Short-Term TSLA Price Movements - 2016

[JeffreyY]

Tesla Model X Deliveries Expand to Canada, Europe, and China in Q2 -- The Motley Fool

 

[Tenable]

Tesla Model X Deliveries Expand to Canada, Europe, and China in Q2 -- The Motley Fool

Am I reading it incorrectly? I thought it was reading 206.5? :-/

 

[Gerardf]

TSLA now at 206,5 in Europe (also at nasdaq.com)

But note that the general markets are down. (German DAX at -/- 1,5%)

 

[Tenable]

Tesla Model X Deliveries Expand to Canada, Europe, and China in Q2 -- The Motley Fool

Am I reading it incorrectly? I thought it was reading 206.5? :-/

TSLA now at 206,5 in Europe (also at nasdaq.com)

But note that the general markets are down. (German DAX at -/- 1,5%)

Thanks for the info Gerard. Tomorrow looks to be a rough day for my short term TSLA and SVXY options.

 

[ev-enthusiast]

Personally I like the June production volume very much. Looks like Q3 will be the first quarter with Fremont factory cranking out both Model S and X together. We absolutely need that good start to get a high cumulative delivery number for all three months during a quarter.

Finally!

 

[sdtslafan]

Saudi Bomb Attacks Could Lift Tesla Motors Inc (TSLA) Stock Price

Now with the Model S 60 kwh in the line up, the price of independence from Oil and the Middle East just got cheaper.

On a separate note, current premarket is at roughly 207 USD. Attention now shifts to the next deliveries report, with a whopping 5100 cars in the pipeline which should pad Q3 numbers nicely. Congratulations to the shorts on seeing the drop before it happened. Hopefully it will at least cover the interest on your borrowed shares.

 

[VanE]

There were quite a few posts here in the last couple of days that said that the Q3 numbers will definitely be great because TM has 5100 vehicles in the pipeline, and they added those vehicles to the average production rate of Q3. But this is wrong, because TM will always have a certain delivery time and thus the higher the production rate, the more vehicles in the pipeline (or they have to invest in their distribution system).

If Tesla wants to achieve their minimum goal of 80.000 vehicles delivered in 2016, they need to deliver 80.000-14.820-14.370 = 50.810 vehicles in Q3 and Q4. They said they were able to achieve an output of 2200 vehicles in Q3 and 2400 in Q4. Imagining linear progress this means that they need to deliver 50.810/(2100+2300)*2100 = 24.250 vehicles in Q3 and 26.560 vehicles in Q4.

Having one week downtime in Q3 and using the same delivery time (about 2,5 weeks), TM could deliver:
Using an average of 2000 vehicles per week: ((13-1)*2000)+5150-(5150/2000*2200) = 23.485

Using an average of 2100 vehicles per week: ((13-1)*2100)+5150-(5150/2000*2200) = 24.685

So to deliver the 24.250 vehicles in Q3 they need to produce an average of (24250-(5150-(5150/2000*2200)))/(13-1) = 2064 vehicles a week.

This means that the 80.000 vehicles delivered in 2016 isn't completely of the table, but it will be tough and they can't afford any more hiccups or other big problems on the production line. I try to stay positive and truly hope that they will be able to make it (no pun intended), but I am very skeptical on this years guidance. (but remain very bullish on the long term)

 

[VanE]

The European markets started of around $206,00, but since the US pre-market opened it went up to about $208,00.

I am very interested in what will happen in the next couple of days, I expected a gigantic drop after such bad delivery numbers (and slightly better, but still lousy production numbers), but it looks pretty good so far. We started last week of even lower.

 

[NOLA_Mike]

Tesla's stock down sharply after Q2 delivery miss

Comments from Deutsche Bank’s Rod Lache:

"That said, suppliers continue to suggest Tesla has had difficulty maintaining steady production of Model X, with some estimating “up time” is as low as 50%. This is highly unusual for an automaker… so we are not sure whether Tesla has overcome production challenges.

We are adjusting our 2016 estimate to a loss of $0.42 from a profit of $0.09 to reflect the adjustment to Tesla’s Q2 delivery forecast."

 

[Blip]

There were quite a few posts here in the last couple of days that said that the Q3 numbers will definitely be great because TM has 5100 vehicles in the pipeline, and they added those vehicles to the average production rate of Q3. But this is wrong, because TM will always have a certain delivery time and thus the higher the production rate, the more vehicles in the pipeline (or they have to invest in their distribution system).)

In addition, several people seem to make the mistake and double count these numbers every quarter. Previous quarters produced-not-delivered are included as deleivered in the next quarter.

 

[Drax7]

That's funny because 6 weeks ago I predicted that Tesla would do a push for demand very soon if they had any cards up their sleeve, and lo and behold what happened, what might be the biggest push for demand so far with both the S60 and the $1000 discount.



That's also pretty funny as the bulls are clearly the ones who enjoy the echo chamber and cries out every time someone doesn't agree that it is smooth sailing to a trillion dollar market cap for TSLA. I have never seen a bearish poster say they have put someone on ignore, we are not here to ignore the opposite site of the argument and call them trolls, that would be you.

I read your views on solar energy with an open mind, now I see you just manipulate . From here onwards
I will ignore you.

 

[Perfectlogic]

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.

This is a great point (that is guaranteed dislikes). There is very little talk about profitability and margins here, people just assume that 25% is great margins and obviously makes for a very profitable product without understand the size of Tesla's overhead. Amazon has a gross margin of 33%, but they are only slightly net profitable. It will be interesting to see if they can finally stop burning through equity at least in the coming quarters as deliveries reach 20k+.

You can't compare TSLA's GM with that of Ford or GM, because they don't spend money on showrooms and charging stations. Those costs come out directly from the GM. Ford and GM also puts R&D under COGS I believe.

 

[CALGARYARSENAL]

If down 3.5% is all the bears can muster this morning, I would be covering. This is hilarious.

 

[MitchJi]

There were quite a few posts here in the last couple of days that said that the Q3 numbers will definitely be great because TM has 5100 vehicles in the pipeline, and they added those vehicles to the average production rate of Q3. But this is wrong, because TM will always have a certain delivery time and thus the higher the production rate, the more vehicles in the pipeline (or they have to invest in their distribution system).

I think that you are partially correct. I think that part of the reason for the high number of undelivered cars is the higher production rate, but it was also due to a substantial number of cars going overseas. In q4 Tesla will do a better job of prioritizing domestic production (they always do).

 

[Yggdrasill]

There were quite a few posts here in the last couple of days that said that the Q3 numbers will definitely be great because TM has 5100 vehicles in the pipeline, and they added those vehicles to the average production rate of Q3. But this is wrong, because TM will always have a certain delivery time and thus the higher the production rate, the more vehicles in the pipeline (or they have to invest in their distribution system).

If Tesla wants to achieve their minimum goal of 80.000 vehicles delivered in 2016, they need to deliver 80.000-14.820-14.370 = 50.810 vehicles in Q3 and Q4. They said they were able to achieve an output of 2200 vehicles in Q3 and 2400 in Q4. Imagining linear progress this means that they need to deliver 50.810/(2100+2300)*2100 = 24.250 vehicles in Q3 and 26.560 vehicles in Q4.

Having one week downtime in Q3 and using the same delivery time (about 2,5 weeks), TM could deliver:
Using an average of 2000 vehicles per week: ((13-1)*2000)+5150-(5150/2000*2200) = 23.485

Using an average of 2100 vehicles per week: ((13-1)*2100)+5150-(5150/2000*2200) = 24.685

So to deliver the 24.250 vehicles in Q3 they need to produce an average of (24250-(5150-(5150/2000*2200)))/(13-1) = 2064 vehicles a week.

This means that the 80.000 vehicles delivered in 2016 isn't completely of the table, but it will be tough and they can't afford any more hiccups or other big problems on the production line. I try to stay positive and truly hope that they will be able to make it (no pun intended), but I am very skeptical on this years guidance. (but remain very bullish on the long term)

You're assuming the current number of cars in the pipeline is "correct" relative to the current production. That probably isn't true.

How many cars were in the pipeline at the end of Q4 2015? Maybe 1000? That was with an annual production rate of around 56k. It stands to reason that Tesla could schedule deliveries such that the pipeline would be much closer to empty than what you're assuming. I think something like 2000-4000 cars in the pipeline is reasonable. Let's say 4000 in Q3 and they push it down to 3000 for Q4.

If so, assuming 12 weeks of production and 2000 cars/week, the equation for deliveries in Q3 would be:

((13-1)*2000)+5150-4000 = 25.150

And assuming 12 weeks and 2100 cars/wk in Q4, the equation for Q4 would be:

((13-1)*2100)+4000-3000 = 26.200

Tesla would thus meet guidance by delivering 80.540 vehicles.

This is with a *slight* production ramp, 1 week off in each quarter, and a number of vehicles in the pipeline relative to production which is higher than they have achieved in the past. This isn't an optimistic estimate.

 

[VanE]

Yes, and there might have been some issues with the deliveries this quarter (I couldn't find the in-transit vehicle numbers for the last quarters, if somebody knows where to find those that would be greatly appreciated!), but I like to be conservative (if Tesla isn't gonna do it someday else has to )

 

[X Yes?]

This is a great point (that is guaranteed dislikes). There is very little talk about profitability and margins here, people just assume that 25% is great margins and obviously makes for a very profitable product without understand the size of Tesla's overhead. Amazon has a gross margin of 33%, but they are only slightly net profitable. It will be interesting to see if they can finally stop burning through equity at least in the coming quarters as deliveries reach 20k+.

Good point. With the ongoing warranty work required in Q2 for the Model X, we will see margins under pressure at ER. It will be interesting to see how far they are willing to pull the margin lever to sell 50K+ cars in Q3 and 4

 

[aznt1217]

A little lesson through the noise and delivery phasing arguments.

Before Model S came out, people said it couldn't be built.

It was built.

After it was released and delivered, people said there's not enough demand for 20k cars.

There was demand.

Then it was said you can't make and deliver 50k cars annually.

It was done.

Now it's the same thing again. It can't be built. It can't be sold. Keep fooling yourselves. Or perhaps just take a trip to your nearest Mercsdes and BMW, then drive a Model S/X and see if you can "get it"

 

[VanE]

You're assuming the current number of cars in the pipeline is "correct" relative to the current production. That probably isn't true.

How many cars were in the pipeline at the end of Q4 2015? Maybe 1000? That was with an annual production rate of around 56k. It stands to reason that Tesla could schedule deliveries such that the pipeline would be much closer to empty than what you're assuming. I think something like 2000-4000 cars in the pipeline is reasonable. Let's say 4000 in Q3 and they push it down to 3000 for Q4.

If so, assuming 12 weeks of production and 2000 cars/week, the equation for deliveries in Q3 would be:

((13-1)*2000)+5150-4000 = 25.150

And assuming 12 weeks and 2100 cars/wk in Q4, the equation for Q4 would be:

((13-1)*2100)+4000-3000 = 26.200

Tesla would thus meet guidance by delivering 80.540 vehicles.

This is with a *slight* production ramp, 1 week off in each quarter, and a number of vehicles in the pipeline relative to production which is higher than they have achieved in the past. This isn't an optimistic estimate.

You are right that the number of in-transit vehicles this quarter might have been greater than average. But 3000 cars in-transit while you're producing 2200 cars a week means that you can get the car in the hands of the customer within 9,5 days on average. I am not an expert on supply-chain logistics, but this sounds as quite a challenge to me! (although this is only the case at the end of the quarter, so as MitchJi suggested they could ship more cars domestically around that time, but still..)

 

[CALGARYARSENAL]

Baird remain bullish buyers with PT of 338.00