Short-Term TSLA Price Movements - 2013

[StapleGun]

It's also worth noting the DB report speculates that there will be 200, 300, and 400 mile range options for Gen 3. If that's true, I would guess the price difference between the the 200 and 400 options would be about $15k, which by itself can push the ASP up quite a bit. If the $7500 tax credit is still around you would be looking at a bare-bones out the door price around $30-35k I think.

 

[DaveT]

Hey guys, there seems to be a lot of confusion about the starting base price of Gen III.

Elon (at the battery swap post-event press conference) made it very clear. They're shooting for $35,000 base price (of course, no options).
"Starting price of $35,000 and that doesn't include any tax credits. (35k on the button)"
"And it needs to have a true range of at least 200 miles."

The video wasn't circulated widely before, so here it is for those who missed it. You can jump to the 1:05 mark to save time.

Also, a quick note: the reason it's $35k w/o tax credits is because by then there won't be many left for Tesla buyers (full federal $7500 tax credits are available only for the first 200k vehicles Tesla sells, and then drops off dramatically)

 

[Jonathan Hewitt]

Many good quotes from the DB report. While I don't agree with everything I really think they "get it." For example, they actually recognize that TSLA probably pays half the cost per kwh as compared to other auto manufactures and we all know that could possibly be the high end. I would spout of some more quotes but it's probably better if you just read it.

 

[DaveT]

Many good quotes from the DB report. While I don't agree with everything I really think they "get it." For example, they actually recognize that TSLA probably pays half the cost per kwh as compared to other auto manufactures and we all know that could possibly be the high end. I would spout of some more quotes but it's probably better if you just read it.

I agree the DB report had some decent analysis. It's definitely worth reading through the whole thing.

My thoughts were as follows:
1. I give them props for owning up to their "mistakes" of the past and giving Tesla credit for the revolutionary car they've made.
2. They seemed to do their due diligence and talked with Tesla management (mentioned a few times in the report). I really wish it was a requirement for all interviews with Elon or Tesla management to be made public in their entirety (ie., audio or video form). It just gives too much of an advantage to firms that interview Elon and don't share the entire interview.
3. I think they're grossly under-estimating production numbers of Gen III (ie., 130k by 2019).
4. I think they're grossly over-estimating gross margin for Gen III. They say 25% GM for Gen III while Elon was very clear they're going mass market with Gen III and will keep margins lower than 20% (from QA at Teslive).
5. Overall, I think this report gives DB the flexibility to increase their price targets as the stock rises because all they need to do is increase 2020 production numbers from their grossly low numbers and then their price target will increase.

Overall, I was surprised at how enthusiastic the DB report was on Tesla in general (excluding low Gen III production numbers and low 2014 projections).

 

[StapleGun]

Hey guys, there seems to be a lot of confusion about the starting base price of Gen III.

Elon (at the battery swap post-event press conference) made it very clear. They're shooting for $35,000 base price (of course, no options).
"Starting price of $35,000 and that doesn't include any tax credits. (35k on the button)"
"And it needs to have a true range of at least 200 miles."

The video wasn't circulated widely before, so here it is for those who missed it. You can jump to the 1:05 mark to save time.

Also, a quick note: the reason it's $35k w/o tax credits is because by then there won't be many left for Tesla buyers (full federal $7500 tax credits are available only for the first 200k vehicles Tesla sells, and then drops off dramatically)

Thanks for that video DaveT, I had not seen it yet.

I hadn't looked in to the 200k limit on the $7500 credit yet. I just did and saw this...

The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

If I'm reading that correctly, it looks like Gen 3 will still see some benefits from the credit. Let's say Gen 3 begins shipping Jan 1st 2018. By this point there will have been 5 full years of Model S sales, and 3 years of Model X sales. I don't expect they will have crossed the 200k threshold yet but might be around 150k (US only) if things have gone really well. If they start at a pace of 100k for their first year, they might cross the 200k mark in Q2 2018. That means that all of Q3 will still get the full credit, Q4/Q1 2019 will get half the credit, and Q2/Q3 2019 will get a quarter of the credit. Altogether it looks like the first 100-200k Gen 3 vehicles will see some form of credit. This is particularly interesting to me since I plan to be one of those buyers. If the CA credit is still there, a $25,000 starting price sounds really nice

 

[brianman]

Tesla has consistently said that Model X will be 'comparable in pricing' to a similarly featured Model S. I assume that means two things: 1) Things like AWD will be a premium over Model S pricing, and, 2) as Model S pricing increases, the 'comparable price' will be based on the NEW Model S price, not the Model S price at the time they made the announcement.

Completely agree.

But I'm also willing to bet that no matter what prices (base and options) are listed there will be screaming on the forums for a couple weeks as people begin to mentally prepare for the monetary separation anxiety.

 

[CyberDutchie]

Wonder if the i3 launch event (coupled with the as expected Bloomberg type headlines "BMW i3 gives Tesla a run for its money...") will put downward pressure on TSLA stock today.

 

[deonb]

Wonder if the i3 launch event (coupled with the as expected Bloomberg type headlines "BMW i3 gives Tesla a run for its money...") will put downward pressure on TSLA stock today.

Nah. This is a stock that goes up when you announce a secondary offering or a recall. To truly make this stock tank, what you need is an upgrade by Goldman Sacks.

 

[xhawk101]

Nah. This is a stock that goes up when you announce a secondary offering or a recall. To truly make this stock tank, what you need is an upgrade by Goldman Sacks.

Haha

 

[Johan]

Nah. This is a stock that goes up when you announce a secondary offering or a recall. To truly make this stock tank, what you need is an upgrade by Goldman Sacks.

Very good answer. What they should do is announce a mini-recall, unveil Gen III, announce Model X production starts in Q3 AND announce another secondary offering at $130 on Aug 6th

 

[Jonathan Hewitt]

Very good answer. What they should do is announce a mini-recall, unveil Gen III, announce Model X production starts in Q3 AND announce another secondary offering at $130 on Aug 6th

That would create a instant stock price increase to infinity, which would cause all the shorts to instantly implode as their accounts go to negative infinity, and as they implode they would act like thousands of little black holes, causing an end to the world as we know it.

I think TSLA knows the power they hold and will not use it in this way.

 

[Causalien]

Well folks, Tuesday is a very big day for me. If you believe that my real life ups and downs is somehow linked to TSLA's stock price like I mentioned several times before, Tuesday is going to be a big one. Just pre-announcing for records sake.

 

[aznt1217]

Well folks, Tuesday is a very big day for me. If you believe that my real life ups and downs is somehow linked to TSLA's stock price like I mentioned several times before, Tuesday is going to be a big one. Just pre-announcing for records sake.

Did I miss something? What is on Tuesday? There's nothing material till Q2 earnings Aug 7

 

[Jonathan Hewitt]

Did I miss something? What is on Tuesday? There's nothing material till Q2 earnings Aug 7

Something personal for him. The question is whether it's something good or bad

 

[ibcs]

Well folks, Tuesday is a very big day for me. If you believe that my real life ups and downs is somehow linked to TSLA's stock price like I mentioned several times before, Tuesday is going to be a big one. Just pre-announcing for records sake.

My guess is that a marriage is coming up? That news will bring another up day for Tesla.

 

[MartinAustin]

I'm watching the BMW i3 launch interview spot in CNBC. The german-sounding BMW representative was asked why this car will sell well, he said "the body is carbon fiber, the chassis is aluminum, which is very important for light weight... it's very much a BMW, it's very much an ultimate driving machine." Those are the reasons? what about its electric-relevant statistics, like, range or driving capabilities?

Phil LeBeau: Will it be #1 in the electric car market in 2014?
BMW guy: Yes.
Phil LeBeau: Emphatically?
BMW: we will fight for it... we will go for it. (uh that is what every manufacturer does with every car)

The on-screen textual statistic read "0-60 in approx 7.0 seconds." Weird that they don't have one fixed number for it like they do for their other cars.

TSLA fell from positive to negative at the same time as this segment. Coincidence? Or is someone thinking that Tesla is under some sort of attack by BMW?

They just discussed it on CNBC and also wondered how TSLA will do today. I hope there aren't a bunch of ignoramuses pulling out of TSLA because they think BMW is going to cause a sales problem. Tesla sells every car it can get its hands on and I don't think the i3 is going to make any difference to that!

 

[aznt1217]

I'm watching the BMW i3 launch interview spot in CNBC. The german-sounding BMW representative was asked why this car will sell well, he said "the body is carbon fiber, the chassis is aluminum, which is very important for light weight... it's very much a BMW, it's very much an ultimate driving machine." Those are the reasons? what about its electric-relevant statistics, like, range or driving capabilities?

Phil LeBeau: Will it be #1 in the electric car market in 2014?
BMW guy: Yes.
Phil LeBeau: Emphatically?
BMW: we will fight for it... we will go for it. (uh that is what every manufacturer does with every car)

The on-screen textual statistic read "0-60 in approx 7.0 seconds." Weird that they don't have one fixed number for it like they do for their other cars.

TSLA fell from positive to negative at the same time as this segment. Coincidence? Or is someone thinking that Tesla is under some sort of attack by BMW?

They just discussed it on CNBC and also wondered how TSLA will do today. I hope there aren't a bunch of ignoramuses pulling out of TSLA because they think BMW is going to cause a sales problem. Tesla sells every car it can get its hands on and I don't think the i3 is going to make any difference to that!

Regardless of the situation, the i3 will sell well only because of its brand equity and due to people that believe in the corporate arrogance/marketing machine that is BMW. Truthfully I wouldn't worry too much about it because the target market is urbanites which explains the cars form factor and its limited range (80-100 miles apparently and 3 Hours to charge to 80% on BMW's I-Wall charger). In fact I think Elon is probably happy that the car came out (with hopes that the Model S started a fire under car companies).

With that said, many aren't going to be ponying up 40 grand for an inferior car compared to their own 3/4 series, what I suspect is many buyers who own an X5/X6/large luxury vehicle will be getting an i3 as a commuter car instead of a main vehicle for reasons of limited range/cost of operation.

OR

The flip side is BMW is notorious for its electrical issues... and given that its an all electric, people will stay away. (highly unlikely because BMW in many of their customers' minds means "Baller" Madness Wins).

 

[toastypasta]

Well folks, Tuesday is a very big day for me. If you believe that my real life ups and downs is somehow linked to TSLA's stock price like I mentioned several times before, Tuesday is going to be a big one. Just pre-announcing for records sake.

Not sure about you but i'm getting married on Thursday so pre-announcing great earnings would be amazing for me.
Or just have amazing earnings on august 7th and maybe i'll extend my honeymoon or stop worrying about spending so much money on a damn couch.
NYC living is way too expensive.

 

[bollar]

Phil LeBeau: Will it be #1 in the electric car market in 2014?

You misheard that point. The question was, "Will BMW be #1 at the end of this year for the luxury market in the US." [BMW was #1 in 2012]

BMWs new i3 battery car targets urbanites

3:00 minutes in, for that part of the exchange.

Otherwise, I think the car is meh. CNBC got overstated the range and had other factual errors in Cramer's and Kernan's separate banters.

 

[aznt1217]

You misheard that point. The question was, "Will BMW be #1 at the end of this year for the luxury market in the US." [BMW was #1 in 2012]

BMWs new i3 battery car targets urbanites

3:00 minutes in, for that part of the exchange.

Otherwise, I think the car is meh. CNBC got overstated the range and had other factual errors in Cramer's and Kernan's separate banters.

A great byproduct of this launch of the i3 is the increased Tesla coverage. Comparisons (stupid ones at that) will be drawn and will be free press.