Short-Term TSLA Price Movements - 2016

[mmd]

- They hit guidance in 2015. 50-55k.
- May and part of June were plagued by X production problems. This has an effect of S production due to the shared line. Slow S production means slower VIN assignments.
- You reek of desperation when your best case for supporting your sub 70k case is that Elon is lying or that they would shut down the factory for no reason other than to maintain production guidance.

- The original 2015 guidance was 50k-60k, then lowered to 50k-55k, then hit 50,4xx.
- This year's initial guidance was 80k-90k. At that time, I said, it will come down as the year goes by. Now, we have 29k in H1, and 50k more in H2, adding up to 79k. It is already below the low end of original guidance, What do you say to that?

BTW, this is what was said about 2000 a week production in Q3. Not sure if this is definitive about current production rate.

But a high-level overview is just we see demand being fairly strong at an average of 2,000 cars a week and we're able to maintain production at that level, notwithstanding occasional supplier hiccups. And then hopefully, we can grow that a little bit towards the end of the quarter and then a little more in Q4. And our aspiration that's unvarnished here, this is just what we're aiming to do internally is to do a little better than 2,000 a week in sales and deliveries in Q4, combined Model S and Model X. I feel fairly optimistic about achieving that goal. Yeah, I think our core business is actually doing quite well right now.

 

[maoing]

Let's say Q3 average production rate 2k/week as conservative, total 12 weeks. Then minimum 24K cars will be produced. Among 2k/week production rate, half shipped to US market which has 2-week delivery time and half shipped to overseas market which has 4-week delivery time. So total needs 6k to fill up the pipeline. Given 5K alreay in pipeline by end of June, so Q3 would expect to deliver 23k at minimum. But I really doubt so because combined S+X demand not in this level yet, so that's the reason TM even didn't give Q3 delivery guidance in ER.

 

[esk8mw]

You can already see from your own data that the second half of July was slower than the first half (2600 vs 2300). That's the post 60 introduction surge that I mentioned earlier. We are now 7 days on from 8/2 and we have not yet seen 156 000, again a rate that is consistent more with the latter half of July, hence why I wrote that effect seems to be dying down. Also, personally I don't like to take first of month to first of month comparisons. Not every month is equally long and the number of weekends may matter as well. I think it is better to just go 4 weeks back. That way it is always comparable.



If you check that spreadsheet back for April then you can easily see that the VIN assignments were NOT held up during the production troubles. Either the same or at most the day after every single order confirmed, it had a VIN assigned. So your theory does not match the facts.



Well. The problem here is that VIN assignments are always higher than S deliveries (AND S production too!). All the way back to 2012. Consistently 10-15%. And that delta kept growing through periods of relatively flat Model S deliveries (like the last 6 months), while the wait time barely does. This strongly suggests to me that a significant number of VINs are simply never built for whatever reason.

I'm sure there was a post 60 surge; that's not surprising. I think the effect will last longer than a couple weeks, though. Not enough data yet. Car buying takes weeks/months for most people, not days.

There's no definitive way to tell if VIN assignments were held up in April or not. I find it hard to believe demand suffered in the face of the refresh, though.

VIN assignments are not always higher than S deliveries and S production. I track this every quarter. Hell, just look at Q1 2016: 12,103 VINs, 12,851 produced, 12,410 delivered. Q4 2015 same story: 13,273 VINs, 13,530 produced, 17,272 delivered (outlier, pipeline emptying, I know - but production > VINs). Production exceeded VINs in Q2 2015, too - 12,171 vs. 12,807.

 

[Yggdrasill]

To those of you tracking VINs, what is it you are actually tracking? Are these only Model S VINs? I can't at least make the Model X deliveries in Norway fit into the numbers provided: Registreringer av nye elbiler i Norge (List of cars registered in Norway, updated daily.) (Also Model S, if interesting: Registreringer av nye elbiler i Norge )

If you're only tracking Model S VINs, there's no issue if the production is 1000 Model S and 1000 Model X per week.

 

[Nate the Great]

In regards to TE 2.0 product launch (Powerwall). Do we think that it will be released this quarter?

I believe they mentioned it would be on the market in a few weeks.

Second Generation Tesla Powerwall Updates - Gas 2

 

[dandurston]

SCTY ER looks pretty good. Appears to be a moderate beat all around (revenue, loss per share) with fairly positive guidance ahead. Nice increase in the value of the watts installed so even without a renewal at 20 years the installs are theoretically profitable.

 

[SBenson]

SCTY needs a bridge loan almost immediately.

Add that to the Q3 bill folks...

 

[esk8mw]

- The original 2015 guidance was 50k-60k, then lowered to 50k-55k, then hit 50,4xx.
- This year's initial guidance was 80k-90k. At that time, I said, it will come down as the year goes by. Now, we have 29k in H1, and 50k more in H2, adding up to 79k. It is already below the low end of original guidance, What do you say to that?

BTW, this is what was said about 2000 a week production in Q3. Not sure if this is definitive about current production rate.

Also known as hitting guidance in 2015. It was within the initial guidance.

I'd say you have an argument that guidance was lowered from 80-90k to 79,212 - 90k. However, Elon's later words you quoted show an aspiration of 2k/week in Q3 and little over 2k/week in Q4. That would be a lot more than 79,212. So it seems like the new guidance is 79,212 - 85kish.

I think Elon was quite clear on production guidance. 2k/week in Q3, ramping to 2200 at the end of Q3, then 2200 in Q3 ramping up to 2400 at the end.

 

[SBenson]

SCTY cleverly blames Tesla

Now there is a moral responsibility by Tesla to save SCTY.

LMAO

 

[hobbes]

Looking at the demand, the numbers for European registrations in July are just complete - doesn´t look too good. Down 25% from April and 52% from July 2015. Europe has been on a down trend for a few quarters, but on the other hand Asia/Pacific is on a trend up, so they might make up for this (scroll down to "Tesla Quarterly Global Deliveries by Region).

My take is the kind of people that used to "reach up" to a Model S (in a price range where they wouldn´t have bought a car othewise) are now waiting for the Model 3. And Tesla knows that and pushed up production for the 3 accordingly.

 

[schonelucht]

There's no definitive way to tell if VIN assignments were held up in April or not.

Yes, there is. Just check the spreadsheet. Compare order confirmation date (column F) with VIN date (column K). They track all through April.

VIN assignments are not always higher than S deliveries and S production. I track this every quarter. Hell, just look at Q1 2016: 12,103 VINs, 12,851 produced, 12,410 delivered. Q4 2015 same story: 13,273 VINs, 13,530 produced, 17,272 delivered (outlier, pipeline emptying, I know - but production > VINs). Production exceeded VINs in Q2 2015, too - 12,171 vs. 12,807.

Maybe I worded that wrong, I apologize. I meant accumulated VIN assignments versus production. Obviously there are some quarters where it is the other way around but they are rare.

To those of you tracking VINs, what is it you are actually tracking? Are these only Model S VINs? I can't at least make the Model X deliveries in Norway fit into the numbers provided: Registreringer av nye elbiler i Norge (List of cars registered in Norway, updated daily.) (Also Model S, if interesting: Registreringer av nye elbiler i Norge )

If you're only tracking Model S VINs, there's no issue if the production is 1000 Model S and 1000 Model X per week.

I am also tracking X. It's much more difficult than model S though. But we are not at 1000 X. We are hovering around 700, maybe 800 but that is really stretching it.

 

[Yggdrasill]

I am also tracking X. It's much more difficult than model S though. But we are not at 1000 X. We are hovering around 700, maybe 800 but that is really stretching it.

Okay, so VINs are assigned at a rate of 1700-1850 per week, according to you. Maybe there's a Model X VIN buffer (due to production delays/constraints) that they are bringing down by 200-300 per week. That means it's entirely plausible that Tesla is producing around 2000/wk.

 

[dakh]

SCTY cleverly blames Tesla

View attachment 189392

Now there is a moral responsibility by Tesla to save SCTY.

LMAO

This was already stated during the offer discussion, they expected to not be able to finance due to pending offer. Doesn't make that much sense to me but that's not new information. The "bridge loan" from Tesla was portrayed to be needed exactly for that reason, and then they stated it isn't likely to be necessary.

I don't know enough about corporate financing but I'm assuming that if these claims weren't justified/common practice, lots of people would be calling BS on them.

 

[esk8mw]

You know, if I sold all my TSLA in the last minute of trading every day and bought it back right before after-hours trading closes...I'd be a rich man. It reliably drops $1-2 almost every day AH. And the drop has no correlation with SP movement the following day.

 

[racer26]

Okay, so VINs are assigned at a rate of 1700-1850 per week, according to you. Maybe there's a Model X VIN buffer (due to production delays/constraints) that they are bringing down by 200-300 per week. That means it's entirely plausible that Tesla is producing around 2000/wk.

I think this is likely the truth.

Currently, it seems combined S/X demand is around 1700-1800/week. Currently, there is a Model X backlog which is probably being drained.

I think S is probably close to outproducing demand, as I've said before. The overall premium SUV market is bigger, though, so I expect ultimately X will be a larger proportion of the combined output. I suspect Tesla knows this and has plans for it to take about the same share of that market as S has of the premium sedan market.

They might briefly reach a period where they catch up on the backlog before the rise in X demand. If that happens, I expect the shorts will have a field day. "ZOMG! They're building inventory cars, TSLA is about to implode!"

 

[MitchJi]

I'm not looking for an argument. You solicited opinions about a statement and I offered mine, giving the reason for it.

You didn't answer my question. Instead you made contradictory statements about Elon's statements, and you offered an explanation of CapEX vs OPEX, which partly went over my head.

If you think excluding CapEX results in profitability would you mind sharing where CapEx appears in an Income Statement?

I am surprised you think I said that or meant to imply that. For some background I think accounting is more boring than watching paint dry. So I don't even fully understand the implications of your statement.

CapEx does not affect the operating (income) statement until the asset is placed in service, and only then does it start showing up as depreciation and amortization expense as part of COGS and OpEx. Unless the new capital assets they are spending on can be also used for S & X production, why place the new assets in service six months to a year before they can start making revenue-generating products?

If Elon and Jason really meant Capex, the logical inference would seem to be they don't understand the financial terms they are using, and I doubt that.

Is it possible that Elon and Jason are both correct and that you are overlooking something? For example they are buying enough supplies to build 300 cars. The will probably start buying and building some of the production line to build those cars. Does building 300 car on a production line using new capital assets cause the money to be categorized as Capex?

If so we should hope they announce something like this! Mid December news flash:
"Tesla produces 300 cars for test purposes using a production line rated as meeting Alien Dreadnought V0.2 specifications."

I clarify my original question and post it again later.

 

[tander]

Okay, so VINs are assigned at a rate of 1700-1850 per week, according to you. Maybe there's a Model X VIN buffer (due to production delays/constraints) that they are bringing down by 200-300 per week. That means it's entirely plausible that Tesla is producing around 2000/wk.

I think it's worth remembering that there's a segment of buyers for Model S that are just buying it because it's the new hot thing, and have no intention of posting VINs online.

 

[Papafox]

You know, if I sold all my TSLA in the last minute of trading every day and bought it back right before after-hours trading closes...I'd be a rich man. It reliably drops $1-2 almost every day AH. And the drop has no correlation with SP movement the following day.

One key to the drops this month is extremely thin trading. Look today, and in a typical minute you see between 10 and 500 shares traded that minute. It's really easy to manipulate the price with such thin trading. Yesterday's after-hours drop of nearly $3 is a good example. When trading began today, nobody cared about the after-hours drop. If you can make money trading after-hours, more power to you.

Edit: Well, as soon as esk8mw let out his whisper, TSLA jumped $1.50 on 1400 shares traded. Before I could congratulae him on his power over Wall Street, someone sold 360 shares and TSLA dropped $1.50. Sigh.

 

[schonelucht]

Okay, so VINs are assigned at a rate of 1700-1850 per week, according to you. Maybe there's a Model X VIN buffer (due to production delays/constraints) that they are bringing down by 200-300 per week. That means it's entirely plausible that Tesla is producing around 2000/wk.

You mean there is a buffer of VINs already assigned that only now get build? That's certainly possible. But at some point this buffer is going to be depleted.

 

[bonaire]

You mean there is a buffer of VINs already assigned that only now get build? That's certainly possible. But at some point this buffer is going to be depleted.

One thing not being pointed out here on the MX. At the start of July, the "confirmation date" of those MX getting Vin #s was one to two months back. Now, the Vin #s come on the date of confirmation. This is a "they caught up" situation and unless incoming orders are roughly 700+ per week, the rate of Vin # issues (inclusive of Inventory car requests by sales centers) will drop off as it seems to be. This is the right time for Tesla to "blame someone" - perhaps a supplier but they will go un-named.

July was "peak Vin # aggregate month" so far. But doesn't look like August will hold up unless they pre-allocate the Vin #s for the 5-seaters and coil buyers who are told production doesn't start until Q4.