Short-Term TSLA Price Movements - 2015

[ecarfan]

To me this really unnecessary "recall" due to one harmless incident of a loose bolt appears to be a public relations ploy by Tesla to assure the public of its total commitment to safety. It may also be a marketing ploy....

I strongly disagree. Seat belts are obviously a safety critical item. Tesla found one car with a faulty seat belt attachment. If that car had been in a serious accident with a person in that seat, the person could have been seriously inured or even died because of Tesla's error in attaching the seat belt to the car. That would obviously be a very bad outcome. Tesla wants to be as sure as possible that such a situation can never happen so Tesla wants to check all cars. Not a "ploy", just logic and common sense.

 

[vgrinshpun]

I'm confused. Is Tesla suggesting that owners do this test themselves? If the owners don't do the test correctly, who becomes liable if the seat belt if found faulty in some accident? Will owners have to sign some waiver if they don't take their cars in for the fix? How did you ensure you applied 80 lbs of force at the correct angle etc. ?

I'm also wondering why only a single car will have this issue. Are these seat belts not installed by programmed robots in the fully automated production line, that tighten bolts to an exact spec? If not, then how can anyone claim that it is a rare issue? Is this a bolt that isn't tightened enough or some defect in materials used?

I'm also thinking, if the car in question is the one in Denmark, driving on AP without anyone seating in the driver seat. May be, due to faulty seat belt, the car failed to detect the absence of the driver and kept on driving.

No, Tesla is not suggesting that owners do it themselves. It suggests to bring car to the Service Center, but says that owners concerned with this issue before the SC visit can perform check themselves. Here is the exact language from the e-mail:

If you are concerned about the status of your seat belt prior to your scheduled inspection, you may be able to detect this condition by pulling very firmly on the lap portion of your seat belt with a force of at least 80 pounds. This procedure may detect an improperly attached seat belt but performing this procedure does not replace the need for an inspection by a Tesla technician.

I do not think that improper seat belt connection to the outboard lap pretensioner has anything to do with the video in Denmark. the presence of a driver is determined using weight sensor in the seat, it has nothing to do with the seat belt pretensioner connection.

 

[mmd]

OK, that sounds right. I somehow thought, you were saying that some owners will check it themselves. If it takes 6 minutes for Tesla SC, no reason for that.

IMO, at least few more cars will have the same issue. The Bloomberg video mentions a loose bolt. Unlikely that just 1 or 2 cars got a lose bolt. I'm guessing, more like 1-2%. But not a big deal either way.

 

[MikeC]

OK, that sounds right. I somehow thought, you were saying that some owners will check it themselves. If it takes 6 minutes for Tesla SC, no reason for that.

IMO, at least few more cars will have the same issue. The Bloomberg video mentions a loose bolt. Unlikely that just 1 or 2 cars got a lose bolt. I'm guessing, more like 1-2%. But not a big deal either way.

They already checked 3,000 and found no defects. At 1-2%, you would expect them to have found 30-60 cars with defects already.

 

[Johan]

OK, that sounds right. I somehow thought, you were saying that some owners will check it themselves. If it takes 6 minutes for Tesla SC, no reason for that.

IMO, at least few more cars will have the same issue. The Bloomberg video mentions a loose bolt. Unlikely that just 1 or 2 cars got a lose bolt. I'm guessing, more like 1-2%. But not a big deal either way.

1-2% ??? Did you pull that number out of your a**???

That would be a HUGE safety scandal and would cause TSLA to drop 30% or more.

If even 1% of cars built (1000 cars) had this defect then likely there would have been serious/fatal accidents reported where the seat belt should have restrained the driver but instead came loose.

Try 1 ppm or less.

My personal belief is it was likely just the one car.

I'd be interested how many checks they have on the seat belt assembly before a car leaves the factory? Ny guess is at least 4 independent checks. On assembly, after finished interior assembly, on final factory inspection and during test drive. Maybe now they'll add this on the inspection list at SC before delivery, if it wasn't there already.

However, improper torque could mean the bolt was tight when the car was new but then came loose?

 

[mmd]

OK, then I don't understand how it will be loose only in a single car. Anyone knows how the problem was found? Someone who has taken the factory tour might know, if these are installed by robots. Then, a whole batch should have the issue and Tesla would know which batch that is. Even if manually installed, I'd think they use expensive wrenches with tension measurements, so these bolts are all tightened to same spec. So, at least a few cars assembled at that time/day should have similar issue.

I also can't understand the 6 minute inspection time mentioned by vgrinspun (from Reuters report). Here is a video of how to access the seat belt and replace it. The seat belt tensioner is not visible from outside. So, what can a 6 minuet inspection reveal for 2 belts? I think, I agree with the explanation given by Curt Renz above.
How To: Remove Seat Belt Pre-Tensioner Repair, MyAirbags.com - YouTube

 

[Johan]

OK, then I don't understand how it will be loose only in a single car. Anyone knows how the problem was found? Someone who has taken the factory tour might know, if these are installed by robots. Then, a whole batch should have the issue and Tesla would know which batch that is. Even if manually installed, I'd think they use expensive wrenches with tension measurements, so these bolts are all tightened to same spec.

I also can't understand the 6 minute inspection time mentioned by vgrinspun (from Reuters report). Here is a video of how to access the seat belt and replace it. The seat belt tensioner is not visible from outside. So, what can a 6 minuet inspection reveal for 2 belts? I think, I agree with the explanation given by Curt Renz above.
How To: Remove Seat Belt Pre-Tensioner Repair, MyAirbags.com - YouTube

Do you understand the statistical concept of an outlier? There could a number of extremely uncommon explanations, such as a production error of the bolt/screw, damaged thread, the unlucky combination of a faulty torque wrench at the factory + a faulty torque wrench used for checking, the owner could have caused it after taking delivery voluntarily or involuntarily etc.

In fact, with so many cars already checked and the fault not having been replicated then the probability of this being a one-off fault grows. However, it seems Tesla want the sample size to == all cars ever built to make the probability 1.

 

[Drax7]

Model X production initiating, now that is massive news.
Sales bring in revenues, and cash solves all problems.

We continue to discount everything that is wrong
About model X, now let's discounted everything that is great about model X .

Short interest is massive , the rest follows

 

[BornToFly]

I also can't understand the 6 minute inspection time mentioned by vgrinspun (from Reuters report). Here is a video of how to access the seat belt and replace it. The seat belt tensioner is not visible from outside. So, what can a 6 minuet inspection reveal for 2 belts? I think, I agree with the explanation given by Curt Renz above.
How To: Remove Seat Belt Pre-Tensioner Repair, MyAirbags.com - YouTube

As I mentioned in the previous page, the part in question is visible from the outside. They just have to move the front seats forward. They then inspect where the belt attaches near the floor behind the seats. Takes about 1 minute per side (I was there). The paperwork took a few minutes longer to document that my car was inspected.

 

[Chickenlittle]

OK, then I don't understand how it will be loose only in a single car. Anyone knows how the problem was found? Someone who has taken the factory tour might know, if these are installed by robots. Then, a whole batch should have the issue and Tesla would know which batch that is. Even if manually installed, I'd think they use expensive wrenches with tension measurements, so these bolts are all tightened to same spec. So, at least a few cars assembled at that time/day should have similar issue.

I also can't understand the 6 minute inspection time mentioned by vgrinspun (from Reuters report). Here is a video of how to access the seat belt and replace it. The seat belt tensioner is not visible from outside. So, what can a 6 minuet inspection reveal for 2 belts? I think, I agree with the explanation given by Curt Renz above.
How To: Remove Seat Belt Pre-Tensioner Repair, MyAirbags.com - YouTube

there is a lot you do not understand.

 

[Johan]

there is a lot you do not understand.

LOL!

 

[FluxCap]

there is a lot you do not understand.

Indeed. I think a lot of people here may never have tightened a bolt on a car, or have much awareness of how many screws and bolts exist in a modern vehicle, where they are, and what they do. Granted a loose seat belt bolt is certainly cause for concern, but one loose bolt in the passenger area of a car in 90,000 cars is almost statistically guaranteed to exist in any sample of automobiles, and could have been caused by all manner of user-related issues. It almost certainly does not indicate a repeatable factory assembly issue, and Tesla has already tested thousands of cars without a single repeat issue. However, out of an abundance of safety, Tesla elected to check them all. This is just not something a traditional car company would do for its customers, and I really think it is going to end up being little more than good PR about how obsessed with passenger safety Tesla Motors is.

 

[ecarfan]

OK, then I don't understand how it will be loose only in a single car. Anyone knows how the problem was found? Someone who has taken the factory tour might know, if these are installed by robots. Then, a whole batch should have the issue and Tesla would know which batch that is. Even if manually installed, I'd think they use expensive wrenches with tension measurements, so these bolts are all tightened to same spec. So, at least a few cars assembled at that time/day should have similar issue.

I have taken the factory tour three times. While I have not seen the specific actions used to install the seats belts, based on my observations it would not be done by robots. Many people are involved in installing parts during final assembly. Believe it or not, occasionally people make mistakes. Complex machinery like vehicles are not perfectly assembled 100% of the time. 99.9XX% of the time, yes.

 

[AlMc]

Indeed. I think a lot of people here may never have tightened a bolt on a car, or have much awareness of how many screws and bolts exist in a modern vehicle, where they are, and what they do. Granted a loose seat belt bolt is certainly cause for concern, but one loose bolt in the passenger area of a car in 90,000 cars is almost statistically guaranteed to exist in any sample of automobiles, and could have been caused by all manner of user-related issues. It almost certainly does not indicate a repeatable factory assembly issue, and Tesla has already tested thousands of cars without a single repeat issue. However, out of an abundance of safety, Tesla elected to check them all. This is just not something a traditional car company would do for its customers, and I really think it is going to end up being little more than good PR about how obsessed with passenger safety Tesla Motors is.

I do believe the way TM has handled the 'seat belt issue' will be a net positive for TSLA. My ONLY concern with this issue: even though it takes very little time to check this ( I won't have mine checked till my next scheduled service as it looks fine to me)...it still is time..time to answer the phone and make an appointment, tech time...or even if not tech time..someone's time. This is either OT pay (affecting bottom line) or time that *may* take away from time that would be better spent at inspecting and delivering cars in Q4. TM is already trying to deliver 50% more cars then they have delivered in any other quarter. Production ramping and emptying the pipeline can make 50% more cars available...they still have to be delivered by someone.

 

[Hogfighter]

I think that a fairly low percentage of owners are going to head for a service center just for this. If it was found on more than one car, then maybe.

 

[AlMc]

I think that a fairly low percentage of owners are going to head for a service center just for this. If it was found on more than one car, then maybe.

That is certainly a distinct possibility..That is why I said *may*. Hopefully my concerns are unwarranted. My TSLA position will be better off if they are...

 

[mmd]

To me this really unnecessary "recall" due to one harmless incident of a loose bolt appears to be a public relations ploy by Tesla to assure the public of its total commitment to safety. It may also be a marketing ploy in two respects. First it gets Tesla in the news for being concerned about safety without the expense of advertising. Second it draws Model S owners into service centers and may inspire them to trade up to newer Tesla cars with more expensive options. That would also allow Tesla to purchase the "older" cars and earn a nice profit when reselling them as Certified Pre-Owned. It appears that algobots and human short sellers today got trapped by this.

I think, Curt's explanation (post 17017) makes most sense to me. More owners go for the 2-minute checkup, the better for TSLA. It's almost $0 cost of getting owners back to the service centers. Send out an email and make the owners hurry back to the SCs.

As I mentioned in the previous page, the part in question is visible from the outside. They just have to move the front seats forward. They then inspect where the belt attaches near the floor behind the seats. Takes about 1 minute per side (I was there). The paperwork took a few minutes longer to document that my car was inspected.

So it's just a minute per belt? Did they test the torque with a wrench? Just looking at the bolt hardly tells much.

To those who came up with very rare probabilistic explanations: Nah, I will just use the Occam's Razor here To each, his own.

To those who made veiled attempts at insulting me: I'm not at auto mechanic, but I have replaced my own brake pads/drums, spark plugs, shocks, CV axles, head lamps, cracked radiator hose, and of course oil change, radiator fluid refill, brake fluid refill, etc. But this is really OT now.

 

[Johan]

Mmd: does your gut still tell you that this issue affects "1-2% of all cars"?

Edit: I know I said my opinion is you must have pulled this number out of your a** and I guess that is insulting. If so I apologize. I'm not a native English speaker so I couldn't come up with a good expression for what I was getting at. Is "Taken out of thin air" an expression an English speaker would understand?

 

[Papafox]

Mmd, I say this in all seriousness. If you hold a short position in TSLA, consider dumping it ASAP. Surely you've heard that as of Friday afternoon some Model X signature customers are receiving calls to expect deliveries in December. News of Model X deliveries beginning in volume will propel the stock upward. We've seen shorts annihilated by this stock before, and another robust climb could be just around the corner. If you value your money, look carefully at the implications of Model X deliveries about to begin.

 

[MitchJi]

I spoke to my x delivery specialist today and was told he received news today he could share with me... I should expect my X to be built in December and I should be able to pick it up at the factory in mid or late December.

Do you know (100%) that he was told that it was okay to share that with you? because in the past, someone got in trouble for sharing similar information. I think the reason was that Tesla hadn't solved all of the production constraints. Until they do they don't want potentially misleading information given out.

So if they have permission to say that it's a really good sign.

I say this in all seriousness. If you hold a short position in TSLA, consider dumping it ASAP. Surely you've heard that as of Friday afternoon some Model X signature customers are receiving calls to expect deliveries in December. News of Model X deliveries beginning in volume will propel the stock upward.

How sure are we that calls have begun. The reasons I ask are:
1. We've heard the same thing before.

2. I'm planning to buy some short term calls asking part of a strategy to roll Mar16's to Jun16's and the more confident I am in the MX Production ramp the more agressive I will be. Possibly to the extent of buying some calls independently of the roll