Short-Term TSLA Price Movements - 2016

[Lump]

Ive been waiting for you guys to come up with the next "mega-catalysts" since the last share recall prediction failed so miserably, those ill informed shorts are doomed .

 

[MitchJi]

What will be the demand trigger after Q1'17? New AR spaceship like interior? It just coincides with the M3 reveal part 2.

Possibly. Also when are we expecting 21-70 cells in S/X? And S/X 100D (non P).

HUD for both would help.

Pretty sure that 2170,cells, bigger cheaper packs won't arrive until after the M3.

AP software feature rollout.

I'm confident that about the same time as the final M3 reveal that there will be some substantial price drops on the MS-MX.

They don't need to constantly improve the MS-MX, if they increase their footprint, they haven't saturated the market.

Q4 the market completely missed the significance. Almost everything that,allowed the positive financial results are either permanent or they will increase.

MX finally turned the corner on MX production and the associated service costs. Tesla will continue to improve and increase production.

Reduced costs due to more leverage with suppliers and increased volume. This will continue to improve, particularly with items that are common to the M3 and MS-MX, e.g. AP hardware and software.

Increased profit margins are going to improve due to 100 packs and AP charges. New financial catalysts.

Focus on capital efficiency.

They won't always be able to save up zev credits but I don't think that they are going away either.

Anyone who thinks that they are jeopardizing the M3 ramp to improve the short term SP doesn't know Elon and either hasn't been paying attention or thinks that he and Jason are lying.

Really soon TE will start to kick in, by the Q2 ER-CC at the latest, probably by Q1, and maybe by Q4.

 

[winfield100]

As far as future mega-catalysts to buy S or X, consider what will happens after Tesla has sold 200,000 units in the U.S. and the federal tax credit is about to start its phase-out. Buyers on the fence will see a $7500 after-tax penalty (if they have suitable income) if they wait until after the phase-out to buy their S or X. Here's the wording from the IRS site:

Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out
The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). 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. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

That final quarter for full the full tax credit given to S, X and M3 buyers may likely turn into a quarter when ALL Teslas are delivered to U.S. customers. With deliveries all in the U.S., you would expect a nice jump up in volume of deliveries that quarter. I would not be surprised if Tesla tweaks the deliveries so that the 200,000th U.S. vehicle is delivered in the first week of a quarter, thus allowing the remainder of that quarter plus the next quarter to be at the full credit value for U.S. customers.

Note: reading the IRS language, it looks like if the 200,000th U.S. Tesla delivery took place in the 3rd Q of 2017, Q3 and Q4 of 2017 would be at 100% fed credit and then 50% credit begins in Q1 of 2018. Please speak up if you interpret differently.

beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold

SO if 200,000 reported 7/1/2017 (3rd qtr), you get 2 qtrs more BEFORE the phaseout year starts (i think i think), because of word "After" (my head hurts every time i read this tho)
{and now i'm not sure again}

 

[AlMc]

beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold

SO if 200,000 reported 7/1/2017 (3rd qtr), you get 2 qtrs more BEFORE the phaseout year starts (i think i think), because of word "After" (my head hurts every time i read this tho)

^^This is how I interpret it as well. Once the limit is reached then you have two quarters at the max credit, then the reduction begins.

 

[3Victoria]

... over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 ...

Yes, agree with others: if 200,000th car is delivered Oct 1 2017, then full credit continues though Q4, Q1, and Q2, with rebate falling to 50% on July 1 2018.

I am hoping that Tesla will need to stop Model 3 deliveries to US during Aug and Sept in the above case, and deliver mine to Canada, during that hiatus.

 

[sdtslafan]

Anyone have clarity on the current run rate?

Did the introduction of AP2 hardware significantly slow down the line?

I saw some reports on Model X November deliveries thread of delays due to sourcing parts and AP hardware complexities but my sense is these may still be delivered in q4 with some juggling.

Also, lot of attention given to low US delivery estimates for October and November recently published. But Elon didn't sound worried on 10/26 CC so maybe this could be due to unusually heavy focus on oversea deliveries those months.

Overall, wouldnt surprise me if they miss heavy this quarter because of reports above. Market already pricing this in...Am I off base?

 

[Ulmo]

MitchJi,

If HUD was not done, but everything else you said was, would you be satisfied?

(For the record, I'd love HUD, but that's not why I asked.)

 

[3Victoria]

AFAIK Tesla shutdown in Oct to change over to AP2 HW. As indicated, Tesla produces for overseas early in the quarter so they can be delivered within that quarter. I have seen no reports of delays over parts sourcing. They would seem to be on track to a good quarter.

 

[MitchJi]

Overall, wouldnt surprise me if they miss heavy this quarter because of reports above. Market already pricing this in... Am I off base?

Yes. Highly unlikely to happen. But the market is probably pricing it in.

 

[MitchJi]

MitchJi,

If HUD was not done, but everything else you said was, would you be satisfied?

(For the record, I'd love HUD, but that's not why I asked.)

I don't believe that a HUD introduction will have a substantial impact on the SP

And I believe it's the least likely of the items I mentioned in three or four months. I think it'll happen eventually.

 

[sdtslafan]

AFAIK Tesla shtdown in Oct to change over to AP2 HW. As indicated, Tesla produces for overseas early in the quarter so they can be delivered within that quarter. I have seen no reports of delays over parts sourcing. They would seem to be on track to a good quarter.

Ok hope you're right. People have anecdotally said that their DS told them that part sourcing of AP hardware had been a problem. But again if problem has been resolved and cars are still delivered by 12/31, it may be a nonissue. If they meet or beat guidance, I think it will go a long way to restoring confidence. Stringing together two 25k delivery quarters should show that they've figured production out and demand is robust.

 

[sdtslafan]

Yes.

I was hoping you would say that.

 

[anon]

AFAIK Tesla shutdown in Oct to change over to AP2 HW. As indicated, Tesla produces for overseas early in the quarter so they can be delivered within that quarter. I have seen no reports of delays over parts sourcing. They would seem to be on track to a good quarter.

There are actually numerous reports of delays due to AP2 parts sourcing in the Model X forum on TMC. However, most are only 1-2 weeks and can likely be made up by the end of the year, assuming that the cars were mostly built on time and just awaiting a few parts.

 

[sdtslafan]

HUD for both would help.

Pretty sure that 2170,cells, bigger cheaper packs won't arrive until after the M3.

AP software feature rollout.

I'm confident that about the same time as the final M3 reveal that there will be some substantial price drops on the MS-MX.

They don't need to constantly improve the MS-MX, if they increase their footprint, they haven't saturated the market.

Q4 the market completely missed the significance. Almost everything that,allowed the positive financial results are either permanent or they will increase.

MX finally turned the corner on MX production and the associated service costs. Tesla will continue to improve and increase production.

Reduced costs due to more leverage with suppliers and increased volume. This will continue to improve, particularly with items that are common to the M3 and MS-MX, e.g. AP hardware and software.

Increased profit margins are going to improve due to 100 packs and AP charges. New financial catalysts.

Focus on capital efficiency.

They won't always be able to save up zev credits but I don't think that they are going away either.

Anyone who thinks that they are jeopardizing the M3 ramp to improve the short term SP doesn't know Elon and either hasn't been paying attention or thinks that he and Jason are lying.

Really soon TE will start to kick in, by the Q2 ER-CC at the latest, probably by Q1, and maybe by Q4.

I hope they hold off on HUD. There are already so many things that can malfunction, why make it even more complex? It just adds execution risk and risk of repair costs down the road.

Just get good cars out in the road for a good price at a good margin. Elon, although brilliant, should follow the KISS (keep it simple stupid) principle.

 

[MP3Mike]

beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold

SO if 200,000 reported 7/1/2017 (3rd qtr), you get 2 qtrs more BEFORE the phaseout year starts (i think i think), because of word "After" (my head hurts every time i read this tho)
{and now i'm not sure again}

Nope, you are reading it wrong: "The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States"

So the first phase out quarter, 50% credit, is the second quarter after they meet the 200,000. So if they meet it in 17Q3, then 17Q3 and 17Q4 are 100% credit, and 18Q1 and 18Q2 are 50% credit, and 18Q3 and 18Q4 are 25% credit.

 

[ongba]

I'll talk about some of your choices for rolling them to J19's.
If you roll them before they are green, obviously you are going to lose something. Lesson is when buying call options buying when the SP is low is critical.

If you roll them while they are OTM for the same strike price the delta will be higher in the J19's. A losing proposition because the further the price increases the less corresponding J19's you will be able to buy. Once they are ITM as the price increases you will start to be able to J19's the more the price of the J18's increases. I'd be inclined to wait at least until January numbers and the GF event, hopefully producing cells and some positive news on TE. February ER-CC should be good as well, but I'm leery of the trump effect.

I think that Q1-Q2 should also be excellent, if there are no real or preceived hiccups in the M3 ramp.

If you decide to roll them before they turn green you might could consider getting a higher strike price. That's normally considered riskier strategy, but you might believe that the risk for something like J19 $240-250's is less than for your J18 $200's. That could potentially undo some or all of the loss eventually.

Another choice that I tried myself, that currently looks like a big mistake, very risky, would be to roll them to something with a shorter expiration, probably with a lower strike price, June17's for example. I rolled my J18 $280's to March 2017 230's I ended up with about ten percent more options and a bigger delta. I did that just before the Q3 numbers because I was confident that the numbers and the ER-CC would be excellent. That was correct but the SP didn't move as I expected. Still if the SP gets to about $230 I'm green on the entire purchase, but I'd need about $250-260 for the J18's to be green.

Mitch,

Thanks so much for your detailed response. As of now, I plan to hold the Jan 18 calls through, at the latest, may 2017, which like you said, will allow for 2 earnings calls (feb, may) as well as the Jan numbers and GF. One thing I am certain is, the stock will not remain at 180 for the next 6 months..Ie there will be big price swings in either direction.

 

[MitchJi]

I hope they hold off on HUD. There are already so many things that can malfunction, why make it even more complex? It just adds execution risk and risk of repair costs down the road.

Just get good cars out in the road for a good price at a good margin. Elon, although brilliant, should follow the KISS (keep it simple stupid) principle.

HUD is a simple well proven technology. First came to market in the 1980's and people liked it. The differences now are that the cost is much less and the quality iand reliability are much better.
Wikipedia:
Timeline

[*]1988: General Motors began using head-up displays. Their first HUD units were installed on Oldsmobile Cutlass Supreme Indy Pace Cars and replicas. Optional HUD units were subsequently offered on the Cutlass Supreme and Pontiac Grand Prix before being more widely available.

 

[MitchJi]

The 5 Best-Selling Electric Cars of 2016 -- The Motley Fool


Electric-vehicle sales have jumped in 2016, with InsideEVs reporting that U.S. sales were up 30.7% through October to 120,517 units, and worldwide sales were up 30.1% to 518,440 units. And this could be the calm before the storm with Tesla Motors (NASDAQ:TSLA), General Motors (NYSE:GM), and Ford (NYSE:F) all launching high-profile EVs in 2017.

Here's a look at which models are selling well in 2016 and what it might mean for next year's EV market.

Tesla leads the EV charge
It shouldn't surprise anyone that Tesla is leading the EV revolution, given its sole focus on making electric vehicles. Through the first 10 months of the year, the company sold 22,171 Model S units in the U.S. and 13,448 of the SUV Model X, good for the No. 1 and No. 3 spots on the list of best-selling EVs. And this is ahead of the Model 3 launch next year, which could be transformational in the EV industry.

The Chevy Volt from General Motors is No. 2 in sales so far this year with 18,517 vehicles sold. The car isn't all-electric, but it's the precursor to the all-electric Bolt coming in limited quantities late in 2016.

Ford's Fusion Energi is fourth in sales with 13,022 sold; Nissan's Leaf has sold 10,650 vehicles, placing it in the fifth spot; and BMW's i3 comes in sixth with 6,205 sales. Ford's C-Max Energi and BMW's X5 xDrive40e are also notable in the sales lineup of vehicles with electric capabilities.

What we can learn from EV sales
If you look at the trends from 2015 to 2016, you can see that Tesla's all-electric long-range strategy is gaining traction. At the same time, Nissan and BMW, both with all-electric short-range vehicles, have seen sales fall during the year. Interestingly, hybrid EV sales are up, with the Chevy Volt and Ford Energi offerings both picking up steam in 2016.

The lesson for automakers here is that making a short-range all-electric vehicle is a terrible way to dip their toes into the EV waters. They've seen better results with either making a hybrid that takes any range anxiety out of the question, or going all-in and making a long-range electric vehicle that will wow consumers.
<Snip>
2016 could be a turning point for EVs
This year may be seen as the point at which the EV industry went from its nascent stage to a full-on growth mode. Customers are now demanding EVs that have long range and high performance, and automakers are starting to respond. I wouldn't expect Tesla's leadership position to be challenged in the next few years, but we'll have to see if companies like GM, Ford, and BMW make a more concerted effort to bring EVs to the market before Tesla can consolidate power. So far, their products haven't gained the kind of traction Tesla's have, and that'll need to change in order for automakers to bring EVs to the masses.

 

[sdtslafan]

HUD is a simple well proven technology. First came to market in the 1980's and people liked it. The differences now are that the cost is much less and the quality iand reliability are much better.

You may be correct. I don't know as much about it. But why not put it in the second iteration of model 3? There must be a reason other car companies have held back. Avoid the model X error of packing too much in at once. Minimize the effect on service centers should something go wrong.

Tesla is SO FAR AHEAD.

Just need make layups and they win the series. Everything doesn't need to be an in your face dunk.

But I guess Tesla wouldn't in this position if they didn't dunk.

 

[MitchJi]

You may be correct. I don't know as much about it. But why not put it in the second iteration of model 3? There must be a reason other car companies have held back. Avoid the model X error of packing too much in at once. Minimize the effect on service centers should something go wrong.

Tesla is SO FAR AHEAD.

Just need make layups and they win the series. Everything doesn't need to be an in your face dunk.

It will probably be in the MS-MX before it's in the M3.