Short-Term TSLA Price Movements - 2016

[Hogfighter]

Yes. Financials will look better

Yes, 21k in Q3 is a "win" in my book. Tesla said said higher production rate in Q4 (with one less week of production)

Also, IMO, Wall Street analysts have know now that TM guidance is always "aggressive". TSLA will hold up fine with 2nd half deliveries less than 50k.
Elon said 2H guidance was "around" 50k. That's "soft" language. Expect less...

And, with the end of the resale value guarantee program, the GAAP vs non-GAAP numbers will look much more in line, putting the whole 'Tesla loses $14,000 per car' nonsense to bed.

 

[Mario Kadastik]

And, with the end of the resale value guarantee program, the GAAP vs non-GAAP numbers will look much more in line, putting the whole 'Tesla loses $14,000 per car' nonsense to bed.

Wouildn't the new 2-year lease do something similar?

 

[TMSE]

Wouildn't the new 2-year lease do something similar?

Leases could have something called residual value guarantee for bank leasing partners. Some in SeekingAlpha are already creating a lot of FUD regarding the effects of this on non-GAAP revenue.

 

[Thumper]

Turing said: ↑
But even if they only hit 21-22k aren't the financials set to look a lot better between the lull in model x capex and model 3 capex and Q3 being the first quarter with ramped MX output?

Maybe not much of a lull in capex. Don't know when the bill for this comes due, but it looks like the capex for M3 has begun.

In June, Dürr received from a US automotive OEM one of the largest orders in its history for the construction of a final assembly plant.[/QUOTE]
Press Releases - Dürr

 

[Fallenone]

But even if they only hit 21-22k aren't the financials set to look a lot better between the lull in model x capex and model 3 capex and Q3 being the first quarter with ramped MX output?

They planed 2.25B capex for whole year and only spent a little over 0.5B in H1. Q3 capex is bound to be high.

 

[GoTslaGo]

Hey, did anyone notice TMC just put handy little red arrows next to the quoted thread which bumps you back to the original thread? Nice!

 

[MitchJi]

But even if they only hit 21-22k aren't the financials set to look a lot better between the lull in model x capex and model 3 capex and Q3 being the first quarter with ramped MX output?

I tried to solicit opinions earlier about the effect on the SP if Tesla hits non-GAAP profitability in Q3 or Q4 except for CapEx and the only answers I got were arguments stating that Elon and Jason were incorrect, that they did not mean CapEx. I don't even care which accounting bucket the money belongs in! I'd still appreciate some opinions on the question.

Rod Lache - Deutsche Bank Securities, Inc.
Sounds like a lot of innovation there. One last just housekeeping thing for Elon or Jason. You'd previously talked about the objective of profitability in the fourth quarter, but I know a lot's changing with the mix and also with the direct leasing. So is that also something that we should think as being pushed out a quarter?

Elon Reeve Musk - Chairman and CEO
Well, if you exclude Model 3 CapEx ramp then – well in fact, really for Q3 and for Q4, Tesla would be profitable excluding the Model 3 CapEx ramp.

Tyler Charles Frank - Robert W. Baird & Co., Inc.
Two short questions. One, can you discuss when you expect to be profitable on a non-GAAP basis? And then number two...

Jason S. Wheeler - Chief Financial Officer
Yeah, sure. On the profitability question, just reiterate what Elon said earlier. If we can execute on our production and our delivery goals in the second half of the year, we got a great chance to be non-GAAP profitable. So...

Elon Reeve Musk - Chairman and CEO
Yeah, excluding Model 3 CapEx. The real question on profitability is where do we set the dial on growth? And obviously, if you set the dial on growth to be super high, then you face dilution because of that increased capital. If you set it too low, there's less dilution but then you grow slower. So you want to set it at the right level where your – the right mix of dilution and growth. I mean, as it is, it's just important to bear in mind, like as a manufacturing company, our percentage growth, I think it's unprecedented in the modern era. It's really nutty.
<snip>
So it's just real important to parse things out and to understand what the real health of the business is. Right now, I mean in a nutshell, we're shipping $10 billion a year of product on an annualized basis at somewhere around 23% to 25% gross margin.

My question is:
Given your (all opinions are wanted) expected situation over the next six month's, what is your opinion (a consensus would be great if possible) on the effect on the SP of Tesla announcing in Q3 or Q4 that they are "profitable excluding the Model 3 CapEx", or OpEx if Elon made a mistake.

I don't even care what the name of the accounting bucket is where the money ends up.

Tesla Motors, Inc.'s Spending Is About to Skyrocket -- The Motley Fool

With its revised production ramp-up in mind, Tesla now expects to spend much more money in 2016. Management explained in the company's first-quarter shareholder letter:

Given our plans to advance our 500,000 total unit build plan, essentially doubling the prior growth plan, we are reevaluating our level of capital expenditures, but expect it will be about 50% higher than our previous guidance of $1.5 billion for 2016. Naturally, this will impact our ability to be net cash flow positive for the year, but given the demand for Model 3, investing to meet that demand is the best long-term decision for Tesla.

Interestingly, though, the bulk of Tesla's spending is set to take place in the last six months of 2016. By the end of Q2, Tesla's year-to-date capital expenditures only amounted to $512 million -- down from its $831 million in capital expenditures in the year-ago trailing-six-month period.

But don't let Tesla's capital spend in the first half the year fool you, management expects second-half capital spend to jump about 340% compared to the first half.

"Despite the disciplined pace of capital spending in the first half of this year," Tesla explained in its second-quarter shareholder letter, "we still expect to invest about $2.25 billion in capital expenditures in 2016, in support of our accelerated production plan for Model 3."

Given just how important Tesla's Model 3 is to the company's future, and how 373,000 deposit-backed reservations within two weeks of the vehicle's unveiling have demonstrated such an extraordinary interest in Tesla vehicles at a lower price point, the main concern at this point may be whether or not the company can spend money fast enough to capture the opportunity in front of it -- not whether it is about to spend too much money. It's a well-known fact that the auto industry is one of the most capital-intensive industries there is.

 

[geneclean55]

I see that a 159XXX was posted on the model S spreadsheet today.

 

[brian45011]

And, with the end of the resale value guarantee program, the GAAP vs non-GAAP numbers will look much more in line,

Tesla has announced the resale value guarantee program is being discontinued as of June 30, 2016. Whether the residual value guarantee (to bank leasing partners) is also being discontinued is unclear. In the shareholder letter, Tesla said it plans to increase direct leases from 8% to 15%. The Q2 increment for cars in these three programs was:

Resale VG--1,790
Residual VG--2,080
Direct Leases--1,120

The resale value guarantee is being discontinued prospectively. The 22,480 cars under that program at June 30, 2016 will still have a 36-39 month run-off, i.e GAAP revenue and GM will increase will non-GAAP revenue and GM will decrease.

Even if the residual value guarantee has been discontinued, the 11,280 cars under that program at June 30, 2016 will still have a similar 36-48 month run-off,

Direct leases are treated the same under GAAP and non-GAAP.

 

[ev-enthusiast]

Some quarters it worked, some it was way off. But I think that is also because as simple as "counting" sounds, there are subtle differences on how to do it (for example I think taking the absolute lowest VIN from a quarter and subtracting the lowest is misleading, because you base your analysis on outliers).

How many would count for you? 156 Model X this quarter in Norway and 122 out of those this month. So one might assume the other European countries got some, too. Registreringer av nye elbiler i Norge

@hobbes thank you for posting the new car sales registration link for the Norway registration numbers. Very helpful.

I agree that in order to get a reliable estimate for deliveries one has to put a lot more science in VIN topic than simply counting new VINs issued during a certain time frame. If we only had a few additional information on how TM is using, batch in or skipping VINs, I could imagine VINs could be a really useful indicator of deliveries.
Remember, with the Model S and X sticker price a couple more or less deliveries do move the needle for financials, thus the arithmetic has to be really reliable.

As far as I remember the first couple of deliveries of waiting list Model X Founders and Signature happened end of June in Denmark (1st Tesla Model X Deliveries In Europe Landed In Denmark). As these vehicles have been the very first customer vehicles that have made it to Europe I expect that TM used these vehicles as well to align processes like in stores, service centers, vehicle registration in European countries and so on. Usually this takes some time as it is an iterative learning process. It makes no sense to start this part of the roll out with hundreds of vehicles right away. TM reiterated multiple times that Model X ramp is, like Model S ramp has been as well, exponential. Thus only a hand full of Founders and Signature vehicle deliveries are not significant of a major ramp happening. They are only an indication that the delivery process in the European countries has finally started. What I am looking for is Model X deliveries taking place in a couple of European countries at a level of low hundreds. From that level onwards deliveries will not only be impressive relative and percentage wise but in an absolute dimension that will affect financials significantly.
Just imagine Model X deliveries in Norway more than doubling from here next month. That is what I am waiting for!

 

[ev-enthusiast]

I see that a 159XXX was posted on the model S spreadsheet today.

Thanks for posting.

What information do you derive from the fact that this VIN has been issued?
It would be great if you could share your reasoning for your conclusion as well.
Thanks in advance!

 

[ev-enthusiast]

Model 3 spotted on the road:
Tesla Model 3: Rare new picture inside of a working prototype emerge

In case someone mised it, TM said to have build an increased number of Model 3 beta prototypes:
Tesla Model 3: Tesla is ordering enough parts for a fleet of ~300 prototypes

 

[racer26]

So the last few weeks, monday morning is a steep rise, followed by closing in the red. Perhaps this week is the opposite? The only real news I'm seeing today is details about AP in v8 being altered to inconvenience drivers who ignore its warnings by requiring the vehicle to be in park before AP can be reactivated. I think this is a good thing. Should help prevent some of the AP-related accidents. Its not difficult to heed the warning to hold the steering wheel and never experience the graceful abort if you're using the system properly.

Other news of the day: a new daylight interior shot of a Model 3 prototype (the silver one) and that Fremont is having parking problems, with chargers getting ICEd due to more staff. All decent news, if a bit pedestrian.

 

[MartinAustin]

So much for $220 support!

 

[tanner]

TSLA is in very oversold conditions currently.

 

[vgrinshpun]

It seems that the last week's slide that is continuing today is coincident with availability of shares to borrow for shorting. Today there is 224,313 shares available to borrow from Fidelity, and estimated annual interest rate is down from above 20% several weeks ago - to 13% today.

 

[Gerardf]

I am a long-long, so in a way this is just noise for me. However these low volume weeks with no news are getting annoying, and allow shorts to push the share price below the DMA's.

There is so much news that we can expect in the not-to-far-future, It is time to see some formal announcements soon, instead of just all the rumors.

- AP 2.0 announcement
- Model-3 Part-2
- PowerWall 2.0
- Tesla Inverter announcement
- PowerPack utilities projects update
- TE ramp
- GigaFactory first cell production
- Gigafactory next sections build-out

And of course Tesla Q3 production & deliveries, next steps in the SCTY merger, SCTY Solar-roof concept etc, etc.

I expect all these some time this year (except for the Model-3 - part 2 maybe)

 

[racer26]

I am a long-long, so in a way this is just noise for me. However these low volume weeks with no news are getting annoying, and allow shorts to push the share price below the DMA's.

There is so much news that we can expect in the not-to-far-future, It is time to see some formal announcements soon, instead of just all the rumors.

- AP 2.0 announcement
- Model-3 Part-2
- PowerWall 2.0
- Tesla Inverter announcement
- PowerPack utilities projects update
- TE ramp
- GigaFactory first cell production
- Gigafactory next sections build-out

And of course Tesla Q3 production & deliveries, next steps in the SCTY merger, SCTY Solar-roof concept etc, etc.

I expect all these some time this year (except for the Model-3 - part 2 maybe)

IIRC Elon said we'd see M3 part deux "later this year". I'm guessing the day before or the day after Bolt officially goes on sale, to steal whatever thunder it makes.

 

[joseph7h]

Model 3 spotted on the road:
Tesla Model 3: Rare new picture inside of a working prototype emerge

In case someone mised it, TM said to have build an increased number of Model 3 beta prototypes:
Tesla Model 3: Tesla is ordering enough parts for a fleet of ~300 prototypes

The extending display should really be an integrated one like MS. Or I may have to cancel my M3 order as it looks so ugly!

 

[racer26]

Or maybe the announcement of e-Golf 9 years away is making this much of an impact? Come on. What reason is there for such a huge selloff?