Short-Term TSLA Price Movements - 2016

[drinkerofkoolaid]

Since @techmaven's reference is after Niedermeyer's reference, I don't think there's a problem.

I'd say there is a big problem with the document he cites. It's from Nov 18, 2015. Tesla had no idea how high demand for the Model 3 would be until March/April 2016.

The document he cites also sort of confirms my point. It says BY 2018. Not by the end of 2018.
Doesn't this mean as of January 1, 2018?

 

[dirtyofries]

Since @techmaven's reference is after Niedermeyer's reference, I don't think there's a problem.

While I think this whole article is a bit bunk - especially given some pretty broad assumptions (and an ignorance that there is a ramp up period which appears to be the bottleneck), it should be pointed out it isn't 520k per year in that doc, it's 520k by 2018 - which reads more like a total to me.

That said, there's clearly a ramp between the 219k he uses as his max per year and the total of 520k a year later. There's a ramp going on. His assumptions seem fallacious.

 

[Turing]

Couple things to note here:

1. 50 mile cars can still be worthy of discounts. The display models, for example, just sit in the showroom but experience significant wear and tear as customers sit in the car, play with features, etc. I know a couple months from now we have have breathless reports from shorts claiming Tesla is back to discounting brand new 50 mile cars, so I wanted to throw this out there.

2. Also, not clear how often the mileage is updated in the inventory listings. From the car I just took delivery of, for example, the car actually came with ~250 more miles than in the listing. It was shipped very soon after I put the deposit down so I doubt it actually experienced 250 more miles of test drives or testing prior to sale - my guess is the mileage was last updated a month or 2 ago. Thus, cars showing 50 miles today might actually have 300 if they are being used for test drives and such, depending on when the mileage was last updated.

Right, this gives sales associates some discretion. Are they allowed to discount inventory floor models that just arrived? Been there a few days of the public climbing in and out of them? Does it need to be a week or two or more? How many test drives before a inventory discount is appropriate? Does it matter? It doesn't seem that unreasonable for a inventory floor model to instantly get a discount. So that if some guy is browsing the display car and wants to make an impulse buy and says I'll give you cash for this car today if i get inventory discount, seems like the answer should be "ok".

 

[drinkerofkoolaid]

To quote Niedermeyer.

Yes, we had to make some assumptions due to limited info.

All of his data charts are worthless. Too many guesses and extrapolations based on assumptions.

I this website about sums it up.

15 Insane Things That Correlate With Each Other

Apparently he's doing a Q&A tomorrow?
1st question: Who paid you to spend "one month" writing this BS? How much did they pay you?

 

[Ulmo]

Couple things to note here:

1. 50 mile cars can still be worthy of discounts. The display models, for example, just sit in the showroom but experience significant wear and tear as customers sit in the car, play with features, etc. I know a couple months from now we have have breathless reports from shorts claiming Tesla is back to discounting brand new 50 mile cars, so I wanted to throw this out there.

2. Also, not clear how often the mileage is updated in the inventory listings. From the car I just took delivery of, for example, the car actually came with ~250 more miles than in the listing. It was shipped very soon after I put the deposit down so I doubt it actually experienced 250 more miles of test drives or testing prior to sale - my guess is the mileage was last updated a month or 2 ago. Thus, cars showing 50 miles today might actually have 300 if they are being used for test drives and such, depending on when the mileage was last updated.

I've personally witnessed and also seen TMC accounts of both those items as well. I never said anything, because I didn't have a large enough sample size, but I can at least say it's more than just plausible.

 

[racer26]

Kernel is under GPLv2 which requires and I suspect @neroden is referring to



They are not doing a), not doing b) and c) is only for noncommerical distribution.

Are you absolutely sure they're not doing b)? All they have to do is bury in the fine print of the manual or a help menu that source code for the Linux kernel that the system is based on is available upon request.

Lots of people believe the Linux kernel's license requires that all Linux software must also be open-source. That's simply untrue. I can produce a closed-source Linux program no problem at all. What I can't do is modify the kernel's source, and not provide that. It merely requires that they be willing to provide for a fee not exceeding their cost to provide it, the open-source source code (and any derived works) of the Linux kernel.

 

[Drax7]

Hard to believe that Elon purchased the most advanced paint shop in the world,
In order to handle masssive capacity without Considering emission limits and permits
Etc..

It's frightening what the enemies of tesla will do to sabotage the company.

 

[dirtyofries]

Hard to believe that Elon purchased the most advanced paint shop in the world,
In order to handle masssive capacity without Considering emission limits and permits
Etc..

It's frightening what the enemies of tesla will do to sabotage the company.

Not to mention, the City of Fremont is a complete nightmare when it comes to permitting - which means Tesla was roadblocked every step of the way. There's no way they aren't all over this.

You can barely put up a small office without weekly visits tearing even the most minor things apart on permitting.

The large picture was dealt with.

 

[esk8mw]

Right, this gives sales associates some discretion. Are they allowed to discount inventory floor models that just arrived? Been there a few days of the public climbing in and out of them? Does it need to be a week or two or more? How many test drives before a inventory discount is appropriate? Does it matter? It doesn't seem that unreasonable for a inventory floor model to instantly get a discount. So that if some guy is browsing the display car and wants to make an impulse buy and says I'll give you cash for this car today if i get inventory discount, seems like the answer should be "ok".

I think the price algo takes all this into account. My understanding is there's a base discount (usually like $1000, but this quarter is was obviously increased, maybe $7500?), then some sort of age discount (e.g., each month from production is worth $1000, just making this up) then a mileage discount (e.g., each mile over 50 is worth a dollar, again just making it up). Add up the 3 numbers, subtract from sticker and there's your price. No room to maneuver for the sales associate.

As noted above, my hypothesis is that this formula was mistakenly applied to brand new inventory not put into service yet given the rush to replace sold floor models and the desire to sell everything that moves. In the normal case this wouldn't matter - impulse buyer gets the $1000 base discount and nothing more for the "new" inventory car that's being unwrapped out back because there's no age or mileage allowance. That's reasonable. Problem here is that for Q3 the base discount looked to be about $7500. That's too big of a discount for a new car and the formula failed to take this rare(ish) occurrence into account. Sales associates, emboldened by Elon's earlier email urging the sale of every car they can, pushed forward on these deals and lost sight of an overarching principle - no discounts to new cars.

My guess is the formula has been updated. The base discount may go back to an amount over $1000 in the future when they really want to move product like they did this quarter, but I bet it won't apply to inventory cars not yet placed into service.

 

[pGo]

Apparently Tesla has responded to the article according to Thestreet.com article:

Tesla's growth goals reportedly face regulatory hurdle

"Tesla responded to the report saying only that it was undertaking a "phased" expansion. "

If this is true, what happens to 500k production plan by 2018?

 

[tlo]

As Elon stated in his Tweet, Tesla does not negotiate on price unless the vehicle is damaged or is a floor model.

I think the comments/guesses I included in my prior posts about this matter have all turned out to be correct .

@Drivin @tlo @Troy Get a life and stop being a trolling turd.

I'm a TSLA bull since 2011. Check my profile. If I'm a troll, then I'm a lousy one.

We know this is a Tesla fan forum, but I believe most of us appreciate balanced, constructive opinion, such as those by @AIMc, @Lump, @DaveT regarding Elon's tweets yesterday. I disliked your posts because I didn't think they were balanced. Evidently, Elon was not aware of some of the things that his sales staff were doing. At the very least, employees/customers were confused about whether there can be discounts, and signing off cars by Sept 31 without delivering them is shady business.

This is by my count the 3rd time you are upset about receiving dislikes. For someone who has given out more dislikes than likes, you sure have thin skin.

 

[techmaven]

If this is true, what happens to 500k production plan by 2018?

It is clearly a phased expansion. Tesla has said this in the past. Here are some relevant quotes:

2/11/2016: Q4 2015 ER

Jason Wheeler - Chief Financial Officer
"We also had some asset impairments, one with our old paint shop. And we've now got a state-of-the-art paint shop in place, which is going to give us the capacity that we need all the way through Model 3."

Elon Reeve Musk - Chairman & Chief Executive Officer
"Yeah, that's 10,000 cars a week, too."

From Eisenmann's press release Tesla Motors building the world’s most advanced paint shop – with Eisenmann technology - Eisenmann SE

"Tesla plans to increase production capacity from 30,000 to 500,000 units annually in two stages – and two fully automated painting lines from Eisenmann will help to accomplish this goal. One will be used for car bodies, and the other for components such as bumpers and rear-view mirrors."

Therefore, we are talking about two phases, one of which is currently painting cars, and the 2nd phase, which brings us to 10,000 cars a week. The question is how many cars can they paint in the first phase and the timing of the 2nd phase. Given the Daily Kanban article's various mistakes, I'm thinking 250,000 to 300,000 for the first phase. That should cover enough for 2017 without a problem. They can always also apply for temporary changes in the allowable limits as they bring the 2nd phase online. Clearly, Air Quality Board is prepared to let Tesla paint for 520,000 vehicles, as granted in 2015. So the intermediate limits can of course, change as needed.

 

[joseph7h]

Interesting to see how the stock will respond to Q3 delivery numbers on Monday. The movement today sounds Wall St is not impressed by Elon's twitter hint "an excellent quarter" or Pacific Crest's estimate 22k deliveries (relatively neutral in the analyst community).

Any predictions?

 

[dha]

Apparently Tesla has responded to the article according to Thestreet.com article:

Tesla's growth goals reportedly face regulatory hurdle

"Tesla responded to the report saying only that it was undertaking a "phased" expansion. "

If this is true, what happens to 500k production plan by 2018?

I think there might be some miscommunication / sloppy journalism going on here and it's not clear to me that Tesla has recently commented on this article. The "phased" expansion response appears in the original dailykanban article in response to a request for comment:

When asked for comment on the findings of this investigation, Tesla’s only response was that it is undertaking a “phased” expansion of the Fremont paint shop.

 

[Jayjs20]

Interesting to see how the stock will respond to Q3 delivery numbers on Monday. The movement today sounds Wall St is not impressed by Elon's twitter hint "an excellent quarter" or Pacific Crest's prediction 22k deliveries (relatively neutral in the analyst community).

Any predictions?

Price movement today is largely following the general market.

 

[Turing]

Interesting to see how the stock will respond to Q3 delivery numbers on Monday. The movement today sounds Wall St is not impressed by Elon's twitter hint "an excellent quarter" or Pacific Crest's prediction 22k deliveries (relatively neutral in the analyst community).

Any predictions?

Wallstreet is taking Elon's claims with a grain of salt until results arrive. They've underperformed for a few quarters now, mostly due to MX production and ramp issues, that appear to be fully fleshed out. It was only 2-3 months ago that there were still a stream of FUD articles claiming that MX would always be a production clustercuss and would never successfully ramp like the MS. Bob Luntz went around saying this, along with others.

 

[larmor]

More grains of salt... Tesloop reported details for their model s, 200k miles in one year, charged to 100% every time with only 6% battery degradation. Battery was replaced under warranty. No brake service. Tales from a Tesla Model S at 200k miles

 

[CarsForLife]

Okay. Someone paid a lot of people to publish BS today. I suggest everyone with a Twitter account Tweet some of these facts at Niedermeyer.

1) Niedermeyer's article is the definition of biased and manipulated data analysis. Also, he makes so many assumptions, that no value can be derived from his conclusions.

2) Niedermeyer uses GM has a baseline for the minimum time needed to get a permit approvedl.


3) Niedermeyer failed to mention that the permit was issued on July 9th, 2015 (before Tesla knew what demand for the Model 3 would be) and expires on July 9, 2017, (8 days from the earliest date Tesla said it expects Model 3 production to begin).

4) Niedermeyer asserts that because Tesla had its planned production time frame removed from the filing, Elon is lying about what Tesla can accomplish. (This is a BS assertion)

5) His entire conclusion is based on the baseless assumption that Tesla's permitting is being handled by incompetent interns, and Tesla has not done what it needed to have the permit that will be valid AFTER July 9th, 2017, updated to reflect Tesla's CURRENT production targets. In 2015, Tesla had no idea it would have 1million + deposits for the Model 3 by July 9th, 2017.

The biggest problem with his article is that his calculation is based on 4.8 VOC/Gallon. More than twice the 2.1 VOC/gallon actual number that has been used in California paint shops for years. So you can more than double the capacity he claims on that fact alone. Tesla wouldn't be spraying with a product anywhere near 4, let alone 4.8. Clears and primers have been 2.1 for ages. Color coat can also be that low, especially if it's water-based.

 

[joseph7h]

Price movement today is largely following the general market.

It is surely on the weaker side, 1.5% drop vs nasdaq 0.6% one.

 

[3Victoria]

I understood that Tesla is high beta, so any nasdaq changes are amplified.