Short-Term TSLA Price Movements - 2016

[Turing]

I have not seen any good VIN counting based analysis here on whether we will hit 25k in q4. Going in to year end, I'd suggest plenty of caution.

This is actually a bit of a bullish indicator if anything. Many of the usual VIN reading experts were tesla skeptics, and so they seem to go more quite and wander off when things are looking pretty good. @neroden Has pointed out that VINs indicate production looks good, but delivery numbers depend on logistics and weather and holiday plans and all that.

One thing to keep in mind is this is the q when SCTY financials are merged and there are likely to be a lot of integration costs baked into this quarter. This will likely cause gaap profitability to be negative, even if TSLA beats on deliveries.

I'd be interested to hear more opinions on this. SCTY is still shifting away from leases, and TE is becoming more noticable, and AP2 providing a nice cash infusion in q4 numbers.

 

[Papafox]

Interesting trading pattern leading up to the close, looks like someone unwinding their position.

Or..
Someone trying to push TSLA into the red before close but meeting resistance with the plan

 

[geneclean55]

Interesting trading pattern leading up to the close, looks like someone unwinding their position.

Agreed. And not that dissimilar from the last couple hours on Friday but in the opposite direction. My bet is MM.

 

[I Am Rolling]

Using ICE auto industry as an analog for Model 3 ramp is probably inappropriate. The 3 is a much simpler car than any ICE car, as well as any other Tesla for that matter. Tesla has specifically designed the 3 to be easy to build and thus ramp.

Hmm, haven't thought about it this way, it's a good point. Does it make up for the complexity of building (so many) cars though?

You've got the body shop, paint shop and the assembly line as the main factories. If the problems occurs in building the body then it doesn't matter how fast you can assemble the car (just an example).

Positives are them buying that German automation company - or is it a panic buy after understating that they need help? How much can that company do for us in a year?

Another positive thing is Elon saying "I've understood how important it is to build the machine that builds the machine" (paraphrasing). But he said that not to long ago IIRC, have he understood this too late?

I'm being negative/pessimistic on purpose, and I don't know the status of the Tesla factories. But to me it's not an easy way to building all those cars and there are a lot of things to be worried about as someone without insights in the company.

 

[EnzoXYZ]

Reading this thread (not all pages since it goes in such a pace) it feels like many are underestimating how hard it is to ramp up production in the auto-industry. I'm worried to be honest.

Thinking about selling 20% of my shares, TSLA totals 20% of my portfolio which is a bit too much me thinks...

Good or bad idea to sell 20% at this moment??

Probably bad just because share price is relatively low in or about 200. If the price is 220+ and we are in April 2017 and still no news on model 3 then all bets are off. That's when selling some be ok idea as a short term trader.

 

[3Victoria]

... Positives are them buying that German automation company - or is it a panic buy after understating that they need help? How much can that company do for us in a year?

Tesla was already working with them a while. I expect they were already working on the line plans and implementation. Just made sense to fold them into the family.

 

[drinkerofkoolaid]

Those of you questioning if the Model 3 will be on time are either trolls or very delusional. Nothing else need be said. Any analyst who thinks the Model 3 will be very delayed has based their assumptions on pure conjecture with zero facts to back up their alleged view.

If you think the timeline for the Roadster, Model S, or Model X are a good proxy of what to expect with the Model 3 you either have no idea what you are talking about, or are delusional.

 

[3Victoria]

I am always amazed that these people that typically doubt Tesla developments often seem to be perfectly willing to take as gospel statements by other OEMs about 'products' 2-7 years in the future.

 

[drinkerofkoolaid]

I am always amazed that these people that typically doubt Tesla developments often seem to be perfectly willing to take as gospel statements by other OEMs about 'products' 2-7 years in the future.

Remember this beauty.

Ex-GM Engineer Explains How Company's 'Culture' Rewards Incompetence

 

[Krugerrand]

By this point I think it's officially official that there will not be significant discounts or lease deals for Q4 inventory, given that Tesla would have trouble delivering inventory cars purchased right now before the end of the year (unless a local purchaser).

I wonder what this says for Q4 deliveries? I have to imagine deliveries and demand must be excellent if they aren't doing a thing to boost numbers all quarter. I suppose it's also possible there has been production issues, but all I've heard is a hiccup with AP2 changeover (some reports of deliveries getting pushed back a week earlier this month) and an issue with 5 seaters (since resolved, deliveries starting). Still, I would think there'd be another effort to sell every available unit if production issues had them at risk of missing 25k guidance.

I think margins will surprise as well since prices have increased, AP2, all glass roof, increased delivery fee, no more X60, very little S60 inventory (mostly 75s, with some 90/100), no lease deals and no significant discounting. If opex is held under control we could be seeing pie v2.0.

Wait for it....

When Q4 is a repeat of Q3, but is pie without the whip cream (whip cream being all that baby cow sugar that supposedly made the pie not worth mentioning) there will once again be a demand issue. Mark my words!

 

[AlMc]

Those of you questioning if the Model 3 will be on time are either trolls or very delusional. Nothing else need be said. Any analyst who thinks the Model 3 will be very delayed has based their assumptions on pure conjecture with zero facts to back up their alleged view.

If you think the timeline for the Roadster, Model S, or Model X are a good proxy of what to expect with the Model 3 you either have no idea what you are talking about, or are delusional.

I am neither delusional or a troll but our frame of reference is delays in EM timelines to date. Can you share your thinking on the date we will see, the 'beta 3', actual production reveal and when we see volume production ( for our purposes let us be conservative and say 2,000 model 3/week)?

While I am not in the Jonas camp of everything is essentially delayed by 12 months +, I will not be surprised to see production begin end of Q3 with at no time during Q4 seeing 2,000/wk.

 

[Krugerrand]

Reading this thread (not all pages since it goes in such a pace) it feels like many are underestimating how hard it is to ramp up production in the auto-industry. I'm worried to be honest.

Thinking about selling 20% of my shares, TSLA totals 20% of my portfolio which is a bit too much me thinks...

Good or bad idea to sell 20% at this moment??

Bad. But what do I know. I'm still wanting to count the pie quarter.

In all seriousness, if you need to rebalance your portfolio and it'll help to do it before the end of the year for tax reasons, then do it. Otherwise, what you talkin' about Willis?

 

[3Victoria]

Wait for it....

When Q4 is a repeat of Q3, but is pie without the whip cream (whip cream being all that baby cow sugar that supposedly made the pie not worth mentioning) there will once again be a demand issue. Mark my words!

Like my old grandma said "If its not one thing, its another." Unfortunately, FUDsters seem to have taken it to heart.

 

[madodel]

While it does sound like GM has encroached on one of Tesla's moats with their announcement of OTA capability, we should keep in mind that we still don't know the breadth of the system. The Model S and X are controlled with a unified computer system which can update the operational parameters of seemingly all of the sub-systems. Historically, ICE automobiles have been controlled by many separate control systems, often not interconnected. As LG was contracted to create the drivetrain control module, it's likely that system can be updated OTA, but it is still unclear how tightly integrated the rest of the systems are. This will be interesting to find out as more hit the roads.

My prediction is that the Bolt sub-systems are still quite segmented, and will not end up with the OTA flexibility enjoyed by Tesla customers.

Hopefully it isn't like the Ford Microsoft Sync crap which updates in the middle of using the GPS. Or we will see Bolts driving off cliffs and what not.

 

[esk8mw]

You can't use VIN counting to solidly project deliveries. However, I've posted several VIN counting analyses here showing that VINs are being handed out at an unprecedented rate for both S and X, suggesting demand (and probably production) are quite healthy.

Replying to my own post here, but had a few minutes to go check and update the VIN counting for Q4. Like my other updates this quarter, it's very good.

Latest S data: over 15,000 VINs so far
Latest X data (as of 12/12): about 11,000 VINs so far
Total: 26,000+
Suggests a pace of about 29,000-30,000 for the quarter.

Comparison to the rest of the year (note early X VIN counting is super shaky, gross estimates given):
16Q1: ~15,000 (12,103 S VINs, unknown X VINs (maybe 3000))
16Q2: ~20,000 (13,100 S VINs, unknown X VINs (maybe 7000))
16Q3: 25,200 (15,000 S VINs, 10,200 X VINs)
16Q4: 29,500 projected (17,000 est. S VINs, 12-13,000 est. X VINs)

In 2015 Q4, deliveries outpaced VINs and production. I have no idea if that's the case this year but I doubt it because Q3 involved a lot of pipeline emptying (also I refuse to believe that 32,000 - 33,000 deliveries are on the table for Q4!). However, I seriously doubt that deliveries will come in below 25,000, which would be 4-5,000 below the VIN pace, especially since VIN assignments have been accelerating all year.

Standard disclaimer: VINs are not the same as production or deliveries. If I say 30,000 VINs got handed out in Q4 that doesn't mean they were all built and delivered in Q4 also - older Q3 VINs get delivered in Q4 and Q4 VINs get built and delivered in Q1. It's an imperfect science. However, VINs can't get assigned if there isn't significant demand/orders so it's obviously a good data point (until such time as you hear about thousands of new Teslas rotting and unsold on some car lot). Trade according to your own risk profile and research.

 

[Papafox]

Interesting trading pattern leading up to the close, looks like someone unwinding their position.

The reason I suggested this is the work of someone trying to push the stock price down, rather than someone trying to lighten their load of shares, is because of the time of day it takes place, and time of day in this case means volume. Why would someone work methodically to shed shares in the afternoon and see the stock price decrease with every passing fifteen minutes of activity when those same shares could have been sold in the morning hours without pulling down the stock price? Selling lots of shares in the low volume afternoon hours is a sure recipe for selling at a lower price than if one sold at a different time of day.

 

[3Victoria]

.... Can you share your thinking on the date we will see, the 'beta 3', actual production reveal and when we see volume production ( for our purposes let us be conservative and say 2,000 model 3/week)?....

I speculate that the final reveal will be last week of March 2017. Early production July to employees. Ramp to 2k/week by 2018q1 and full ramp by 2018q4.

 

[AlMc]

I speculate that the final reveal will be last week of March 2017. Early production July to employees. Ramp to 2k/week by 2018q1 and full ramp by 2018q4.

Early July production for staff would be great. Doubt it happens but I hope you are correct and I am mistaken. Won't be the first or last time.

 

[Krugerrand]

Replying to my own post here...

Always the attention seeker and needing to be the center of attention.

 

[EinSV]

Replying to my own post here, but had a few minutes to go check and update the VIN counting for Q4. Like my other updates this quarter, it's very good.

Latest S data: over 15,000 VINs so far
Latest X data (as of 12/12): about 11,000 VINs so far
Total: 26,000+
Suggests a pace of about 29,000-30,000 for the quarter.

Comparison to the rest of the year (note early X VIN counting is super shaky, gross estimates given):
16Q1: ~15,000 (12,103 S VINs, unknown X VINs (maybe 3000))
16Q2: ~20,000 (13,100 S VINs, unknown X VINs (maybe 7000))
16Q3: 25,200 (15,000 S VINs, 10,200 X VINs)
16Q4: 29,500 projected (17,000 est. S VINs, 12-13,000 est. X VINs)

In 2015 Q4, deliveries outpaced VINs and production. I have no idea if that's the case this year but I doubt it because Q3 involved a lot of pipeline emptying (also I refuse to believe that 32,000 - 33,000 deliveries are on the table for Q4!). However, I seriously doubt that deliveries will come in below 25,000, which would be 4-5,000 below the VIN pace, especially since VIN assignments have been accelerating all year.

Standard disclaimer: VINs are not the same as production or deliveries. If I say 30,000 VINs got handed out in Q4 that doesn't mean they were all built and delivered in Q4 also - older Q3 VINs get delivered in Q4 and Q4 VINs get built and delivered in Q1. It's an imperfect science. However, VINs can't get assigned if there isn't significant demand/orders so it's obviously a good data point (until such time as you hear about thousands of new Teslas rotting and unsold on some car lot). Trade according to your own risk profile and research.

My translation of the VIN numbers (and lots of other data points) is that while Q4 2016 is very likely to be a good quarter, Q1 2017 is likely to be even stronger than Q3 and Q4 2016 across the board for the automotive business -- higher production, higher deliveries and higher margins.

This is very different than Q3, which I think many people thought might be a one-off due to all of the reports of discounting and the full-court press on deliveries.