Short-Term TSLA Price Movements - 2016

[techmaven]

The #1 sign that things have moved up is visible signs of construction of the 2nd phase of the Gigafactory. There's no reason to really look elsewhere for a year or two. They have 4 more phases of the Gigafactory to construct. Even if they build out the Fremont factory to handle more cars, they need the 2nd phase of the Gigafactory online to support this level of pre-orders.

Cash needs are:

$125 million or so to finished Gigafactory pilot phase (Panasonic investment separate)
$1 billion? to finish Fremont factory upgrades for Model 3 (remember, paint shop and stamping already done)
$250-500 million in parts and/or parts commitments
$400 million for Gigafactory phase 2 (Panasonic investment separate)
$1 billion for more Fremont factory upgrades.

Organic growth or pedal to metal?

 

[neroden]

I think getting to INITIAL production launch sooner than Q4'17 is FAR more valuable for the SP than solely planning for higher rates in 2018 and beyond.

Yes, but it's also incredibly important not to rush it. It's vital to avoid the early design errors of the Model S and X -- get everything debugged before going into mass production. Take the time to test the parts and validate the suppliers and get all the little details right. Much better to launch in Q4 '17 with a perfect car than to launch in Q3 '17 with a car with lots and lots of "tweaks" needed.

(Need to do both of course... Quicker launch and higher ramps)

I do not want to hear about body changes months from now (e.g, trunk hatch, etc). Just lock down the design soon and start building out the lines

I agree on this.

I do NOT want to hear about new factories NOW. This is all "out year" stuff.

I do want to hear about new factories now. If my projections are right, Tesla is going to have two years of Fremont production reserved *before August*, and that's a conservative projection; they could have *four years* of Fremont production reserved before the end of 2016. If Fremont is the only factory, this would be a problem.

They will want to have a second car factory and a second Gigafactory up and running almost *immediately* after Fremont starts producing Model 3. Probably the European factories. Now, they can basically just copy what they're doing at Fremont and Reno for the interior of the factories. But the problem of buying land, getting permits, arranging truck and rail connections, and so on... that takes a long, long time. It shouldn't cost huge amounts of money, but it wil take huge amounts of time, so they need to get started now.

 

[lango]

The #1 sign that things have moved up is visible signs of construction of the 2nd phase of the Gigafactory. There's no reason to really look elsewhere for a year or two. They have 4 more phases of the Gigafactory to construct. Even if they build out the Fremont factory to handle more cars, they need the 2nd phase of the Gigafactory online to support this level of pre-orders.

Cash needs are:

$125 million or so to finished Gigafactory pilot phase (Panasonic investment separate)
$1 billion? to finish Fremont factory upgrades for Model 3 (remember, paint shop and stamping already done)
$250-500 million in parts and/or parts commitments
$400 million for Gigafactory phase 2 (Panasonic investment separate)
$1 billion for more Fremont factory upgrades.

Organic growth or pedal to metal?

I think $2B is too much in Fremont for the factory upgrades. But there is more costs like hiring new workers before the line is flowing, SG&A training and hiring etc.

I don't think stamping is done for Model 3, last I read was that the body line can do like 150-175k a year but it would be S and X. As ballpark figure I think Model 3 investment in Fremont will be a bit lower than S and X combined. What they are probably going to do is to duplicate the lines in Fremont in the new factories, but they need to start construction of the new factories before which means they should start right now .

 

[techmaven]

I've been thinking about Tesla Energy lately, especially how disappointed I am with regards to Tesla Energy. I'm thinking that Tesla Energy is completely a de-risk maneuver. In 2013, when Tesla went to Panasonic to re-negotiate their supplier agreement and order up something north of 8 GWh of production a year, Panasonic probably thought they were nuts. After all, Panasonic was bleeding red ink and had bled lots of red ink as battery demand did not materialize. They had abandoned the 2nd phase of the Suminoe plant and shuttered other facilities. Now Musk comes and insists they want more batteries. Remember, in the summer of 2013, as much as Tesla stock had soared, the actual volume of vehicles at that point wasn't all that impressive. On top of that, Tesla wanted Panasonic to cough up another $2 billion or so and build the world's biggest battery plant? Right after Panasonic had to shut down plants and drop expansion plans because of lack of demand?

So, I think Musk had to commit to selling those cells regardless of how Tesla vehicles did in the marketplace. Not only that, they were creating a new battery plant that would effectively obsolete the very plants in Osaka, Japan that Tesla wanted Panasonic to dump some money into in 2013/2014/2015 to build more cells for Tesla. Hmmm... so I think Tesla Energy is a result of Musk promising that all will turn out well for Panasonic.

As a result, I think Tesla Energy only gets cell supply that Tesla Automotive can't sell. And in 2015, that's primarily the result of the Model X delay. Say Panasonic had to make production plans in 2014 for the amount of cells they were going to build in 2015 for Tesla. Tesla tells them that the Model X will ship in the summer of 2015 and the run rate by the end of 2015 is 75,000/year. That didn't happen. Lets say the shortfall is 5,000 vehicles. Panasonic had to build out that capacity ahead of Tesla's ability to ship those cars that didn't happen. 5,000 vehicles, mostly Model X 90 kWh models is a lot of batteries. About 450 MWh. I think Tesla could have sold 450 MWh of PowerPack last year. That should be about $112 million dollars of revenue. However, they sidestepped this question in the earnings call. I can't find reasonably specific information in the 10-K.

Now, we know that they transitioned Tesla Energy production to the Gigafactory in Q4. That probably delayed things. Does Tesla have about $65 million dollars worth of cells sitting at the Gigafactory waiting for them to put them into PowerPacks? Note that this isn't PowerWall that uses NMC cells, maybe from LG.

 

[neroden]

Note : If it's true the Federal tax credit will apply to an unlimited number of vehicles for 6 months after hitting the 200,000 mark, Tesla might want to time deliveries to maximize how many people are able to receive the tax credit.

It is true (assuming Tesla reaches 200,000 on the first day of a calendar quarter). Tesla would be wise to attempt to maximize US production during those 6 months.

 

[neroden]

I've been thinking about Tesla Energy lately, especially how disappointed I am with regards to Tesla Energy. I'm thinking that Tesla Energy is completely a de-risk maneuver.

Agree. I think that is clear from previous statements by Musk and Straubel.

In 2013, when Tesla went to Panasonic to re-negotiate their supplier agreement and order up something north of 8 GWh of production a year, Panasonic probably thought they were nuts. After all, Panasonic was bleeding red ink and had bled lots of red ink as battery demand did not materialize. They had abandoned the 2nd phase of the Suminoe plant and shuttered other facilities. Now Musk comes and insists they want more batteries. Remember, in the summer of 2013, as much as Tesla stock had soared, the actual volume of vehicles at that point wasn't all that impressive. On top of that, Tesla wanted Panasonic to cough up another $2 billion or so and build the world's biggest battery plant? Right after Panasonic had to shut down plants and drop expansion plans because of lack of demand?

So, I think Musk had to commit to selling those cells regardless of how Tesla vehicles did in the marketplace. Not only that, they were creating a new battery plant that would effectively obsolete the very plants in Osaka, Japan that Tesla wanted Panasonic to dump some money into in 2013/2014/2015 to build more cells for Tesla. Hmmm... so I think Tesla Energy is a result of Musk promising that all will turn out well for Panasonic.

As a result, I think Tesla Energy only gets cell supply that Tesla Automotive can't sell. And in 2015, that's primarily the result of the Model X delay.

I think the Powerpack demand is strong enough that Musk will make a point of reserving *some* batteries for them in the future -- commercial and utility customers can be quite intolerant of major delays -- but I do think you're basically right, that the autos get priority.

Say Panasonic had to make production plans in 2014 for the amount of cells they were going to build in 2015 for Tesla. Tesla tells them that the Model X will ship in the summer of 2015 and the run rate by the end of 2015 is 75,000/year. That didn't happen. Lets say the shortfall is 5,000 vehicles. Panasonic had to build out that capacity ahead of Tesla's ability to ship those cars that didn't happen. 5,000 vehicles, mostly Model X 90 kWh models is a lot of batteries. About 450 MWh. I think Tesla could have sold 450 MWh of PowerPack last year. That should be about $112 million dollars of revenue. However, they sidestepped this question in the earnings call. I can't find reasonably specific information in the 10-K.

Now, we know that they transitioned Tesla Energy production to the Gigafactory in Q4. That probably delayed things. Does Tesla have about $65 million dollars worth of cells sitting at the Gigafactory waiting for them to put them into PowerPacks? Note that this isn't PowerWall that uses NMC cells, maybe from LG.

 

[FredTMC]

Maybe Uber worked out a deal with Tesla for 500,000 deposits, that would bring the total to 850,000-900,000? It's unlikely but always possible lol.

Why the dislike lol? . Über did say would buy the entire 2020 production from Tesla, if Tesla could make them fully autonomous. If Uber still wants to buy 500,000 Tesla in 2020, they better have a deal worked out with Tesla soon. If Uber waits until 2017 to work out a deal it might not be possible without Uber partnering with Tesla (perhaps by paying for an Uber factory?) to significantly increase production.

No deal. According to the illustrious Adam Jonas, tesla will replace Uber

 

[InTheShadows]

I hope I'm wrong but things are feeling a little toppy to me for the short term. I exited all of my short term options today slightly after the peak.

In 2013 we were in this same situation and the thing continued to rally beyond all expectations. I hope that's what we have again.

A few pages ago someone posted that the top is likely one good announcement away. Which could be our tweet tomorrow.

I'm thinking 350k. Which I don't think will be a shocker. Over 400k would shock many. 500k would shock everyone.

Good luck tomorrow.

 

[FredTMC]

I hope I'm wrong but things are feeling a little toppy to me for the short term. I exited all of my short term options today slightly after the peak.

In 2013 we were in this same situation and the thing continued to rally beyond all expectations. I hope that's what we have again.

A few pages ago someone posted that the top is likely one good announcement away. Which could be our tweet tomorrow.

I'm thinking 350k. Which I don't think will be a shocker. Over 400k would shock many. 500k would shock everyone.

Good luck tomorrow.

Thx. The talking heads on CNBC were mentioning TSLA double top at $285. Needs to bust through there...

 

[Fallenone]

I've been thinking about Tesla Energy lately, especially how disappointed I am with regards to Tesla Energy. I'm thinking that Tesla Energy is completely a de-risk maneuver. In 2013, when Tesla went to Panasonic to re-negotiate their supplier agreement and order up something north of 8 GWh of production a year, Panasonic probably thought they were nuts. After all, Panasonic was bleeding red ink and had bled lots of red ink as battery demand did not materialize. They had abandoned the 2nd phase of the Suminoe plant and shuttered other facilities. Now Musk comes and insists they want more batteries. Remember, in the summer of 2013, as much as Tesla stock had soared, the actual volume of vehicles at that point wasn't all that impressive. On top of that, Tesla wanted Panasonic to cough up another $2 billion or so and build the world's biggest battery plant? Right after Panasonic had to shut down plants and drop expansion plans because of lack of demand?

So, I think Musk had to commit to selling those cells regardless of how Tesla vehicles did in the marketplace. Not only that, they were creating a new battery plant that would effectively obsolete the very plants in Osaka, Japan that Tesla wanted Panasonic to dump some money into in 2013/2014/2015 to build more cells for Tesla. Hmmm... so I think Tesla Energy is a result of Musk promising that all will turn out well for Panasonic.

As a result, I think Tesla Energy only gets cell supply that Tesla Automotive can't sell. And in 2015, that's primarily the result of the Model X delay. Say Panasonic had to make production plans in 2014 for the amount of cells they were going to build in 2015 for Tesla. Tesla tells them that the Model X will ship in the summer of 2015 and the run rate by the end of 2015 is 75,000/year. That didn't happen. Lets say the shortfall is 5,000 vehicles. Panasonic had to build out that capacity ahead of Tesla's ability to ship those cars that didn't happen. 5,000 vehicles, mostly Model X 90 kWh models is a lot of batteries. About 450 MWh. I think Tesla could have sold 450 MWh of PowerPack last year. That should be about $112 million dollars of revenue. However, they sidestepped this question in the earnings call. I can't find reasonably specific information in the 10-K.

Now, we know that they transitioned Tesla Energy production to the Gigafactory in Q4. That probably delayed things. Does Tesla have about $65 million dollars worth of cells sitting at the Gigafactory waiting for them to put them into PowerPacks? Note that this isn't PowerWall that uses NMC cells, maybe from LG.

For me, I view the Tesla Energy products as practice for the Gigafacatory. To bring down cost of the battery, you need better technology (new form and cell chemistry), vertical integration to cut down transportation and middlemen (all-in-one Gigafactory), and experience in actually making the batteries. Tesla Energy products provide the chance for Gigafactory workers to increase their efficiency before Model 3 arrives. Whether TE makes a lot of money or not before than doesn't matter. What matter is how many batteries they make. The more they make, the more experienced they are at it, the more GM on the cars which would be the major income source.

 

[lango]

For me, I view the Tesla Energy products as practice for the Gigafacatory. To bring down cost of the battery, you need better technology (new form and cell chemistry), vertical integration to cut down transportation and middlemen (all-in-one Gigafactory), and experience in actually making the batteries. Tesla Energy products provide the chance for Gigafactory workers to increase their efficiency before Model 3 arrives. Whether TE makes a lot of money or not before than doesn't matter. What matter is how many batteries they make. The more they make, the more experienced they are at it, the more GM on the cars which would be the major income source.

Yeah, but Tesla Energy I think will be important to keep the 50% growth target beyond 2020. JB Straubel is very involved in TE so I think it has more than just a de-risk function.

It would be great for Tesla if Panasonic built up more capacity independently as GF1 won't be enough.

 

[MitchJi]

Government subsidies may be gone before most buyers can get a Tesla Model 3

EM's tweet about subsidies mentioned tweaking deliveries so that they hit 200k near the beginning of a quarter. But that won't have much effect unless they deliver a lot of cars in the U.S. in the following two quarters. So I think we can infer that right now EM expects a pretty fast ramp.

 

[ev-enthusiast]

Personally, I am waiting for a tweet from EM that Model 3 press mentions around the globe increased demand for Model S and X significantly and that demand is still ahead of production.

 

[Papafox]

Personally, I am waiting for a tweet from EM that Model 3 press mentions around the globe increased demand for Model S and X significantly and that demand is still ahead of production.

I like this thought but think we'll likely have to get X into the stores before demand takes off for it in a big way. Fortunately, I suspect that the X vehicles for the stores will ship soon, now that Q1 is completed.

 

[Xpert]

I suspect there might be a sell the news early tomorrow when the reservation number is out. Im thinking to add more if that happens. But also worrying about Q1 bad numbers. Anyone still adding at this point or waiting for a dip? The uptrend seems crazy last few days with heavy volume.

 

[Darren12]

I'm thinking 350k. Which I don't think will be a shocker. Over 400k would shock many. 500k would shock everyone.

Good luck tomorrow.

350k is my bear case. My projections are 390k. Which I get to from:

- 130k in first day.
- 260k after three days (additional 130k over next 2 days)
- 390k after seven days (additional 130k over next 4 days)

I suspect that more reservations were made in the last three weekdays via word of mouth from previous reservation holders (some cases of this were mentioned earlier today). If we hit 500k, I expect TSLA to break $270.

 

[sundaymorning]

I suspect there might be a sell the news early tomorrow when the reservation number is out. Im thinking to add more if that happens. But also worrying about Q1 bad numbers. Anyone still adding at this point or waiting for a dip? The uptrend seems crazy last few days with heavy volume.

"Sell the news" is a quote often mentioned with Tesla, however, the news has already been released yet the stock keeps rising. We are now in the cycle of "buy the news" as investors are finally getting the bigger picture. Just ask yourself this: out of the 300,000 people buying a M3, how many of them are also buying the stock? The Tesla brand seem to have took the world by storm with the M3 reveal, when was the last time anyone stood in line for a $35,000 product? Images of eager customers floating around the internet must have made many potential investors salivate, this of course, is all reflected in the current price of TSLA.

 

[30seconds]

Eindhoven Netherlands would be a good choice for a new car factory. The old Philips factory industrial complex is up for grabs.

What happened to the Saab factories?

 

[Gerardf]

On Citron / Left :

Johan already did a good write-up. For those who want to view it :
Tesla's Model 3: Many Questions Remain

I am not so sure he still believes in his short position @ 185-190 himself, but sure sounds like he did not close it
This was his story then.
Citron exec: This is Tesla’s biggest problem

I feel Citron must have lost a lot of credibility, and he will not be as influential to the SP anymore as last time, no matter what future report he might come out with.

 

[Tslynk67]

I'm going for 366k for the M3 reservation - I was thinking 355, but it is a leap-year after all...

Looking ahead though I do believe we're going to see increased demand for MX once they put some cars in-store and, more importantly, as demonstrators.

Then, at some point next year (we all hope), the MIII will hit the streets and demand will increase by an order of magnitude. I believe it will be so good to drive that it will become irresistible.

Then we'll see some ATH, daily...

EDIT: for those that didn't notice yet, $269.99 in pre-market