TSLA Market Action: 2018 Investor Roundtable

[Chickenlittle]

I expect a dip after q2 deliveries number, I think they will underwhelm. But q2 earnings call and outlook, assuming 5k steady state by then, along with high margin model 3 cars sold out through 2018, profitability and China announcement. It will officially be the end of the beginning for Tesla and trigger the short squeeze Elon has mentioned.

Of course deliveries matter but more important is the production rate at the end of qtr and margin improvement

 

[Lump]

A Model S (belonging to a friend of Chelsea Handler) appears to have spontaneously caught on fire while cruising Santa Monica Blvd.

Chelsea Handler on Twitter

Car belonged to Mary McCCormack & husband, (driven by her husband at the time)
Mary McCormack on Twitter
Tesla belonging to husband of US actor Mary McCormack shown shooting flames from undercarriage

 

[MTL_HABS1909]

A Model S (belonging to a friend of Chelsea Handler) appears to have spontaneously caught on fire while cruising Santa Monica Blvd.

Chelsea Handler on Twitter

I wonder why her friend didn’t warn her....

 

[Sparky]

May I ask what street you’re on? Jk is your source reliable?

No idea. It was unsolicited. I try to be aware of my own confirmation biases while scrounging for info at the end of quarter. Like others here, I count Tesla truck carriers when I drive I-5 (19 trucks up-thread beats my previous best of 14!). I visit the 2-3 stores in my area more than I care to admit and talk to all the floor people. I was inquiring about the feelings of the place following the 9% RIF this week and this highlight (already at 5k/week) came out. For sure, like me they have some kool-aid stained shirts. So factor that in.

 

[TrendTrader007]

TT007, why do you think they will be in danger of losing their nerve and sell prematurely? Do you foresee a majoe dip be fore recovering by the end of 2018? In that case, why not hold off until the dip and then leverage up?

TT007, why do you think they will be in danger of losing their nerve and sell prematurely? Do you foresee a majoe dip be fore recovering by the end of 2018? In that case, why not hold off until the dip and then leverage up?

one of the risks of rapid price action is that it’s super scary for both longs and shorts

 

[TrendTrader007]

Bolded part: it's possible, even probable, but you can't know that for sure.
You sound like you know and are expert, but you were already wrong with the same claim in 2017.
One possible outcome of being brave and leveraged is to end up bankrupt (I know, I've almost done it).

Fallacy: you have to be right to make money in markets. You can be wrong 9 times out of 10 and still end up making tons of money
Experts almost never make big money
Most traders don’t know how to handle leverage and mistake being super leveraged with being brave. Their is nothing brave about being leveraged. They don’t know what they are doing and consequently end up becoming voices of reason for the rest of their nondescript careers as has been traders

The biggest mistake is when you don’t know what you’re doing.

Read Art of War by Sun Tzu

 

[ValueAnalyst]

If Musk is sleeping in factory again, 6000/week is possible by end of June, sp ATH will break $400 shortly.

Agreed, and the confirmation of 6,000/week by end June or shortly after would ignite "the short burn of the century." Although the stock is up 25% in two weeks, I do not believe many shorts are yet being forced by their brokers to cover at any cost, which is the definition of a short squeeze. Daily volume has somewhat increased, and came in at ~10 million shares on Friday; but in a short squeeze, I would expect to see it consistently above 20 million daily, maybe more, for at least a week, given the extreme short interest level. This is all predicated on the 6,000/week timing, but if that happens, then the short burn of the century is looking more likely than not.

 

[Chocochip]

3500 units/week now (kinda/almost), 5k requires further improvements. New letter to employees leaked.
Tesla Model 3 production update: Elon Musk will be ‘almost 24/7’ at factory to help fix a few bottlenecks

 

[dmvevguy]

3500 units/week now (kinda/almost), 5k requires further improvements. New letter to employees leaked.
Tesla Model 3 production update: Elon Musk will be ‘almost 24/7’ at factory to help fix a few bottlenecks

I don't like this for sentiment, but if within this week or next week if he can help fix production bottlenecks I think we'll hit 5k/week. The good thing is he's pinpointing the focus of the bottlenecks. It would be so badass within 2 weeks to achieve this target and announce China GF...

 

[Krugerrand]

one of the risks of rapid price action is that it’s super scary for both longs and shorts

I don’t find making money hand over fist while sitting on my couch eating Cheetos and watching FIFA scary. At all. In fact, it’s kind of like a big dream come true.

 

[geometro]

I don't like this for sentiment, but if within this week or next week if he can help fix production bottlenecks I think we'll hit 5k/week. The good thing is he's pinpointing the focus of the bottlenecks. It would be so badass within 2 weeks to achieve this target and announce China GF...

Unfortunately, there are only 2 weeks left in the quarter and last time they extrapolated their production numbers based on a few days it didn’t go over well with a lot of folks.

 

[Krugerrand]

Fallacy: you have to be right to make money in markets. You can be wrong 9 times out of 10 and still end up making tons of money
Experts almost never make big money
Most traders don’t know how to handle leverage and mistake being super leveraged with being brave. Their is nothing brave about being leveraged. They don’t know what they are doing and consequently end up becoming voices of reason for the rest of their nondescript careers as has been traders

The biggest mistake is when you don’t know what you’re doing.

Read Art of War by Sun Tzu

But ignorance is bliss. Knowledge can be paralyzing especially when you know enough to know how much you don’t know.

 

[elasalle]

I cashed out some shares today at a hair under $360 and pulled trigger on a LR+RWD+blue+Aero+EAP. I'm expecting the PPS to move higher next week to make me regret this. But I still have plenty of shares and LEAPs left to enjoy the ride up

The bigger issue is that I don't know what I'm going to do with my user name in a couple of months once I get my M3

As soon as I saw the trade war headlines yesterday getting nastier I kind of did the same yesterday. Closed my 340 PUTS and some SEP Calls.
Have from now till first payment to decide - If SP goes up will use to pay in cash, if SP goes down will sell another put and negate the ~6.5K interest on the 3.85% loan for 6 yrs. ~ cheers

 

[bdy0627]

Here's my take on the leaked production update email. It appears clear that in 2 weeks, they will be somewhere between 3,500 and 4,900 per week. At this point, they are targeting 4,900, so they aren't aiming for a beat, just trying their hardest to close the gap from where they are to get very close to the guidance of 5,000/week.

From Elon's leaked email to employees:
"All parts of the Model 3 production system are now above 500 and some are almost at 700 cars already."
-we don't know how much above 500, but this tells us that they either are now able to, or should be able to, produce over 3,500 units per week. Some processes are almost at 700/day. Of course, you can only produce a complete car at the pace of your slowest process. It's probably safe to assume the bottleneck processes are just slightly above 500 or else they would have indicated a higher level.

Elon "will stay “almost 24/7” at the Fremont factory to help fix the last few bottlenecks to bring the production to ~700 units per day."
-alright, this is his top priority and focus, which should help. That's encouraging. It seems clear that the absolute max to expect within 2 weeks is 700/day = 4,900/week. For anyone optimistically thinking they will surprise and be above 5,000/week, this should temper that idea.

The current bottlenecks all need “radical improvements. These are the ”paint shop output, GA3, bringing up the new GA4, End of Line and Module Zone 4 at Giga”.
-the language is a little concerning here when Elon says they need "radical" improvements in "all" of these bottlenecks. One is bringing up the new GA4 line, so that's less concerning to me since it is going to happen soon, it's likely just a matter of +/- some number of days from the end of the quarter before that one is fully operational. However, the other ones need radical improvements to get faster. Jerome Guillen has been moved to overseeing the new assembly line. JB Straubel is working at the GF bottleneck production of battery packs.

"The CEO invited anyone in the company who “feel can help out in any of those areas” to reach out".
-This line and the one about needing "radical improvements" suggest they haven't yet found the solutions to getting those bottlenecks up to 700/day. It seems to me (disclaimer: I'm not in the manufacturing industry) that it is an awful lot to expect all of these things to happen within the next 2 weeks. It's still quite possible that one of the bottlenecks does not improve much in the timeframe, leaving Tesla perhaps closer to 4,000 than 5,000.

All of this really only matters for the end of quarter numbers, which in turn may affect the news coverage and sentiment. In the end, it looks to me like they are continuing to make meaningful progress on the ramp, but may not be able to jump all the way up to 5,000/week over the next couple of weeks.

 

[wipster]

Good synopsis BDY, that's what I picked up as well. Basically though, they're going to need to get all these bottlenecks straightened out next week in order to actually make ~5K M3's in 7 days by the end of June. Otherwise, if they make >700 cars a day it will just be a 5K/week rate. Not that that is a bad thing mind you.

Let's all keep our fingers crossed...

 

[Unpilot]

i think we are going to look back on this 5k a week stuff in a couple of years and laugh.
Me from my private island!

 

[pyromatter]

From: Elon Musk

To: Everybody

Subj. Only 8 days left to reach 700 cars/day or 5k/week

June 15, 2018

8:27 pm

It's getting very exciting! All parts of the Model 3 production system are now above 500 and some are almost at 700 cars already. Congratulations to all on making so much progress!

That said, radical improvements are still needed in paint shop output, GA3, bringing up the new GA4, End of Line and Module Zone 4 at Giga. We also need to achieve sustained, 700+ per week on the body line.

Wherever you are in the company, if you feel you can help out in any of those areas, please check in with Jat Dhillon on GA3, Jerome Guillen on GA4 and Omead on EoL and JB Straubel or Christ Lister on Module Zone 4.

I will be at our Fremont factory almost 24/7 for the next several days checking in with those groups to make sure they have as many resources as they can handle.

Thanks,
Elon

via Elon Musk tells Tesla employees that 'radical improvements' are needed to hit quarterly targets

 

[YasB]

If this snapshot shows the inside of that new tent, and this is what's supposed to become a new general assembly line, i doubt they can have it up and running in less than 2 weeks.

skabooshka on Twitter

Yet i suspect they will still somehow announce a peak rate close to 5k per week, whatever that means. They'll probably not be able to sustain 5k per week output in July and August. Not that it would matter much financially if they lag some more weeks given how late they already are. Another thing i'm currently asking myself: Aren't robotic assembly lines quite difficult to calibrate and sensitive to temperature and other outside influences? I know that to be true for some of our customers, but they are producing medical equipment and require very high precision. Not sure if that would affect an automotive assembly line, where less precision is needed ... maybe someone more knowledgable could elaborate?

 

[j0hn]

If this snapshot shows the inside of that new tent, and this is what's supposed to become a new general assembly line, i doubt they can have it up and running in less than 2 weeks.

skabooshka on Twitter

Yet i suspect they will still somehow announce a peak rate close to 5k per week, whatever that means. They'll probably not be able to sustain 5k per week output in July and August. Not that it would matter much financially if they lag some more weeks given how late they already are. Another thing i'm currently asking myself: Aren't robotic assembly lines quite difficult to calibrate and sensitive to temperature and other outside influences? I know that to be true for some of our customers, but they are producing medical equipment and require very high precision. Not sure if that would affect an automotive assembly line, where less precision is needed ... maybe someone more knowledgable could elaborate?

i don't think this is the new GA line.

my guess would be they need to use some spaces inside the main building in a different way (like adding duplicate stations) and are taking out all the stuff that doesn't need to be there.

edit: also could be staging of new equiptment looking at all those crates..

but like i said , i am just guessing

 

[mongo]

If this snapshot shows the inside of that new tent, and this is what's supposed to become a new general assembly line, i doubt they can have it up and running in less than 2 weeks.

skabooshka on Twitter

Yet i suspect they will still somehow announce a peak rate close to 5k per week, whatever that means. They'll probably not be able to sustain 5k per week output in July and August. Not that it would matter much financially if they lag some more weeks given how late they already are. Another thing i'm currently asking myself: Aren't robotic assembly lines quite difficult to calibrate and sensitive to temperature and other outside influences? I know that to be true for some of our customers, but they are producing medical equipment and require very high precision. Not sure if that would affect an automotive assembly line, where less precision is needed ... maybe someone more knowledgable could elaborate?

Elon's recent e-mail mention GA3 and GA4. At the shareholder's meeting, he said GA3 was getting set up and would help to get to 5k, so this may be overflow of GA4 parts due to not wanting to disrupt the current 3 lines.
Looks like a bunch of non-production frames, so they may have done some factory cleaning and this is unused things.


(Also may have gotten a good deal from the SpaceX tent supplier)