Short-Term TSLA Price Movements - 2016

[JBRR]

I was wondering why I had not received invite to vote my shares yet.
I'm danish and keep my portfolio at a scandinavian bank.

Gave the bank a call and was told that foreign holders of a stock doesn't own the stock under their name but just as a part of a big pool - and as such it is not possible to vote.
He insisted that this was standard across all banks.
Is this true?

And if it is - what happens to the pool of stocks that cannot be voted by the individual owner? I'm waiting for them to get back with an answer, but maybe someone here can shed light on this.

 

[vgrinshpun]

I was just following @vgrinshpun 's argument that's basically saying that Tesla would have no reason to sell the credits unless it made a meaningful contribution to the bottom line and working out a lower bound price. So the conservative guess is indeed argued based on the total revenue from the sale. I see no reason why this would not be the valid.

This is just a hypothetical exercise, purely generic approach without considering specific circumstances. This ignores that there was a demonstrated need to buy credits by Fiat Chrysler and Ford, as shown in STEPS 5, 6 and 7. Selling credits in these circumstances at 95% discount could be assumed realistic only if you think that Elon is crappy negotiator, which he is clearly not.

Do not forget that my analysis included only one of the 10 ZEV states - California. Auto manufacturer's sales in other nine states - Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont - add to the ZEV demand.

The $250 is simply not plausible in these specific circumstances.

 

[Tslynk67]

It's also my sentiment that once the M3 is being delivered and people start seeing them on the roads, friends and neighbours get one, etc. Then the demand is going to go through the roof and the SP with it.

Anyone any idea when this new product announcement is due? I also through it would be AP2, but on reflection that doesn't strike me as a "new product".

 

[Tslynk67]

I was wondering why I had not received invite to vote my shares yet.
I'm danish and keep my portfolio at a scandinavian bank.

Gave the bank a call and was told that foreign holders of a stock doesn't own the stock under their name but just as a part of a big pool - and as such it is not possible to vote.
He insisted that this was standard across all banks.
Is this true?

And if it is - what happens to the pool of stocks that cannot be voted by the individual owner? I'm waiting for them to get back with an answer, but maybe someone here can shed light on this.

Probably explains why I've heard nothing too. I'll contact my broker and ask the same questions.

 

[schonelucht]

Here is something interesting. Normally I'd post it in the appropriate thread but it merits wider discussion I think : Model S and X in Europe now have a projected delivery date for early 2017. That means Tesla is confident that it can reach their European quota (supposedly 5000 cars for the quarter) with orders in transit over the quarter + inventory + orders in October. Inventory is around 500, transit over the quarter worldwide was 5000, so maybe 2000 for Europe? Makes orders in October 2500 or 800/wk. That's pretty high given that EU demand in the 3 months prior was just shy of 400/week.

 

[Maddin0r]

... Makes orders in October 2500 or 800/wk. That's pretty high given that EU demand in the 3 months prior was just shy of 400/week.

That would be great.
Reaching this number after the immense sales of the September with a lot of discounted cars.

Everything is ready for a nice SP rise - there is hope

 

[vgrinshpun]

Here is something interesting. Normally I'd post it in the appropriate thread but it merits wider discussion I think : Model S and X in Europe now have a projected delivery date for early 2017. That means Tesla is confident that it can reach their European quota (supposedly 5000 cars for the quarter) with orders in transit over the quarter + inventory + orders in October. Inventory is around 500, transit over the quarter worldwide was 5000, so maybe 2000 for Europe? Makes orders in October 2500 or 800/wk. That's pretty high given that EU demand in the 3 months prior was just shy of 400/week.

There are two possibilities: they just went to being production constrained, or there is some unexpected shutdown of the factory. We will know for sure next Wednesday: in case of unexpected factory shutdown they will have to adjust Q4 deliveries guidance, otherwise Tesla will let us know that they are currently production constrained.

 

[schonelucht]

This is just a hypothetical exercise, purely generic approach without considering specific circumstances. This ignores that there was a demonstrated need to buy credits by Fiat Chrysler and Ford, as shown in STEPS 5, 6 and 7.

I assumed, since that price was introduced in step 4, that is was concluded based upon the arguments developed up to that point.

 

[vgrinshpun]

I assumed, since that price was introduced in step 4, that is was concluded based upon the arguments developed up to that point.

Note to self: next time do a flow chart

 

[Bobfitz1]

Also, you seem to misunderstand how the tax credit works: After the 200,000th car is delivered to a US customer, Tesla gets two full quarters where they're still eligible for the full tax credit to every buyer. Then two more quarters where you get half. In other words, if you sell the 200,000th car on January 1, 2018, it isn't until January 1, 2019 that the customer feels the full $7,500 differential.

Reading this post led me to check a bit on the tax credit specifics. This bit of them was quoted by Forbes.

Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period.

I'm not sure what the definition of phase-out period may be, but it sounds like it means the 4 quarters after Tesla has sold their 200,000th
EV. If this quote from the regs is correct, then buyers in the two quarters after reaching 200K will get $3750 credit and those in following 2 quarters will get $1875.

What is the rough consensus on when Tesla is likely to reach the 200K sold mark?

 

[schonelucht]

There are two possibilities: they just went to being production constrained, or there is some unexpected shutdown of the factory. We will know for sure next Wednesday: in case of unexpected factory shutdown they will have to adjust Q4 deliveries guidance, otherwise Tesla will let us know that they are currently production constrained.

They didn't say anything about the April factory troubles in their Q1 conference call either, so not sure they'll update guidance if the same would happen today. Regardless, I don't see a factory shutdown very likely. In fact, with their guided current production rate of 2000-2500, I don't think they shut down the factory at all. They were producing the 161xxx range at the end of september. There are already 166xxx's available as European inventory. Assuming 1500 Model X rate per week, it would take the full 3 weeks of production between end of september and now, leaving no scope for any factory shut down at all. Unless those inventory VINs shown for Europe are actually not yet produced, just planned. But if they show planned but not yet produced inventory for Europe, why not do the same thing for the US where the inventory pool is quite shallow. Ugh. The longer I think about it, the less sense it all makes.

If it isn't a factory shutdown, it could be demand constrained. Possibly due to a surge in Asian sales the decided to shift production capacity from EU to Asia. Another explanation is that this time they plan to empty the pipeline for real and shift EU capacity to the US instead?

 

[MitchJi]

As an investor, that would be AWESOME that Tesla's 200k US quota for 7500 tax credit is used up by Model S and X buyers. Implies high end demand is insatiable and definitely higher GM vs. Model 3. Nice scenario!

Actually that would mean that either Tesla produces a lot more S-X than expected or that the M3 production is delayed.

 

[Drax7]

Can't base an investment or trade in Tesla based on Zev credits and nobody here is I hope. Whatever the number is, it will be Irrelevant very quickly in my view. I predict the half life of a zev rally is about that of a fruit
Fly.
Elon seems to intensely dislikes subsidies , and to base his enormous accomplishments
On them would drive him crazy.

 

[geneclean55]

Can't base an investment or trade in Tesla based on Zev credits and nobody here is I hope. Whatever the number is, it will be Irrelevant very quickly in my view. I predict the half life of a zev rally is about that of a fruit
Fly.
Elon seems to intensely dislikes subsidies , and to base his enormous accomplishments
On them would drive him crazy.

He dislikes the management of subsidies when he feels like they aren't being utilized properly (see ZEVs). To say that he doesn't appreciate subsidies is plain wrong in my opinion. They serve a purpose and he knows that.

 

[MitchJi]

Another explanation is that this time they plan to empty the pipeline for real and shift EU capacity to the US instead?

I'm sure that's at least part of the reason.

 

[Tslynk67]

SP 200 in Pre - which is nice, at least psychologically

 

[vgrinshpun]

Can't base an investment or trade in Tesla based on Zev credits and nobody here is I hope. Whatever the number is, it will be Irrelevant very quickly in my view. I predict the half life of a zev rally is about that of a fruit
Fly.
Elon seems to intensely dislikes subsidies , and to base his enormous accomplishments
On them would drive him crazy.

You've been around long enough to know better.

CASH IS KING.

In Q1 2013 GAAP was purely due to sale of ZEVs, and it did not hold SP back for a second. I remember bein amazed that there was virtually no "subsidy" talk back then.

Fast forward to 2016. Tesla is likely to be GAAP profitable without counting ZEVs. The additional $100MM or so due to ZEV would be icing on the cake, sorry, money in the bank.

You also should know that Tesla investment case is NOT based on ZEVs in any way, shape or form. I hope you were not suggesting it.

At the end of the day what would be highly relevant is that Tesla could have about $100MM more to grow their business.

 

[myusername]

Reading this post led me to check a bit on the tax credit specifics. This bit of them was quoted by Forbes.

Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period.

I'm not sure what the definition of phase-out period may be, but it sounds like it means the 4 quarters after Tesla has sold their 200,000th
EV. If this quote from the regs is correct, then buyers in the two quarters after reaching 200K will get $3750 credit and those in following 2 quarters will get $1875.

What is the rough consensus on when Tesla is likely to reach the 200K sold mark?

today in Colorado if [hypothetically] a person were to buy a M3 for $35000... they would get a Fed credit of $7500 and a Colorado credit of $6000. that would make 38% of the vehicle price subsidized and the cost of the vehicle for the consumer $21500.

if Tesla leaks up into the 200k and then sells 500k in 2018 as is planned... then with the 50% for 2Q and 25% for 2Q formula you're describing... that would be an additional $3b in Federal subsidies and $2.5b in Colorado subsidies.

regardless of what anything at this point says... this is not going to happen. the laws will quickly change as these kinds of numbers would bankrupt Colorado and on the Federal side... if all manufacturers did this would be in the many 10s of billions.

also... these credits are only useful for Colorado residents that have a tax bill of greater than $13500... I'd guess that a typical salary based income of about $75k to $80k would be required to take full advantage of these credits.

so not only would quickly dumping 500k in 4 quarters after the tax credit went away be not in the nature of the credits... the credits themselves are only available to those that make 50% more than the median income in the US.

and even worse... TODAY... the only people benefiting from these tax credits are again... people making significantly more than the standard US household... and those that can afford a Tesla starting at $70k... which requires even a much higher income.

this is taking from the poor and giving to the rich. this whole setup has been truly disgusting. there should have been a $40k vehicle price cap on eligibility for the credit as well as an income based cap of $100k.

 

[Yggdrasill]

Elon seems to intensely dislikes subsidies , and to base his enormous accomplishments
On them would drive him crazy.

He dislikes the management of subsidies when he feels like they aren't being utilized properly (see ZEVs). To say that he doesn't appreciate subsidies is plain wrong in my opinion. They serve a purpose and he knows that.

Musk has talked about this quite a bit - he dislikes subsidies, but he accepts them as being better than no subsidies when it comes to BEVs and renewable energy. He would prefer a carbon tax, but given that this tax is politically difficult to implement, subsidies for BEVs and renewable energy at least levels the playing field somewhat. The primary issue is the unpriced externalities that ICE vehicles, coal power, etc causes, primarily CO2, NOX, particulates and SOX, with the impact these have on the environment, and the hundreds of thousands of deaths they cause every year.

 

[CALGARYARSENAL]

Hey Elon. I love autopilot but just don't want to hear about it today. Thanks! Signed: Underwater Investor, the Ultra-bull.