TSLA Market Action: 2018 Investor Roundtable

[Reciprocity]

Recent factory shut down, slow down in VIN registration. Could it be that AWD is coming?

That was my initial thought, but then the rumor from ride the lightning was issues with robot timing. Then a rumor that Tesla is preparing to test ramp to 3k next week. All rumor. Can't really trust anything, but you can trust facts like new vins registered at nhtsa. Given the 2 rumors, Tesla registered only 1000 new vins in almost a month. So both rumors could be right but Tesla needs vins soon for the 3k rumor to make any sense.

 

[Waiting4M3]

That was my initial thought, but then the rumor from ride the lightning was issues with robot timing. Then a rumor that Tesla is preparing to test ramp to 3k next week. All rumor. Can't really trust anything, but you can trust facts like new vins registered at nhtsa. Given the 2 rumors, Tesla registered only 1000 new vins in almost a month. So both rumors could be right but Tesla needs vins soon for the 3k rumor to make any sense.

Maybe the timing tweak was for robot installing the 2nd motor? A whole week to tweak timing on existing programming seems a little long, given they've already ran several thousands cars through these robots.

Maybe Tesla is now verifying how the 2nd motor addition works before they decide what to build in March, and register more VINs accordingly.

If it works, they can let the cat out of the bag in the next 1-2 weeks, register AWD VINs, open up configurator option. The main upside for Tesla is to make the AWD option available before the next step-up in production ramp, so they can maximize revenue when the production/delivery volume starts to pick up.

If it doesn't work, since they're running out of time to hit the 2500/wk end of March target, so they'll probably punt on AWD for March, and go full throttle with LR+RWD till end of March to try to ht the 2500/wk target, then revisit AWD in April. In this case, they're wise not to let anything about AWD slip, and cause raised expectations and subsequent disappointment and inevitable stock price punishment.

 

[Manton]

Maybe the timing tweak was for robot installing the 2nd motor? A whole week to tweak timing on existing programming seems a little long, given they've already ran several thousands cars through these robots.

Maybe Tesla is now verifying how the 2nd motor addition works before they decide what to build in March, and register more VINs accordingly.

If it works, they can let the cat out of the bag in the next 1-2 weeks, register AWD VINs, open up configurator option. The main upside for Tesla is to make the AWD option available before the next step-up in production ramp, so they can maximize revenue when the production/delivery volume starts to pick up.

If it doesn't work, since they're running out of time to hit the 2500/wk end of March target, so they'll probably punt on AWD for March, and go full throttle with LR+RWD till end of March to try to ht the 2500/wk target, then revisit AWD in April. In this case, they're wise not to let anything about AWD slip, and cause raised expectations and subsequent disappointment and inevitable stock price punishment.

I think slightly maximizing revenue (AWD) isn't enough of an upside to miss the 2.5k/wk guidance. Considering it has been pushed forward already, then confirmed on ER, then reconfirmed in 8K, i think they will do their best to hit it. Perhaps i wasn't paying close enough attention before, but it seems like this time they are really really committed to guidance. Anyone has evidence of the contrary? I'd prefer it actually, would love some discounted shares, nom nom nom!

 

[bdy0627]

I think it is a very safe bet that Tesla will not hit its Q1 goals and I am planning accordingly. In many ways I hope they do not. I want more shares of Tesla and its always easier to get them at a discount after earning a ton of money on Puts after a big miss. Not an advice, but There is about 0 chance Tesla hits 2500/w between now and the last week of the month, which is in 21 days. They dont even have enough Vins registered to do more then 1K/w so it will be easy to tell. They either will register a big chunk of Vins in the next 2 weeks or I am going to buy a lot of Puts, which I will sell a few weeks later to buy discounted shares. Not an advice.

Be careful. I'm sure you already know this, but TSLA often trades in an irrational way. You may expect a miss, get a miss, and inexplicably see the stock go up. I bought puts last fall for an ER that was a miss and the stock did go down, but the puts were so expensive that I still only broke even or lost a little bit. I think what I will likely do is move to shares only as we get closer to the ER. I might pick up a put or two but I'm not confident about that at this point.

 

[Waiting4M3]

I think slightly maximizing revenue (AWD) isn't enough of an upside to miss the 2.5k/wk guidance. Considering it has been pushed forward already, then confirmed on ER, then reconfirmed in 8K, i think they will do their best to hit it. Perhaps i wasn't paying close enough attention before, but it seems like this time they are really really committed to guidance. Anyone has evidence of the contrary? I'd prefer it actually, would love some discounted shares, nom nom nom!

Tesla registered a handful of AWD VINs a while ago, and a few of those have been spotted in the wild. So obviously they can already make them in low volume. The next step is high volume AWD production. I suspect that the Feb shutdown has to do with ramping up AWD high volume production.

I think Tesla could be trying to see if they can build the AWD config AND hit the 2.5k/wk target at this moment, and that's the reason they're holding off registering all the VINs that they might need for March, but only registering a small batch of ~1000 last week, just enough so they can assign VINs for cars going into production right now. If it looks like AWD production can hit high volume in March, then Tesla will register some AWD VINs to build in March. If it doesn't look good, they will register all RWD VINs to build in March, and revisit AWD ramp in April.

 

[BETA1019]

Tesla registered a handful of AWD VINs a while ago, and a few of those have been spotted in the wild. So obviously they can already make them in low volume. The next step is high volume AWD production. I suspect that the Feb shutdown has to do with ramping up AWD high volume production.

I think Tesla could be trying to see if they can build the AWD config AND hit the 2.5k/wk target at this moment, and that's the reason they're holding off registering all the VINs that they might need for March, but only registering a small batch of ~1000 last week, just enough so they can assign VINs for cars going into production right now. If it looks like AWD production can hit high volume in March, then Tesla will register some AWD VINs to build in March. If it doesn't look good, they will register all RWD VINs to build in March, and revisit AWD ramp in April.

I don’t really see them sacrificing their ability to hit guidance for awd. Think they’re just behind. Hope not to try and paint a rosy picture out of (somewhat expected) disappointing news on the ramp.

 

[Reciprocity]

I don’t really see them sacrificing their ability to hit guidance for awd. Think they’re just behind. Hope not to try and paint a rosy picture out of (somewhat expected) disappointing news on the ramp.

You assume that they have enough demand for the LR with single motor. Doesnt seem like that many people want a rwd only car unless its the cheapest version with no PUP. Which we know is not coming until much later in the year.

 

[Reciprocity]

Be careful. I'm sure you already know this, but TSLA often trades in an irrational way. You may expect a miss, get a miss, and inexplicably see the stock go up. I bought puts last fall for an ER that was a miss and the stock did go down, but the puts were so expensive that I still only broke even or lost a little bit. I think what I will likely do is move to shares only as we get closer to the ER. I might pick up a put or two but I'm not confident about that at this point.

im always careful. But thanks. I would never buy puts for a single event. they would be deep in the money long term puts as protection. I would have months to pull the trigger on the puts and they would be used only to increase my long term position whether its calls or stock. no margin though, not for this guy. There are a few stocks that I follow closely and I am just now learning how to put in some protection so I am very interested in any advice.

Edit: Just to be clear, I have no TSLA puts now. Waiting for some clarity and a nice run up.

 

[Crowded Mind]

You assume that they have enough demand for the LR with single motor. Doesnt seem like that many people want a rwd only car unless its the cheapest version with no PUP. Which we know is not coming until much later in the year.

They have enough demand. They’ve barely started inviting non-owners.

 

[Bobbyducati]

sold some calls against my shares i bought last week that are in the red. probably should have waited a little longer as they jumped a $ pretty soon after buying them... such is my luck.

 

[Reciprocity]

They have enough demand. They’ve barely started inviting non-owners.

Who knows really. They could send out 20,000 invites and get 1000 orders and 19,000 say that they are waiting for Dual motor, P and base model. And maybe that extrapolates to less then 2500/w when you consider all US reservations. Could explain Canada as well, they do not have enough demand for the RWD car, which would be why they are pushing hard for Dual motor. Higher ASP and margins as well.

 

[Crowded Mind]

Who knows really. They could send out 20,000 invites and get 1000 orders and 19,000 say that they are waiting for Dual motor, P and base model. And maybe that extrapolates to less then 2500/w when you consider all US reservations. Could explain Canada as well, they do not have enough demand for the RWD car, which would be why they are pushing hard for Dual motor. Higher ASP and margins as well.

Then they’d just invite 20,000 more. Myself and many others haven’t been invited. It’s not demand.

 

[Tenable]

Purchased TSLA 340 weeklies. Feel free to laugh at my pain shortly. ;-)

Edit: Purchased at $3.70. I trade in and out of short term positions quickly, I do not recommend others do the same.

 

[Waiting4M3]

Then they’d just invite 20,000 more. Myself and many others haven’t been invited. It’s not demand.

I think it looks more like Tesla simply ramping up AWD on their original timeline (early 2018), instead of lack of demand for RWD. I'm in the same boat, I've indicated my preference for 1st production configuration on Tesla website but have not received any invitation.

To me, the battery module production delay and 5k/wk push-out shouldn't necessarily also push out AWD introduction. If Tesla already had all the suppliers parts lined up to roll out AWD in Q1, and Fremont factory side of the M3 production is in good shape and constrained by the battery, why would Tesla need to push out the AWD schedule just because the volume constrain on batteries? Wouldn't it make more sense to stick to the plan at Fremont and bring up AWD while they wait on GF side to sort out the battery module/packs? and when those packs start to arrive in higher volume, Fremont will already have a more profitable product mix including AWD ready to roll.

 

[EinSV]

I think it looks more like Tesla simply ramping up AWD on their original timeline (early 2018), instead of lack of demand for RWD. I'm in the same boat, I've indicated my preference for 1st production configuration on Tesla website but have not received any invitation.

To me, the battery module production delay and 5k/wk push-out shouldn't necessarily also push out AWD introduction. If Tesla already had all the suppliers parts lined up to roll out AWD in Q1, and Fremont factory side of the M3 production is in good shape and constrained by the battery, why would Tesla need to push out the AWD schedule just because the volume constrain on batteries? Wouldn't it make more sense to stick to the plan at Fremont and bring up AWD while they wait on GF side to sort out the battery module/packs? and when those packs start to arrive in higher volume, Fremont will already have a more profitable product mix including AWD ready to roll.

This makes sense to me. It wouldn’t surprise me to see the first small batch of employees receive Dual Motors soon as we go through the early stages of Dual Motors S ramp.

If battery production is limiting why not ramp other parts of the process like Dual Motors so they are less likely to be a bottleneck down the road.

 

[BETA1019]

Who knows really. They could send out 20,000 invites and get 1000 orders and 19,000 say that they are waiting for Dual motor, P and base model. And maybe that extrapolates to less then 2500/w when you consider all US reservations. Could explain Canada as well, they do not have enough demand for the RWD car, which would be why they are pushing hard for Dual motor. Higher ASP and margins as well.

But what proportion of the 400k+ reservations do you think are in the united states? My guess - 65% US / 35% rest of world

 

[Waiting4M3]

But what proportion of the 400k+ reservations do you think are in the united states? My guess - 65% US / 35% rest of world

My impression of Tesla sales mix over the last 1-2 years is that ~40% US, and 60% rest of the world. Any reason you think 65% of M3 res are from the US?

 

[SteveG3]

re AWD... probably takes a few months of testing, my memory is we first saw VINs in January.

I think Tesla still has reservationists available to take the first production (RWD, PUP) configuration. I think the AWD testing has begun, so Tesla can try to be in position to ship basically May and June production to Canada if pushing off crossing 200K US deliveries seems doable (i.e., extend the US full tax credit one more quarter).

I find it hard to come up with another explanation as to why Tesla not only moved Canadian reservationists up 6 months (when they announced that they pushed out many US reservation holders 6-9 months), but, also that this included moving up non-owners in Canada, and Canadians have been told they will have the dual motor and SR configuration of the car ahead of the timeframe US reservation holders (including owners) have been told these will be available.

In about a month what Tesla is doing, or trying to do, in terms of Canada and the US tax credit will probably be clear one way or the other.

As far as market action, I think it's just guesswork as to whether the ramp will move quickly in the next few weeks or not. If they don't (which is my gut feeling), I may have another chance at some trading shares. If they do, that's why I've never let go of any core shares. Making use of what the market offers seems much more satisfying than trying to predict exactly when the market will offer us any particular kind of pricing on Tesla or anything else.

 

[BETA1019]

My impression of Tesla sales mix over the last 1-2 years is that ~40% US, and 60% rest of the world. Any reason you think 65% of M3 res are from the US?

Wild guess, to be honest

 

[Waiting4M3]

re AWD... probably takes a few months of testing, my memory is we first saw VINs in January.

I think Tesla still has reservationists available to take the first production (RWD, PUP) configuration. I think the AWD testing has begun, so Tesla can try to be in position to ship basically May and June production to Canada if pushing off crossing 200K US deliveries seems doable (i.e., extend the US full tax credit one more quarter).

I find it hard to come up with another explanation as to why Tesla not only moved Canadian reservationists up 6 months (when they announced that they pushed out many US reservation holders 6-9 months), but, also that this included moving up non-owners in Canada, and Canadians have been told they will have the dual motor and SR configuration of the car ahead of the timeframe US reservation holders (including owners) have been told these will be available.

In about a month what Tesla is doing, or trying to do, in terms of Canada and the US tax credit will probably be clear one way or the other.

As far as market action, I think it's just guesswork as to whether the ramp will move quickly in the next few weeks or not. If they don't (which is my gut feeling), I may have another chance at some trading shares. If they do, that's why I've never let go of any core shares. Making use of what the market offers seems much more satisfying than trying to predict exactly when the market will offer us any particular kind of pricing on Tesla or anything else.

This almost makes sense except that a lot, and I mean a lot of US online 1st day reservations, like me, still currently have Apr-Jun 1st production delivery window. If what you said is true then I guess Tesla will have to delay those people again.