Short-Term TSLA Price Movements - 2016

[Vitold]

Why do people keep saying (assuming?) the leak of the e-mail was orchestrated by Elon? Did I miss something at some point?

I think it's pretty safe to assume that he expected for the memo to find it's way to the press.

 

[uselesslogin]

this I get... and see it as a difference of perceived market vs demand.

I think something negative here though is that the target market was well defined and understood when described in early 2015... and anticipated demand was laid out in timelines from 2015 through 2017 based on revenue projections... and here we are in late 2016 talking about articles discussing 2 MWh.

this is why I don't factor it in and why I assume many of the analysts don't either.

Well also there are articles for 80MWh and 34MWh:
Tesla Wins Massive Contract to Power the California Grid
Tesla and AMS win another major energy storage contract, 34 MWh of battery capacity for water treatment facilities

But hey, whatever, keep on shorting. You are right it is up to Tesla to prove it so we'll just have to wait and see what happens.

 

[myusername]

I'll grant myusername the point that Tesla has yet to prove that the market for Tesla Energy products is huge. But it's not so easy to prove until the Gigafactory is running at full speed and you start shipping the products. When your product isn't available, the customers will find other solutions.

Q4 should be the quarter where Tesla Energy can no longer be disregarded by analysts.

agreed... if we see 250+ MWh go out in Q1... then there might be something to all of this... and if we see incremental growth in Q2/Q3... then I will completely change my tune on TE and likely so will everyone else.

but if we continue to see 10s of MWh orders make headlines in Q4/Q1 and that's it... then I think it will very negatively impact the stock.

 

[EinSV]

Here is my take on the discussions re targeting profitability in Q4. IMO, the priorities should be to:

• Launch Model 3
• Accelerate GF production ramp to accelerate sales of PW and PP products asap
• Accelerate construction of next phases of the GF
• Build out service centers and Superchargers to get ready for M3 launch (some of this may be able to wait for 2017)
• Accelerate production of new integrated solar product
• R&D for Model Y, pickup, minibus, etc.
• R&D for autonomy

Excellent and speedy execution on Model 3 and TE should pay huge dividends very quickly. If Tesla can do that (along with the other items above) and be profitable in the short term, great. Otherwise, any added risk to long term plans is a mistake IMO. Trying to squeeze a few bucks into the SP now is just not worth it given execution on Model 3 alone could send the SP through the roof by 2018 and execution in TE could cause a significant bump up even sooner.

 

[NOLA_Mike]

I think the point is that in most cases the only way you "get in early" on a company/stock (without illegal insider information) is that you have to believe in things that are not spelled out in the filings or are patently obvious to everyone else. If they were that obvious then everyone would already be in. If @myusername wants to refer to that as "investor enthusiasm" then so be it - as I said before, time will tell who was right.

I think Tesla Energy is one of those cases. As @eloder pointed out, all the cell towers went down after Katrina here. Since then, they have installed back up generators in most cases with diesel tanks to supply fuel. If the outage is more than a few days, the generators run out of fuel unless the tank is refilled. A good example of where batteries perhaps combined with solar would be a much better solution. I think there are many more examples that we don't even think of right now.

My own personal situation was post Katrina (being without electricity or gasoline for more than a week) I installed a natural gas powered whole home generator and bought the Model S. I would not be without transportation after the next one. I have since moved and installed solar but I'm waiting for a viable solution to be offered (Tesla or someone else) for battery backup. In a perfect world, Tesla would let me use the 85 kWh battery in my car for that purpose (power flows both in and out to the home) but I don't see that happening anytime soon so I wait for Power Wall or something similar. I don't want the noisy backup generator anymore.

Mike

 

[Yggdrasill]

I think something negative here though is that the target market was well defined and understood when described in early 2015... and anticipated demand was laid out in timelines from 2015 through 2017 based on revenue projections... and here we are in late 2016 talking about articles discussing 2 MWh..

Tesla clearly waited for the Gigafactory to start ramping up Tesla Energy. And that was probably the right decision. Now Tesla can provide a 2nd gen product with very low cost batteries. This is good for margins and good for pricing. Bye bye competition.

 

[nienco2]

Just look at the many billions of dollars needed for stationary storage today.
I just don't see them running into demand issues as they ramp up production capabilities because replacing lead-acid battery backups will create immense savings (maintenance/longevity) for businesses.

Contrary to EM stating they, TSLA, have solved a major problem when he announced TE this is not virgin territory.
43 Battery Storage Companies To Watch

 

[nienco2]

How can we claim last year that if it weren't for all the spending on growing the business (expanding the production line, opening new stores and service centers, and building out the supercharger network), Tesla would've been a profitable company. All those growth items should've been treated as CapEx, and amortized over a long period of time? right? Or am I missing a fundamental detail?

You may be an engineer but you have correctly come to understand what many others haven't.

 

[Chickenlittle]

Why do people keep saying (assuming?) the leak of the e-mail was orchestrated by Elon? Did I miss something at some point?

Yes you did. If I sent a email to over 6000 employees I would assume it would get out. Like someone on tv telling everyone to lower volume and keep what I say a secret

 

[Gerasimental]

Tesla is doubling the energy capacity of the Powerpack with new battery cells from the Gigafactory

"Electrek has learned some details of Tesla’s ‘Powerpack 2.0’, the second generation of Tesla Energy’s scalable battery pack for commercial and utility-scale projects, which will be equipped with the new 2170 battery cells. The new cell is potentially Tesla’s most important product to be unveiled this year – and yes, I’m aware Tesla unveiled the Model 3 earlier this year."

"While the current Powerpack is being advertised with a capacity of 100 kWh, sources say that the available energy is closer to 95 kWh and that the new Powerpack 2.0 will have a capacity of 200 kWh."

"Another interesting improvement coming with the Powerpack 2.0 is that Tesla is dropping the Dynapower inverter and introducing its own inverter, which has been referred to as ‘Tesla Inverter’. That’s something Tesla has been talking about for a while. When discussing power electronics in August, Elon Musk said of Tesla: ‘we are probably the best in the world on advanced inverter technologies’."

Tesla is doubling the energy capacity of the Powerpack with new battery cells from the Gigafactory

Well if nobody else is going to react to this, then I will: Wow!
Can this kind of increase in pack energy density really be only due to the chagne in form factor?
Will we see this kind of step change in automotive batteries as well?

 

[Yggdrasill]

agreed... if we see 250+ MWh go out in Q1... then there might be something to all of this... and if we see incremental growth in Q2/Q3... then I will completely change my tune on TE and likely so will everyone else.

but if we continue to see 10s of MWh orders make headlines in Q4/Q1 and that's it... then I think it will very negatively impact the stock.

The first phase of the Gigafactory is good for around 15 GWh of production per year.

Some of this capacity may be used for the Model 3, but I would expect Tesla Energy to ramp up to something like 2.5 GWh/quarter in Q1/Q2.

The ramp might look something like this:

Q4: 200 MWh
Q1: 1500 MWh
Q2: 2500 MWh

 

[Krugerrand]

I think it's pretty safe to assume that he expected for the memo to find it's way to the press.

Based on what exactly? Never mind that I just asked the question of a poster who clearly expressed confusion as to that action. Saying it's 'safe to assume' is like saying 'it's a sure bet' as the horse 1-9 favorite horse breaks a leg halfway down the home stretch. So again, based on exactly what can we assume he did it on purpose?

And TMSE why did you like Vitold's post when it was your post expressing the confusion? Does that mean you're not actually confused at all? Then why post what you did?

 

[vgrinshpun]

And now there are 0 shares available to short at Fidelity, with interest steady at 14%.

So it looks like short sellers consumed all 1 million shares that were available at Fidelity yesterday.

Fidelity had another 694,306 shares available for shorting just before the market opened, interest rate dropped to 13%, which most likely indicates that supply of shares for shorting is growing.

 

[LargeHamCollider]

Here is my take on the discussions re targeting profitability in Q4. IMO, the priorities should be to:

• Launch Model 3
• Accelerate GF production ramp to accelerate sales of PW and PP products asap
• Accelerate construction of next phases of the GF
• Build out service centers and Superchargers to get ready for M3 launch (some of this may be able to wait for 2017)
• Accelerate production of new integrated solar product
• R&D for Model Y, pickup, minibus, etc.
• R&D for autonomy

Excellent and speedy execution on Model 3 and TE should pay huge dividends very quickly. If Tesla can do that (along with the other items above) and be profitable in the short term, great. Otherwise, any added risk to long term plans is a mistake IMO. Trying to squeeze a few bucks into the SP now is just not worth it given execution on Model 3 alone could send the SP through the roof by 2018 and execution in TE could cause a significant bump up even sooner.

I would move "R&D for autonomy" to second place on the list. The two developments which are most important for the future of the automobile are electrification and autonomy, Tesla currently leads in both. If they retain leads in both then it is, imo, inevitable that their value will exceed that of Toyota in the next 6 years.

 

[EinSV]

The first phase of the Gigafactory is good for around 15 GWh of production per year.

Some of this capacity may be used for the Model 3, but I would expect Tesla Energy to ramp up to something like 2.5 GWh/quarter in Q1/Q2.

The ramp might look something like this:

Q4: 200 MWh
Q1: 1500 MWh
Q2: 2500 MWh

This seems like a reasonable guesstimate to me. I assume that they'll do some small initial runs to work out the kinks in production and then ramp pretty quickly. I don't think there is any question that the demand is there.

My main hesitation in assuming that something like this is correct is that Tesla hasn't provided any guidance yet.

 

[Krugerrand]

Yes you did. If I sent a email to over 6000 employees I would assume it would get out. Like someone on tv telling everyone to lower volume and keep what I say a secret

That's different than what people have been saying, but point taken. Feel free to go back to TMSE's post where I asked the question. He clearly is pointing to Elon, specifically, leaking the e-mail, not an Elon assumption that one of those 6000 employees will break what is arguable every company's protocol to not release internal memo's to media.

 

[myusername]

The first phase of the Gigafactory is good for around 15 GWh of production per year.

Some of this capacity may be used for the Model 3, but I would expect Tesla Energy to ramp up to something like 2.5 GWh/quarter in Q1/Q2.

The ramp might look something like this:

Q4: 200 MWh
Q1: 1500 MWh
Q2: 2500 MWh

that's a very aggressive ramp... there was a decent post a couple of days ago (where the author described me as a troll)... regarding a 5x ramp in 2017 that started in the low 100s of MWhs... that incrementally ramped through the quarters into GWh... that seemed like a reasonable expectation.

but my question was... if we were to expect 100s of MWhs of deliveries in Q1... then shouldn't we start seeing headlines describing these orders pretty soon?

so my questions to you are: how long do you think it would take to produce and deliver 1GWh after an order was placed?... and if that time is 3 to 6 months after the order was placed... then those Q1 delivery expectations would need to be fills of orders starting today, yes/no?

 

[EinSV]

I would move "R&D for autonomy" to second place on the list. The two developments which are most important for the future of the automobile are electrification and autonomy, Tesla currently leads in both. If they retain leads in both then it is, imo, inevitable that their value will exceed that of Toyota in the next 6 years.

Definitely should be one of the highest priorities, agreed.

 

[Yggdrasill]

This seems like a reasonable guesstimate to me. I assume that they'll do some small initial runs to work out the kinks in production and then ramp pretty quickly. I don't think there is any question that the demand is there.

My main hesitation in assuming that something like this is correct is that Tesla hasn't provided any guidance yet.

My view is that the guidance is of limited value. Tesla will ramp up as fast as possible.

The question I ask myself is : Can Tesla ramp up to 10+ GWh per year at the Gigafactory by Q2 2017? And I think they can, so they will likely do so.

 

[CALGARYARSENAL]

Remember that the institutions are not selling. As Guy Adami says...."who are the incremental sellers?" The answer is retail holders that get spooked easily. Expect good news to hit real soon.