Short-Term TSLA Price Movements - 2015

[Drax7]

service centers must be bored for lack of work, the "maytag repairman syndrome"
is well documented.

 

[austinEV]

service centers must be bored for lack or work, the "maytag repairman syndrome"
is well documented.

I wish that were true... It is not.

 

[Scott Ales]

Boom!

Back at pre-announcement levels.

That was smooth.

 

[MikeC]

Nice rebound so far.

Congrats to those who added positions. Looks like a great play for the next setup!

Would be interesting to know what entity or who dumped the 300k shares earlier. Didn't play that too well it seems.

Probably someone who sold a bunch of $220 calls that are expiring today. We will see how close it ends up to max pain (currently $220).

 

[FluxCap]

Probably someone who sold a bunch of $220 calls that are expiring today. We will see how close it ends up to max pain (currently $220).

Max pain definitely in play today despite news. Market makers want it at $220 and they are getting their way on low volume.

 

[Curt Renz]

It's actually more like 500K seat belts... assuming each car has an average of 4.5 (child seats and such)

It's only the front seat belts as noted in the email to car owners. There was an initially ridiculous overreaction to this "recall" announcement, probably mainly by algobots. There was a single European incident of a seat belt detaching from its mount with no resulting accident. Tesla says the problem was due to improper installation and not a defective part. The cars called into service centers will be inspected for a loose seat belt connection. If there is a deficiency, I suspect it may simply involve tightening a bolt. The cost to Tesla would be negligible and far far less than the loss in market cap during the mini-panic today. The market instead should be respectful of Tesla's proactive concern for maximum safety.

 

[AprilDelivery??]

I was short two thousand shares before the recall . I covered now, I was looking for a news item like this to cover! It was against me a few g's.

 

[aznt1217]

It's only the front seat belts as noted in the email to car owners. There was an initially ridiculous overreaction to this "recall" announcement, probably mainly by algobots. There was a single European incident of a seat belt detaching from its mount with no resulting accident. Tesla says the problem was due to improper installation and not a defective part. The cars called into service centers will be inspected for a loose seat belt connection. If there is a deficiency, I suspect it may simply involve tightening a bolt. The cost to Tesla would be negligible and far far less than the loss in market cap during the mini-panic today. The market instead should be respectful of Tesla's proactive concern for maximum safety.

Oh great, this is super helpful. Thanks for clearing that up. Good for that seat belt supplier also...

 

[Drax7]

It's only the front seat belts as noted in the email to car owners. There was an initially ridiculous overreaction to this "recall" announcement, probably mainly by algobots. There was a single European incident of a seat belt detaching from its mount with no resulting accident. Tesla says the problem was due to improper installation and not a defective part. The cars called into service centers will be inspected for a loose seat belt connection. If there is a deficiency, I suspect it may simply involve tightening a bolt. The cost to Tesla would be negligible and far far less than the loss in market cap during the mini-panic today. The market instead should be respectful of Tesla's proactive concern for maximum safety.

Yes indeed it must be the algobots, the word "recall" triggers automatic selling ,
I knew a guy that traded on that basis.

 

[MitchJi]

Finally we have some datapoints that line up and tell us that Model X production is ramping:
- Model X vehicles spotted at end of production in Fremont.
- Delivery timeframe (last week in December) given to a Model X owner.
- First review of a production Model X out yesterday.

Curious what comes next.

I just called my local store (Corte Madera, CA) and they told me they were told Q1 (which they thought meant February). My previous calls they told me they were told by the end of the year.

123

 

[doctoxics]

A major recall and only down two bucks. Pretty strong!

 

[ev-enthusiast]

123

???

 

[Spidy]

Things I am thinking about:

1) What is the material cost of this recall to Tesla
2) When will bears will spin up "Tesla safety ratings may be in question" FUD
3) Will this impact Model S customer demand in any way, putting 2015 guidance in question
4) How many investors see this as a convenient entry point prior to Model X lines coming fully online
5) Will this news fizzle out over the weekend, or will it grow in volume
6) Does this merit a Tesla blog post (probably not)?

Any thoughts?

I think the big question is how much this will **** with Service Centers. In the US it does not seem that bad from what I understand, but in Norway they seem have 3-6 months of wait time and I read a post in the Model S section about someone in Vienna with over a months wait time, too.
And if Tesla is seriously concerned about safety then they have to make space in their already booked up schedule.

 

[hockeythug]

I think the big question is how much this will **** with Service Centers. In the US it does not seem that bad from what I understand, but in Norway they seem have 3-6 months of wait time and I read a post in the Model S section about someone in Vienna with over a months wait time, too.
And if Tesla is seriously concerned about safety then they have to make space in their already booked up schedule.

I'm sure they will prioritize this specific issue.

 

[Yggdrasill]

I'm sure they will prioritize this specific issue.

I hope not. It's too bad people will have to drive around with serious issues for an additional six(?) months before they can get them resolved. A 12 month waiting time for service is just not good enough.

 

[FluxCap]

Things I am thinking about:

1) What is the material cost of this recall to Tesla
2) When will bears will spin up "Tesla safety ratings may be in question" FUD
3) Will this impact Model S customer demand in any way, putting 2015 guidance in question
4) How many investors see this as a convenient entry point prior to Model X lines coming fully online
5) Will this news fizzle out over the weekend, or will it grow in volume
6) Does this merit a Tesla blog post (probably not)?

Any thoughts?

OK, so after some analysis I will answer myself:

1) Negligible service cost, can be checked/fixed in seconds by a tech with a wrench if there even is an issue. Could actually end up providing positive PR as "the safety choice" vs. other automakers.
2) This line of reasoning seems like a large stretch given the particulars.
3) Could actually increase demand due to positive PR.
4) Turns out, quite a few. Buying accelerated in afternoon trading.
5) Will of course be some articles written, but likely mix of negative and positive.
6) Not really, unless Elon wants to highlight that Tesla likes to go above and beyond for customer safety.

Model X lines are starting up very soon if they haven't already, and this was probably a bit of a gift for those savvy enough to pounce on some cheaper TSLA shares.

 

[aznt1217]

A major recall and only down two bucks. Pretty strong!

Major recall? lol. There's not even a need for parts replacement... It's just a time cost for SC's.

 

[MonroeSS]

The 'company owned service center' model will be beneficial in situations like this. It shouldn't cost Tesla a penny since the employees are salaried and there are no parts to be replaced in 99% of the cases. A 3rd party dealer would charge the automaker for labor. 10 minutes per car @ $80/hr will add up fast. Tesla can check the seatbelts when the car is in for other stuff like yearly service or minor repairs.

 

[Yggdrasill]

I hope not. It's too bad people will have to drive around with serious issues for an additional six(?) months before they can get them resolved. A 12 month waiting time for service is just not good enough.

I did some rough calculations:

To start with, there's about 10,000 Model S in Norway and there's currently 9 service centers.

Assuming each service center can fix five cars at the same time, each inspection takes 1 hour including all the logistics and assuming a 37.5 hour work week, that means the service centers can inspect about 1700 cars per week. This in turn means the additional service wait time should be somewhere in the area of 6 weeks.

 

[ke6jph]

OK, so after some analysis I will answer myself:

1) Negligible service cost, can be checked/fixed in seconds by a tech with a wrench if there even is an issue. Could actually end up providing positive PR as "the safety choice" vs. other automakers.
2) This line of reasoning seems like a large stretch given the particulars.
3) Could actually increase demand due to positive PR.
4) Turns out, quite a few. Buying accelerated in afternoon trading.
5) Will of course be some articles written, but likely mix of negative and positive.
6) Not really, unless Elon wants to highlight that Tesla likes to go above and beyond for customer safety.

Model X lines are starting up very soon if they haven't already, and this was probably a bit of a gift for those savvy enough to pounce on some cheaper TSLA shares.

You are correct.....Having to deal with similar issues on "other" car lines, the service tech will most likely verify proper torque on the fastener. If it is loose he/she will replace the bolt with a new one having chemical thread locking compound on it. 5 minutes max.....the service paperwork will probably take longer.