.ickup: SUV/ minivan: sedan: high MPG. Which type is used for commuting long distances? Which type is used by contractors/ farmers/ businesses for job site support? The top vehicle in the very large segment was an F-350 crew cab 4WD, how many high speed highway miles is that going to see?
I believe you missed the biggest "growth story" news in the Q3 call: Model Y mass production got accelerated by 9-12 months (!), to ~June 2020.
This is a significant source of near term growth:
Note that this is both revenue growth, GAAP income and cash income growth: if the $4,000 margin advantage is realized, then for every 1k/week Model Y production it's +$650m revenue (10% growth on top of the current top line), while 20% margins improve to 30%, which generates $195m of cash and GAAP income for every 1k/week unit of production growth, all other things equal.
- Model Y initial capacity is 1,000/week, with a ceiling of probably around 3,500/week, maybe as high as 7,000/week.
- Model Y entry price is ~$4,000 higher than the Model 3, for the same cost of goods. This means a massive +10% margin improvement.
- China GF3 has been built with Model Y production from scratch - introducing the Model Y will be faster and low capex.
There's probably also over a hundred thousand units of pent-up demand for the Model Y, which would further push the order book towards higher trims and higher margins.
Furthermore, Model Y expansion capex is probably half of Model 3 capex, which would give another ~2-3% of GAAP margin advantage in terms of lower per unit depreciation GAAP expenses, at a ~5k/week runrate.
I.e. the Q3 Model Y announcement is a Big Falcon Deal in terms of valuation models: for example Adam Jonas valued 2020 Model Y output at ... $0.
Wut up homies?! Are we mooning yet? Where is @SpaceCash and @StealthP3D? Whose house is the party at this weekend?
All right, though seriously, I'm not popping the champagne yet. Nor willing to margin up or by LEAPS. But I have a good sized stock only position (with limited margin) and made some options money on the move up yesterday, which I converted to stock. I have no idea what the stock is going to do. Either I'm jaded or just confused. We've been here many times. It's a big move with a big gap, and we all know TSLA likes to fill the gaps, and there are even gaps below 250. But unlike previous times, I'm not convinced that this will go back down and fill. This was a major gap up, almost like a so-called "break away" gap, which could end up permanently trapping shorts below.
The stock is really behaving unusual IMO. If you look at the multi-year chart, you'll see that it bounced between approx 180-280 for years and then between 280-380 for some more years. It then had a technical break below 280 support this past spring. At this point, I expected it to either continue falling, or go back into its old range of 180-280, or make a V shape recovery. It now doesn't appear to be doing the former two, so the V shape recovery appears to be on the table. I stated previously that it would take either significant time or sig news to get back above the technical break of 280. The market has determined that this was that news. So this is what I'm hoping for, a V shaped rapid recovery with maybe a minor pullback and partial gap fill, and (eventually) new all time highs. With that said, I'm not willing to bet on it in leveraged fashion. Because we all know how TSLA can be. But to each, their own.
The other two possibilities I see are: that it's a head fake and we quickly fade back down back below into the 180-280 range. We will know whether this is true shortly. Or, second, that it forms a completely new pattern than before, where it freely moves between a new wider range between 180-380. That scenario would just royally suck IMO. As if it isn't bad enough that we had to bounce around in a 100 point range multiple times a year. 200 point range would just be hell. An example of this would be that it goes up to 320-340 (or even 380) and then goes all the way back down to 180 again. That would just suck, esp if you got leaps or other options (personally, if I bought Leaps at 180, I would liquidate them now and convert to shares, as it would just hurt too much to see those leaps come back to 180 -- been there, done that.) This is why I'm just holding shares. Yes, it takes longer till we get rewarded, but much less stress. I only give up opportunity cost and maybe minor margin interest expense.
Anyway, just some thoughts on the matter. Not advice. Good luck to all!
"summer" could be later in the year than June. No need to set ourselves up for potential disappointment of "missed" time frames, I'd rather treat "summer" as pessimistically as possible and be pleasantly surprised
Because they want to get their hands on the $6+B. Banks always want to loan money to those who don't require it.
OT and misuse of statistics:
Those numbers are accidents per million registered vehicles. Not fatalites per accident nor fatalities per million miles driven nor anything scaled to show overal safety.
Look at the trend: low MPG
It also ignores driving acumen vs vehicle type (which type are new drivers more likely to have?)
15-20 year old drivers were involved in 9% of fatal crashes, 65 and over were involved in 18%. What is their vehicle mix?
Overall, 2016 fatality rate was 1.16 per 100 million miles traveled. Extrapolate that to miles driven given fatalities per car. Vehicle mix for fatalities 2016 is attached.
Type of driving:
Table VM-1 - Highway Statistics 2016 - Policy | Federal Highway Administration
The chances of a Bollinger running into a tree at highway speeds is really out there considering the type of person who would purchase one. This occasionally happens to a Tesla driver because many of them are focused on speed. A Bollinger driver tends to be focused on ruggedness and traversing tough terrain. There is a place for both kinds of vehicles. Sure, Bollinger will never sell the amount that Tesla sells, but that's not a problem. Selling enough to make a tidy profit, getting oil leaking vehicles out of the backroads and streams, and making BEVs look cool to a new group of people is just fine.
It takes quite a few years for a typical middle-class person to be in a position to purchase a $40K plus car. Most service techs aren't that old.
I don't see why. Many people, Denise included, want a smaller car. Also, Tesla has such a small part of the overall car market that it will be a long time before the overall vehicle type mix takes over. When Tesla starts selling 5-10M per year it will be a different story. Now there is plenty of room for all the production they can make of both 3 and Y.
