Short-Term TSLA Price Movements - 2016

[esk8mw]

Regarding the ability to upgrade sensors / GPU for later more advanced versions of AP suite:

My Model S was built just 2 weeks before the AP1 hardware was introduced. After the AP1 announcement I have asked Tesla if there was any possibility to retrofit the new hardware to my car. The answer was, that the cost would be prohibitive, because my car is missing the wiring harness in the body panels, so they would have had to take apart and rebuild the entire car.

On the other hand, if a car already has the harness for the right number of sensors/cameras/GPU and it is only a matter of replacing them with newer versions, the cost would be much more reasonable: new parts + labor cost to swap them.

Exactly. Tesla is forward thinking with this stuff. When AP1 came out, it was understood that additional hardware and redundancy would be needed for autonomy.

Now, with AP2 out, Tesla has said everything is in that is needed for autonomy. In other words, everything is wired up and ready to go. When better sensors come out to improve the autonomous driving experience, they will be swappable. He's already said the nVidia chip is easily swappable. It's like the 3G to 4G switch. Thing is future proofed now.

Also, keep in mind that Tesla has the NHTSA's ear when it comes to certifying autonomy. Remember how 8.0 was developed with input from them? Does anyone think this system wasn't developed with lots of input from the decisionmakers and with inside knowledge of the details that would make the system achieve certification? I'm placing my bets on Elon here.

 

[Drax7]

general market down, and tesla stock up, there is a god .​

 

[Fallenone]

Are you sure about that? Is that how they did it before?

The dual motor cars were introduced along with "Autopilot" in October of 2014. I purchased my car with Autopilot hardware in Dec 2014. They did not activate the Autopilot until Oct. 2015. Did they defer revenue on the option purchase in 2014/2015? I don't remember them doing that...

If they do, then TACC was turned on first in early 2015, do they recognize a part of the revenue at that time?

Yes that's how they did it for AP1.0. The revenue from early AP1.0 was not fully recognized until Q4 2015. They have recorded the amounts of deferred revenue in their 10-Q

 

[dc_h]

Moderator Input: Apparently there is too much content for all members to read all posts. This is understandable.

THIS Moderator consistently includes at least some red ink in his posts. That way, they are easily noticed by anyone scanning through all pages of a thread.

It may be wise to develop the habit of learning what a Moderator recently has done. It's a good way to keep afresh of the most recent efforts the Mod Squad has been utilizing to keep this forum civil.

Starting next week, there MAY be Monday morning a MODERATOR REMINDER post suggesting ways to stay good boyz 'n grilz over the coming week, each Monday morning. Still mulling over that.

===>Entire Post Deleted. Inappropriate content.<====

 

[NOLA_Mike]

Yes that's how they did it for AP1.0. The revenue from early AP1.0 was not fully recognized until Q4 2015. They have recorded the amounts of deferred revenue in their 10-Q

Ok, thanks. I did not realize that. Mike.

 

[30seconds]

Thank you Forbes for summing up all my ranting:

“To choose now you’re saying that today’s technology will be the solution five years from now,” said Nidhi Kalra, a senior information scientist at RAND Corp. and co-director of its Center for Decision Making Under Uncertainty. ”The package of sensors you might want five years from is probably going to be very different.”

Tesla's Self-Driving Hardware Gamble: Is 2016 Tech Good Enough For Next Decade?

You are absolutely right. I'm going to wait five years to buy something from now on.

 

[MitchJi]

I crunched the physics on what it takes to push a semi through the air at 70mph for 11 hours. I concluded that a Tesla Semi is viable with Model S technology underpinning it, and is slightly lower on Total Cost of Ownership than a comparable sleeper cab diesel semi as of the release of SMP2. Advances on battery density, cost, and rising costs of diesel fuel only make the proposition better. Better still if you don't even need the driver anymore, and can run goods around the country autonomously.

What price did you use for packs? I bet they'll be much cheaper than you think.

Question. One can reserve 2 M3's under a single name and login correct? I need to reserve another one. Stood in line for the first, time to put $1,000 to get in line for a second just in case the backlog is eventually millions long.

Correct. We have two reserved.

Here's some interesting numbers. I tried to redo my numbers in my model for this quarter assuming the new AP hardware had been included. My assumptions are that this would increase ASP/automotive revenue by $4000/car (AP is now 2k higher for base and 5k higher for full, I'm assuming take rate from normal AP buyers would be pretty high for the enhanced) and margins by 3.5% (4k more revenue on a 100k car, less incremental hardware costs). Here's how it changed my numbers:

GAAP EPS: $0.51 --> $1.20
non-GAAP EPS: $0.89 --> $1.59

That's...substantial. Focus on the delta between the earnings numbers here and not the absolute numbers, as the absolute numbers are dependent on a number of my assumptions for Q3 in my (flawed) model that will probably not be there in Q4 (e.g., lots of ZEV credit revenue, fingers crossed!). Improving margins by 3.5% could result in $0.69 more GAAP profit. Consider that every single car ever produced by Tesla will now have this extra revenue/margin built in, whether it's enabled (i) at purchase, (ii) after purchase at an even higher price or (iii) by Tesla when it takes the car as a CPO and resells it with full capabilities.

Awesome! Hopefully they talk about this on the CC.

I find it notable that we have already reached a point where the computers and auto pilot Hardware is already more of it cost factor then the battery.

Maybe one the prices they charge, but on the cost it's not close.

 

[MP3Mike]

It's as if the side badge was designed to house a camera from day 1. Very forward looking to take this into account in 2011/2012.

It probably was, since they didn't want side view mirrors, but the laws didn't allow them to not have the mirrors.

 

[FredTMC]

Good interview with James Albertine of Stifel....but who slapped the title on this? Also, nary a mention of Tesla Energy - no one sees the monolithic structure rising in the Desert - must think it is the Raiders new Nevada stadium not a battery factory and revenue stream that could rival or surpass auto revenues. Their ignorance is our opportunity.

Elon Musk diverting attention from bigger problems?

Apparently, he's NOT with Stifel. He's now some boutique firm that I've never heard of...

 

[electracity]

good article:

http://seekingalpha.com/article/4013854-tesla-nvidia-autopilot-win-companies

 

[winfield100]

good article:

http://seekingalpha.com/article/4013854-tesla-nvidia-autopilot-win-companies

he forgot to mention the self driving video tho, otherwise pretty good

 

[esk8mw]

What price did you use for packs? I bet they'll be much cheaper than you think.


Correct. We have two reserved.


Awesome! Hopefully they talk about this on the CC.

Maybe one the prices they charge, but on the cost it's not close.

Just to follow up on this, apparently at least some portion of the AP revenue might be deferred for some period of time and therefore won't initially show up in margin. The 10-Q data suggests that AP1 revenue was deferred until the system was switched on in Oct 2015.

The question here is - when does the AP revenue stop being deferred for AP2? I could make a strong argument for that time being whenever the features are initially switched on - i.e., December/January, rather than when the car reaches full autonomy.

For AP1, a good chunk (maybe all?) of the AP revenue was recognized in 2015, before significant features such as summon were introduced in 2016. Once AP2 is utilizing all the hardware to provide some AP features, couldn't we argue that the goods have been put into service? I suppose there's also an argument for recognizing just the 5k AP portion of the revenue at that time and continuing to defer the 3k self driving part until it's fully self driving. Will be interesting to see how they handle this in the next 10-K.

 

[electracity]

he forgot to mention the self driving video tho, otherwise pretty good

Every company doing autonomous driving has cars operating in urban environments. Here is Volvo in 2013:

 

[FredTMC]

good article:

http://seekingalpha.com/article/4013854-tesla-nvidia-autopilot-win-companies

Sorry. Friends don't let friends click to S.A.

 

[BobSk]

I saw articles using this tactic to discourage people from buying new Tesla cars with AP 2.0: AP 2.0 may not work, future systems will be better.

Elon says AP 2.0 is good, I trust Elon on that.

If AP 2.0 works for full autonomy with good safety improvement, then I don't care about AP 3.0, or 4.0. Besides, AP 2.0 has all the wiring in place. It can be upgraded by replacing the Chip and sensors.

 

[Krugerrand]

Why were you using sonar rather than radar, and did we meet you about six weeks ago in Paxson when you'd had a flat tire on the Denali Highway on your rental motorbike?

On edit: One of the lesser frustrations of being a Moderator is trying to determine why forum members SO frequently use those lower-right emoticons. What, for example, was remotely "Funny!" about this post? I certainly thought there were many features about the prior platform through which TMC appeared; there were technical reasons it had to change but certainly the response mechanism of the former was superior to what we now have.

I find your posting funny for a lot of reasons, especially after you edited it but I currently lack the will to push my mouse button. Anywho, back to short term discussion: Wow! Would you look at SP, an epic battle at $200. I wonder who will be victorious at the end of the day?

Moderator edit: Fair enough, though I still find it bizarre. We had a discussion then with someone who was from the poster's area (Hayward, CA), had knowledge and experience in sonar and vehicles, and had a flat tire...didn't get his name. That was all!

 

[electracity]

Sorry. Friends don't let friends click to S.A.

Perhaps use incognito mode to read this pro-Tesla article.

 

[3Victoria]

Every company doing autonomous driving has cars operating in urban environments. Here is Volvo in 2013:

Where can I buy one?

 

[EinSV]

Sorry. Friends don't let friends click to S.A.

If you want to catch up on the latest Seeking Alpha themes, it is easy enough to hit "Show Ignored Content," read a few posts from the Seeking Alphans who have taken up residence here, and go about your business.

 

[MitchJi]

Just to follow up on this, apparently at least some portion of the AP revenue might be deferred for some period of time and therefore won't initially show up in margin. The 10-Q data suggests that AP1 revenue was deferred until the system was switched on in Oct 2015.

The question here is - when does the AP revenue stop being deferred for AP2? I could make a strong argument for that time being whenever the features are initially switched on - i.e., December/January, rather than when the car reaches full autonomy.

For AP1, a good chunk (maybe all?) of the AP revenue was recognized in 2015, before significant features such as summon were introduced in 2016. Once AP2 is utilizing all the hardware to provide some AP features, couldn't we argue that the goods have been put into service? I suppose there's also an argument for recognizing just the 5k AP portion of the revenue at that time and continuing to defer the 3k self driving part until it's fully self driving. Will be interesting to see how they handle this in the next 10-K.

I don't understand why they'd defer it once the car is delivered but if they've done that when they rolled out AP 1 they probably will.

But it doesn't make sense to me to defer the $5k after they deliver a substantial portion of the AP 1 functions which is supposed to happen in Q4, which is excellent for our purposes .


Edit Addition: Maybe they deferred it until October 2015 to help the Q3 balance sheet .