TSLA Market Action: 2018 Investor Roundtable

[neroden]

Good point Neroden
I see the parallels too
42% drop in February 2016 over 26 trading days vs 35% over 22 days now
90% rally over 40 trading days in February thru early April 2016
Would you please give me some color on the FUD back in February 2016?

I was actually on vacation and didn't read any articles at all so I missed the whole thing. Anyone else got some color?

beside the Nasdaq drop in early 2016
Thanks

 

[dc_h]

I really doubt Amazon invented it. Google have a large cloud infrastructure at the time. Many other as well. They just do not know how to monetize them.

I believe the first parallel processing computers, that proceeded the cloud were built at Argonne Labs outside of Chicago. Google took the concept to a new level and Amazon commercialized it most successfully.

 

[ZachShahan]

The essential problem is that Tesla does not have a solid computer system for doing this sort of communication and does not have a solid non-computer "human protocol" system for it either. It's a lack of internal communications. It doesn't really matter who's in "charge" of scheduling deliveries -- it could be anyone anywhere -- what matters is that there's some sort of database tracking the status of all the cars, that the database *works* and is maintained, and that all the people involved have appropriate access to the database (ability to update it, espcially) and ability to communicate with each other (particularly necessary when the database is inaccurate to figure out who put bad data into it / didn't put updates in). This all clearly isn't happening. It's a communications problem as well as an Information Technology weakness problem.

I don't really understand how/why this hasn't been worked out better by now.

Would like more info on how their system works and where the bottlenecks are.

I was actually on vacation and didn't read any articles at all so I missed the whole thing. Anyone else got some color?

If you want to scroll through Tesla news from that period, starting at page 70 of our Tesla archives will start you out in April 2016: Cleantech News — #1 In EV, Solar, Wind, Tesla News | CleanTechnica

 

[scaesare]

I believe the first parallel processing computers, that proceeded the cloud were built at Argonne Labs outside of Chicago. Google took the concept to a new level and Amazon commercialized it most successfully.

Cloud computing has a lot of specifics around provisioning, scalability, elasticity, multitenancy, etc...

It's not just parallel computing, large internal data-centers, hosting providers, etc...

I'd agree with the earlier posts that Amazon really did this first. Google certainly had impressive internal infrastructure, but Amazon put the public provisioning and other pieces that really made it the cloud, and not just a public datacenter.

 

[bdy0627]

I actually sort of hope you're right, since I'd like another chance to buy cheap, but the next "real news" is 3Q deliveries on October 2nd or so, which is actually *very close now* -- is there really time to have another serious dip in two weeks? I'm looking at the Feb 2016 chart...

I agree with looking at the Feb 2016 chart for comparison. I tend to think this current timeframe is most similar to the stock movement during that time in some significant ways. Obviously, that single dip was worse, but the combination of the most recent dip along with the preceding short climb and the dip before that produced a very similar overall percentage drop. Here's what I am seeing:

12/14/15 - Tesla bottoms from a minor 10.1% dip
12/30/15 - Tesla tops from a 13.6% climb
2/9/16 - Tesla bottoms from the most brutal dip in its history, 42%
Overall drop over the combination of the first dip, climb, and then the last dip: -38.5%
That was the worst drop over such a combination of a dip, climb, dip. The average is -11.6%. The 2nd worst such combination just happened.

Present:
8/14/18 - Tesla bottoms from a huge 25.6% dip
8/23/18 - Tesla tops from a rapid climb of 13.5%
9/7/18 - Tesla bottoms from another large 22.9% dip
Overall drop over the combination of the first dip, climb, and then the last dip: -35%
This was the 2nd worst such combination in Tesla's history, since 2014 anyway
The 3rd worst was -31.8% over the summer of 2015
Again, the average after such a combination is -11.6%

What about the history of the next climb?
The climb after that huge drop in Feb 2016 was 90.8%
The climb after the 3rd worst such combination was 39%
At this point, we are up 15.9% from the recent low

How high should we expect to climb based upon TSLA's history? This is not going off of technicals, though they are undoubtedly buried in this data, including Fibonacci retracements for sure.

Let's look at the data when we add in the next climb, for a total of a dip, climb, dip, and then another climb. Looking at that combination since 2014, the average movement over the combination is +12.9%. After the severe dip in Feb 2016, with the huge following climb, the combination ended up at +52.3%. The worst change after such combination was -10.3% in April 2014. Our current change over such a combination is -19.1%. If this climb ended now, we would end up with the worst such combination by far. If this climb takes us up to a total change of -10.3%, matching the worst ever, the stock would need to climb to $318.

 

[Xpert]

I was actually on vacation and didn't read any articles at all so I missed the whole thing. Anyone else got some color?

If I recall correctly in Feb 2016:

Market was down 10% at the low
Model X ramp was behind
Tesla loses $18k for every car sold
Tesla cannot make any $ on model 3
Tesla cannot build model X
Bold will be tesla killer
Elon is a liar
Competition is coming

 

[elasalle]

I agree with looking at the Feb 2016 chart for comparison. I tend to think this current timeframe is most similar to the stock movement during that time in some significant ways. Obviously, that single dip was worse, but the combination of the most recent dip along with the preceding short climb and the dip before that produced a very similar overall percentage drop. Here's what I am seeing:

12/14/15 - Tesla bottoms from a minor 10.1% dip
12/30/15 - Tesla tops from a 13.6% climb
2/9/16 - Tesla bottoms from the most brutal dip in its history, 42%
Overall drop over the combination of the first dip, climb, and then the last dip: -38.5%
That was the worst drop over such a combination of a dip, climb, dip. The average is -11.6%. The 2nd worst such combination just happened.

Present:
8/14/18 - Tesla bottoms from a huge 25.6% dip
8/23/18 - Tesla tops from a rapid climb of 13.5%
9/7/18 - Tesla bottoms from another large 22.9% dip
Overall drop over the combination of the first dip, climb, and then the last dip: -35%
This was the 2nd worst such combination in Tesla's history, since 2014 anyway
The 3rd worst was -31.8% over the summer of 2015
Again, the average after such a combination is -11.6%

What about the history of the next climb?
The climb after that huge drop in Feb 2016 was 90.8%
The climb after the 3rd worst such combination was 39%
At this point, we are up 15.9% from the recent low

How high should we expect to climb based upon TSLA's history? This is not going off of technicals, though they are undoubtedly buried in this data, including Fibonacci retracements for sure.

Let's look at the data when we add in the next climb, for a total of a dip, climb, dip, and then another climb. Looking at that combination since 2014, the average movement over the combination is +12.9%. After the severe dip in Feb 2016, with the huge following climb, the combination ended up at +52.3%. The worst change after such combination was -10.3% in April 2014. Our current change over such a combination is -19.1%. If this climb ended now, we would end up with the worst such combination by far. If this climb takes us up to a total change of -10.3%, matching the worst ever, the stock would need to climb to $318.

Why not Nov 2016? Then SP jumped based on expectations of M3 ramp. Now we are in the cusp of that fact becoming true .. cheers

 

[RABaby]

I don't really understand how/why this hasn't been worked out better by now.

Would like more info on how their system works and where the bottlenecks are.

For what it's worth, I can offer my experience and what the delivery specialist told me.

I have twice rejected taking delivery of a P3D.
I was probably offered the first Blue one in the area but they only gave a few days notice and I would have to sell stock to pay for it.
They want to flip these fast, so there is no delaying delivery and since I am doing cash with no trade in, there is no alternative to not having cash at the time. Since I have an S, I don't a car. This would be a toy. So no rush and there was no problem on Tesla's end.

Then I got contacted a couple weeks later - that was Wednesday last week, and was told it would be ready on Monday the 10th. I sent email to let the rep know that I had submitted a question about a tax that was inappropriately applied to my due bill and was still waiting for the response that the website said I would get. No response.

So the next day, Thursday, I get a call from a different delivery specialist - this is number 3 that I have spoken to, all out of Nevada. He said I could pick up my car the next day Friday the 7th . I said no way, the question still exists about a tax I have no intention of clawing back from the state after the fact, but more important, the lag between the first car and the second was the going private tweet and the money I had collected to pay for the car was now in TSLA and deep in the hole. But even if I were willing to sell it, which meant around 300 shares instead of 250, there would be a few days lag before the money was ready. Tesla wants to move the cars fast and won't hold them for anyone for any reason.

So the DS had no problem with marking me for a later delivery. It was then that I asked how these are being delivered to people with
no notice and no responses to inquires regarding their due bill? As it turns out, these guys are only remotely involved.
Calling them specialists is kind of a joke. Tesla builds cars and then at some point they are loaded onto a truck with a set of prospective owners for a particular VIN. I don't know if there are multiple distribution centers, or if they are all in Las Vegas, but that is where all my communications have been. So these VINS and customers pop up and the specialists start contacting them. If the first person refuses the car for one reason or another, the next on the list gets a call. If the car doesn't have someone in the area for that spec, it goes into inventory. We know inventory on AWD and performance gets sold quickly. There is plenty of demand.

The specialists are basically acting like cold callers who have a phone list that they go through. There is no system for better communications. One would think that could easily be improved, but the fact that one can input a something on their home page and it shows that a delivery specialist will get back to them but never does, indicates there is a problem. Accepting input and then ignoring it is more irritating to customers than just leaving them in the dark until delivery.

There has to be someone in charge who recognizes the deficiency somehow hurts Tesla sufficient that it is worth improving. It's possible Tesla made the calculation and the irritation to the customer is a lower cost than correcting the system. Or they are trying and we have not yet seen the improvements.

While Tesla has a ways to go to get the delivery system running in a customer friendly style, but the important thing is that they are pumping out the cars and trying to get them to people. The real problem is that the just in time style doesn't work the same once the item is ready for a customer. If I were anxious to know the status of my car, it would be an issue. People just need to be patient.

 

[MikeC]

Good point Neroden
I see the parallels too
42% drop in February 2016 over 26 trading days vs 35% over 22 days now
90% rally over 40 trading days in February thru early April 2016
Would you please give me some color on the FUD back in February 2016?
beside the Nasdaq drop in early 2016
Thanks

It was the China stock market crashing, leading to fears of global contagion and a credit crunch. The idea was that TSLA, requiring capital infusions because of production delays, was especially vulnerable.

 

[EinSV]

It was the China stock market crashing, leading to fears of global contagion and a credit crunch. The idea was that TSLA, requiring capital infusions because of production delays, was especially vulnerable.

Also at that time Model X ramp was just getting started and was extremely rocky.

 

[Boomer19]

For what it's worth, I can offer my experience and what the delivery specialist told me.

I have twice rejected taking delivery of a P3D.
I was probably offered the first Blue one in the area but they only gave a few days notice and I would have to sell stock to pay for it.
They want to flip these fast, so there is no delaying delivery and since I am doing cash with no trade in, there is no alternative to not having cash at the time. Since I have an S, I don't a car. This would be a toy. So no rush and there was no problem on Tesla's end.

Then I got contacted a couple weeks later - that was Wednesday last week, and was told it would be ready on Monday the 10th. I sent email to let the rep know that I had submitted a question about a tax that was inappropriately applied to my due bill and was still waiting for the response that the website said I would get. No response.

So the next day, Thursday, I get a call from a different delivery specialist - this is number 3 that I have spoken to, all out of Nevada. He said I could pick up my car the next day Friday the 7th . I said no way, the question still exists about a tax I have no intention of clawing back from the state after the fact, but more important, the lag between the first car and the second was the going private tweet and the money I had collected to pay for the car was now in TSLA and deep in the hole. But even if I were willing to sell it, which meant around 300 shares instead of 250, there would be a few days lag before the money was ready. Tesla wants to move the cars fast and won't hold them for anyone for any reason.

So the DS had no problem with marking me for a later delivery. It was then that I asked how these are being delivered to people with
no notice and no responses to inquires regarding their due bill? As it turns out, these guys are only remotely involved.
Calling them specialists is kind of a joke. Tesla builds cars and then at some point they are loaded onto a truck with a set of prospective owners for a particular VIN. I don't know if there are multiple distribution centers, or if they are all in Las Vegas, but that is where all my communications have been. So these VINS and customers pop up and the specialists start contacting them. If the first person refuses the car for one reason or another, the next on the list gets a call. If the car doesn't have someone in the area for that spec, it goes into inventory. We know inventory on AWD and performance gets sold quickly. There is plenty of demand.

The specialists are basically acting like cold callers who have a phone list that they go through. There is no system for better communications. One would think that could easily be improved, but the fact that one can input a something on their home page and it shows that a delivery specialist will get back to them but never does, indicates there is a problem. Accepting input and then ignoring it is more irritating to customers than just leaving them in the dark until delivery.

There has to be someone in charge who recognizes the deficiency somehow hurts Tesla sufficient that it is worth improving. It's possible Tesla made the calculation and the irritation to the customer is a lower cost than correcting the system. Or they are trying and we have not yet seen the improvements.

While Tesla has a ways to go to get the delivery system running in a customer friendly style, but the important thing is that they are pumping out the cars and trying to get them to people. The real problem is that the just in time style doesn't work the same once the item is ready for a customer. If I were anxious to know the status of my car, it would be an issue. People just need to be patient.

this is similar experience i’ve had. tough to contact the parties that can give you more than canned answers. hard to get a response when you do contact them. pretty much in dark.
that needs to get solved soon bc the deeper you get into deliveries, (the mainstream that don’t know tesla or the sacrifices you must make as a customer) the less tolerance for bs. my friends have had their 3 for over a month and they don’t have their spoiler or badging (clearly this isn’t deal breaker, but it matters to some people) or any clue when they will be delivered (or more likely they’ll have to go pick them up). just saying, the early adopters have a bs tolerance level higher than those who have been getting their asses kissed by white glove customer service teams from other lux auto mf.

it’s disappointing that this isn’t being handled quicker. the teams (cust service, cust UI and UX) have nothing to do with production..they should’ve been working on this for at least a year and a half.

again, is it a dealbreaker? no. not yet. it will take some more time to become impactful, if ignored...but we know it’s not being ignored. so hopefully we will see marked improvement.

unrelated, one poor customer on the model 3 forum had his car crushed while on the truck, they accidentally lowered the top level of the truck onto his car in the bottom level..ouch. that sucks. i can’t stop thinking about how insane that would make me

 

[RABaby]

this is similar experience i’ve had. tough to contact the parties that can give you more than canned answers. hard to get a response when you do contact them. pretty much in dark.
that needs to get solved soon bc the deeper you get into deliveries, (the mainstream that don’t know tesla or the sacrifices you must make as a customer) the less tolerance for bs. my friends have had their 3 for over a month and they don’t have their spoiler or badging (clearly this isn’t deal breaker, but it matters to some people) or any clue when they will be delivered (or more likely they’ll have to go pick them up). just saying, the early adopters have a bs tolerance level higher than those who have been getting their asses kissed by white glove customer service teams from other lux auto mf.

it’s disappointing that this isn’t being handled quicker. the teams (cust service, cust UI and UX) have nothing to do with production..they should’ve been working on this for at least a year and a half.

again, is it a dealbreaker? no. not yet. it will take some more time to become impactful, if ignored...but we know it’s not being ignored. so hopefully we will see marked improvement.

unrelated, one poor customer on the model 3 forum had his car crushed while on the truck, they accidentally lowered the top level of the truck onto his car in the bottom level..ouch. that sucks. i can’t stop thinking about how insane that would make me

I've been through the system twice before. They really didn't know where the cars were from the beginning. It has not been a priority.
Even when they were clearing out in 3rd quarter 2016 and I bought one that met my criteria, it suddenly disappeared. OK, the system didn't recognize that it had already been sold. So they find another and it was supposed to be ready at a certain date, but I ended up not taking it in September. They were rushing to sell as many as possible I thought to look good for the quarter but that wasn't it. They wanted to clear out the AP1 before announcing the AP2 and having to offer better deals. That's just how it was. Sometimes we think one thing about the company motives but then it is something entirely different.

Investors and early adopters are going to be more tolerant. Early investors are going to be the most tolerant and those with limited funds but have had a reservation in for a long time are going to be the least tolerant. It will interesting to see what changes are implemented when there are no reservations and only orders and they have twice as many as now. Receiving the car is probably somewhat like leaving the dentist's office in that the pain is gone and now you have a solid tooth. The car dispels most memories of the pain of waiting.

 

[Paracelsus]

Nomura's Romit Shah has the perfect recipe. Said buy at 350 and sell at 275. In chip business we call it silicon to carbon converter...

And many years ago as an ET in the Navy Nuclear Reactor Operator program we had a circuit to perform this function. It was called a 'flip flop'............which might also be relevant here.

 

[Xpert]

Anyone able compare the design/technology of this “tesla killer” EQC with model X? Their battery design is interesting, i wonder how good cooling would be. 110mph max speed is disapponting though.

 

[Artful Dodger]

Do we know that the new systems are only capable of building SR packs? I thought they were redesigning the packs for both SR and LR, so perhaps the new equipment can do both and they can slowly replace the old equipment with more copies of the new equipment and then have whichever mix they want.

Of course we don't know anything (including how gravity works), but clearly a multipurpose robot is more complex, more expensive and takes longer to develop than a single purpose robot. So given the urgency of this project, I suggest they'll go for simpler, faster, cheaper. Remember the goal is to CLONE the battery pack lines in multiple places around the world, in order to grow as fast as possible while still being capital efficient.

The SR pack is a new design separate from the LR pack which will continue as is. No need to mess with success, or spend money fixing something thats not broke. They'll let the existing process run, and earn money, at the existing selling price. The SR will also earn money because it'll be incrementally cheaper to produce on these new lines, which Tesla said will allow them to sell the $35K car and still make a profit.

Also, I recall the new lines being said to be faster so the mix might not be a linear extrapolation of the ratio of lines, if it can only make SR packs. Though I've heard anything from 30% to 3x faster so who knows if the news of being more efficient is accurate ...

The new Panasonic battery cell lines are said to be faster, but those are completely separate and unrelated to the new Tesla Grohmann battery pack lines arriving now from Germany.

Overall, Tesla needs both types of battery packs. They can balance supply with demand for the different size packs in the future simply by choosing which lines to expand next as they grow. Easy-peasy, short'n'squeezy.

 

[Artful Dodger]

Also, on Friday when stock hit $255 in the morning, I posted "It has reached the lower end of the Bollinger band on weekly chart." That should be a major buy signal for trading or investing in TSLA. It seems most people don't care about this kind of info.

Yeah, on Friday there were 20 pages of off-topic posts on this thread, burying the signal in the noise, and swamping the MODS.

People, DON'T post off-topic during MARKET HOURS!

Vote DISAGREE on any comment that does. 3 DISAGREES earns a time-out. Agreed?

 

[CorneliusXX]

Those production choices were made at least 6 months ago, and the equipment has been ordered, paid for, and is being shipped and installed as we speak. They're not going to undo that now, nor do they have the ready ability to change the product ratios. We have imperfect, outsider knowledge of their plans. But whatever their plans are, that ship is leaving port right now. All aboard!

But examine again your assumptions on gross margins and the product mix. With EAP+FSD, a Model 3 SR gets a bonus $9K in gross margin, since there is zero incremental cost to enabling a feature already present in software. So with 2.5K Model 3 SRs, what does the take rate need to be on EAP/FSD before the SR is more profitable than the LR, due to the lower production cost of the battery?

Personally, I'm confident Tesla's new AI chip will make FSD much more popular, and further, that Tesla know much better than I what it needs to do to maximize profits in the long run.

If Tesla can make more from a SR than a LR, why wouldn't they have built that from day one?

 

[Artful Dodger]

If Tesla can make more from a SR than a LR, why wouldn't they have built that from day one?

Profit. Gross margin is much higher when they charge $9K for the additional 25 kWh of cells, or $360/kWh. That's the best strategy with low production numbers. As production expands, they can occupy more price points, as long as the manufacturing technology grows with it to maintain gross margins.

It's the same reason why they don't sell 500K Model S cars, the demand isn't there. They have to move down market to expand. And that's the reason Tesla will sell 1 M cars or more at the $25K price point. But they're not there yet in terms of being able to produce that car profitably.

Cheers!

 

[srius]

Christian Laettner was a famous Duke basketball player who hit "the shot" against Kentucky in 1992 which many will never forget.

Chris Lattner came from Apple and did not do very well at Tesla. He is a guy many in Tesla circles will never remember.

Thanks for the correction.
I brought up Chris Lattner as an example that a good engineer/manager doesn't fit into Tesla's culture. Chris has a good track record in leading Apple's App development environment. While Apple's working pace is not blazing fast, it's not slow either, especially in the early days of iOS.
Elon is still operating in the scrambling startup mode, pushing the envelope as hard as possible. The biggest question is that how long Tesla can keep growing without incorporating the orderly execution style.

 

[Unknown_Wizard]

Börsengang von Nio überschattet: Tesla-Probleme schaden sogar der Konkurrenz

Headline of the German "Manager Magazin" was: Tesla schadet sogar der Konkurrenz ...

Please free to translate. OMG... max FUD.