TSLA Market Action: 2018 Investor Roundtable

[rameshbende]

Good article
Elon Musk Races to Exit Tesla’s ‘Production Hell’

 

[Reciprocity]

September '17 the SP reached $389 on speculation of quickly achieving 5000 M3/week. Well, we are days away from that confirmation of a steady run rate so I expect to move back into that range by Tuesday. That's a 15% increase over yesterdays closing price. Not a short squeeze, but a short hug...and I'm not even talking about the news that will trigger a short squeeze which I can only guess. Never bet against change.

If you recall the year before that date, the run up to 389 was an a constant onslaught of green days. That is the kind of squeeze I expect over the next 12 months. With the occasional macro landmine to blow up your aggressive calls, so play it safe out there.

Couple of things to keep an eye on. What if Tesla is doubling S/X production for tax credit phase out into the end of the year and later for China tariffs demand. This would require 2170 cells, so it's not going to be easy.

The second thing, and I predicted this a couple months ago.. cash balance in Q2 could be stable vs Q1. How I get there is 100,000 orders from the flood Gates being opened up yesterday and today will add $250M in cash. There could also be a bunch of new China reservations from the recent tour of model 3 in China, but I don't have a good idea what that count would be. Lower capex due to payments for model 3 equipment competed in Q2 and Tesla putting off more capex until later this year. 25,000 model 3 deliveries vs less than 10,000 in Q1 and the negative cash cycle kicking in on the majority of those deliveries means half will be cash positive in Q2. The total of these things could offset the typical quarterly cash burn. Not to mention that Tesla will deliver an enormous amount of cars in the first week of Q3, freeing up more cash. Which will assure investors that cash is stable going forward.

If Tesla announces that S/X production was increasing to 3k/w or more, that could contribute to a squeeze. 1000 more S/X would be equivalent to 3,000/w model 3s in terms of gross profits. It would also kill this negative demand narrative. A commination of tax credit phase out and China would be the Targets of the new demand. I expect Tesla to eventually double production on these two vehicles by 2019 either way, assuming tariffs get worked out it Tesla pulls a tilberg in China. Again, reliant on 2170 packs, which is a non trivial effort.

 

[Words of HABIT]

If you recall the year before that date, the run up to 389 was an a constant onslaught of green days. That is the kind of squeeze I expect over the next 12 months. With the occasional macro landmine to blow up your aggressive calls, so play it safe out there.

Couple of things to keep an eye on. What if Tesla is doubling S/X production for tax credit phase out into the end of the year and later for China tariffs demand. This would require 2170 cells, so it's not going to be easy.

The second thing, and I predicted this a couple months ago.. cash balance in Q2 could be stable vs Q1. How I get there is 100,000 orders from the flood Gates being opened up yesterday and today will add $250M in cash. There could also be a bunch of new China reservations from the recent tour of model 3 in China, but I don't have a good idea what that count would be. Lower capex due to payments for model 3 equipment competed in Q2 and Tesla putting off more capex until later this year. 25,000 model 3 deliveries vs less than 10,000 in Q1 and the negative cash cycle kicking in on the majority of those deliveries means half will be cash positive in Q2. The total of these things could offset the typical quarterly cash burn. Not to mention that Tesla will deliver an enormous amount of cars in the first week of Q3, freeing up more cash. Which will assure investors that cash is stable going forward.

If Tesla announces that S/X production was increasing to 3k/w or more, that could contribute to a squeeze. 1000 more S/X would be equivalent to 3,000/w model 3s in terms of gross profits. It would also kill this negative demand narrative. A commination of tax credit phase out and China would be the Targets of the new demand. I expect Tesla to eventually double production on these two vehicles by 2019 either way, assuming tariffs get worked out it Tesla pulls a tilberg in China. Again, reliant on 2170 packs, which is a non trivial effort.

I thought the MS & MX lines were pretty well maxed out at Fremont at +- 100k/annum. 10% or 20% improve efficiencies seems possible, but 50% seems unlikely without additional line/facility and resulting CapEx spend.

 

[JRP3]

What if Tesla is doubling S/X production for tax credit phase out into the end of the year and later for China tariffs demand. This would require 2170 cells, so it's not going to be easy.

? SX use 18650

 

[mrdoubleb]

I thought the MS & MX lines were pretty well maxed out at Fremont at +- 100k/annum. 10% or 20% improve efficiencies seems possible, but 50% seems unlikely without additional line/facility and resulting CapEx spend.

Right and they have said during past ER calls that they do not intend to do additional Capex ti increase capacity for those cars. They are comfortable with the current rate plus efficiencies.

 

[mongo]

I need to sell some shares for my deposit but I don't want to lessen my position...AHHHH!!!!

Probably just going to hold off a couple of days and see where the stock goes.

Dan

Isn't the deposit via credit card? Open a new card with 0% introductory rate on new purchases for 12-18 months... (or at least time it to delay cash payment till 30-60 out)...

 

[ruralectric]

I got a Harbor Freight ad. But no Tesla invite. May 10th 2016 reservation.

There is still a line somewhere.

Another data point: Non-owner here, and my SECOND reservation status (from 3/20/17) has changed to "ready to design", with a 3-5 month delivery date for AWD. This happened overnight, and seems consistent with Dan Detweiler's post about every reservation converting overnight.

ps: Nobody cares by now, but I too configured my first reservation yesterday : ) : ) : )

 

[22522]

Another data point: Non-owner here, and my SECOND reservation status (from 3/20/17) has changed to "ready to design", with a 3-5 month delivery date for AWD. This happened overnight, and seems consistent with Dan Detweiler's post about every reservation converting overnight.

ps: Nobody cares by now, but I too configured my first reservation yesterday : ) : ) : )

Correction. If I go to Tesla and manage, it says, "ready to be designed" now.

But no email trigger to do this.

Gotta go!

[Thanks to folks here for the configuration trigger]

 

[Irishjugg]

I didn't knew about that and need to verify that the info is accurate.
Realistically, they wouldn't cut prices if demand was high so this is a red flag for investors.

Oh goodness you are cute

 

[Reciprocity]

I thought the MS & MX lines were pretty well maxed out at Fremont at +- 100k/annum. 10% or 20% improve efficiencies seems possible, but 50% seems unlikely without additional line/facility and resulting CapEx spend.

In 2016, Tesla was making up to 2500/w S/X before they cut a shift. Here is a question.. If you had demand for your flagship cars that was 2x what you could produce. Would you try to produce more, or nah?

CapEx wouldnt necessarily be all that excessive. It could be a matter of some small tweaks and tweaks have been made since 2016 that could allow a 24x7 production schedule to build 2500-3000 S/X. The question is, do they have demand for that with Tax Credits expiring. Do they want to sell a $1B more worth of its more profitable product? Can China consume the excess in 2019 and beyond when tariffs are gone? Tesla just added a GA line in 3 weeks with scraps, so I would not put it past them to do something to increase production for S/X with tax credits expiring. There will also be a lot of international pent up demand with Tesla focusing on US tax credit phase out deliveries the rest of this year.

 

[Reciprocity]

? SX use 18650

Yes, and there is a set amount of cells that Panasonic can make. No one knows what that amount is, but lets assume its not 2x what they make today. Maybe 20% more maybe 50% more, but not double.

Tesla would have to make a 2170 pack that is compatible with S/X which will eventually happen, but the timing seems more like they would wait until after the tax credits phase out, about a year from now. The idea that I had was that Tesla could drop the S/X 75D and add a S/X 120D based on 2170, while keeping the S/X 100D with 18650 for at least another year. This will make Panasonic happy and the S 75D gets replaced by the 3 LRD and 3P LRD. The question is, can they make a pack for the S/X that does not require so much change to the pack that the car would need to be resigned to fit the pack. My guess is that they could figure it out, but it may not be a great idea.

The thing I keep going back to in my mind is that Tesla MUST have had a plan for post 200k while tax credits phased out. A plan being to fully leverage the credits for S3X, not just Model 3. I have yet to see what it is for S/X, model 3 is easy to see. Just ramp like crazy and release the P/D variants.

 

[Yonki]

I would normally take black interior, but I hate the wood dash piece. So I had to go white.

OT, but for the record: I wouldn't let the wood dash make me give up my first-choice for interior color. There are many relatively inexpensive options for changing it. RPM Tesla (and possibly others?) have very attractive wraps for it. It can also fairly easily be removed and stained darker (or painted).

 

[MP3Mike]

Yes, and there is a set amount of cells that Panasonic can make. No one knows what that amount is, but lets assume its not 2x what they make today. Maybe 20% more maybe 50% more, but not double.

Tesla would have to make a 2170 pack that is compatible with S/X which will eventually happen, but the timing seems more like they would wait until after the tax credits phase out, about a year from now. The idea that I had was that Tesla could drop the S/X 75D and add a S/X 120D based on 2170, while keeping the S/X 100D with 18650 for at least another year. This will make Panasonic happy and the S 75D gets replaced by the 3 LRD and 3P LRD. The question is, can they make a pack for the S/X that does not require so much change to the pack that the car would need to be resigned to fit the pack. My guess is that they could figure it out, but it may not be a great idea.

But if Panasonic is already having 2170 cell shortages keeping up with the Model 3 production, they likely can't make enough for the S&X as well...

 

[yngwie_2012]

But if Panasonic is already having 2170 cell shortages keeping up with the Model 3 production, they likely can't make enough for the S&X as well...

mini short squeeze underway?

 

[jhm]

Trading advice today.

 

[Unpilot]

Nice morning pop!

 

[jhm]

It's just shorts reloading so they can slam the stock when good news comes out. Don't take the bait.

 

[HG Wells]

It's just shorts reloading so they can slam the stock when good news comes out. Don't take the bait.

Too late. I took the bait a couple of weeks ago.

 

[lklundin]

Pickup truck will have power outlets allowing use of heavy duty 240V, high power tools in field all day. No generator needed.

I could imagine some buyers of Tesla's other models would be happy to add such an option as well - it can't be too expensive. I probably would.

PS. I guess the "No generator needed" is to educate the general public - or maybe some form of Elon Musk humor?

 

[lklundin]

It’s hard to see a squeeze happening without the 5k confirmation.

I am unsure if this is even possible, but what if the timing of the federal tax credit expiration has prompted Tesla to hold back several thousand M3s in Q2 (apart from the Canada exports)?

This could cause the Q2 deliveries to appear artificially low - which the market could interpret as confirmation of unsurmountable production issues with the M3, causing a significant SP dip.

I invite everyone to argue against this line of reasoning.