Short-Term TSLA Price Movements - 2016

[Ulmo]

10-Q is up.

Tesla Motors - Quarterly Report

But the big story is the work in progress... $163.83 million to $199.157 million, or $35.3 million.

Before Model X ramp, Q1 2015 was $63 million and Q4 2014 was $56 million. Even given the much higher pace of production, doubling $63 million to $125 million or so... we are about $75 million cars higher than we probably should be. That's 625 Model X's or so. If you scale by raw materials YoY, we're talking about $86 million in work in progress, or about $113 million over. That's about 941 Model X's lying around waiting for parts.

This seems consistent with my observations of work in progress parking lots at Service Centers. Also, it seemed Tesla was really comfortable doing this for Model X if they had to. While it looked odd seeing a bunch of new vehicles collecting dust while people waited for theirs to be delivered, it seemed to all match what Tesla stated in conference calls: that they sometimes were waiting for only one or two parts, and they had to wait to deliver to customer, because the vehicles were only 99% complete. They booked it as ABL and then everyone kinda just waited for that 1 part. Tesla has already taken actions to remedy this delay in delivery to customers for those affected. This has been discussed from many angles already, and I think this is just more data of the same things we've already discussed.

 

[jhm]

Simple, 45% is far less than 100% therefore there's demand constraint.

Silly me. The global GDP is $75.59T. So at about $100k per car, the globe is limited to buying no more than 756 million Model S in a year. So obviously demand is constrained.

 

[cluster]

the increase should not apply to cars only. TE products also require deposits.

The 10Q is out.

In it this statement :

As of March 31, 2016 and December 31, 2015, we held customer deposits of $391.4 million and $283.4 million.

So an increase of 110 Million !

This might include some of the Model-3 reservation deposits, however it is also possible that that cash is not received yet.

Even more interesting is to realize that most of the 1.000 Model-X sig's were delivered in Q1. Maybe not all SIG's ordered, but that would probably be at least 500 SIG's deliver (I guess more). IIRC each of them were 40k deposit. So al least 20M less MX-SIG deposits in the books. Not only were these (at least) 500 x 40k deposits replaced by new deposits @ US 1.000 each, the final number of deposits for March 31st increased by 110M.

Correct me if I overlooked something, but it seems this is again proof demand continues to be a non-issue.

 

[EinSV]

What the hell? Does that mean that all backlogged folks with reservations will have cars by mid July?

I don't feel a need to trumpet how I trade because I would hate for some one to follow me and get burned, as I often do, but you seem interested so I will admit to being long up until April expiration

Now here I am again around where we were in October but now my short thesis is more long term, Jan 18 puts, and now know there is no point in listing my rationale. There are so many shares sold short that any further downdraft may be buffered by short sellers covering and taking profits so I doubt there will be a steep short term drop, but at least I have the puts. Maybe even back to ATH in the meantime, who knows?

Thank you for acknowledging your short position, albeit a bit belatedly.

 

[electracity]

You know, I have yet to hear any demand constraint theorists admit that a 45% increase in net new orders for the Model S is evidence against their hypothesis. Anyone care to own this?

All talk, no quant.

Please reveal the 2015 Q1 order number the 45% gain is based on.

 

[drinkerofkoolaid]

Any word on what date the Gigafactory event/party will be on?

Another thing. An important article from 2 days ago that was overlooked. Panasonic is ramping up its investment in Tesla.

Panasonic doubled its investment in the Tesla Gigafactory during the last quarter [Q1 2016 Activity Report]

 

[mejojo]

I do however see some reckless optimism here that should be tempered or a lot of innocents may get hurt.

Quite simply, not your job.

 

[Intl Professor]

Quite simply, not your job.

Gentlemen or ladies and gentlemen, or ladies since I haven't looked up your handles, are we finished with this?

 

[colettimj]

Earnings letter stated that these were not counted as of March 31, they were mostly still being accounted for as receivables. So that raise is likely S/X orders - remember they did say that S order rate went up in the last quarter.

Weren't Tesla and SpaceX employees able to put $1k down before the 31st? If so, that could account for some of that increase.

 

[nienco2]

Thank you for acknowledging your short position, albeit a bit belatedly.

Hey it was back in October. but at you least you are civil and not condescending, could you remind the Professor that at least our back and forth was trading related, unlike what you can read upthread. I'm done until next time you call me out. peace brother

 

[Intl Professor]

Hey it was back in October. but at you least you are civil and not condescending, could you remind the Professor that at least our back and forth was trading related, unlike what you can read upthread. I'm done until next time you call me out. peace brother

Thanks, and touché, mon ami.

 

[jhm]

Sunrun Makes a Historic Stride for Solar Energy Storage in Hawai’i

Congratulations to Sunrun for bringing BrightBox solar+storage systems to Hawaii! They've partnered with a pretty cool battery supplier too.

 

[nienco2]

Thanks, and touché, mon ami.

Oh no! classy response... now I can't dislike you

 

[drinkerofkoolaid]

Anyone calling Tesla, SolarCity, or SpaceX examples of crony capitalism is extremely ignorant and myopic.

1) The US government heavily subsidizes the production, distribution, and protection of "oil assets". Why? Because an alternative didn't exist until recently.

2) If trillions of dollars were not spent every year subsidizing the oil, and the gasoline vehicle industrial complex, it wouldn't be necessary for there to be any incentives for EVs, since the cost of gasoline would be much higher, the cost to produce gasoline vehicles would be much higher, and the cost to buy a gasoline vehicle would be much higher.

3) The US government has spent trillions of dollars getting the existing utilities where they are today.

4) SpaceX is providing a service superior to its competitors, at a price that is significantly lower than what it cost before.

5) I, Cringely . The Pulpit . The $200 Billion Rip-Off | PBS

If the utilities worked with companies like SolarCity, instead of trying to harm them in court, the utilities and all solar companies would benefit. It makes zero sense for the Utilities to invest billions in infrastructure that will be worthless and will basically duplicate what Solar Panels are able to accomplish for a lot less.

6) Tesla Motors is the only company that has paid back the money loaned by the DOE, and did so nine years early.

Tesla Repays Department of Energy Loan Nine Years Early

Two major loan packages were given to automakers in the last five years: the automaker bailout package detailed in the Troubled Assets Relief Program (TARP) signed into law by President Bush, and the 2010 Advanced Technology Vehicle Manufacturing Program (ATVMP), which Congress approved to help boost alternative fuel auto manufacturing in the US.

TARP was the larger of the two, with GM and Chrysler receiving about $50.9 billion and $11 billion in taxpayer-guaranteed loans. Chrysler has since fulfilled its debt obligations, and it doing pretty well under new owner Fiat, an Italian conglomerate. That led the company to fire back at Tesla's claims that Tesla is the only company to have paid back its government loans. But fulfilling its obligations doesn't mean it's repaid the debt in full, as a number of terms were waived; all told, taxpayers lost billions on the deal.

The government, meanwhile, is still about $20 billion short on GM's deal. The US Treasury still owns about 32 percent of GM's stock, which it will sell off over time to recoup loan costs. But for the deal to break even, Treasury needs to sell its 500 million shares for close to $53 each. GM's stock is currently sitting at below $33. Unless the stock climbs appreciably before Treasury dumps it, the GM deal will wind up in a substantial loss for taxpayers.

Tesla Motors Is the First Automaker to Repay All of Its Government Loans

 

[maoing]

How trustable is this 45% number? The 2015 Q1 order should be delivered in 2015 Q2 which has 11.5K deliveries. So 45% increase from Tesla implied that 11.5K*145% = 16.675K model S orders in 2016 Q1. With additional minimum 750/week model X production rate * 12 weeks, which implies 9K model X in Q2. How come Tesla only guided 20K production in Q2 and only 17K delivery, it's barely on par with Q4 model S only delivery. Is it production constrained, the answer is certainly NO. It's just the excuse Tesla played in last several years. Go think how aggressive is the plan for M3 production ramp? The obvious reason is huge demand is there. In last several years, Tesla just had OK demand for model S, so they kept throttling production rate to match with demand.

I know some people will yell the old story of production constrained or whatever reasons. To be frank, as investors, we mainly care QoQ growth (instead of negative and flat growth in Q1/Q2) and financial improvement. Production constrained or inability of ramping up production isn't a good excuse anymore! Certainly SP doesn't like this weakness and wants Tesla to show the proof it can overcome it the sooner the better.

Please reveal the 2015 Q1 order number the 45% gain is based on.

 

[jhm]

Please reveal the 2015 Q1 order number the 45% gain is based on.

Well, under the hypothesis that the Model S was demand constrained in both 2014Q4 and 2015Q1, then the numbers of orders in 2015Q1 was 10,030. Otherwise, the number could be higher.

So at a minimum of 10,030 in 2015Q1 with 45% going into 2016Q1, we arive at a minimum of 14,543 orders.

However, Tesla only delivered 12,420 Model S in 2016Q1. Thus, they had over 2100 orders for Model S on hand that they otherwise could not fill.

That Tesla was sitting on 2100 unfilled orders is not what the demand constraint theorists would have led us to believe.

 

[jhm]

How trustable is this 45% number? The 2015 Q1 order should be delivered in 2015 Q2 which has 11.5K deliveries. So 45% increase from Tesla implied that 11.5K*145% = 16.675K model S orders in 2016 Q1. With additional minimum 750/week model X production rate * 12 weeks, which implies 9K model X in Q2. How come Tesla only guided 20K production in Q2 and only 17K delivery, it's barely on par with Q4 model S only delivery. Is it production constrained, the answer is certainly NO. It's just the excuse Tesla played in last several years. Go think how aggressive is the plan for M3 production ramp? The obvious reason is huge demand is there. In last several years, Tesla just had OK demand for model S, so they kept throttling production rate to match with demand.

I know some people will yell the old story of production constrained or whatever reasons. To be frank, as investors, we mainly care QoQ growth (instead of negative and flat growth in Q1/Q2) and financial improvement. Production constrained or inability of ramping up production isn't a good excuse anymore! Certainly SP doesn't like this weakness and wants Tesla to show the proof it can overcome it the sooner the better.

So you are basically admitting that your original demand constrained hypothesis is incongruent with a 45% y/y increase in orders.

No doubt Tesla can do better on execution, but that is a consequence of a different hypothesis.

 

[Hogfighter]

How trustable is this 45% number? The 2015 Q1 order should be delivered in 2015 Q2 which has 11.5K deliveries. So 45% increase from Tesla implied that 11.5K*145% = 16.675K model S orders in 2016 Q1. With additional minimum 750/week model X production rate * 12 weeks, which implies 9K model X in Q2. How come Tesla only guided 20K production in Q2 and only 17K delivery, it's barely on par with Q4 model S only delivery. Is it production constrained, the answer is certainly NO. It's just the excuse Tesla played in last several years. Go think how aggressive is the plan for M3 production ramp? The obvious reason is huge demand is there. In last several years, Tesla just had OK demand for model S, so they kept throttling production rate to match with demand.

I know some people will yell the old story of production constrained or whatever reasons. To be frank, as investors, we mainly care QoQ growth (instead of negative and flat growth in Q1/Q2) and financial improvement. Production constrained or inability of ramping up production isn't a good excuse anymore! Certainly SP doesn't like this weakness and wants Tesla to show the proof it can overcome it the sooner the better.

Dude, you said they were demand constrained like 2 years ago. I'm diming you out. Yes, one day you will be correct, if you keep this up for long enough. Your other posts merit value, but your demand conspiracy has gone from boring to annoying.

 

[EinSV]

Hey it was back in October. but at you least you are civil and not condescending, could you remind the Professor that at least our back and forth was trading related, unlike what you can read upthread. I'm done until next time you call me out. peace brother

Please get your story straight. You just acknowledged that your "short thesis" currently has you in Jan18 puts:

Now here I am again around where we were in October but now my short thesis is more long term, Jan 18 puts, and now know there is no point in listing my rationale. There are so many shares sold short that any further downdraft may be buffered by short sellers covering and taking profits so I doubt there will be a steep short term drop, but at least I have the puts. Maybe even back to ATH in the meantime, who knows? I'll sell some near term puts to knock premium off the 18's. I write this only because you bring up how despicable I am when short, fwiw during this same time I was long BTU the largest coal producer who has dropped all the way to BK so unlike others here I also have screw ups.

 

[electracity]

Well, under the hypothesis that the Model S was demand constrained in both 2014Q4 and 2015Q1, then the numbers of orders in 2015Q1 was 10,030. Otherwise, the number could be higher.

So at a minimum of 10,030 in 2015Q1 with 45% going into 2016Q1, we arive at a minimum of 14,543 orders.

However, Tesla only delivered 12,420 Model S in 2016Q1. Thus, they had over 2100 orders for Model S on hand that they otherwise could not fill.

That Tesla was sitting on 2100 unfilled orders is not what the demand constraint theorists would have led us to believe.

You forgot that Tesla carried over 1400 MS from Dec. of 2014. While no one outside Tesla knows Q1 2015 orders, the number is likely well below 10K. That's why they introduced the 70D in Q2.

If they are up 45% for what is the slowest car quarter, that's good. But Musk is choosing to give a big percent without ever revealing the actual numbers.

You can't claim that Tesla is always demand constrained and yet will have a run rate of 500,000 in 2018. Either they know how to build a lot of cars, or they don't. Pick one.

The MS 70D was released when demand was soft. The MX 70D is released early due to a smaller than expected production queue.