Short-Term TSLA Price Movements - 2016

[techmaven]

To be fair, Lutz isn't completely clueless. He is self aggrandizing and, like many, has a very limited view of Tesla. Many automobile execs/analysts/industry watchers don't really follow Tesla close enough to really understand what is going on, so they grab a few misleading headlines and fit it into their assumptions. That's ok if he didn't then get onto various forms of media and run his ignorant mouth.

It's like the talking heads on CNBC or Bloomberg. Even those that are stock experts, they just don't spend enough time to understand Tesla. It's true of any company that doesn't quite fit the mold of other companies in a particular sector or industry. Of course, they go through a basket of stocks, use the same tools, and they don't have to time or energy to go chase down why one company is really different from another. A few will, but it's a few and most of those don't get in front of the media.

 

[electracity]

Here's an excellent point by point dismantling of the Lutz lies by fellow TMCer Fred Lambert of elektrek.co. Good Guy Fred!

Former GM Chairman Bob Lutz is spreading false and misleading information about Tesla

It doesn't dismantle Lutz's correct understanding of the mass (time and money) needed to scale in the auto industry. Lutz certainly isn't a "hired gun", he is an old man with plenty of money who says what he believes based on his life experience.

What Lutz's life experience blinds him to is the hundreds of correct decisions, both big and small, that Tesla makes that traditional car guys get wrong. He thinks that Tesla has shown the big guys what works, and that they will adopt and overwhelm. He doesn't see how Tesla plans to move the goal post. Audi, Mercedes, and Porsche will make good S/X competitors. But those cars won't catch the Germans up to Tesla.

 

[The Blue Owl]

To be fair, Lutz isn't completely clueless.

He sounds completely clueless to me.

 

[Johan]

He sounds completely clueless to me.

That was my point as well. According to Merriam-Webster "clueless" means:

"completely or hopelessly bewildered, unaware, ignorant, or foolish"

Sounds about right to me.

 

[techmaven]

It doesn't dismantle Lutz's correct understanding of the mass (time and money) needed to scale in the auto industry.

Seriously, why is this still a thing?

Tesla has a temporary advantage in the electric drivetrain and especially in battery cell and pack cost. It likely more than covers their disadvantage at large scale vehicle manufacturing. I suspect that Tesla will even up their disadvantage in large scale vehicle manufacturing before the others make up the lost time in electric drive trains. Especially since the tier 1 automakers are being hollowed out and the tier 2 suppliers are doing so much heavy lifting.

One could take this stance when Tesla was making under 10,000 cars a year. They are no longer there. A price difference of about $5,000 to $7,000 in the electric drivetrain, as well as significant design differences will keep Tesla ahead for now.

Go look for an electric motor sold by any of the major automakers that puts out more than 250hp. Almost all use permanent magnets. Tesla has the highest specific energy cells at the lowest cost per kWh.

A big problem is that the electric vehicle drivetrain for a PHEV and a long range, high motor power BEV are different. You can take the PHEV electric vehicle drivetrain and use bits and pieces for a low power motor BEV. For example, the i3's motor and the i8's can share. But a pure BEV i8 can't use that motor... it can't even use that motor's design. The major automakers do so much common platform development that it actually hurts them when it comes to competing with Tesla on BEVs.

 

[Drax7]

It doesn't dismantle Lutz's correct understanding of the mass (time and money) needed to scale in the auto industry. Lutz certainly isn't a "hired gun", he is an old man with plenty of money who says what he believes based on his life experience.

What Lutz's life experience blinds him to is the hundreds of correct decisions, both big and small, that Tesla makes that traditional car guys get wrong. He thinks that Tesla has shown the big guys what works, and that they will adopt and overwhelm. He doesn't see how Tesla plans to move the goal post. Audi, Mercedes, and Porsche will make good S/X competitors. But those cars won't catch the Germans up to Tesla.

under lutz GM went bankrupt , millions of correct decisions that went wrong ......

does he take credit for that?

 

[Hogfighter]

Seems like each time there's a push higher, it runs out of steam and falls back to 210 like there's a tractor beam involved. Tons of support to keep it above 200 though.

 

[mmd]

Ah, do a careful reading on those articles and see through your blind hatred of Tesla.

That article has almost no content. Tesla met with some battery makers recently. That's it. That's the entire factual content of that Korean article. Everything else is speculation.

It is just as likely that Tesla is shopping for a partner for Gigafactory #2 and #3 to scale beyond 500,000 cars. Panasonic is already in for $2 billion for the Gigafactory on top of their $1.2 billion or so for their Osaka plants and has only so much risk appetite given their failing other businesses, so they might want to wait to commit to Gigafactory #3 or #4. Maybe LG/Samsung/SKI is willing to chip in $2 billion sooner than Panasonic. Complete speculation and more plausible than your speculation.

Now you are being silly What risks could Panasonic possibly see when Elon already announced the $7.5B of orders in a day? Surely, the orders will hit a few trillions for the year, no? Or is Panasonic also blinded by their hatred for Tesla to see such risks where none is mentioned by Elon? We should label Panasonic as mega FUDsters.

Is it at all possible, that it is you who is blinded by your fatal love for TSLA? So the only analysis you like is taking the promises made by Elon as the only truth? Just something to ponder about...

 

[FredTMC]

Seems like each time there's a push higher, it runs out of steam and falls back to 210 like there's a tractor beam involved. Tons of support to keep it above 200 though.

If macros hold, won't surprise me to see TSLA rally in the final hour today.

 

[techmaven]

What risks could Panasonic possibly see when Elon already announced the $7.5B of orders in a day?

Have you followed Panasonic IR from 2010?

Besides, I'm not quite following you... Panasonic is putting up $1.6 billion thus far. They expanded out their Osaka plants to the tune of another $500-700 million. So you are faulting Panasonic somehow?

Have you not read TSLA's 10-Q?

You haven't presented anything that passes the smell test. Go ahead and try.

 

[Hogfighter]

Now you are being silly What risks could Panasonic possibly see when Elon already announced the $7.5B of orders in a day? Surely, the orders will hit a few trillions for the year, no? Or is Panasonic also blinded by their hatred for Tesla to see such risks where none is mentioned by Elon? We should label Panasonic as mega FUDsters.
View attachment 177147

Is it at all possible, that it is you who is blinded by your fatal love for TSLA? So the only analysis you like is taking the promises made by Elon as the only truth? Just something to ponder about...

As a favor....please state your theses and opinions in a straightforward manner, preferably with facts to support said theses. Your overuse of the Socratic method muddies the water. (I'm a big fan of Muddy Waters, however)

 

[Gerardf]

I think Mr. Lutz will never admit he was and is wrong.

It started with him taking position that it is simply impossible for a startup like Tesla was to ever compete with (or even survive against) big automotive like GM.

With every succesfully executed step of Tesla's roadmap that is proving him wrong, he got ( and will get) more and more vocal and extreme to defend his initial position that Tesla will never succeed and will be crushed by the big ones like GM. He makes up new reasons for that to replace earlier ones.

To my opinion this process is already quite far along, with him openly stating it is GM's strategy for the Bolt to sell EV's at a loss to crush Tesla. He must have lost many people there.

He will probably get extremer, and thus this 'problem' will solve itself.

Same is happening with the other vocal shorts that have to come up with new even crazier reasons monthly to defend their short thesis. Funny actually, as these other shorts defend all the time that the 'losing money per car produced' is Tesla's strategy and will kill Tesla.

 

[Papafox]

Seems like each time there's a push higher, it runs out of steam and falls back to 210 like there's a tractor beam involved. Tons of support to keep it above 200 though.

If macros hold, won't surprise me to see TSLA rally in the final hour today.

I think what we're seeing is shorts pulling down the SP during low volume parts of the day to keep the gains for the day from looking too good. It is game playing.

The good news is that the recent improvement of Model X ramping is not baked into the SP yet. Goldman surely knows that X is doing better at ramping now, but they deliberately showed some concern for X ramp in order to leave them with the catalyst for part 2 of their upgrade, which I believe will be a price target increase when they "suddenly" realize that Model X ramp up has been going very well the past two weeks.

 

[geneclean55]

I think what we're seeing is shorts pulling down the SP during low volume parts of the day to keep the gains for the day from looking too good. It is game playing.

The good news is that the recent improvement of Model X ramping is not baked into the SP yet. Goldman surely knows that X is doing better at ramping now, but they deliberately showed some concern for X ramp in order to leave them with the catalyst for part 2 of their upgrade, which I believe will be a price target increase when they "suddenly" realize that Model X ramp up has been going very well the past two weeks.

Well the stock market is just responding to the Fed news this afternoon which is probably pushing TSLA down with it.
Funnily enough, the Fed seems bullish about the general economy.

 

[tander]

And here is the one dollar question:
Given Tesla Motor's track record of the last couple of years and all the goals they achieved, will it be favorable for Tesla Motors to grow a lot faster again?
Hint:
The last couple of times the market loved it.
And by the way, just run some numbers on the newly projected growth rate. After you have done this you will no longer worry about dilution.

Yes in the long term dilution isn't a big deal, but in the short if I remember right the market did not like the cap raise last Aug? very much.

 

[electracity]

Seriously, why is this still a thing?

Tesla has a temporary advantage in the electric drivetrain and especially in battery cell and pack cost. It likely more than covers their disadvantage at large scale vehicle manufacturing. I suspect that Tesla will even up their disadvantage in large scale vehicle manufacturing before the others make up the lost time in electric drive trains. Especially since the tier 1 automakers are being hollowed out and the tier 2 suppliers are doing so much heavy lifting.

One could take this stance when Tesla was making under 10,000 cars a year. They are no longer there. A price difference of about $5,000 to $7,000 in the electric drivetrain, as well as significant design differences will keep Tesla ahead for now.

Go look for an electric motor sold by any of the major automakers that puts out more than 250hp. Almost all use permanent magnets. Tesla has the highest specific energy cells at the lowest cost per kWh.

A big problem is that the electric vehicle drivetrain for a PHEV and a long range, high motor power BEV are different. You can take the PHEV electric vehicle drivetrain and use bits and pieces for a low power motor BEV. For example, the i3's motor and the i8's can share. But a pure BEV i8 can't use that motor... it can't even use that motor's design. The major automakers do so much common platform development that it actually hurts them when it comes to competing with Tesla on BEVs.

I don't know why you think any company is going to have a problem building a decent electric drive train at a competitive price.

What Tesla needs is a much larger balance sheet to manufacture a million plus cars. They are not going to get there through cash flow as they will need to continue to maintain large R&D effort indefinitely. A million cars is probably enough sales where competitors no longer have large advantages due to scale. Mazda manufactures a bit over a million vehicles, Daimler a bit under 2 million. These companies are examples examples of the capital necessary for scale. Lutz knows this.

I do think Tesla can get to that size, because they have a path to remain a differentiated, desirable brand. But they are going to need to raise a lot more capital.

 

[tander]

Here's an excellent point by point dismantling of the Lutz lies by fellow TMCer Fred Lambert of elektrek.co. Good Guy Fred!

Former GM Chairman Bob Lutz is spreading false and misleading information about Tesla

If I remember right Lutz is an investor or officer at Via Motors, and electric/hybrid company so I kind of wonder if he's trying to talk down the potential competition. The other possibility is that he and everyone else is used to him being an auto industry "expert", but everyone has forgotten that he may not really be up to date on things anymore.

 

[electracity]

I wonder how the market will feel when it realizes that the model 3 replaces the model S?

If I remember right Lutz is an investor or officer at Via Motors, and electric/hybrid company so I kind of wonder if he's trying to talk down the potential competition. The other possibility is that he and everyone else is used to him being an auto industry "expert", but everyone has forgotten that he may not really be up to date on things anymore.

He is 84. He is not scheming about anything. He is glad he is alive and that people still want to hear what he has to say.

 

[JBRR]

Elon tweet: "Merc News story about Tesla using $5/hr labor seems to be missing a digit. Tesla actually paid $55/hr."

Elon Musk on Twitter

 

[techmaven]

I don't know why you think any company is going to have a problem building a decent electric drive train at a competitive price.

It isn't that they can't, it is that they don't have the time before Tesla reaches scale. Honestly, I thought they would have by now. I'm sure Tesla is befuddled by the other automakers behavior too. If they aren't spending the time perfecting AC induction motors, how will they scale to millions? The hybrid permanent magnet motors are unlikely to scale in both resource consumption and high performance efficiency. They're great at low power efficiency.

Back in 2012, I felt that Tesla's advantages were very temporary. One of the reasons I didn't hold my initial $35/share buy in. However, each passing year with each new car and each new concept, we still don't have the right ingredients, or a complete recipe from the other automakers. It doesn't have to be Tesla's recipe, but at least something viable.

What Tesla needs is a much larger balance sheet to manufacture a million plus cars. They are not going to get there through cash flow as they will need to continue to maintain large R&D effort indefinitely. A million cars is probably enough sales where competitors no longer have large advantages due to scale. Mazda manufactures a bit over a million vehicles, Daimler a bit under 2 million. These companies are examples examples of the capital necessary for scale. Lutz knows this.

I do think Tesla can get to that size, because they have a path to remain a differentiated, desirable brand. But they are going to need to raise a lot more capital.

I've seen various industry analysts and production engineers talk about various different levels. As low as 150,000, mostly at the 250,000 level. It obviously depends on the segment and the margin of the vehicle. Given the market segment, it is likely that 1,000,000 level isn't necessary, especially if they continue to enjoy significant advantages on the electric drivetrain.