Short-Term TSLA Price Movements - 2015

[Johan]

Model S demand has been around 1k/week for a while, soon production capacity will be 2k/week, do you really think the X will double the demand? I don't think the X will add more than 500/week demand at the very most. Sure Tesla will still be temporarily production constrained even with 1500 demand due to the backlog, but if the demand ends up around 1500 after the X release I wouldn't say Tesla is truly production constrained as I doubt they will expand capacity for a while.

X will more than double demand.

I think global demand for the X will be bigger than the S, and that they will be selling 40/60 S/X when they're at full capacity which will be 2000/week i.e. 100k/year.

If they should risk running in to demand constraints remember that in 2017 comes Model 3

 

[doggusfluffy]

VW staff, supplier warned of emissions test cheating years ago - reports

Manipulated exhaust systems: VW to have been warned years ago

Translated.

But from words to deeds? The "Welt am Sonntag" doubts this and writes of a "diesel-conspiracy": The federal government wants to delay the introduction of a new, more realistic emission tests by the European Union. The newspaper refers back to an internal position paper, after which the new test mode will not end as planned in 2017, but only 2021 introduced.

For Volkswagen, it is meanwhile closely. The Federal Motor Transport Authority has the legal department of the group prompted loud "BamS", submitted by 7 October a "binding measures and timetable" whether and by when the affected vehicles can comply with the mandatory emission regulation even without software. That could also impact on the driver of VW diesel vehicles have - on the other hand, Volkswagen has already announced technical improvements.

 

[MartinAustin]

do you really think the X will double the demand?

Dude... this is only the first time that Tesla has been able to sell a product into the biggest sector in the industry.

SUVs and crossovers outsell cars. Also, premium cars and especially premium SUVs are selling like hotcakes these days. There is EVERY possibility that the Model X will sell more than the Model S - assuming they can ramp production to the promised 2,000 per week.

At first they were selling a 2-seat open-top Roadster... then a four-door sedan. Now it's an SUV. This is the biggest market sector.

Reports like this have been coming out over the last year or two... I keep thinking "bodes well for Model X... bodes well for Model X..."
http://www.cnbc.com/2014/12/08/americans-on-verge-of-buying-1m-expensive-cars.html

 

[30seconds]

Over the next week or so I think the likeliest scenario is lots of excitement regarding X launch followed by not quite hitting the estimated Q3 delivery numbers leading to pullback on 55k target. I think this will present a nice entry as tesla will be set up for a bigger run through 2016. Wouldn't mind being wrong on this, but the company has struggled to meet delivery targets so until they meet one my default is recent history.

 

[MitchJi]

Important distinction:
1. Demand constrained for MODEL S (due to Osborne effect from Model X)
or
2. Demand constrained. (For S+X combined).

1 is semi-plausible, 2 not at all.

After X ramp is complete it couldn't matter less to Tesla what the S vs. X mix is, but as they ramp the X there is a period of 4-6 months where they don't want "everyone" not buying a Model S because they want to wait for an X.

Agree!

Also in 2016, as the GF starts to ramp they will be able to reduce prices substantially without reducing margins due to reduced pack costs.

 

[Thumper]

With luck, TM can drop the price by as much as the tax subsidy by the time the subsidy expires. That would keep the price to the consumer the same as before.

 

[Perfectlogic]

Dude... this is only the first time that Tesla has been able to sell a product into the biggest sector in the industry.

SUVs and crossovers outsell cars. Also, premium cars and especially premium SUVs are selling like hotcakes these days. There is EVERY possibility that the Model X will sell more than the Model S - assuming they can ramp production to the promised 2,000 per week.

At first they were selling a 2-seat open-top Roadster... then a four-door sedan. Now it's an SUV. This is the biggest market sector.

Reports like this have been coming out over the last year or two... I keep thinking "bodes well for Model X... bodes well for Model X..."
http://www.cnbc.com/2014/12/08/americans-on-verge-of-buying-1m-expensive-cars.html

By thinking that the X will add incremental demand of 1k+/week you are assuming that every future X buyer haven't even considered buying the S because it isn't tagged SUV. I think many potential X buyers have opted for the S until now, I believe the most important aspect for a large part of Tesla customers is the acceleration, the car being electric, the supercharger network, the tech, stuff like that. What will the X really have to offer on top of these things? A bit more space, at the cost of a lower range, worse acceleration and I think many would agree a worse design. And The S is already a very large car, I really don't think half the potential Tesla buyers disregards the S because it's too small.

 

[anticitizen13.7]

I think many potential X buyers have opted for the S until now, I believe the most important aspect for a large part of Tesla customers is the acceleration, the car being electric, the supercharger network, the tech, stuff like that. What will the X really have to offer on top of these things? A bit more space, at the cost of a lower range, worse acceleration and I think many would agree a worse design. And The S is already a very large car, I really don't think half the potential Tesla buyers disregards the S because it's too small.

There are 2 issues with Model S. Yes, it is a large car, but the 2nd row headroom is poor due to the profile of the sloping roof. Second, the Model S does not have the higher seating position of a crossover. Like it or not, I know people who won't buy a car that doesn't have the visibility of a high seat. Ingress and egress difficulty can be an issue with some people with lower cars too -- they want a crossover for ergonomic reasons because they can get in/out more easily.

 

[Perfectlogic]

There are 2 issues with Model S. Yes, it is a large car, but the 2nd row headroom is poor due to the profile of the sloping roof. Second, the Model S does not have the higher seating position of a crossover. Like it or not, I know people who won't buy a car that doesn't have the visibility of a high seat. Ingress and egress difficulty can be an issue with some people with lower cars too -- they want a crossover for ergonomic reasons because they can get in/out more easily.

I'm not saying those people doesn't exist, I'm saying that I think that for a large part of Tesla's potential customers the visibility of a high seat isn't the deciding factor.

 

[mrdoubleb]

Dude... this is only the first time that Tesla has been able to sell a product into the biggest sector in the industry.

SUVs and crossovers outsell cars. Also, premium cars and especially premium SUVs are selling like hotcakes these days. There is EVERY possibility that the Model X will sell more than the Model S - assuming they can ramp production to the promised 2,000 per week.

At first they were selling a 2-seat open-top Roadster... then a four-door sedan. Now it's an SUV. This is the biggest market sector.

Reports like this have been coming out over the last year or two... I keep thinking "bodes well for Model X... bodes well for Model X..."
http://www.cnbc.com/2014/12/08/americans-on-verge-of-buying-1m-expensive-cars.html

I fully agree with you on X potentially outperforming S, the SUV segment is huge these days, especially in the US. However, I would like to point out that 2000 cars per week run rate has been clarified by Elon as the theoretical limit of the line(s). In reality, he said, they will produce 1600-1800 cars per week on average.

I know this is the short term thread, but this being a Sunday and the thread being OT already as it is, I would like to point out one more mid-term boost to TSLA on the horizon in 1-2 years. Whenever we talk about the GF, we - and Tesla - usually point out how that 30+ percent reduction in cost per kwh is essential for Model 3. While that is true, i do not think the market has realized yet what that means for the gross margin on S and X. It is already in the very healthy 25% range (give or take), now imagine the cost of the most expensive component being cut by a third or more. While I am not sure this directly translates to an extra 10 grand in profit per car, even if it is "just" 5k, at 90k S/X per year, that's almost half a billion of extra profit.

 

[anticitizen13.7]

I'm not saying those people doesn't exist, I'm saying that I think that for a large part of Tesla's potential customers the visibility of a high seat isn't the deciding factor.

This seems to be an American thing as far as I can tell. SUVs and trucks have made up over 50% of new vehicle sales in the U.S. since 2001, and compact Crossovers outsold midsize sedans last year (Source: http://blog.caranddriver.com/consider-the-crossover-now-please-stop-it/).

This is a huge potentially untapped market.

Americans generally are vehement about a high seating position. The Subaru Outback, for example, used to be a more car-like wagon, but in 2010, Subaru significantly raised the height of the vehicle and re-labeled it as a crossover. Where USDM sales are concerned, Tesla is probably leaving a lot of money on the table if they chose not to play in the crossover market.

 

[MitchJi]

I think many would agree a worse design.

It's possible that some "would agree", now before the reveal, but afterwards, absolutely not.

I know this is the short term thread, but this being a Sunday and the thread being OT already as it is, I would like to point out one more mid-term boost to TSLA on the horizon in 1-2 years. Whenever we talk about the GF, we - and Tesla - usually point out how that 30+ percent reduction in cost per kwh is essential for Model 3. While that is true, i do not think the market has realized yet what that means for the gross margin on S and X. It is already in the very healthy 25% range (give or take), now imagine the cost of the most expensive component being cut by a third or more. While I am not sure this directly translates to an extra 10 grand in profit per car, even if it is "just" 5k, at 90k S/X per year, that's almost half a billion of extra profit.

On the horizon by Q1 2017.

Even if it is "just" $5k per car, it also translates to a big potential demand lever.

 

[Perfectlogic]

We already know what the X looks like Mitch.

 

[hobbes]

Made a poll for Q3 deliveries! Be quick to vote, expires in only 3 days!
Q3 2015 Prediction Competition (with Poll)

 

[MitchJi]

We already know what the X looks like Mitch.

IMO, not if you believe this:

I think many would agree a worse design.

But we will find out, over the next few weeks if you are correct :wink:.

 

[dmunjal]

This seems to be an American thing as far as I can tell. SUVs and trucks have made up over 50% of new vehicle sales in the U.S. since 2001, and compact Crossovers outsold midsize sedans last year (Source: http://blog.caranddriver.com/consider-the-crossover-now-please-stop-it/).

This is a huge potentially untapped market.

Americans generally are vehement about a high seating position. The Subaru Outback, for example, used to be a more car-like wagon, but in 2010, Subaru significantly raised the height of the vehicle and re-labeled it as a crossover. Where USDM sales are concerned, Tesla is probably leaving a lot of money on the table if they chose not to play in the crossover market.

I remember in 2000 when it was considered blasphemy for BMW and Mercedes to get into the SUV/CUV market and the hell froze over when Porsche finally did with the Cayenne. In hindsight, it was a wise choice for all of them as they have sold well.

 

[RobStark]

This seems to be an American thing as far as I can tell.

When Elon and JB had their talk in Norway there was a short Norwegian women that complained she wanted a Tesla but could not see over the hood. Elon said the X was on the way.

My sister(4' 11") has commuted to work alone for the last 20 years in a large SUV for this very reason. It drives me nuts why she won't switch to a midsize CUV.

Higher seating position. Seating for 7 adults not 5 adults plus two children and ability to carry larger items trumps better looks,longer range and better efficiency for some. It has nothing to do with being "tagged" an SUV.

I see X doing very well in US,Norway,Canada,Australia and China.

Densely populated heart of Europe not so much.

Here the compact Model 3 based CUV will do much better.

 

[Johan]

When Elon and JB had their talk in Norway there was a short Norwegian women that complained she wanted a Tesla but could not see over the hood. Elon said the X was on the way.

My sister(4' 11") has commuted to work alone for the last 20 years in a large SUV for this very reason. It drives me nuts why she won't switch to a midsize CUV.

Higher seating position. Seating for 7 adults not 5 adults plus two children and ability to carry larger items trumps better looks,longer range and better efficiency for some. It has nothing to do with being "tagged" an SUV.

I see X doing very well in US,Norway,Canada,Australia and China.

Densely populated heart of Europe not so much.

Here the compact Model 3 based CUV will do much better.

Your observation is correct. To add some local perspective: in Europe we have something called a "station wagon" (some Americans may have heard of it) which is why SUVs are relatively less popular here. Sedans however are generally not big sellers here. The X will do very well in large parts of Europe.

 

[doggusfluffy]

Indian Prime Minister tours Tesla, talks batteries with Elon Musk - Fortune

A by India’s Ministry of External Affairs on YouTube, shows Modi arriving at Tesla’s factory on Saturday afternoon, greeted by Musk. Tesla executives, including Tesla’s CTO JB Straubel ( “40 under 40 list”), show Modi and his contingent around the plant. Straubel showed Modi the inside of a lithium-ion battery pack, which is Tesla’s core intellectual property and the secret sauce for its cars.

 

[EldestOyster]

in Europe we have something called a "station wagon" (some Americans may have heard of it) which is why SUVs are relatively less popular here.

Station wagons were a staple in the U.S. for many years. Somehow they metamorphosed into the SUV's of today. Maybe high seating, maybe that other American problem ("mine's bigger"), but I also think a large dose of marketing went into this. They are forever trying to make a vehicle that is all things to all people (and so we got CUV's, too).