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TSLA Investor Discussions
- Thread starter Fr23shjive
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Adm
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California grants Tesla $10 million to build Model X
http://www.forbes.com/sites/toddwoody/2012/10/10/california-grants-tesla-10-million-to-build-the-model-x-electric-suv/?partner=yahootix
http://www.forbes.com/sites/toddwoody/2012/10/10/california-grants-tesla-10-million-to-build-the-model-x-electric-suv/?partner=yahootix
CyberDutchie
Active Member
[note - I don't know if this should be in a new thread]
There is plenty of volatility in the market and TSLA is even more volatile. From my observations of the various threads, there are a number of people that are holding their final payment in TSLA stock. Given the resources available on the TMC bulletin boards, I believe we can understand company-specific risks by analyzing the data surrounding the market expectations. Essentially, we should be able to understand if certain expectations will, or will not be, met.
Understanding what is ahead could help people make their own decisions to remain in TSLA or switch to cash, prior to their final payment. I do believe that most of the participants in TMC are long on TSLA and, for multiple reasons, want to be part of the increasing adoption of electric vehicles in the U.S. and abroad.
The key expectations in the financial market appear to be on (1) meeting production levels; (2) the net growth rate in reservations (new reservations less cancellations; and (3) earnings and cash flows. There are other elements of TSLA’s business that we have insight into, including the overall demand for electric vehicles, Supercharger network developments and the value of the Supercharger network, and the value of the TSLA brand.
While some analysts and readers may be bearish and on the short side, given certain information and knowledge, they may change their perspective and (short) position.
It would be good to have some quantitative and qualitative information on the production rates. Somewhere, someone in the TMC network must be calculating the production rates per week, which can be compared to the expectations that Elon and TSLA have set with the markets. It would be nice to know what we at TMC believe the expectations are for the end of Q3, including the number of finished cars in transit and finished cars waiting for minor parts in the Fremont Factory.
People on TMC share their reservation numbers and cancellations. Also, the cancellation of a Model S and a new Model X reservation (i.e., simply switching Model S to Model X). There are other indications of the interest in the Gen III. There are certain expectations that TSLA has set, and expectations that analysts have so they can create financial models to forecast results. Of course, these expectations are adjusted by TSLA’s actual results and TSLA’s guidance.
Regarding earnings and cash flows, I’m not sure we have much insight into these elements except for the impact of production, inventory and net new reservations. Regarding gross margins, we at TMC can understand the configurations being delivered and what the average selling prices are. Generally, more vehicle options results in higher margins. Offsetting the margins are the overtime shifts at the Fremont Factory.
The overall demand for electric vehicles is difficult to calculate, including actual global sales. It would be very interesting to see an analysis of the ‘installed base’ of electric vehicles in the U.S. and forecast at what point will there be more TSLA branded vehicles on the road compared to Chevy Volts, Nissan Leafs, Fiskers, etc. If TSLA produces well built, stylish, advanced cars without a serious mishap then the demand for TSLA vehicles will continue to increase as more and more people become exposed to the brand and the actual vehicles. For example, the cumulative number of Roadsters in the U.S. should be eclipsed by the number of Model S’s on the road before, say, the end of November.
We can probably provide more insight into the Supercharger network by reviewing each of the public sites. Many people, including the TSLA sales people, do not understand the Supercharger network and there have been some insightful comments and videos posted on TMC.
The value of the TSLA brand is not understood at this point. I would propose that brand loyalty is extremely high, noting the conversion from Roadsters to Model S, to Model X reservations. Apple’s latest iPhone demonstrated how fierce brand loyalty is monetized quickly with new products and how protecting, to some extent, existing customers with software and operating system upgrades continues to build the brand.
Let me hypothesize … TSLA’s ‘installed base’ of Roadsters could become stranded in the legacy charging or TSLA may choose to offer some type of ‘upgrade path’ to the Supercharger network. What are they going to do? Given time, upgrades will be made for the Model X, then Gen III. How will TSLA treat its installed base of products, and customers? Insight into how TSLA will keep its products current can increase, or decrease, the value of its brand.
Speaking of the TSLA brand and total sales of electric vehicles in the U.S., shouldn’t financial analysts understand the value of TSLA not spending a huge amount on television and other advertising to build its brand? Compare the amount of advertising for the Chevy Volt and the Nissan Leaf to the pennies that TSLA spends. While some analysts may focus on book value, having insight into the value of intangibles, such as the brand, can help these analysts value TSLA stock.
Those are my thoughts. I could see having some threads on Production Rates, Reservation Rates, Supercharger Locations (one thread for each location), etc.
Please post your responses and any ideas on how to take this forward (or dismiss it).
There is plenty of volatility in the market and TSLA is even more volatile. From my observations of the various threads, there are a number of people that are holding their final payment in TSLA stock. Given the resources available on the TMC bulletin boards, I believe we can understand company-specific risks by analyzing the data surrounding the market expectations. Essentially, we should be able to understand if certain expectations will, or will not be, met.
Understanding what is ahead could help people make their own decisions to remain in TSLA or switch to cash, prior to their final payment. I do believe that most of the participants in TMC are long on TSLA and, for multiple reasons, want to be part of the increasing adoption of electric vehicles in the U.S. and abroad.
The key expectations in the financial market appear to be on (1) meeting production levels; (2) the net growth rate in reservations (new reservations less cancellations; and (3) earnings and cash flows. There are other elements of TSLA’s business that we have insight into, including the overall demand for electric vehicles, Supercharger network developments and the value of the Supercharger network, and the value of the TSLA brand.
While some analysts and readers may be bearish and on the short side, given certain information and knowledge, they may change their perspective and (short) position.
It would be good to have some quantitative and qualitative information on the production rates. Somewhere, someone in the TMC network must be calculating the production rates per week, which can be compared to the expectations that Elon and TSLA have set with the markets. It would be nice to know what we at TMC believe the expectations are for the end of Q3, including the number of finished cars in transit and finished cars waiting for minor parts in the Fremont Factory.
People on TMC share their reservation numbers and cancellations. Also, the cancellation of a Model S and a new Model X reservation (i.e., simply switching Model S to Model X). There are other indications of the interest in the Gen III. There are certain expectations that TSLA has set, and expectations that analysts have so they can create financial models to forecast results. Of course, these expectations are adjusted by TSLA’s actual results and TSLA’s guidance.
Regarding earnings and cash flows, I’m not sure we have much insight into these elements except for the impact of production, inventory and net new reservations. Regarding gross margins, we at TMC can understand the configurations being delivered and what the average selling prices are. Generally, more vehicle options results in higher margins. Offsetting the margins are the overtime shifts at the Fremont Factory.
The overall demand for electric vehicles is difficult to calculate, including actual global sales. It would be very interesting to see an analysis of the ‘installed base’ of electric vehicles in the U.S. and forecast at what point will there be more TSLA branded vehicles on the road compared to Chevy Volts, Nissan Leafs, Fiskers, etc. If TSLA produces well built, stylish, advanced cars without a serious mishap then the demand for TSLA vehicles will continue to increase as more and more people become exposed to the brand and the actual vehicles. For example, the cumulative number of Roadsters in the U.S. should be eclipsed by the number of Model S’s on the road before, say, the end of November.
We can probably provide more insight into the Supercharger network by reviewing each of the public sites. Many people, including the TSLA sales people, do not understand the Supercharger network and there have been some insightful comments and videos posted on TMC.
The value of the TSLA brand is not understood at this point. I would propose that brand loyalty is extremely high, noting the conversion from Roadsters to Model S, to Model X reservations. Apple’s latest iPhone demonstrated how fierce brand loyalty is monetized quickly with new products and how protecting, to some extent, existing customers with software and operating system upgrades continues to build the brand.
Let me hypothesize … TSLA’s ‘installed base’ of Roadsters could become stranded in the legacy charging or TSLA may choose to offer some type of ‘upgrade path’ to the Supercharger network. What are they going to do? Given time, upgrades will be made for the Model X, then Gen III. How will TSLA treat its installed base of products, and customers? Insight into how TSLA will keep its products current can increase, or decrease, the value of its brand.
Speaking of the TSLA brand and total sales of electric vehicles in the U.S., shouldn’t financial analysts understand the value of TSLA not spending a huge amount on television and other advertising to build its brand? Compare the amount of advertising for the Chevy Volt and the Nissan Leaf to the pennies that TSLA spends. While some analysts may focus on book value, having insight into the value of intangibles, such as the brand, can help these analysts value TSLA stock.
Those are my thoughts. I could see having some threads on Production Rates, Reservation Rates, Supercharger Locations (one thread for each location), etc.
Please post your responses and any ideas on how to take this forward (or dismiss it).
CapitalistOppressor
Active Member
For me, the two most important metrics that I've been trying to keep on top of are production rate and reservation rate.
Determining the production rate at this point is akin to Kremlinogy. It's easy to model what Tesla must do in order to meet the goals they have set, but those models can fail at prediction because reality has a tendency to intrude. Based on the tea leaves it looks like Tesla produced between 100 and 150 car last week. The model says that 150 is short of what their goal is, but not drastically so.
A recent announcement that one customer had his window pushed back suggests this is the case. A build rate of 100 would imply many more notifications of a delay. But this is all supposition based on speculation.
Reservations is much more straightforward because we get actual data and there are fewer confounding variables. My recollection of the Sept 23 announcement is that net reservations at that time were averaging more than 30 per day. Plug in the gross reservations since then and we can monitor this activity fairly closely.
Citizen-T
Active Member
I think much of the information you seek is already being compiled in various threads. Sometime when I'm not mobile I might dig them up. Some of these threads are quite sophisticated with forms and spreadsheets with the data.
One thing that you didn't mention that I have been very interested in for more than a year now is the "viral" affect of Model S. More specifically, I hypothesize that every car that makes it onto the road will sell some number of new cars for Tesla. Maybe this is because the owner gives his friend a test drive, or because they pick their client up in it, or maybe some one just passes it in the mall parking lot and, curious, looks it up.
The question: how many new reservations are the direct result of a single Model S making it onto the road. If it is less than 1 we've got a reservation cliff coming up as we burn down the existing backlog faster than reservations are coming in. If it is just 1, we've got a sustainable business case for now but might struggle to fill Model X production. If it is greater than 1, things get really interesting. Greater than 2 and we've got exponential growth that is going to result in the death of at least one major automaker.
It might be time to try to quantify how many sales each new owner is generating. At these very early stages of the curve, exponential growth is going to be hard to detect by just looking at the overall reservation count.
One thing that you didn't mention that I have been very interested in for more than a year now is the "viral" affect of Model S. More specifically, I hypothesize that every car that makes it onto the road will sell some number of new cars for Tesla. Maybe this is because the owner gives his friend a test drive, or because they pick their client up in it, or maybe some one just passes it in the mall parking lot and, curious, looks it up.
The question: how many new reservations are the direct result of a single Model S making it onto the road. If it is less than 1 we've got a reservation cliff coming up as we burn down the existing backlog faster than reservations are coming in. If it is just 1, we've got a sustainable business case for now but might struggle to fill Model X production. If it is greater than 1, things get really interesting. Greater than 2 and we've got exponential growth that is going to result in the death of at least one major automaker.
It might be time to try to quantify how many sales each new owner is generating. At these very early stages of the curve, exponential growth is going to be hard to detect by just looking at the overall reservation count.
Excellent idea. Though sometimes it's hard to know whether the person you gave info to will eventually buy. Just today I was wearing my Tesla shirt and someone asked me about Tesla. They knew about the Roadster but had never heard of the Model S. I gave them some basics about the car and told them to go to the website. The price was not an issue and they already drive a Prius. My instincts say that they will consider buying one but I'll probably never know for certain.
< 1% of America knows about Tesla IMO, and in even in California. maybe some have heard of the roadster but think Tesla is pretty much out of business, from my experience. Advertising is huge
Just tell people to test drive one, regardless if they can afford it or not! at least they will understand the difference between a real car and all of the POS' out there.
CapitalistOppressor
Active Member
My belief is that the majority of new sales will be driven through the retail stores. Seeing a Tesla on the road might get a person into the store, but I think most potential sales will need a store to close. So for me the big issue is opening new stores. Ultimately I'd like to see each store selling ~2 cars per day. If Tesla can manage that we should see really decent sales growth during the next few years.
earthling
Iam Notdesi
As long as they can keep the quality up and resolve any problems quickly when they do arise with the end user, then I believe that we all have a winner here. For me, all of press reports that are appearing now that the S is populating the roads is enough to drive sales for the near term.
Citizen-T
Active Member
I know. Need to discount it somehow if the info comes from TMC. Not an easy task, but getting a leg up on an investment rarely is.
I did a highly unofficial comparison of the number of reservations from september 27th until 9th of october, and came up with 55 new reservations per day (47 if 15% cancellation is subtracted). These numbers are based on numbers reported in the "reservation tally" thread. This is a big step up from the rate of 25-30 about a month ago.
Also made this simple graph from the numbers from shareholders letters:
Zzzz...
Member
Interesting... 50 reservation a day is a very good number. That is 350 a week. They need 400 per week to get to 20k a year sale target. But!
1) Right hand drive model for UK, Japan, Australia was not launched. Sales will grow there after it will become available.
2) 9+ months till car delivery is not helping. That would be addressed as production ramps up.
3) I think TM need to work more closely with EU local media, while they did a great job in US/Canada... Like look at Spain. A country with strong green policies and public opinion favorably(at least in comparison to some other countries) treating America. And one marker on reservation holding map? Seriously? But there is not only Spain out there.
So overall, potential for grows of Model S sales rate is very big. If reservations already are coming at 50 per day level - that is very impressive.
CapitalistOppressor
Active Member
My suspicion is that cancellations have been significantly higher than the historical average in the past couple of weeks. The 60kWh SuperCharger issue produced a lot of publicly reported cancellations, and those public data points were validated by the high level PR attention the issue received from GeorgeB and the eventual mass e-mail walkback of the policy.
The numerous public cancellations and rants (and don't forget the service plan issue which is still simmering) are similar to any other data we get here, in that they represent only a small sample of what is going on in the larger reservation universe. I would guess there were dozens of additional cancellations that were in addition to the normal background rate.
Absolutely, but I must emphasize that these numbers are uncertain. When Q4 is done we`ll see the viral effect. I do not think the estimate can be more than 5-10% off, so even if the numbers are uncertain they show a solid growth! In my opinion reservations will quickly (they are about to) exceed their production goals for 2013, so the question is not "if" they`ll sell 20.000 cars in 2013, it`s how many they are able to produce.
We`ll see in the beginning of 2013 how the cancellation rate has been. As I understood more than 65% of the buyers has so far reserved the 85kw pack? Also, the numbers I`ve based the estimate on are from the period 27th of september till 9th of october, which is after the 60kw/supercharger issue occured, and right about when it was "fixed". In other words, buyers dont seem to be put of by the 60kw/supercharger issue. I feel confident that the cancellation rate will drop when buyers won`t have to wait a year (some have been waiting several years) to receive the car, and sales will accelerate when more pepole realize that the Model S is`nt somewhere in the future. The car is here!
I agree that Tesla needs to steer clear of any PR disasters. I large scale recall would set the company back severely, allthough when they`ve made it this far the hypothetical error that results in a recall must be of a fundamental character to really threaten the company. Given the time and money spent to develom the Model S, I think the chances of a fundamental error are quite slim.
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bonnie
I play a nice person on twitter.
Even though only a small percentage of Model S reservations are posted to the reservation map, it will be a helpful resource to validate that each Model S generates new sales - if the new reservations tend to cluster around existing reservations, it's a good data point that there is a viral effect.
In fact, look at where Roadsters are currently in operation -- that's where the Model S are, for the most part. The viral effect didn't start with the first delivery of a Model S. It started with Roadsters. And Model X reservations also go up as more deliveries are made.
In fact, look at where Roadsters are currently in operation -- that's where the Model S are, for the most part. The viral effect didn't start with the first delivery of a Model S. It started with Roadsters. And Model X reservations also go up as more deliveries are made.
I suspect that's correlation rather than causation. Major pop centers, west coast centric that might have heard of Tesla, west cost is full of engineering types, etc. Just anecdotal, but while I'd heard of the Roadster I paid it little mind since it was, to my mind at the time, a 2-seater millionaire's toy. I'm not saying that mindset was correct, just that even for someone like me in tech that likes gadgets and is in an eco-aware state like Oregon, the Roadster still wasn't making inroads as a legitimate daily car.
I think it was the Leaf actually that made me aware of the Model S. I think I was talking to a buddy about the Leaf, but it was ugly and short range and he said Tesla's coming out with a sedan. Now, it's possible he was more aware of the Roadster and so perhaps my sale was Roadster generated in the seven degrees of Kevin Bacon sense.
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