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Why is the press obsessed with Tesla's delivery projections? It's absurd

Discussion in 'Model S' started by calisnow, Jul 3, 2016.

  1. calisnow

    calisnow Active Member

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    So, I read today that Tesla missed its delivery projections again. But so what? The growth rate is huge - it doesn't matter in the long run whether quarterly projections get met. With growth like this the obvious long run conclusion is huge sales numbers.

    Honestly, you'd think that journalists have never held stock for 10-20 years and don't understand the concept of long term growth.

    Tesla's Difficult Month Just Got A Little Worse
     
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  2. Tree95

    Tree95 Member

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    The press and others are closely observing delivery rate precisely because it is a measure of success. Elon Musk has made very public and very bold delivery rate promises. Some would say absurd.

    So, it really is meaningful to compare actual performance against promised performance as a prediction of the long term health of Tesla.
     
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  3. MikeC

    MikeC Active Member

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    It's relevant to the share price. If Tesla wasn't a public company, it wouldn't be news.
     
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  4. calisnow

    calisnow Active Member

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    I guess so. But there's no way to calculate the value of Tesla's shares except to hope that far into the future, many years from now, the company is gigantic. As for short term quarterly growth numbers they tell us nothing except that Tesla is scaling up quickly. Whether they are off by a quarter or even a year won't matter in a material way to the long term value of the business.
     
  5. ZeroDarkSilver

    ZeroDarkSilver HEPA cleaning your atmosphere, you're welcome

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    Journalists are obsessed with the long term growth of clicks to their websites.
     
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  6. jschwefel

    jschwefel Member

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    I couldn't agree more; this is a long term investment. It reminds me of Amazon in the early days and analysts giving it a hard time for missing numbers and not making a profit (i.e. Bezos invested in the business). Clearly Elon is an optimist, and even though he doesn't always get the timing of things right, he does get it right eventually.
     
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  7. sorka

    sorka Active Member

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    The miss is just a technicality. It doesn't include the 5100 vehicles manufactured and on delivery trucks at the time the quarter closed which is far larger than the normal number of vehicles in transit. The miss was due to shipping issues. What it means is the next quarter will be larger than expected because the missed cars will be included next quarter.
     
  8. Tree95

    Tree95 Member

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    It's very relevant to the holders of nearly 400,000 Model 3 reservations.
     
  9. EinSV

    EinSV Member

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    Lost in all the noise is that Tesla's production in Q2 increased 18 percent quarter-on-quarter to a new record 18,345 from the previous record of 15,510 vehicles produced in Q1. This is eye-popping growth.

    Tesla appears on target to continue growing at a rapid pace in the second half of the year, as it is targeting production of 2400 vehicles/week by the end of Q4 -- a further 56% increase from the record production rate in Q2.
     
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  10. ZeroDarkSilver

    ZeroDarkSilver HEPA cleaning your atmosphere, you're welcome

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    #10 ZeroDarkSilver, Jul 3, 2016
    Last edited: Jul 3, 2016
    Agree, this is good. But on the other hand they had projected 20,000 cars produced for Q2, so that was still a miss.

    They are clearly still not great at predicting their own production and delivery. It would be nice if they were better at that, but it's more important that they get better at making the cars.
     
  11. Drivin

    Drivin Member

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    Given the absurd promise and the track record, I don't think this will surprise anyone who has paid attention.
     
  12. EinSV

    EinSV Member

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    #12 EinSV, Jul 3, 2016
    Last edited: Jul 3, 2016
    Agreed, it would be nice if Tesla's short-term forecasts were more accurate, but from a long-term perspective IMO the growth rate is much more important.

    To put the Q1-Q2 growth rate in context, if all Tesla did was continue to grow production at the same rate through the end of 2018, with no special ramp up for Model 3, it would end 2018 producing at a rate of 393,000 vehicles per year. Not bad although I think Tesla will do better than that since Model 3 will be set up to manufacture at much higher volumes than S/X.
     
  13. ZeroDarkSilver

    ZeroDarkSilver HEPA cleaning your atmosphere, you're welcome

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    Correction to my previous post. I was comparing Tesla's worldwide numbers to BMW, MB, and Audi's North America numbers. So scratch that.
     
  14. CarlK

    CarlK Member

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    If people didn't know how Elon operates they should know it by now. He always set the highest possible, or impossible, goal for himself and his team to work on. Under the most optimistic situation he might reach the goal but it will always not. He never wanted to hedge the projection so he could easily reach it or slightly ecceed it like many companies, notably Job's Apple, would do. That's just how he operates from the day one of SpaceX and Tesla. He would kill himself if the company reached the goal thinking he has set the goal too low. It really does not matter other than for people who are only concentrate on quarter to qurter numbers. That's the only thing those people could understand anyway.
     
  15. msnow

    msnow Active Member

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    It's definately relavent to those of us who own TSLA and definately a main metric of analysts. To think otherwise is naive.
     
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  16. calisnow

    calisnow Active Member

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    I agree that if one is a short term speculator on volatile TSLA share prices then quarterly misses have some meaning.
     
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  17. ecarfan

    ecarfan Well-Known Member

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    Quarterly reports missing by a few percent from forecast only matter to short term thinkers who lack vision or are looking to make a quick buck. Elon thinks years and decades out.
     
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  18. Drivin

    Drivin Member

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    That is completely irrelevant.
    What matters in a public company is how the shareholders and potential shareholders think and value the company.

    Besides, if he thinks decades out why the self-admitted hubris of the company on the X?
     
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  19. msnow

    msnow Active Member

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    Not true. For me personally I've been in since about a week after IPO so I'm obviously long on this stock. But if a company, any company, regularly misses their own projections it's a bad sign. Investors need to trust managements understanding of the market and their ability to deliver. That's why quarterly earnings calls are important to investors.
     
  20. DrManhattan

    DrManhattan Member

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    #20 DrManhattan, Jul 3, 2016
    Last edited: Jul 3, 2016
    I own a reasonable amount of TSLA, but it would be nice if they could hit their projections, then again, they've been steadily increasing, and this is the only quarter recently they've really been short. Stock will take a hit, but I think X has been a headache that is slowly getting better, and I expect Q3 deliveries to make up for it. I'm in it for the long haul anyway so It's all good.
     
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