Big talk on 500k cars next year is all fine. What about the margins on those? If Tesla's margin is negative on a $140K Model X, what will be the margin on the M3? If M3 alpha cars are shipped in volume next year, Tesla will be fried to crisp in two months.

New investors in Tesla should take everything Elon and Tesla says with a mouthful of salt. You've been cautioned.

Apples to Oranges. This is like comparing an Acura MDX to a Honda Civic.

Model X is, by Elon's admission, an overly complex machine. It has a completely new HVAC system, Falcon-wing doors, automatic sensing front doors, monpost 2nd row seats, and a towing-capable chassis (with associated control software).

Model 3, in contrast, appears designed for simplicity and ease of manufacturing.

Now, I agree that Elon's projections should be taken with skepticism. 500k cars in 2018 sounds crazy even to me.

However, Elon's track record is that he (1) is generally late (2) but he gets the job done. I wouldn't speculate on TSLA because the timing is too difficult to predict, but long-term investors are IMO likely to be rewarded if they can hold the stock for 5 years or more.

 

[Causalien]

A bunch of ridiculous predictions in this ER. Mr. Musk dodging any question that's relevant for investors is not a good thing. Talk about walking back FCF positive this half of 2016 to more capital raise. Talk about walking back from "we don't need any more capital raise" just a few months ago. And let's not forget, that Mr. Hubris that Tesla keeps blaming for Model X quality issues in none other than Mr. Musk himself.

Big talk on 500k cars next year is all fine. What about the margins on those? If Tesla's margin is negative on a $140K Model X, what will be the margin on the M3? If M3 alpha cars are shipped in volume next year, Tesla will be fried to crisp in two months.

New investors in Tesla should take everything Elon and Tesla says with a mouthful of salt. You've been cautioned.

Elon is providing me with the middle finger I need to show it to big oil. That's good enough for now. 500k new vehicles that don't need oil means the middle finger is bigger.

 

[Julian Cox]

Wow, are you disappointed that the stock isn't falling after the ER as you predicted?

It is performing EXACTLY as I predicted which was flat to down. What is your point? I appreciate it would be much more likeable to be totally wrong. What's a guy to do?

Hug me

 

[Cattledog]

Love it when dumb questions make him mad, you get the sense he wants to just hang up and go do it.

 

[tanner]

No Andrea James yet....

Not coming on, sadly

 

[The Blue Owl]

Apples to Oranges. This is like comparing an Acura MDX to a Honda Civic.

Model X is, by Elon's admission, an overly complex machine. It has a completely new HVAC system, Falcon-wing doors, automatic sensing front doors, monpost 2nd row seats, and a towing-capable chassis (with associated control software).

Model 3, in contrast, appears designed for simplicity and ease of manufacturing.

Now, I agree that Elon's projections should be taken with skepticism. 500k cars in 2018 sounds crazy even to me.

However, Elon's track record is that he (1) is generally late (2) but he gets the job done. I wouldn't speculate on TSLA because the timing is too difficult to predict, but long-term investors are IMO likely to be rewarded if they can hold the stock for 5 years or more.

Another interesting thing vaguely related to the doctor's argument is that Model X margins are not negative. With assumptions like that, it should be pretty clear why, although he is seeking value, he is just not finding it.

 

[anticitizen13.7]

Yes, but you're not taking into account that it was in design long before it was unveiled

I'm sure Model 3 has been in the works for years. However, it still takes significant time to set everything in motion, especially when jumping from 10's of thousands to 100's of thousands of cars in production. That doesn't even take into account the need to boost service and sales support.

This is Tesla's gateway to the big leagues. It's the realization of the Secret Plan from 2006. I think they can do it, but I don't think it will be easy.

 

[Ulmo]

Are these numbers even possible?

He said engineering is basically complete. My interpretation of that is that the residual engineering is to make a really good manufacturing feedback loop like mentioned above. This is a really decent way to look at it: put together the goal, and then achieve it.

 

[Fallenone]

Another interesting thing vaguely related to the doctor's argument is that Model X margins are not negative. With assumptions like that, it should be pretty clear why, although he is seeking value, he is just not finding it.

For Q1, it likely was.

 

[The Blue Owl]

For Q1, it likely was.

Even if that's the case, it doesn't matter, as I'm sure you know. What matters is the margins obtained when the production line runs at a steady pace after all kinks have been ironed out. No reason to believe they will be negative.

 

[aronth5]

Just another quiet 24 hours for Elon who now looks forward to tomorrow's very early morning launch of SpaceX's JCSAT-14 satellite.

 

[Ulmo]

"Sensor encrusted christmas trees" LOL

In all fairness, this was one of the main questions in this realm. It was nicely framed by both sides, although overly terse and abbreviated. More and more we hear EM's cautious optimism for autonomous; not here now, but coming. Earlier in the day at the other conference he discussed the view of the exponential curve when you're close looks linear, so when you keep predicting the thing earlier that means your linear view is plotting the geometric. My interpretation of that is that this will become a part of the Model 3 but no confirmation that it already is day 1.

 

[hoang51]

That was a hand full of information provided during the conference call. It'll take time to digest it all. One thing to note is that capital raise timing wasn't disclosed (for good reasons), so I'm thinking TSLA will be range bound for the entire year. After hours stock price seems to reflect on capital raising, which dropped almost half of the gain from the good Q1 news.

 

[Dr ValueSeeker]

Apples to Oranges. This is like comparing an Acura MDX to a Honda Civic.

Model X is, by Elon's admission, an overly complex machine. It has a completely new HVAC system, Falcon-wing doors, automatic sensing front doors, monpost 2nd row seats, and a towing-capable chassis (with associated control software).

Model 3, in contrast, appears designed for simplicity and ease of manufacturing.

Now, I agree that Elon's projections should be taken with skepticism. 500k cars in 2018 sounds crazy even to me.

However, Elon's track record is that he (1) is generally late (2) but he gets the job done. I wouldn't speculate on TSLA because the timing is too difficult to predict, but long-term investors are IMO likely to be rewarded if they can hold the stock for 5 years or more.

I would pay some credence to that statement, if Mr. Musk said that about Model X before the delays and issues started showing up. Who knows what he will be saying about Model 3 in a year or two?

Obviously, this sudden advancement of ramp-up goal shows Tesla s very poor in predicting anything from deliveries to cash needs. From the ER, it became clear to me that Tesla didn't even check the feasibility of suppliers ramping up, and is just throwing out a hugely optimistic number to boost stock price before the capital raise. Good luck to the longs; you will need it big time.

 

[dha]

@Julian

Correct me if I'm wrong, but the whole DTU thesis is supposed to culminate in the methodical revealing of Tesla's cards in order to engineer a short squeeze, culminating in a capital raise at new ATH.

Does the acceleration of the 500K target by two years and effective doubling of the 2020 target constitute a reveal of one of those cards? Does the admission in the Q1 shareholder letter of a forthcoming capital raise mean a reassessment of the DTU thesis may be in order?

 

[Papafox]

Overall impression after CC is over: Bears are going to twist facts,
Analysts are going to rework price targets and revise upward on M3 ramp update,
Tesla is going to name very respected manufacturing experts to team shortly,
Stock needs only a little nudge to take off after that, if not before.

 

[30seconds]

It is performing EXACTLY as I predicted which was flat to down. What is your point? I appreciate it would be much more likeable to be totally wrong. What's a guy to do?

Hug me

Flat to up, close enough, that I think you are right that this is a good time to accumulate in the long-term holdings. Or even short term as I would expect to see price targets raised in the next two weeks.

 

[drinkerofkoolaid]

Important Take Aways:

1) 1million vehicle production by 2020.
2) The Gigafactory + Tesla Factory could theoretically produce 1 million vehicles. Elon mentioned this might not be advisable since ultimately 25-30% of sales will come from USA. At a minimum, a factory will be needed in Asia and in Europe.
3) We will hear about some big Executive hires very soon.
4) GM is not aiming to achieve anywhere near the scale Tesla is. This is one of the many reasons GM will lose money on every EV it sells.
5) Battery storage will be a bigger part of Tesla's business than vehicle sales. Tesla will likely provide an update on this in a few more months.
6) It is possible for Tesla to deliver 200-300k vehicles in 2017.
7) After excluding $57 million of ZEV credit revenue, Q1 Automotive gross margin was 20.0% on a non- GAAP basis and 19.6% on a GAAP basis.
8) Warranty related costs were lower than Tesla expected.

 

[electracity]

For Q1, it likely was.

For the M3, Y1 is likely negative. But it doesn't matter. Either they sell significant volume of the M3, or they are no longer an independant company.

The Bolt looks like a car designed to not lose too much money at low volume.

 

[dha]

I would pay some credence to that statement, if Mr. Musk said that about Model X before the delays and issues started showing up. Who knows what he will be saying about Model 3 in a year or two?

Obviously, this sudden advancement of ramp-up goal shows Tesla s very poor in predicting anything from deliveries to cash needs. From the ER, it became clear to me that Tesla didn't even check the feasibility of suppliers ramping up, and is just throwing out a hugely optimistic number to boost stock price before the capital raise. Good luck to the longs; you will need it big time.

Tesla is indeed very poor at making predictions. They predicted Model S sales would peak at around 20,000 units / year!

http://files.shareholder.com/downlo...DB4-63D491FB6BD0/Company_Overview_Q3_2011.pdf