Short-Term TSLA Price Movements - 2016

[neroden]

I've appreciated what you've contributed to the board. I always learn from your posts. I'd love to hear your analysis on where you think demand will end up for the X and S this year and the next few years.

I'm currently guessing -- totally a guess -- that S will stay sort of flat at 50-60K and X will rise to sell about as many as S (+ or - 20%). I figure X got worse reviews than S, so -20%, but SUVs are a larger market than sedans particularly in China and the US, so +20% and it's about equal. X seems to be totally production-limited still, and S... well, we've seen some sales drops and some evidence of inventory cars, so it may actually be flatlining. I'm a pessimist, so demand might be higher than that. Any serious entry into new markets will boost demand. So will providing service centers to markets which don't have them.

And so will any price cuts, and we very well might see some price cuts as the Gigafactory goes into full production. If production allows, Tesla may cut the profit margin per car and increase the volume to generate more money.

My concern is that Model S demand may plateau at 50-55K for the next few years.

Why is this a concern? If they keep doing this at these prices is this really a problem for the company? I think IIRC (I could be wrong) the production line can only handle about 100K, and if that's equally split between S and X, that's it. Remember Tesla originally thought they'd sell 20-25K Model S per year *at a significantly lower base price*

Obviously it's absolutely necessary to sell Model 3; it's the only way to get the volumes necessary to cover the fixed costs and make significant amounts of profit reliably.

 

[neroden]

Bob Lutz, a so called "expert" in the automotive industry once stated "gull wing doors on MX was unbuiltable."

Now we have another expert claiming Elon's post to be impractical. Well, you guys can make your own judgement on this.

Yeah, I'm not even an expert, just an educated amateur, but anyone who looks at the geometry of New York City or San Francisco streets knows Elon's barking up the wrong tree with his views on mass transportation. I'm surprised Elon hasn't looked at the geometry himself, honestly, but I suppose he's been busy. I just hope he does look at it before wasting stockholder money.

I realize there are a lot of people on this forum who worship the ground Elon walks on. I think his open admission of his own mistakes at the last Tesla annual meeting should have been a corrective to that. He's a great, very honest guy, he just hasn't done the most basic research into the basic questions of mass transportation.

 

[dakh]

@neroden, not a bad idea to exhale and just wait to know what the proposed solution is. That blog post you linked to has at least a few assumptions that to my eye (not trained in specifics of urban transport) look like based on convention. Maybe they're thinking about some kind of mothership bus with pods that can detach and go surface street speeds only, maybe there's a system of various sized vehicles and you have to transfer between them, maybe there's something else. But I rate the probability that they have considered arguments presented, looked at what is possible when you make a "bus" dispatchable to demand, and figured out a way to play it that is efficient as much higher than ignorance that you claim it is.

edit: yeah, I've read/skimmed the article linked from the article you linked. It's BS. His perspective is restricted to the current model's limitations. If there's no driver, per mile cost is order(s) of magnitude lower, and dispatching and routing is dynamic not static like it is now the picture changes completely and is not governed by the rules he describes. Also consider the effect on city traffic if people have very little reason to use personal vehicles. They do it now exactly because of the issues with mass transit that are described in the article. That don't exist in a dynamic dispatch solution. Sorry I call BS on your statement that Musk is full of *sugar* on this one. He might be, but your reasons are not convincing.

 

[neroden]

The chance that Elon has considered the actual dynamics of people moving during rush hour in a major city is very low. Here's why:
-- First, he has given zero indication that he understands any of the basics, and has repeatedly indicated that he doesn't (see #3)
-- Second, remember that this is a company which didn't calculate the cost of unlimited Ranger service before offering it (causing them to quietly stop offering it after a year or two). They *do* jump into things without analyzing them properly. And the "master plan part deux" is an off-the-cuff remark pretty much.
-- Third, this is a man who claimed off-the-cuff that Hyperloop would be much cheaper than a high-speed railway, without apparently realizing that most of the cost of a high speed railway is in civil construction, and Hyperloop has exactly the same civil construction costs; and who claimed that Hyperloop could take sharper turns, without realizing that turn radius on trains is limited only by passenger comfort; and who made the *exact same mistake* with Hyperloop that he's making with his bus ideas, not understanding the point of the word "mass" in "mass transportation" (Hyperloop as proposed has significantly lower capacity than a high-speed train). This is sloppy stuff, and the best I can say about it is that he didn't put any of his own money into it, which shows some wisdom.

Hopefully Tesla will actually consider the dynamics of people moving during rush hour in a major city before spending stockholder money on bad ideas. I actually think there is a fairly high chance they will do this. The "Secret Master Plan Part Deux" is clearly full of off-the-cuff speculation, and hopefully some actual analysis will happen before committing to projects. Maybe they could start by hiring someone who has some sort of experience in the field, even a little. (For another example of off-the-cuff ignorance, "transition the role of bus driver to that of fleet manager" makes no sense; there already *are* fleet managers and I can't see why you'd need to hire *more*; the trend is actually to automate that.)

Financially speaking, the busmakers are all going electric ASAP, so Tesla would be competing based on other distinguishing factors. Automating buses isn't that hard, though, because of predictable routes, so that won't be a distinguishing feature for long either. Going into this market without understanding the market would be bad. Anyway, I figure Musk is probably smart enough to stay out of that business once the competition is already operating (full-size) automated electric buses... which will probably happen on the same day fully-automated vehicles are allowed in China.

I gotta say, I don't know as much about trucking, but the Master Plan idea for a tractor-trailer look really solid (and has someone who actually knows tractor-trailers heading it). Should be a great business, since there's very little competition right now and very little on the horizon.

 

[jhm]

For those who want to know, Jarrett Walker, a professional public transportation consultant (who is also a big supporter of automation) has explained better than I can, and more politely, why Musk is being really dumb and ignorant about *mass* transportation: Does Elon Musk Understand Urban Geometry? — Human Transit

Read that. Then you'll understand why Musk doesn't know what he's talking about. And honestly, if Musk read it, he'd probably change his views in about ten minutes.

Jarret Walker is a mass transit consultant. He seems outright hostile to Musk's suggestion. He imagines that Musk intends to take riders out of packed large busses and put them into put them two at a time into smaller vehicles, which of course would crowd the streets. This is an absurd, strawman interpretation of what Musk is propsing. He is clearly wanting to increase ridership of mass transit in lieu of building cars that are cheaper than the Model 3. Musk clearly sees the need to reduce vehicle miles traveled. The challenge is to design mass transit options that encourage people to move away from personal autos and into higher density vehicles. Smaller autonomous vehicles can help feed passengers into higher density busses and trains. So product innovation can give transit planners new options for improving service and boosting ridership.

Walker seems to dismiss Musk out of hand and attributes the worst sort of elitist motives to him. It appears to me that Walker feels professionally threatened by Musk. Mass transit is an incumbent industry that is enormously dependent on public funding. It's understandable the Walker would feel his ties have been stepped upon.

 

[DrJohnM]

Another endorsement for self driving cars...

Volvo Cars Plans a Self-Driving Auto by 2021, Challenging BMW

Volvo Car Group plans to sell a model able to pilot itself down the highway by 2021, joining BMW AG in a promise of self-driving technology within five years.

 

[hobbes]

Don´t know if this was posted before, can´t quite keep up with all the posting here:
White House unlocks $4.5 billion for electric vehicle infrastructure and announces new EV programs

Regarding the public transportation discussion, I really like Elon´s ideas. Where I live regular busses are just too big when added to the regular car traffic. I believe the seperation between private (one owned car per person/household) and public (big buses right now) will soften, with people being able to share their private cars (as Elon suggested in the new Master Plan) with a few friends/neighbors or anyone, regular car sharing, small autonomous buses and maybe in some places where many people need to be moved along the same route still bigger buses/trains.

 

[WarpedOne]

a professional public transportation consultant

This is not a qualification but disqualification. The mess of public transport is not against their teachings but because of their teachings.
P2P is the name of the game. Buses are not the problem, bus stops are the problem. Their 'predictable routes' are the problem.

Public transport of 21st century looks like this:
- I enter the desired target location into mobile app
- the system calculates which bus is the most optimal to pick me up
- the system calculates optimal route to my target location (an all other passenger that are currently on board)
- system gives me options to wait where I currently am or to go to next crossing where some other bus can pick me up sooner
- system gives me option to announce my exact location, time and target location in advance
- system sends the bus to pick me up

Bus stops, routes, timetables don't mix with computer age.

 

[Matias]

Possibly faster.

Much slower than existing metro rail systems, and slower than existing light rail systems.

A bit less than taxis. But the congestion level is almost entirely determined by the drivers of private cars. In the busiest, most popular locations, induced demand causes them to fill up any available space, if they're allowed in. Enough private car drivers have weird biases about this that they'll drive their private cars even if it's significantly *slower* than the alternatives. In a city big enough and dense enough to need *mass* transportation, you *cannot* avoid congestion as long as you allow private cars into the lanes. Heck, if the lanes open up enough, you even get joyriders clogging them up.

Yeah, cheaper than a private SUV!


Interestingly, elevators actually have a problem with scaling up to huge passenger volumes, you just don't see it very often because most buildings don't have nearly enough people travelling for it to be an issue. It shows up in skyscrapers where added elevators to combat the traffic start crowding out rentable space.

Look, this is pretty much automated taxis. There's massive inefficiency in taxis right now -- drivers all clustering around the most profitable locations, for example -- so automated taxis are great. But it isn't *mass* transportation; it doesn't scale up. Consider what percentage of people take taxis vs. subways in major cities which have both. It's not just due to the price... it's because during rush hour, the taxis are stuck in traffic, and the subways are actually *faster*.

Mass transportation is what you need when you just have so many people moving that you can't give everyone their own two-ton armored vehicle and still fit them into the street. (And the distances are too far to walk.) That's why it was called "mass" transportation.


Maybe, but it'll face the same congestion as Uber or a cab. In rush hour it will be slower than a subway, metro, light rail, or Vancouver Skytrain. (Look, fully automated electric trains, already in use.) This sort of "intermediate" option is not mass transportation, it's a driverless taxi.

Which is fine, except that Musk claimed he was addressing "high passenger-density urban transport". Which shows that he *does not know what he's talking about*, because he immediately proposes smaller buses which have inherently lower density.

I understand your points; driveless taxis can't substitute bus and rail in dense urban areas. But it doesn't need to be "one size fits all" solution.

There are plenty of areas (rural and suburban) where this can work.

 

[Matias]

Bob Lutz, a so called "expert" in the automotive industry once stated "gull wing doors on MX was unbuiltable."
.

Well, Elon has basically admitted that they were a mistake..

 

[Tslynk67]

So, looking ahead to SMP3, I predict:

- Earth's diminishing lithium supplies mean branching-out to Kuiper-Belt asteroid mining
- Tesla and Space X to merge, new name "The Company"
- The mining ships will be fully-autonomous, run by AI Minds called Mother
- Some ship staff will actually be androids
- Still manual labour jobs foreseen, especially in cargo bays
- Mineral exploration seen as a fantastic opportunity to encounter alien life-forms

You heard it here first folks!

 

[DrJohnM]

This is not a qualification but disqualification. The mess of public transport is not against their teachings but because of their teachings.
P2P is the name of the game. Buses are not the problem, bus stops are the problem. Their 'predictable routes' are the problem.

Public transport of 21st century looks like this:
- I enter the desired target location into mobile app
- the system calculates which bus is the most optimal to pick me up
- the system calculates optimal route to my target location (an all other passenger that are currently on board)
- system gives me options to wait where I currently am or to go to next crossing where some other bus can pick me up sooner
- system gives me option to announce my exact location, time and target location in advance
- system sends the bus to pick me up

Bus stops, routes, timetables don't mix with computer age.

Go to somewhere like Kenyia and they use microbuses that pick up and drop off anywhere on the route.

 

[Yggdrasill]

I understand your points; driveless taxis can't substitute bus and rail in dense urban areas. But it doesn't need to be "one size fits all" solution.

There are plenty of areas (rural and suburban) where this can work.

My guess is that small autonomous ~8 passenger buses can replace something like 95% of current buses without increased congestion. And also increase bus ridership by at least a factor of three in the developed world. Very few places are sufficiently dense urban areas that current sized buses are ideal congestion-wise. They're sized to reduce the number of drivers to the number of passengers as much as possible.

Actually, when I think about it, there was a bus company that tried to make a go at running small ~10 passenger buses here, "Norwegian on wheels". The driver salaries made them go bankrupt, but the service was great for as long as it lasted. During the day you could go to the bus stop and wait a maximum of 20 minutes before a bus came along, and at night it was an hour. Now, with the conventional buses, we're back to an hour during the day and up to four hours at night. It's pretty much useless.

 

[Gerasimental]

Another endorsement for self driving cars...

Volvo Cars Plans a Self-Driving Auto by 2021, Challenging BMW

Volvo Car Group plans to sell a model able to pilot itself down the highway by 2021, joining BMW AG in a promise of self-driving technology within five years.

Will be an EV too.

 

[jhm]

Ability of the trucks to run on battery for a few miles off the wire. So really this is made possible by battery improvements. Interesting, eh?

A few years ago, you would have had to have complicated trolley-wire junctions at every junction for each truck to diverge and park. Yeeech!

Hybrid technology would have sufficed.

 

[Gerardf]

Now that we are a few days after the MP-2, can I suggest that we try to limit post in this thread to Short-Term Share Price movement topics.

Most of the discussions on the MP-2 topics are long-term effects over a timeline of 10 years, and some of the topics discussed deserve their own thread so the interesting thoughts, that are in many of these posts, do not get lost in the almost 26.000 (!) posts here.

 

[imherkimer]

Well, Elon has basically admitted that they were a mistake..

Ummm, no.

 

[bookfast]

$500 kWh is crazy. Tesla announced a while ago that their pack cost is under $190 per kWh. That surprised quite a few people. I had previously analyzed their costs and $190 was the worst case price. I believe it's under $170 kWh.

Yes that is Tesla's estimated cost, but we must consider consumer cost. Right now they charge $600/kWh for the 60 to 75 upgrade? So lets call it $300/kWh. We are still talking trillions of dollars of batteries to be paid up front by truckers/trucking companies, etc, vs billions of dollars of infrastructure for overhead lines invested by government and recouped on a per use basis through tolls. Of course there is a huge inertia to overcome to get the infrastructure built.

 

[bookfast]

Now that we are a few days after the MP-2, can I suggest that we try to limit post in this thread to Short-Term Share Price movement topics.

Most of the discussions on the MP-2 topics are long-term effects over a timeline of 10 years, and some of the topics discussed deserve their own thread so the interesting thoughts, that are in many of these posts, do not get lost in the almost 26.000 (!) posts here.

agreed. sorry.

 

[MTL_HABS1909]

Well, Elon has basically admitted that they were a mistake..

Not even close. He said they maybe shouldn't have been included in the first version of the X, but in no way did he say they were a "mistake". Please get your facts straight before posting misinformation.