Short-Term TSLA Price Movements - 2016

[neroden]

Take a look at ev-cpo.com and sort by VIN. For example, the consecutive range of VINs from 137700 to 137739 was available as inventory sale (some got sold but the series is still visible). You can find such ranges of 10-20 cars at a time regularly in the list. Those cars were specifically build for inventory and in the meantime are used as loaners.

They've stopped using them for loaners (to avoid the depreciation hit).

So Tesla now does have a deliberate policy to produce some inventory. How much? Maybe it's just enough to collect money with the minority of rich, impatient, buyers who walk in the door and want their car NOW NOW NOW. That might make sense even if Tesla is sticking to the build-to-order paradigm; there are some people who simply won't wait for a custom-built car, and it's worth holding a couple of inventory cars at each store to get their money.

 

[Gerardf]

< deleted in order not to bother those who blocked you with your post

That is no proof of inventory, so I assume you indeed just made that story up.
The other 7 points you bring up can be discussed in the demand thread, as I requested you to move this conversation to.

 

[pGo]

Tesla continues to puzzle me in their execution. The products are world class, but the execution requires tons of improvement. Enough talking of the past two years. And enough showing day dreams. Enough raising money at 242 &215s at every few quarters if you can't show execution. Enough asking to believe on a 10 years horizon where you are not executing a two years plan properly. Please do less talking and more doing.

I can see two goals missing this time around.
- missing 80-90k deliveries. Even if I believe all the words you say, 80k delivery isn't possible. Q4 delivery report suggested MX at 250/wk, and Q1 report suggested they are getting closer to 750/wk and mid may Tesla executive presentation suggested they are at 2000/wk. OK, that's not a lie. But why always optimistic, damn it when you end up eating your own words a few weeks later.
- I can see Tesla releasing MX 65 D and non D to spur demand. This, along with MS 60, a very good offering which I see as high as 30%+ MS sales will guarantee in my books Tesla will NOT meet 30% MS and 25% MX margins end of the year.

 

[neroden]

Open market value: Just under $50k. Realize this is RWD, has no sensors, no folding mirrors....We all call them 'classic Ss'

The GRV was devised early on in TMs history and has been discontinued IIRC.
EM initiated it and personally guaranteed it. It was initiated because there was concern about what the R esale value of the early Ss would be. So, he guaranteed that if you financed the car through one of TM's partner banks that he and TM would guarantee, in writing, a specific dollar amount that TM would pay you if you turned the car back in between 36-39 months after purchase.

They pegged the dollar amount based on the residual % of what a 3 year old MB would bring... % wise if the original purchase price.

Ahhhhh, you're suffering from having bought a fully loaded model. My "classic S" is a not-very-loaded S85 and seems to have about the same open market value as yours. From what I can tell, the open-market residual value of the base model is above the GRV. But the residual value of the options is below the GRV, even though the GRV discounts the options faster than it discounts the base model -- most of the options in practice seem to depreciate to 0 instantly. So Tesla will only be on the hook for the GRV for heavily loaded models.

 

[AlMc]

Ahhhhh, you're suffering from having bought a fully loaded model. My "classic S" is a not-very-loaded S85 and seems to have about the same open market value as yours. From what I can tell, the open-market residual value of the base model is above the GRV. But the residual value of the options is below the GRV, even though the GRV discounts the options faster than it discounts the base model -- most of the options in practice seem to depreciate to 0 instantly. So Tesla will only be on the hook for the GRV for heavily loaded models.

Correct. IRRC, the GVR was based on a higher percentage residual for the base (S60), then a smaller percentage residual for ALL options...bigger battery, P, +, etc.. So, the P85+ was a little more fun to drive than your S85....but I have 'paid' for that fun with a lower residual on the options.

 

[AlMc]

From DB: via Seeking Alpha but it is a note from DB that reinterates 'hold' and PT of $295

Tesla's recent production miss underscores risks - Deutsche Bank

 

[larmor]

From DB: via Seeking Alpha but it is a note from DB that reinterates 'hold' and PT of $295

Tesla's recent production miss underscores risks - Deutsche Bank

No comment on solar city offer or pivot to energy company....

 

[geneclean55]

No comment on solar city offer or pivot to energy company....

From the note

"We currently see at least 3 significant drivers for the stock: 1) Increasing visibility into TSLA’s business plan; 2) Re-focusing Tesla’s strategy on execution of this plan (most investors, and we suspect most Tesla customers, have not yet signed up to all aspects of management’s plans for a broadly defined sustainable energy company)

 

[postpast]

Tesla continues to puzzle me in their execution. The products are world class, but the execution requires tons of improvement. Enough talking of the past two years. And enough showing day dreams. Enough raising money at 242 &215s at every few quarters if you can't show execution. Enough asking to believe on a 10 years horizon where you are not executing a two years plan properly. Please do less talking and more doing.

I can see two goals missing this time around.
- missing 80-90k deliveries. Even if I believe all the words you say, 80k delivery isn't possible. Q4 delivery report suggested MX at 250/wk, and Q1 report suggested they are getting closer to 750/wk and mid may Tesla executive presentation suggested they are at 2000/wk. OK, that's not a lie. But why always optimistic, damn it when you end up eating your own words a few weeks later.
- I can see Tesla releasing MX 65 D and non D to spur demand. This, along with MS 60, a very good offering which I see as high as 30%+ MS sales will guarantee in my books Tesla will NOT meet 30% MS and 25% MX margins end of the year.

There is nothing to be puzzled by. They are working their hardest, but auto manufacturing is stupid difficult. VW had 1/4 Trillion in revenue and 100 years of experience last year; yet their market cap is barely above Tesla's and their whole business model could fail.

I think the X is expensive to build and you will not see any incentives for them, The S will see discounts because the 3 is in the same wheelhouse. The question will be; what is the profit margin in the 60G Model S.

 

[Sancho]

As I posted here last week, I was informed with 2 days left in the quarter that my Model X arrived and I should pick it up in the next 2 days. I have a flexible enough schedule to make that happen, but others wouldn't. There will be a lot of deliveries this coming week throughout the country.

It's pretty clear to me that Tesla finally got its act together on the Model X mid-quarter, and then feverishly tried to deliver cars by June 30, but just ran out of time. Hence the unusually large number of cars "in transit."

Yes, I would prefer if Elon was more conservative in his projections and delivered consistent positive surprises than negative surprises. Its a bad enough track record that we should all be skeptical about Model 3 delivery dates within 6-12 months of projection . Greater skepticism than that, however, is not warranted. The Company continues to perform well in every metric.

Even if Model 3 is a year late, TSLA is still a screaming buy. The demand is proven. The competition will take years to catch up. Tesla can raise funds when and if needed by any delays or hiccups in their plan.

 

[Darren12]

Model S & Model X

You'll notice that the web site has been redesigned to equally market the Model X and Model S. This is a big milestone for the company. For the first time, they're no longer cautious about creating demand for the Model X.

That's good news! However it only seems to be redesigned for the American version of the site. On my browser, all of the other countries are still showing the previous site with the Model S. Perhaps they are still in the process of updating the rest.

 

[imherkimer]

Even clicking on your link brings only Model S. Maybe the new page only showed briefly and was taken down for debugging already or some such

 

[sundaymorning]

So a few have mentioned that they would prefer an Apple type of "under promise" and "over deliver." This is quite short sightedness but I don't blame you bc this is the short term thread. My main question for investors who keep referring to Apple is why not just put your money into Apple? They under promise all the time and are almost guaranteed to beat short term. Is it because Tesla has more growth trajectory and potential that draws you here? If that's the case, then you'll just have to readjust your investment time horizon bc Tesla builds complex cars, delays will happen..

 

[postpast]

The Company continues to perform well in every metric.

Other than profit... Which is the Achilles' Heel of the whole industry that Tesla is in. Tesla could produce a million cars a year within 5 years; but that is significantly less than Buick sold in China last year.

Everybody is caught up in the ability of Tesla Growth to even think of if Tesla will be able to differentiate itself, profit wise, compared to the competition.

 

[RobStark]

Tesla could produce a million cars a year within 5 years; but that is significantly less than Buick sold in China last year.

“That’s a Buick?” In China, unlike the U.S., there’s no doubt

GM sold 986k Buicks in China last year. That is GM's biggest volume brand in China.

So 986k is not significantly more than 1000k.

 

[postpast]

“That’s a Buick?” In China, unlike the U.S., there’s no doubt

GM sold 986k Buicks in China last year. That is GM's biggest volume brand in China.

So 986k is not significantly more than 1000k.

You are correct, I mis-read a different article. I do believe the point still stands.

 

[Yggdrasill]

This argument has been used since Q4 2015, so forgive me for not believing it until it actually happens. Disclaimer: huge long-term bull, but long-term is being pushed further and further out every week it seems.

It's to an extent true that in every quarter it seems like deliveries for next quarter will be awesome. I expected the Model X to start mass deliveries in Q3 2015, then Q4 2015, then Q1 2016, but they didn't really properly start until Q2 2016.

But that is also why I think this next quarter will likely be quite awesome. With 5000+ cars in the pipeline, and stable production close to 2000/wk, really the only reason why Q3 would fall flat is demand, and I'm not at all worried about demand. I would be very surprised if we don't see more than 25k deliveries in Q3. To the point where if Tesla doesn't succeed in delivering 25k+, my confidence in Tesla would really be rattled.

Once 25k deliveries in Q3 is achieved, meeting guidance will be easy. They'd really only need to repeat their accomplishment for Q4. While I would expect them to make an effort to repeat the achievement from Q4 2015, clearing the pipeline almost completely. I would expect Tesla deliveries for the year pretty much right in the middle of the guidance of 80-90k.

But again, if Tesla doesn't kick ass in Q3, that goal will likely be impossible.

Tesla has a lot more to prove before I stop trading short and medium term profits as they come around. The thing that really worries me long-term now is that the combination of very poor short to medium term decisions (not having a solid financial quarter, SCTY debacle, greatly accelerated 3 ramp) is that there's a very good possibility a significant amount of cash (SCTY buy, unforseen 3 ramp issues) will be raised at significantly lower TSLA prices. A several-billion dollar dilution wouldn't be a huge deal at 280, but it will heavily slash valuation if the stock drops down to the mid-100s and heavy dilution then occurs--and I think this is a very real possibility due to shaken institutional investor faith and Elon valuing reckless growth above all else.

I think the increased revenue coming in from the Model S and X will very much help.

Most likely, Q2 was the last quarter where Tesla delivers under 25k cars. Consistently delivering over 25k cars per quarter will definitely help the financials.

I think the recent secondary, and timing of the SCTY acquisition point to the "Elon bailing out SCTY from potential bankruptcy" theory, so SCTY possibly becoming part of TSLA greatly disrupts my long-term faith in the company.

I'm pretty much neutral to the SCTY acqusition. I doubt it will impact Tesla substantially postively or negatively.

I'm probably not buying unless TSLA dips below 150-160 without actual proof that things aren't running out of control at TSLA, and I may be looking into additional short or medium term exits before the next ER for my shares bought in the 190s. It'd suck to lose on a large upswing, sure, but better to lose some profits then to potentially have a lot of money locked away in a lowly-valued TSLA for a long time.

I may be looking to unload some shares at 250, if we get there before Q3, but I will also be looking to buy more at 190 or less.

 

[RobStark]

You are correct, I mis-read a different article. I do believe the point still stands.

It does not. ICEv(with the exception of the premium end) have essentially become commoditized and manufactures compete with razor thin margins.

BMW and MB have much better margins than GM and VW Brand. Audi and Porsche are in the premium end.

One day BEVs will suffer the same fate but not anytime soon. And IMO it will be further yet when Premium BEVs become commodotized.

And the implied point is an even bigger miss. Buick is a niche brand in North America. Implying that a niche brand in China can outsell Tesla globally. In China, Buick is a step up brand that does very large volume; roughly 1 in 25 cars sold in China is a Buick. That includes very low end $8k developing market only cars.

 

[postpast]

It does not. ICEv(with the exception of the premium end) have essentially become commoditized and manufactures compete with razor thin margins.

BMW and MB have much better margins than GM and VW Brand. Audi and Porsche are in the premium end.

One day BEVs will suffer the same fate but not anytime soon. And IMO it will be further yet when Premium BEVs become commodotized.

And the implied point is an even bigger miss. Buick is a niche brand in North America. Implying that a niche brand in China can outsell Tesla globally. In China, Buick is a step up brand that does very large volume; roughly 1 in 25 cars sold in China is a Buick. That includes very low end $8k developing market only cars.

The three most popular Chinese models of Buick are over 25,000 USD so it is premium at least in that market.

Cars, ICE or otherwise, are commodities. Audi and Porsche are part of the VW group and stock is worth practically nothing, much less than Toyota or other Japanese companies that live on slim Margins.

 

[ev-enthusiast]

Tesla expands to Taiwan starting with a store in Taipei