Short-Term TSLA Price Movements - 2015

[aznt1217]

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.

depends on when. For me it's not during EOY de ja vu with the Dual Motors deployment. It's De ja vu for when everyone was declaring Model S DOA and that there wasn't enough demand. Car isn't compelling enough, etc.

 

[Krugerrand]

Deja vu still means there is a delivery miss at the end of the year.

Nope, that's not the deja vu.

 

[vgrinshpun]

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.....

View attachment 97251

Well, I am all for discovering some other rabbits, but I think yours doesn't quite do the trick. The whole thing is that "old" BIW line is seemed to be limited to 1,100 cars per week average run. So it is unlikely that Q3 production significantly exceeded the deliveries. I would guess that at best by about 700 cars.

Regarding the maturation of the pipeline, remember, that if Tesla would put both BIW lines into production of MS, it will mean roughly 50% increase of the produced cars, so the pipeline will have ato do a lot of catch-up...

 

[anon]

The problem is that new BIW line is being used for slow ramp-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.

While I agree that it is likely that the BIW line is currently being used for slow Model X ramp-up, it is possible that they will have debugged the production process over relatively short production runs (e.g. one day per week at full speed) before they are able to sustain full production every day because of the parts shortage that Elon Musk has mentioned. At this point, they no longer need to keep refining the Model X production process on the new BIW line and therefore will have some time available to start Model S production on it.

Another point to consider: producing Model S on the new BIW line could also require some ramp up time until it running at full speed. Furthermore, successfully mixing both X and S on the same line at the same time could also require some ramp time. Therefore it is likely that the old line will remain running temporarily while S is ramping on the new line.

While thinking about the slow Model X ramp on the new line preventing Model S production, it occurred to me that the reverse is also true: when Model X is in production, they won't want to delay it while ramping S production on the new line too...so they will probably do at least some S production on the new line relatively soon while they have spare time before all of the X parts are available. Then they reduce the risk of delays later.

Conclusion: it is likely that the new line will be used for at last some low-rate Model S production this quarter while the old line also remains running, so the total Model S production will be greater than for the old line alone.

I am still concerned about meeting guidance, but I am perhaps a little more optimistic than many people here. Of course everything I have said is speculation and I don't actually know any details about whether it is trivial or complex to adapt the S production process to the new line.

 

[Drax7]

if we close higher on the day, all the closet bulls will jump back in.

 

[erha]

I think this is a great buying opportunity we see here. The X has launched, and it seems like a great car. Yes, they are probably having problems ramping production, but there is no reason why they wouldn't be able to do that. The rest of Tesla is chugging along and demand seems strong enough.

Just a small recap of peak share prices:
September 27th 2013: $190.90
February 28th 2014: $244.81
September 12th 2014: $279.20
July 20th 2015: $282.26

So, from the September 27th peak in 2013, the stock has moved up ~$30 in two years. The share is trading at lower prices today than what it did in February 2014. And then think about how much Tesla has evolved as a company since 2013. I'm buying.

Note: I'm not saying that I think SP will go up tomorrow, this month or maybe not even in 2015. However, I think that the share price today is a great entry price for a longer term investment.

 

[AlMc]

I think this is a great buying opportunity we see here. The X has launched, and it seems like a great car. Yes, they are probably having problems ramping production, but there is no reason why they wouldn't be able to do that. The rest of Tesla is chugging along and demand seems strong enough.

Just a small recap of peak share prices:
September 27th 2013: $190.90
February 28th 2014: $244.81
September 12th 2014: $279.20
July 20th 2015: $282.26

So, from the September 27th peak in 2013, the stock has moved up ~$30 in two years. The share is trading at lower prices today than what it did in February 2014. And then think about how much Tesla has evolved as a company since 2013. I'm buying.

Note: I'm not saying that I think SP will go up tomorrow, this month or maybe not even in 2015. However, I think that the share price today is a great entry price for a longer term investment.

Agree with this. LONG term 'buy and hold' investors will be rewarded at this price point. Short term????

 

[Newb]

@erha: +1 to the entry point statement.

 

[uselesslogin]

Nope, that's not the deja vu.

I'm not sure I understand,

Production on plan for 2012 goal of 5,000 deliveries

Given Tesla’s rate of progress over the past few months, we are confident of being able to deliver 2,500 to 3,000 Model S vehicles in Q4 and over 20,000 in 2013.

However, we faced some challenges scheduling deliveries nearthe end of Q4 as our peak production coincided with vacations during the holiday season. As a result, we delivered approximately 2,400 Model S vehicles during the quarter and about 2,650 for the year.

Edit/added thought: deja vu also means 100,000 deliveries in 2016 or close to it.

 

[jhm]

I'm pretty confident Tesla will sell 46k cars in 2015 and 75k in 2016. So a year from now when auto sales are up 65% y/y plus hundreds of MWh of Power products, the stock will be looking pretty good.

All this is consistent with a long-term revenue growth rate of 50%. So the short term question is how cheap can we get these shares?

 

[uselesslogin]

I'm pretty confident Tesla will sell 46k cars in 2015 and 75k in 2016. So a year from now when auto sales are up 65% y/y plus hundreds of MWh of Power products, the stock will be looking pretty good.

All this is consistent with a long-term revenue growth rate of 50%. So the short term question is how cheap can we get these shares?

Yes it will. I am very much looking forward to 2016 while hoping the stock remains down until October 19th when June options come out.

 

[FredTMC]

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.

Thx for this insight. Quick question about Max capacity of BIW line #1 (used for MS)...

Are you saying this robotic line can only make 1200 Model S BIW per week while running 7/24? (e.g. Using a third shift).

Reason I ask is that this robotic line doesn't require many workers while its operating (tens of worker per shift). A third shift wouldn't be terribly difficult to implement (IMO)

thanks in advance!

 

[Big-T]

Hey guys, I'm just curious if you guys think the stock might drop below $200 before the end of the month? Seems like for the most part the stock has been dropping daily since the Model X announcement. I don't really see much to cause the stock to go up until some sort of official announcements form Tesla come out. Does anyone know when the next earnings call happens? Sorry for the basic questions I just started looking at Tesla's stock in the last couple weeks and am trying to find a good time to jump in for a few shares.

 

[FluxCap]

Hey guys, I'm just curious if you guys think the stock might drop below $200 before the end of the month? Seems like for the most part the stock has been dropping daily since the Model X announcement. I don't really see much to cause the stock to go up until some sort of official announcements form Tesla come out. Does anyone know when the next earnings call happens? Sorry for the basic questions I just started looking at Tesla's stock in the last couple weeks and am trying to find a good time to jump in for a few shares.

And the bottom is in folks!

I jest, but I do think that when we all start getting e-mails from family members and new investors remarking about how cheap TSLA looks, it's an interesting indicator.

For what it's worth, Big-T, none of us can tell you how to invest your money, but I would pay particular attention to vgrinshpun's posts for more insight on quarterly analysis. Also, you can Google the earnings call times.

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.

 

[uselesslogin]

Hey guys, I'm just curious if you guys think the stock might drop below $200 before the end of the month? Seems like for the most part the stock has been dropping daily since the Model X announcement. I don't really see much to cause the stock to go up until some sort of official announcements form Tesla come out. Does anyone know when the next earnings call happens? Sorry for the basic questions I just started looking at Tesla's stock in the last couple weeks and am trying to find a good time to jump in for a few shares.

I really don't think it will get below $200 but of course it is unpredictable. In any event the next earnings call is probably going to be the first week of November. It hasn't been announced.

 

[MitchJi]

Not good short-term news:
All Charged Up in Berlin Handelsblatt Global Edition

I hope to be profitable next year. I agree, we cannot be making losses forever. This year we’ll be investing a lot into the manufacturing ramp-up of the Model X, and in the long term, the Model 3 as well. So our goal from next year onwards is to be cash-flow positive. But we wouldn’t slow down our growth for the sake of profitability.

 

[EarlyAdopter]

Thx for this insight. Quick question about Max capacity of BIW line #1 (used for MS)...

Are you saying this robotic line can only make 1200 Model S BIW per week while running 7/24? (e.g. Using a third shift).

Reason I ask is that this robotic line doesn't require many workers while its operating (tens of worker per shift). A third shift wouldn't be terribly difficult to implement (IMO)

thanks in advance!

This is a good point.

When I toured the factory last year, around 3:00pm on a Wednesday, I asked why the body panel presses weren't running then. I was told it was because they could crank out an entire day's worth of panels in the morning.

Just an example of how Tesla can have a significant amount of production capacity headroom if they were to run things longer.

 

[vgrinshpun]

Thx for this insight. Quick question about Max capacity of BIW line #1 (used for MS)...

Are you saying this robotic line can only make 1200 Model S BIW per week while running 7/24? (e.g. Using a third shift).

Reason I ask is that this robotic line doesn't require many workers while its operating (tens of worker per shift). A third shift wouldn't be terribly difficult to implement (IMO)

thanks in advance!

This line has originally had capacity of 400 cars/shift. So original 2 shift capacity was 800 cars/80 hours week (2 shifts). At some point there were some improvements done to this line and it also was run at more than two shifts for quite some time. I do not know precisely whether they run three shifts (120 hours per week), or somewhat less (may be 100 hours), but this line did not run at more than 1100 cars/week. This was the number that I also saw at a board during my factory tour this summer. So I believe that this line can probably run at 1100 cars/week average, and this requires more than 2 shifts.

 

[uselesslogin]

When I toured the factory last year, around 3:00pm on a Wednesday, I asked why the body panel presses weren't running then. I was told it was because they could crank out an entire day's worth of panels in the morning.

I think those are the NUMMI presses they got with the sale of the factory. They can do 500,000 cars worth per day. They are only that capable because Tesla got them in a fire sale. OTOH the new paint line can also do 500,000 cars so it is good to remember that investment is for Model 3 as well.

 

[vgrinshpun]

This is a good point.

When I toured the factory last year, around 3:00pm on a Wednesday, I asked why the body panel presses weren't running then. I was told it was because they could crank out an entire day's worth of panels in the morning.

Just an example of how Tesla can have a significant amount of production capacity headroom if they were to run things longer.

You are probably referring to the stamping line, not the BIW line. BIW line puts all the body panels together using various techniques. It's capacity, as I mentioned before is about 800 cars/per 80 hours week.