Short-Term TSLA Price Movements - 2015

[pGo]

Even so, eluding to my post yesterday, even if X had a slow ramp they can just make more Model S vehicles, yes it's not the wisest thing for the consumer but in terms of financials it's way better.

Its possible, but quite unlikely. See Vgrin's post above talking about the same.

 

[Drax7]

It is a bearish argument but I give it no more credence than: Coffee bean plants die of unknown disease making the price of peanut butter rise 500%.

The ramp of X and 3 are not tied together. What is tied together is the progress of Gigafactory and the launch of 3. Don't get distracted.

Totally agree, in fact they seem to have learned the hard way to simplify, if that is even
a lesson they had to learn. Model 3 will be a breeze to manufacture .

There is an emotional component to every decision, though I am certain they
had plenty of time to override it and let go of the emotional Fantasia in order to reach
profitability .

 

[aznt1217]

Its possible, but quite unlikely. See Vgrin's post above talking about the same.

Yes I read that, but IMO doesn't hold as much water as one might think. One would hope their manufacturing goes as follows. Some analyst sees the amount of windshields/seats/whatever part is the most constrained for the X then tells production that we can only make X number of X's with the parts we have and their production systems/team will adjust accordingly. Then the rest of the time the machines work on the X. With the way the robots work (based on my readings/watching the videos on manufacturing) they can retool extremely quickly because of the modular nature of the robots. I also don't buy the argument that the first 6 were hand-built because we've seen screenshots of the Model X being worked on by the robots.

 

[Krugerrand]

Also, one would think that the Model 3 will be a much easier car to manufacture than the X. At least there is no reason why that couldn't be the case.

Now, will Elon go over the top with designing it and putting in some features that make it difficult? It's quite possible. But if you make it like a scaled down Model S it _should_ be relatively easy for Tesla, considering their experience with the S, and now the X will be well established (it already is with the S). I think the goal of 500K cars per year by 2020 is entirely possible.

Elon has already stated they will go with a less aggressive design for the 3 for the first iteration. He's also said the 3 will not have near the features as the S/X. Elon has also been repeating publically the importance of the timing of Gigafactory and how it relates to Model 3 as well he's been starting to state the importance of Model 3 timing in accordance with Gigafactory timing. Ignore him at your own investing peril.

 

[pGo]

Yes I read that, but IMO doesn't hold as much water as one might think. One would hope their manufacturing goes as follows. Some analyst sees the amount of windshields/seats/whatever part is the most constrained for the X then tells production that we can only make X number of X's with the parts we have and their production systems/team will adjust accordingly. Then the rest of the time the machines work on the X. With the way the robots work (based on my readings/watching the videos on manufacturing) they can retool extremely quickly because of the modular nature of the robots. I also don't buy the argument that the first 6 were hand-built because we've seen screenshots of the Model X being worked on by the robots.

Thanks. Going back to the precise point then, how many Xs do you see being delivered this year? Since we are talking short-term, Q3 results, and Q4 outlook, it would help to see your view.

 

[AlMc]

With the current plan of delivering, at best, NA Signature MX in 2015, the goal of 50K delivered MS/MX seemed to be increasingly unlikely. The problem is that new BIW line is being used for slow ram-up of MX. The "old" BIW line which is producing MS was maxed out at 1100-1200 cars, with OT (as compared to a standard 2 shift operation). In reality, in terms of an average output, I think that existing line is maxed out at 1100 cars per week.

So, taking 12 working weeks/quarter (given the history), maximum production of MX seem to be limited to 13,200 cars. Even if we assume that all these cars will be delivered, the total MS/MX deliveries in Q4 are likely going to be limited to a maximum of 14,500 cars, resulting in a substantial 2,500 cars miss as compared with minimum guidance of 50K cars.

Theoretically, of course, it is possible to pull the rabbit out of the hat by may be not producing MX on the new BIW line, freeing it to produce MS, and then switching back to producing MX, but this will require tuning of the new BIW line, they can't just use new BIW for 4 weeks producing MS at a rate of 1,000 cars/week. The only way this can possibly work IMO, if they decide not to deliver any MX this year, and try to run existing BIW line at a steady 1,000 cars/week, while also ramping MS production on the new BIW line. This scenario, however, would produce noticeable drop is the estimated MS delivery times, which so far is not the case, with estimated delivery times actually increasing in the last several weeks.

So I am not very optimistic regarding the Q3 earnings call. I think that Tesla will need to share their outlook for Q4, and they will most likely lower it to perhaps 14,000 cars, with 2015 guidance lowered by about 3K cars to 47K.

The issues with this MX ramp up are relatively mundane in a bigger scheme of things, but given that this is a short term thread, I suspect, with all the shorting activity and hysteria ignited by constant bear crescendo, I am afraid that visiting sub $200 is not out of the question.

The long term outlook remains very good, but I would advise caution in the short to medium term.

Probably the best post in the last 50 pages.

Some people look at Lump's posts being neutral to bearish but few would say the same about VGrin. I agree that long term is great, short term (weeks) and medium term (3-4months) 'may' be a different story. I am not giving investment advice. This is still a momentum stock that many analysts ( and investors like me) do not know how to price. Many people here have been to this 'rodeo' more than I but sentiment right now is not great. Some will see it as a great buying opportunity and others will give this a little more time to settle. Good luck which ever camp you fall into.

 

[Krugerrand]

Thanks. Going back to the precise point then, how many Xs do you see being delivered this year? Since we are talking short-term, Q3 results, and Q4 outlook, it would help to see your view.

I believe he's saying it does not matter how many X's will be delivered this year in terms of 'making guidance'. The question you want to ask is, will Wall Street care what the mix of S's to X's is at the end of the year as long as guidance is met? Obviously if guidance is not met, then X ramp will be labelled a disaster and it's the end of the world as we've come to know it. But if guidance is met with less than an ideal number of X's delivered, the spin can go either way: Just look at that demand for S and just wait until Tesla can ramp X's!!! VS Tesla failing at X ramp, good thing model S is hanging there! VS (current speculation) I got nothing and am just spinning my wheels!

 

[Bobbyducati]

covered my calls about 80% with puts i exited out of today, looks like its just a waiting game with those, anything i can make out of them is bonus money to me (dec 18 280$ calls)

 

[Gtoffo]

With the current plan of delivering, at best, NA Signature MX in 2015, the goal of 50K delivered MS/MX seemed to be increasingly unlikely. The problem is that new BIW line is being used for slow ram-up of MX. The "old" BIW line which is producing MS was maxed out at 1100-1200 cars, with OT (as compared to a standard 2 shift operation). In reality, in terms of an average output, I think that existing line is maxed out at 1100 cars per week.

So, taking 12 working weeks/quarter (given the history), maximum production of MX seem to be limited to 13,200 cars. Even if we assume that all these cars will be delivered, the total MS/MX deliveries in Q4 are likely going to be limited to a maximum of 14,500 cars, resulting in a substantial 2,500 cars miss as compared with minimum guidance of 50K cars.

Theoretically, of course, it is possible to pull the rabbit out of the hat by may be not producing MX on the new BIW line, freeing it to produce MS, and then switching back to producing MX, but this will require tuning of the new BIW line, they can't just use new BIW for 4 weeks producing MS at a rate of 1,000 cars/week. The only way this can possibly work IMO, if they decide not to deliver any MX this year, and try to run existing BIW line at a steady 1,000 cars/week, while also ramping MS production on the new BIW line. This scenario, however, would produce noticeable drop is the estimated MS delivery times, which so far is not the case, with estimated delivery times actually increasing in the last several weeks.

So I am not very optimistic regarding the Q3 earnings call. I think that Tesla will need to share their outlook for Q4, and they will most likely lower it to perhaps 14,000 cars, with 2015 guidance lowered by about 3K cars to 47K.

The issues with this MX ramp up are relatively mundane in a bigger scheme of things, but given that this is a short term thread, I suspect, with all the shorting activity and hysteria ignited by constant bear crescendo, I am afraid that visiting sub $200 is not out of the question.

The long term outlook remains very good, but I would advise caution in the short to medium term.

Shouldn't the second line be able to produce both vehicles? Retooling time MIGHT be minimal meaning they could fiddle with the production mix.

And wait time increase could be related to the demand increase Elon has talked about rather than Model S production.

 

[pGo]

I believe he's saying it does not matter how many X's will be delivered this year in terms of 'making guidance'. The question you want to ask is, will Wall Street care what the mix of S's to X's is at the end of the year as long as guidance is met? Obviously if guidance is not met, then X ramp will be labelled a disaster and it's the end of the world as we've come to know it. But if guidance is met with less than an ideal number of X's delivered, the spin can go either way: Just look at that demand for S and just wait until Tesla can ramp X's!!! VS Tesla failing at X ramp, good thing model S is hanging there! VS (current speculation) I got nothing and am just spinning my wheels!

Yes, correct question is the total production of X+S. I disagree with aznt that producing more Ss on the 2nd line would be that easy when they are dealing with setting robots for the X. To me, it is very highly likely that they miss the combined production numbers 2nd year in the row. WS may not like that. Obviously, it doesn't matter for long term but I think it will create a great buying opportunity.

 

[aznt1217]

I believe he's saying it does not matter how many X's will be delivered this year in terms of 'making guidance'. The question you want to ask is, will Wall Street care what the mix of S's to X's is at the end of the year as long as guidance is met? Obviously if guidance is not met, then X ramp will be labelled a disaster and it's the end of the world as we've come to know it.

That's exactly what I am getting at. Total vehicles and total revenue I think Tesla will hit their 50,000 car mark, the only question is product mix. I honestly think 3,000 Fully loaded Model X's will be made factoring things in such as Holidays and what not. In my previous posts, I classify short term as under 1 year investment horizon ... just like the IRS. What people are doing here is almost to the nano-level of time horizon which is stupid from my experience. This is how mistakes are made and opportunities lost.

The issue we're all facing here on this short term thread is we are buying into the "Model X is a failure" story that is being plastered everywhere. Add to that a garnish of "oh my goodness the second seats don't fold" with a hint of poor media coverage "the 1% vehicle for the 1%" party line we have too many people focusing on the wrong thing and forgetting that Tesla turned into a real car company and not the one trick pony that people have been painting it to be in the past.

Yes the SUV market is huge, but so is the sedan market that Tesla has to conquer with Model S. At the day we know Model S orders spiked after the X announcements (you can speculate why... cancellations/disappointment/others) but I believe it's incremental gains because people didn't know about the brand. The key things Wall Street wants to see is the difference in capex post Model X completion. Chances are they'll be curious about the breakout given the fact that we know GF is still being made and store expansion continues.

TL;DR Tesla has 2 cars now. I think 3,000 Model X's will be made. Model S is still a great car and can Tesla can crank em out to meet guidance.

 

[Krugerrand]

That's exactly what I am getting at. Total vehicles and total revenue I think Tesla will hit their 50,000 car mark, the only question is product mix. I honestly think 3,000 Fully loaded Model X's will be made factoring things in such as Holidays and what not. In my previous posts, I classify short term as under 1 year investment horizon ... just like the IRS. What people are doing here is almost to the nano-level of time horizon which is stupid from my experience. This is how mistakes are made and opportunities lost.

The issue we're all facing here on this short term thread is we are buying into the "Model X is a failure" story that is being plastered everywhere. Add to that a garnish of "oh my goodness the second seats don't fold" with a hint of poor media coverage "the 1% vehicle for the 1%" party line we have too many people focusing on the wrong thing and forgetting that Tesla turned into a real car company and not the one trick pony that people have been painting it to be in the past.

Yes the SUV market is huge, but so is the sedan market that Tesla has to conquer with Model S. At the day we know Model S orders spiked after the X announcements (you can speculate why... cancellations/disappointment/others) but I believe it's incremental gains because people didn't know about the brand. The key things Wall Street wants to see is the difference in capex post Model X completion. Chances are they'll be curious about the breakout given the fact that we know GF is still being made and store expansion continues.

TL;DR Tesla has 2 cars now. I think 3,000 Model X's will be made. Model S is still a great car and can Tesla can crank em out to meet guidance.

That right there in its entirety. And for the record, I'm not buying into any of the Model X noise. Not even a teeny, tiny bit because I recognize it for what it is - deja vu.

 

[pGo]

That's exactly what I am getting at. Total vehicles and total revenue I think Tesla will hit their 50,000 car mark, the only question is product mix. I honestly think 3,000 Fully loaded Model X's will be made factoring things in such as Holidays and what not. In my previous posts, I classify short term as under 1 year investment horizon ... just like the IRS. What people are doing here is almost to the nano-level of time horizon which is stupid from my experience. This is how mistakes are made and opportunities lost.

The issue we're all facing here on this short term thread is we are buying into the "Model X is a failure" story that is being plastered everywhere. Add to that a garnish of "oh my goodness the second seats don't fold" with a hint of poor media coverage "the 1% vehicle for the 1%" party line we have too many people focusing on the wrong thing and forgetting that Tesla turned into a real car company and not the one trick pony that people have been painting it to be in the past.

Yes the SUV market is huge, but so is the sedan market that Tesla has to conquer with Model S. At the day we know Model S orders spiked after the X announcements (you can speculate why... cancellations/disappointment/others) but I believe it's incremental gains because people didn't know about the brand. The key things Wall Street wants to see is the difference in capex post Model X completion. Chances are they'll be curious about the breakout given the fact that we know GF is still being made and store expansion continues.

TL;DR Tesla has 2 cars now. I think 3,000 Model X's will be made. Model S is still a great car and can Tesla can crank em out to meet guidance.

To be very clear, I don't see Model X as a failure. I see many posts on FB in Tesla forums where people want to sell their current S to get X next year. This process will speed up for current owners once they see the car. For short term, WS wants to get a production number and I say that it is almost impossible to get to 50K.

 

[aznt1217]

To be very clear, I don't see Model X as a failure. I see many posts on FB in Tesla forums where people want to sell their current S to get X next year. This process will speed up for current owners once they see the car. For short term, WS wants to get a production number and I say that it is almost impossible to get to 50K.

You might not be but Jim Cramer and a lot of others are. I feel that's kind of the purpose of this thread. To add to the noise for others and filter out the truth for others.

 

[vgrinshpun]

Shouldn't the second line be able to produce both vehicles? Retooling time MIGHT be minimal meaning they could fiddle with the production mix.

And wait time increase could be related to the demand increase Elon has talked about rather than Model S production.

Yes, new BIW line will eventually be producing both vehicles, but starting this line with just one vehicle presents challenges that are kind of run of the mill from the bird's eye view, but a much more serious given the challenges to adjust the line robotics to the production of the brand new body design (MX) within the restraints of time. I would say that chance of producing both vehicle (MX and MS) bodies on one "new" BIW line in the next 6 months are very slim.

Regarding the wait time, if Tesla is trying to get to 17k MS in this quarter, using both lines to churn out MS, there should be 50% drop in wait time assuming steady demand. Even if one assumes that rate of incoming orders jumped 50% (very unlikely), this would result in estimated delivery times just staying flat. This, however, was not the case. The wait times were on the rise for last several weeks. So, once, again this scenario is unlikely.

 

[Newb]

Ok, here's why I was a buyer today:
-> jhm's BFPT
->Tesla is aiming to invite all reservation holders to configure their cars by the end of the year. The optimist in me translates this into "about 20,000 people will have configured their Model X by the end of January, and Tesla won't let these people wait for their deliveries for too long". Plus, after bonnie's status on mytesla changed to "confirmed", it seems like they're close to get her Model X into production soon (my gut feeling is saying that she might get a delivery date by the end of next week).
->Long-term fundamentals are much better than they were a year ago and there's some positive catalysts on the horizon: Tesla Energy backlog and first deliveries of Powerwalls most probably just days/weeks away. Gigafactory ahead of schedule (you should watch the latest drone fly over video). CPO programs extended to Germany and elsewhere, good to extend the customer base. X Sig deliveries should begin in the weeks ahead - this will bring back confidence that Tesla can execute on the X. We're also awaiting news on the supercharger partnership with the European car manufacturer. And there's always some surprising tweets from Elon around the corner, too.

 

[davecolene0606]

With the current plan of delivering, at best, NA Signature MX in 2015, the goal of 50K delivered MS/MX seemed to be increasingly unlikely. The problem is that new BIW line is being used for slow ram-up of MX. The "old" BIW line which is producing MS was maxed out at 1100-1200 cars, with OT (as compared to a standard 2 shift operation). In reality, in terms of an average output, I think that existing line is maxed out at 1100 cars per week.

So, taking 12 working weeks/quarter (given the history), maximum production of MX seem to be limited to 13,200 cars. Even if we assume that all these cars will be delivered, the total MS/MX deliveries in Q4 are likely going to be limited to a maximum of 14,500 cars, resulting in a substantial 2,500 cars miss as compared with minimum guidance of 50K cars.

Theoretically, of course, it is possible to pull the rabbit out of the hat by may be not producing MX on the new BIW line, freeing it to produce MS, and then switching back to producing MX, but this will require tuning of the new BIW line, they can't just use new BIW for 4 weeks producing MS at a rate of 1,000 cars/week. The only way this can possibly work IMO, if they decide not to deliver any MX this year, and try to run existing BIW line at a steady 1,000 cars/week, while also ramping MS production on the new BIW line. This scenario, however, would produce noticeable drop is the estimated MS delivery times, which so far is not the case, with estimated delivery times actually increasing in the last several weeks.

So I am not very optimistic regarding the Q3 earnings call. I think that Tesla will need to share their outlook for Q4, and they will most likely lower it to perhaps 14,000 cars, with 2015 guidance lowered by about 3K cars to 47K.

The issues with this MX ramp up are relatively mundane in a bigger scheme of things, but given that this is a short term thread, I suspect, with all the shorting activity and hysteria ignited by constant bear crescendo, I am afraid that visiting sub $200 is not out of the question.

The long term outlook remains very good, but I would advise caution in the short to medium term.

There is a second rabbit in the hat.... Q3 production numbers. We have to take into account that part of Q3 delivery numbers were attached to switching for rail for transport in NA. That pipeline was still being primed and I think the possibility exists that it is being properly filled so that we won't have a repeat of Q4 deliveries like last year. Q3 did not have that end of quarter push to deliver which perhaps indicates a maturation of the delivery pipeline which will help Q4. Again, the possibility exists of very strong production numbers with substantially higher deliveries falling into Q4 added to the numbers theorized in your post. I really do think the BIW 2 line has a little more flexibility toward the end of November which can add to late December deliveries of more Model S's.

Remember, Elon spoke of a spike in demand for the S after the X reveal. I think Fremont is very competent at turning the production line up to speed for a year end sprint. I seem to recall mention of 2k per week as a MAX figure (only for short bursts as I remember) so I'm still in the confident corner for making 50k. (gonna be close)

For the "short" term, clearly there is a pile on in progress and lots of "pika-nic baskets" have been left unattended at the camp ground. The first bear scare could come from Bonnie posting a delivery date with the other Sigs in tow in combo with general production invites going out. (Nov 3?). In between now and then.... I agree with your conclusion:smile:

In the mean time.....

 

[sub]

That's exactly what I am getting at. Total vehicles and total revenue I think Tesla will hit their 50,000 car mark, the only question is product mix. I honestly think 3,000 Fully loaded Model X's will be made factoring things in such as Holidays and what not. In my previous posts, I classify short term as under 1 year investment horizon ... just like the IRS. What people are doing here is almost to the nano-level of time horizon which is stupid from my experience. This is how mistakes are made and opportunities lost.

The issue we're all facing here on this short term thread is we are buying into the "Model X is a failure" story that is being plastered everywhere. Add to that a garnish of "oh my goodness the second seats don't fold" with a hint of poor media coverage "the 1% vehicle for the 1%" party line we have too many people focusing on the wrong thing and forgetting that Tesla turned into a real car company and not the one trick pony that people have been painting it to be in the past.

Yes the SUV market is huge, but so is the sedan market that Tesla has to conquer with Model S. At the day we know Model S orders spiked after the X announcements (you can speculate why... cancellations/disappointment/others) but I believe it's incremental gains because people didn't know about the brand. The key things Wall Street wants to see is the difference in capex post Model X completion. Chances are they'll be curious about the breakout given the fact that we know GF is still being made and store expansion continues.

TL;DR Tesla has 2 cars now. I think 3,000 Model X's will be made. Model S is still a great car and can Tesla can crank em out to meet guidance.

Thank you, exactly my thoughts.

 

[AlMc]

IMO.....For 'the street' to be happy TM needs to meet the lowered guidance of 50K vehicles. The mix is probably not that important though it would be great to see at least all Sig deliveries by eoy.
There is really no issue with X demand. Some, like myself, may pass/delay for practical reasons of our own but there will be many more people to take our place. It will not be good if at the upcoming ER/CC TM has to further lower guidance.. I don't think this happen.

Do not do as I do: I have been wrong as often as right with TSLA. I will begin buying stock by DCA if we drop below $210 (I put that possibility at 50%) in the next 2-3 months and buy as many J18 LEAPS as I can ( in mid November when they come out) if we go sub $200 (20% chance). So, for me, I have a 30% chance of missing the bull train by waiting to see what happens.

 

[uselesslogin]

That right there in its entirety. And for the record, I'm not buying into any of the Model X noise. Not even a teeny, tiny bit because I recognize it for what it is - deja vu.

Deja vu still means there is a delivery miss at the end of the year. OTOH it also means that October is the last time we will see prices this low on TSLA.