Short-Term TSLA Price Movements - 2016

[FredTMC]

http://finance.yahoo.com/news/tesla-eyes-3b-equity-raise-172720706

I can't believe that analysts and authors like this get paid to cover Tesla. The total cost, whether it's less than or more than $3 billion, simply will not be raised all at once. Tesla has never raised more than $750M at one time but he thinks they're currently "eyeing" a $3B equity raise in Q2 alone? Speculating that the shares could be diluted 11% misleads the readers. They've clearly stated that it will be a combination of debt and equity. Plus, people seriously underestimate Elon's commitment to his reputation of only having up rounds.

If the share price remains at these levels I'll bet they close a debt deal before going to public equity markets. GM will make a more compelling EV before Tesla dilutes shares by 11% at once.

Yep. 100% correct. Model 3 capital will be raised in stages. Model 3 production will be scaled up in stages. First assembly line will be less than 200K cars/year

 

[Irishjugg]

Right now, TSLA is bleeding cash, and cannot fix that by ramping up production.

That's not correct at all though. Tesla would be accumulating cash like crazy if they weren't spending to grow, that's the whole point here. If they got rid of model 3 plans right now, and just focused on selling 80k+ model S and X they would show enormous profit and free cash flow.

Tesla isn't bleeding cash they are spending cash, huge difference.

 

[drinkerofkoolaid]

Interesting article about Tesla in China that was published today.
工信部官员谈新能源补贴是否应"内外有别" - EV视界

Google translated section from article

Whether new energy vehicles subsidy should distinguish between imported brands and independent brands, the General Office of the Ministry of Industry and Information Technology Research Vice Ren Zhouwei room in "the fourth annual meeting of China's independent innovation", said: "Support fostered an industry and a certain size of the market, driven by the development of national brands, is the bounden duty of the government, but on specific practices, or to stand in an open field of vision, in line with international rules of practice.

Zhou Wei in answering a reporter's question mentioned that China is a member of WTO, established in trade policy, should be in accordance with WTO rules.Thus, "in external diameter, it should be treated equally, from which to find a balance, but for the national brand, we also hope to take advantage of China's huge auto market to drive its development.

Zhou Wei said that China's new energy automotive industry real scale, there must be a number of enterprises to the impact of new energy vehicles as a business to locate.As a government, we should pay attention to guide planning policy, appropriate policy support, and boost consumer information and so on, to create a better environment."Ministry of Industry to explore a wide entry, strict management ideas, more to stimulate the vitality of market players to strengthen a matter of ex post regulation, relax market access qualifications, so vibrant qualified enterprises can participate in the new energy automotive industry to promote the work of development.

Additionally, this was published today.

KT to develop telematics system with Tesla - report

 

[electracity]

I'm saying 'optimize the business'. Fk the stock prices. Lots of very successful businesses are privately held.

Right now, TSLA is bleeding cash, and cannot fix that by ramping up production.

So you do things that are blasphemy to fix it.

Tesla Motors cannot survive in the long term by ignoring technical data.

It's time to attack the failures, not time to bury Tesla Motors.

Live blissfully unaware of how things are made and how money works, and let the Tesla dream die.

Your choice.

1) The stock price is based on a future, much larger company
2) Musk likely has the capability to raise much, much more capital. Bleeding cash is probably fine if cash transfusions are readily available
3) There is no realistic scenario where Tesla "dies". The brand is valuable. While a full sale would be bad for shareholders, the company would live on.

Tesla can do what investors and customers will let Tesla do. No one, except perhaps you, wants them to be conventional.

 

[McRat]

Thanks. That explains how it is accounted on the Balance Sheet. So it has no impact on Statement of Operations(Income Statement) at all?

Here's how reality works:

You have $1 million.

You can either buy equipment, or invest it.

If you invest it, it does not depreciate.

If you buy equipment it depreciates, ie- you need to buy it again and again.

Nut really unique to automotive manufacturing, nor a part that Tesla would be in-sourcing. Which parts that Tesla makes today or may plan on making do you think that they should not be?

The number of parts that are made in excess of what Tesla Motors needs per day are pretty much the entire car.

The number of parts per day you can make with a huge "3D Printer" factory, larger than the largest factory on earth would not make the existing production levels of the Model 3.

3D Printing is still for prototyping and small runs. Ignore the guy behind the curtain wearing the Internet Expert t-shirt who says 3D Printing is the ultimate solution to low cost manufacturing. We don't live in Oz.

 

[rallykeeper]

Agreed with everything you wrote. I'd also add software. Software is really expensive to develop for just 20,000 cars -- it barely costs anything more to roll out that software to 100,000 cars or 1 million cars.

By shifting virtually all the car's controls to that big hulking screen, Tesla has managed to replace the much more complicated dashboards of traditional carmakers with a <$100 panel, a ~$200 computer (all in at most), and "free" software.

As for overall profit, right now the company is carrying very high fixed costs spread over a pretty small sales volume. The Model 3 fundamentally changes that.

 

[The Blue Owl]

Bloomberg Radio: Why Tesla Scares German Carmakers

The guest got the 2015 Tesla deliveries wrong, but the rest is good.

 

[30seconds]

I'm not sure where the fallacy of Tesla being fully vertically integrated has come from but as far as I can tell they really only make parts that 1.) they have a cost or technical advantage with (stamping, software, motors, battery packs) or 2.) they have had issue with supplier sending in the "B teams" (e.g., seats)

What are the examples of parts they should be outsourcing?

Most of their cost disadvantages seem to have more to do with scale vs. decision to outsource.

And anyways 100% of the "burn" is from investing in the growth (new models, stores, service centers, factories) of the companies and not the Model S production. Shaving another 5% of COGS of the Model S is nice but really not the point.

 

[surfside]

Yep. 100% correct. Model 3 capital will be raised in stages. Model 3 production will be scaled up in stages. First assembly line will be less than 200K cars/year

i've seen you post this multiple times as if this is fact. not sure why you feel so confident about this idea of having multiple different assembly lines, with the first only being capable of less than 200k cars per year -- on the earnings call elon indicated that tesla would likely make ~100k model 3 cars in 2017, which would not be possible if volume production starts on a line only capable of 200k for a full year.

maybe i'm missing something -- could you explain where you get the impression that they are going to build the production line as you suggest?

thanks,
surfside

 

[Krugerrand]

Yes, by all means ignore the people with manufacturing experience and continue with the cartoon version of Tesla.

His level of mfg experience is as a machinist. He said so. While being a machinist takes some skill, it's a long way from the top in manufacturing. Indeed, it's where you start - like being a groom and learning all the ins and outs before deciding what kind of a trainer or rider you want to be and then working towards that higher level, or discovering you don't possess the qualities required to go beyond being the best groom you can be.

His current connection to manufacturers is as a service provider...measuring stuff.

Point being, he's far from being an expert in the field of manufacturing. Meaning, not *the* source of information or likely the best source for information on the topic.

 

[ludicrousspeed]

Tesla hires a longtime Audi executive to take over vehicle production

Great news, based on the CC I think we will hear at least one more name in the next week or so.

 

[dc_h]

I'm a Boeing, P&W, and Honeywell supplier. None of them are vertically integrated.

In fact, Boeing is mainly a design company today. They sold off over 90% of their corporate mfr'g, I used to work at both McDonnell Douglas and Rockwell International, which are now Boeing. All of it is gone.

Good example: Isn't SpaceX putting Boeing out of the rocket business.

 

[Krugerrand]

Not sure whether this was picked up already, but may be a first indication that the ball is starting to roll

Hankook Tire picked as main supplier for Tesla's Model 3

I'll have some tires for sale.

 

[hirox]

Good example: Isn't SpaceX putting Boeing out of the rocket business.

Not boeing, ULA.

 

[Krugerrand]

Tesla hires a longtime Audi executive to take over vehicle production

Great news, based on the CC I think we will hear at least one more name in the next week or so.

Looks like an awesome hire according to his Linked In page. Far deeper manufacturing background than the previous guy.

 

[MitchJi]

If 25-30% of your COGS is wrapped up in the battery pack cost, and Tesla can make that component for almost 35% cheaper than the next best manufacturer, we're talking lots of room to be bad at other things. Let's look at battery cost. GM's ex-chief engineer of the Volt, Jon Bereisa, estimates that the Bolt's battery pack costs $215/kWh, or $12,900 for 60 kWh. While he probably has great insight on GM's costs, he has terrible understanding of Tesla's costs and Tesla IR person calls in to correct him on Tesla's current battery costs. Likely Tesla's current costs are around $185/kWh at the pack level and the Model 3's pack level cost is aimed at $150/kWh. Therefore, with a 55 kWh battery, the Model 3 pack cost is more like $8,250, a $4,650 cost differential on mid $30k vehicles. And that's just the battery.

$185 - .35 equals $125. Thirty percent due to the GF and about five percent due to cell improvements. Panasonic and Tesla both have repeatedly said that the GF will conservatively reduce pack costs by 30%, and Elon and JB have said that when the. GF starts producing cells there will be a "moderate, not big not small" improvement due to cell chemistry.

There are hundreds of members on this forum at any given time, and thousands of members. Mr. Mcrat is not the only person with Manufacturing experience here...

Normally on this forum when someoe states that they have professional experience it's because they can't make a convincing case.

 

[jhm]

Personalized search results?

(I'm not getting this on my phone or my work computer)

Jim (@jhm) needs a new profile picture with some nicer curtains in the background. Seriously.

Oh, this saddens me. They are not curtains. They are actually quite lovely paintings where I teach yoga.

 

[AlMc]

I feel calmer and more focused already.

 

[MikeC]

Looks like an awesome hire according to his Linked In page. Far deeper manufacturing background than the previous guy.

I think as the pieces like this start to fall into place - and people see that Elon is going to be able to, once again, accomplish what the naysayers thought he couldn't - the share price will rise accordingly.

 

[SteveG3]

Jim Cramer (whose said such things as

) says Elon is getting away with murder for even publicly stating the new production goals. Peter H. just left a very successful 22 year career at Audi to take on the challenge of those goals. Perhaps even casual observers will start to realize the likes of Cramer have practically been getting away with murder by managing to stay on the air.