TSLA Market Action: 2018 Investor Roundtable

[jhm]

I'm not entirely convinced that it's just the Model 3 cannibalizing those models. For the Civic and Accord there is something going on (as the HR-V and CR-V have both lost sales), but for the Toyotas...

Camry YTD difference: -12,528
RAV4 YTD difference: +11,870

Corolla family YTD difference: -18,133
C-HR YTD difference: +21,907

Basically, Toyota isn't losing the sales, they're just converting them to crossovers instead. (Now, where they are losing the sales and I suspect not converting them, is Prius family sales, -12,487 units on YTD, and that's with a refresh on the Prius c since then. I also didn't look at the Lexus brand, there may well be sales lost there.)

That's a good point. It is helpful to watch how the brand level results are doing to see the net effect of all this product switching.
U.S. Auto Sales Brand Rankings - August 2018 YTD -

So we see that Toyota is up 6.8% ytd, but down 1.2% for August results. Meanwhile the best selling Camry slipped down 5.4% ytd and a whopping 18.7% down in August.This upgrade to SUV strategy may have been working in the early part of the year before Model3 had much volume, but the Aug results could show cracks in the strategy. Declines appear to be accelerating for the Camry faster in August than the crossover upsale strategy can compensate.

Also from a reputational point of view, it may not look so good to let Camry and Corolla sales fade as Model 3 rises. Will Toyota want to lose best seller rank to the like of Tesla? If they keep going down this path the Model 3 could best the Camry in 12 months. Hard to imagine the press around Toyota Camry losing the number 1 best seller status to Tesla Model 3. This could well signal the death of ICE car in the minds of car buyers. Even if Toyota is upselling all of these losses to crossovers, I think this would be a serious blow to the brands reputation. Toyota would become the company that used to make the best selling car in America.


Of course, if Toyota wants to migrate car buyers into crossover country, Tesla will meet them there with the Model Y. The upshot for Toyota could be to boost revenue for a year or two through upsale. That is certainly a valid objective. But longer term this could be risky. As their product base becomes less diverse, their customer base become more inclined to cross-shop with Tesla and other brands. A generation ago Japanese car makers routed US car makers out of dominance in sedan segments and thus established their place in the US market. Tesla may be turning that same strategy right back at them.

 

[Fact Checking]

Also, Germain Toyota has a land about a mile from us that has easily 300 new cars (and it hasn't changed much in last 3 months)......

Those dealers are in for a financial day of reckoning......

Next couple of months are going to be somewhat awful for them: end of 2017 saw a lot of forced new car sales due to hurricane damage (hurricanes destroyed over 1 million cars in the U.S. last year), so year-to-year comparisons will probably show a drop for the rest of 2018.

Those folks with new cars in hurricane affected areas might also wait another 1-2 years to see how this EV thing is going to work out. Tesla also got some good press back then, you can recharge it from PV, while ICE cars owners have to queue up the gas station, assuming the gas station is functioning. Tesla's doubling as temporary boats due to their excellent mass distribution is also nice in flood or hurricane affected areas.

 

[tivoboy]

310 contracts @ $3 per share for a $420 call is not as much a surprise as the 1,545 contracts traded @ $13.20 per share for $200 puts. That is about $93,000 vs $2.039 million. Open contracts are 7,300 vs. 32,300. Q4 numbers will not even be out by then. Someone thinks they know something...

My bad I quoted you the wrong year. These were Jan 2020 put LEAPS selling at the 420$ strike that were bid up from 155$ to 162$ per share.

I find that a very odd contract to buy.

 

[beachbum77]

My bad I quoted you the wrong year. These were Jan 2020 LEAPS selling at the 420$ strike that were bid up from 155$ to 162$ per share.

I find that a very odd contract to buy.

I would agree. I think buying $2 million worth of $200 puts is just as odd at these elevated prices.

 

[X Fan]

That's a good point. It is helpful to watch how the brand level results are doing to see the net effect of all this product switching.
U.S. Auto Sales Brand Rankings - August 2018 YTD -

So we see that Toyota is up 6.8% ytd, but down 1.2% for August results. Meanwhile the best selling Camry slipped down 5.4% ytd and a whopping 18.7% down in August.This upgrade to SUV strategy may have been working in the early part of the year before Model3 had much volume, but the Aug results could show cracks in the strategy. Declines appear to be accelerating for the Camry faster in August than the crossover upsale strategy can compensate.

Also from a reputational point of view, it may not look so good to let Camry and Corolla sales fade as Model 3 rises. Will Toyota want to lose best seller rank to the like of Tesla? If they keep going down this path the Model 3 could best the Camry in 12 months. Hard to imagine the press around Toyota Camry losing the number 1 best seller status to Tesla Model 3. This could well signal the death of ICE car in the minds of car buyers. Even if Toyota is upselling all of these losses to crossovers, I think this would be a serious blow to the brands reputation. Toyota would become the company that used to make the best selling car in America.


Of course, if Toyota wants to migrate car buyers into crossover country, Tesla will meet them there with the Model Y. The upshot for Toyota could be to boost revenue for a year or two through upsale. That is certainly a valid objective. But longer term this could be risky. As their product base becomes less diverse, their customer base become more inclined to cross-shop with Tesla and other brands. A generation ago Japanese car makers routed US car makers out of dominance in sedan segments and thus established their place in the US market. Tesla may be turning that same strategy right back at them.

Model Y is a very important product & it's introduction may be timed with an accelerating reflection point in EV sales.....

I don't doubt it will be a great product but Y needs to come out on time!

 

[Fact Checking]

Back to Market Action:

• $TSLA did something rather impressive in today's trading: after the +$9 spikes in pre-market trading there was a +$4 rise on open
  
• But after open $TSLA shrugged off a ~0.7% drop on NASDAQ as if nothing happened. Normally that would correlate to a -1.5%-2% drop.
  
• When the NASDAQ drop rebounded a bit $TSLA went up and triggered a breakout.

This is usually a sign of strong professional buy/accumulation interest, although it's too early yet to call yesterday's low a pre-Q3 bottom.

 

[Tslynk67]

So Joe Rogan is the exact inverse of David Gelles @ NYT?

Good!

He's an MMA fighter too, no and does stand-up comedy. Talented man.

JR that is, not DG...

Nice gap up so far on fairly low volume...

 

[Tslynk67]

This article looks accurate, inclusive, balanced and broad to me. Good article to share to introduce the world of EV, Tesla, and Elon. Provides a fairly complete list of negatives of Elon and Musk without the FUD. Mercedes-Benz is finally taking on Tesla. It probably won’t work.

Just started reading, just be aware there are already a few questionable things early-on - they state the range as 279 miles, but I think this was already down-graded to 200, or 220, depending which MBenz person you believe.

Also this I think is a typo: "The Model S and Model X are among the best-selling electric cars in the US, outpacing conventional luxury vehicles from Audi to BMW." - is should read "among the best-selling cars", the ARE the best-selling electric cars...

So read with a critical eye...

 

[ggr]

Who seriously cares about 2% or even 4%?! TSLA has lost over 30%,of its value and needs to go up nearly 40%

"A journey of a thousand miles begins with a single step." -- Lao Tzu.
If you are truly long (which I doubt), be happy. Otherwise double down on your trolling.

 

[Krugerrand]

Elon going on Joe Rogan tomorrow. Any predictions on if he'll say something to crash our stock prices some more?

It’s not his fault the media want to ignore the truth of what’s happening at Tesla Motors, Tesla Energy, Gigafactory, etc... and instead want to try and find some totally unrelated fodder to sling. Elon could say anything and it’ll be turned negative.

So yes, of course Elon will say something that someone will take out of context that in turn may affect the SO negatively. SSDD.

 

[MartinAustin]

Nice price action. I only wonder what the shorts are up to... perhaps they are waiting until tomorrow to attack after the Joe Rogan Experience. (a gamble... as the interview might go really well)

I timed the market well, buying at $280 yesterday. (a very short term statement

Comment on the GoodCarsBadCars numbers - 1) I believe they are USA+Canada. 2) some of the drivers of those top four cars, Corolla, Camry, Accord and Civic, are the kind of people with a lot more money in the bank than they like to communicate, but they don't normally see value in spending a lot of money on their cars. Tesla cars have a unique ability to "unlock the wallet" of some of these people, and they will buy a Tesla. I can personally attest to this... going from a Civic which I had for 11 years to a Model S!!! I would never have bought a Mercedes S Class. I believe that, in USA+Canada at least, that all cars, and especially the top 4 are suffering in part from people opting for Model 3.

I realised what UBS stands for today. (The first letter stands for "Utter.")

 

[Truthsetter]

Every gain is just being sold again... We hit 290$ and back down to 286$. I am not in a very positive mood about this price action. Just a slow breath before it gets further down. Or Elon does really tweet something very positive. Maybe another buyout at 450$ this time?

To me it just seems TSLA can fall very very quick and hard but to regain the share price it is very difficult.

I imagine myself TSLA like a big mountain and you have a non-electric bycycle. It makes a lot of fun riding it all the way down but riding up the mountain is really really hard.

Amazon stock and Apple stock is more like driving a Ferrari up the hill.

 

[winfield100]

Next couple of months are going to be somewhat awful for them: end of 2017 saw a lot of forced new car sales due to hurricane damage (hurricanes destroyed over 1 million cars in the U.S. last year), so year-to-year comparisons will probably show a drop for the rest of 2018.

Those folks with new cars in hurricane affected areas might also wait another 1-2 years to see how this EV thing is going to work out. Tesla also got some good press back then, you can recharge it from PV, while ICE cars owners have to queue up the gas station, assuming the gas station is functioning. Tesla's doubling as temporary boats due to their excellent mass distribution is also nice in flood or hurricane affected areas.

Off Topic
We got outta Cape Coral (120 miles SW of Tampa on west coast of Florida) monday, 4am
just ahead of pulse of 3 Million evacuating the state up I-75 and I-95
Cape Coral ran out of gas later that day (100,000+ residents)
Interstate 95 kinda trashed/unpassable in North and South Carolina soon afterwrds, detours of 100+ miles west

 

[Fact Checking]

Just started reading, just be aware there are already a few questionable things early-on - they state the range as 279 miles, but I think this was already down-graded to 200, or 220, depending which MBenz person you believe.

BTW., this explains why traditional ICE avoided the EV space for so long: it has now forced them to come out with utterly unconvincing concepts that lay bare the competitive advantage of Tesla.

I mean, is Mercedes's top EV offering going to be 200-220 miles by 2020 when Tesla will probably be shipping 120-150kWh battery packs, not to mention the 2020 Roadster with a 200 kWh battery pack and 1000 km (620 miles) of range? Really?

How does Benz think they'll be able to generate premium EV sales if they are offering only 30-50% the expected vehicle range of the market leader, Tesla?

 

[beachbum77]

Every gain is just being sold again... We hit 290$ and back down to 286$. I am not in a very positive mood about this price action. Just a slow breath before it gets further down. Or Elon does really tweet something very positive. Maybe another buyout at 450$ this time?

I think we are seeing day-trader activity today. They saw the opportunity in the pre-market numbers. They jump in quick and bail as soon as the numbers seem to peak.

 

[jeewee3000]

Every gain is just being sold again... We hit 290$ and back down to 286$. I am not in a very positive mood about this price action. Just a slow breath before it gets further down. Or Elon does really tweet something very positive. Maybe another buyout at 450$ this time?

To me it just seems TSLA can fall very very quick and hard but to regain the share price it is very difficult.

I imagine myself TSLA like a big mountain and you have a non-electric bycycle. It makes a lot of fun riding it all the way down but riding up the mountain is really really hard.

Amazon stock and Apple stock is more like driving a Ferrari up the hill.

You clearly have not been following the Tesla stock price for too long.

 

[HG Wells]

NASDQ down 45 we are up 8.
N I C E

 

[mspohr]

Nice price action. I only wonder what the shorts are up to... perhaps they are waiting until tomorrow to attack after the Joe Rogan Experience. (a gamble... as the interview might go really well)

I timed the market well, buying at $280 yesterday. (a very short term statement

Comment on the GoodCarsBadCars numbers - 1) I believe they are USA+Canada. 2) some of the drivers of those top four cars, Corolla, Camry, Accord and Civic, are the kind of people with a lot more money in the bank than they like to communicate, but they don't normally see value in spending a lot of money on their cars. Tesla cars have a unique ability to "unlock the wallet" of some of these people, and they will buy a Tesla. I can personally attest to this... going from a Civic which I had for 11 years to a Model S!!! I would never have bought a Mercedes S Class. I believe that, in USA+Canada at least, that all cars, and especially the top 4 are suffering in part from people opting for Model 3.

I realised what UBS stands for today. (The first letter stands for "Utter.")

I have the same situation. Before I bought my Model S, my previous new car was a $20,000 Fiat 500. I never cross shopped any other luxury car. I would never have spent $100,000 on an ICE car but was happy to buy the Tesla. People will spend more for a Tesla.

 

[EV forever]

Nice price action. I only wonder what the shorts are up to... perhaps they are waiting until tomorrow to attack after the Joe Rogan Experience. (a gamble... as the interview might go really well)

I timed the market well, buying at $280 yesterday. (a very short term statement

Comment on the GoodCarsBadCars numbers - 1) I believe they are USA+Canada. 2) some of the drivers of those top four cars, Corolla, Camry, Accord and Civic, are the kind of people with a lot more money in the bank than they like to communicate, but they don't normally see value in spending a lot of money on their cars. Tesla cars have a unique ability to "unlock the wallet" of some of these people, and they will buy a Tesla. I can personally attest to this... going from a Civic which I had for 11 years to a Model S!!! I would never have bought a Mercedes S Class. I believe that, in USA+Canada at least, that all cars, and especially the top 4 are suffering in part from people opting for Model 3.

I realised what UBS stands for today. (The first letter stands for "Utter.")

I can attest to the “unlock the wallet” as well. Model 3 is THE most expensive car we have ever purchased. Not because we couldn’t afford an expensive car before, but because we saw no value is anything other than a typical accord or Camry. We did have an SUV when kids were younger which was 45k with upgrades, that was in 2003. Our incomes have more than doubled since then, but we would still never have shelled out 55k for anything other than a Tesla.

 

[Artful Dodger]

Thanks for report.....it's even more significant since they all have been running promotions in August to boost sales....

And perhaps more important is the revenues for Tesla. If we have an ASP of $60K (very possible in Aug due to the high proportion of AWD and P versions, plus all-white Int. and ea.w. LR/PUP) then that's about $1.227B in revenue for August alone.

And if we can say 15% Gross Margin, then that's $184M Gross Profit. Not a bad month's work, wot?

BTW, the top-selling Camry at $30K ASP and 30K sold is only $900M gross for August, and remember that a good chunk of that goes to the Dealers, not to Toyota.

So who's yer Elon now, boys? That's right. Elon is. Uh-huh.