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Very cool! Below is a post from the Model X march delivery thread a week before end of q1 for comparison.
So does free OTA updates, free parking sensors, free autopilot hardware, free supercharging, free supercharging hardware, and countless other improvements.
Tesla could easily be at 50% margin, if only they never improved their original car... nevermind the fact that they'd be still be producing 10k cars a year.
Consumers get better value --> more consumers are driven to buy the car. Tesla gets levers to recoup cost through upgrades and CPO program.
dc_h
Active Member
As noted, this is part of their strategy to man up for M3. They can't hire the new line staff in a day. They will likely run 3 shifts til M3 and then break out staff to the new line as they start ramping. Lower avg selling price margins may also be compensated for by increasing return on fixed investment costs and pressure Panasonic to move at the gigafactory.
I'm all for sacrificing a point or two of margin to be at 1mm vehicles before a competitor is producing 50,000 vehicles. They will have the EV scale advantage in all key areas over their mature competition.
JRP3
Hyperactive Member
I don't disagree with any of that, only with the claim that giving a way a large portion of a major component will not affect margins. It will to some degree.
Just interested because:
1. I see complaints about 3 week delays in getting into service centers
2. positive news about production and SuperCharger buildout.
But not much about Service Center expansion. I just would like to know if anyone heard anything new in that regard..
But they're not giving it away - no dilution of current market by discounting, they're just expanding the market by offering a cheaper product with a really cool upgrade feature that is likely to bring in future revenue at minimal effort. I suspect most of the people who received S40s are going to pay off their loans and then buy the upgrade to a 60. Those who buy the 75 dba 60, will probably do the same thing.
MitchJi
Trying to learn kindness, patience & forgiveness
NASA's 'Maxwell' Electric Plane Could Launch Air Tesla
Another link:
NASA will spend the next 4 years innovating electric passenger plane transport with the 175mph ‘X-57’
My prediction, Elon and JB will be the first to launch an economically viable EP (electric plane).
Another link:
NASA will spend the next 4 years innovating electric passenger plane transport with the 175mph ‘X-57’
What's going to change is battery technology, probably led by Tesla
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Of course they are. At the shareholder meeting you heard JB express his very keen interest of doing this. Couple that with Elon having mentioned electric planes in very loving terms over the years: "I would love to do that in the future", "the battery density isn't there quite there yet for this to make sense". Those two stand points from Elon pretty much tells us that he will do it, FOR SURE, as soon as battery technology has matured to that stage. Which may be much sooner than they originally thought when going at the electric car first, because what they've achieved with Tesla and will do in the years to come which works as a catalyst toward even faster progression of battery tech.
2virgule5
Member
New 60 may have reduced margin but it increases addressable market by quite a lot. It will bring more revenue over time as some customers will be enticed to upgrade. I also suspect a lot of those will be leases, which means than when they come back to Tesla in 3 years, they instantly become 75 to be sold as such for the price of a badge change, so they will get whatever amount of extra money back at that time.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
This is the prefect explanation of "taking the up front profit cut" with the software limited 75 sold, for less(!), as the lesser "60": they know they'll capture all this profit, or say at least 90% or more of it" within the first 5 years or so by unlocking all "60"s they come by to 75s and sell them as such as CPO cars. This is why Tesla does not want to give away the CPO market to second parties.
The Shorts' View of the Next Two Weeks
When predicting what TSLA SP is going to do in the near future, it's actually more important at present to predict what the shorts are going to do than what the longs are going to do (at least that's a view expressed by Julian Cox some time back and I share it). With shorts controlling nearly 30 million shares, the average day-to-day trading is influenced as much by what the shorts are doing as what the longs are doing (because the shares held by many funds and by officers such as Elon Musk are not doing much trading and those of us who are independent investors hold less than 30 million shares).
It's true that sometimes a rally is propelled by longs. Take the Model 3 reservations rally, for instance. The large number of Model 3 reservations did not destroy the shorts' thesis and even though some short selling took place on the way up, numbers of shares held short didn't fall all that much. Rather, much of the rally came from longs and new shareholders who wanted to ride this up escalator buying in. When TSLA started down after the 250-255 price range, it started hitting stop losses set by rookie shareholders and quickly worked its way back down. Nonetheless, this was a rally primarily the work of longs because the numbers of shorts didn't change dramatically during the rally and the subsequent readjustment in SP.
I see the next rally for TSLA as being more of a shorts-inspired rally, however, which will have additional thrust added by longs. We have just over 2 weeks before the Q2 delivery numbers come out. Which of the shorts are aware of the threat these numbers pose? Consider that there are two kinds of shorts: uber-bears and smarter shorts. The uber-bears and going to hold their short positions until either Tesla goes bankrupt (not likely) or until their brokerage gives them such a huge margin-call that they have little choice but to sell (much more likely). When the uber-bears fall, it will be during the MOASS (mother of all short squeezes), but don't hold your breath for this quite yet. The smarter shorts are aware that Tesla hit 2,000 vehiciles/week already and there are reports out of substantially higher production levels. We're interested instead with what the smarter shorts are planning, because awareness and logic are involved in their decision making. My point is that in just over two weeks when Q2 delivery numbers are announced, this could be an extremely perilous time to be short on TSLA, and most of the smarter TSLA shorts will have either gotten out by then or hedged their bets by then (by buying calls that expire beyond the first week in July). Buying calls might be the preferred method of hedging bets by smarter shorts since it does not directly cause TSLA stock price to change. Buying calls only delays the timing of getting out for the shorts, however. The smarter shorts will indeed exit if TSLA starts heading up because the fundamentals look promising and Tesla is delivery at last on the manufacturing side.
So, if you think that a good amount of the smarter shorts trading in TSLA will either get out in the next two weeks, you should plan accordingly. The shorts have found that 215 has been a pretty solid support level in recent weeks. Waiting to get out of your TSLA short doesn't make sense, then, right? Well, we have this thing called Brexit that has been causing lots of fear in the macros lately, and I think some of the smarter shorts are hanging in there, hoping the macros plus FUD plus creative shorts trading mischief will bring TSLA below 215 and start a cascade to lower prices, where they will exit TSLA. As time to July 1 gets closer, however, the shorts are going to get nervous, and a moderate rally could prompt many to jump ship. If they can't bust 215 this coming week it really does not make sense to stay in TSLA as a short, and even if they do bust 215 and get out at a lower number, their exit will bring TSLA right back up.
So, my point is that the first few days of July is an important time and the shorts will either succeed in breaking through 215 or they won't and either way quite a few of them are going to plan to close their short positions prior to July 1. It is in our best interest to understand the timetable. The reason for the shorts to throw in the towel is because their thesis is all but shot now. Tesla has the money in the bank to reach the Model 3 production ramp-up. Demand is not a problem once Model 3 begins production, and TSLA has just introduced demand levers that should carry S and X in sufficient numbers through the Model 3 launch. The Model 3 is not a weirdmobile and has great ability to draw orders. TSLA has in recent weeks shown that it can get the S and X production line humming without too many problem cars being produced, and with production expertise comes the likelihood of Tesla ramping up Model 3 successfully on or near its target date. Bob Lutz was wrong, Tesla can indeed build the X. So, the referee has just blown the two weeks warning whistle, and the only thing the shorts have working for them at this point is the macro situation with Brexit. Please keep these factors in mind when analyzing your stock moves in the near term.
When predicting what TSLA SP is going to do in the near future, it's actually more important at present to predict what the shorts are going to do than what the longs are going to do (at least that's a view expressed by Julian Cox some time back and I share it). With shorts controlling nearly 30 million shares, the average day-to-day trading is influenced as much by what the shorts are doing as what the longs are doing (because the shares held by many funds and by officers such as Elon Musk are not doing much trading and those of us who are independent investors hold less than 30 million shares).
It's true that sometimes a rally is propelled by longs. Take the Model 3 reservations rally, for instance. The large number of Model 3 reservations did not destroy the shorts' thesis and even though some short selling took place on the way up, numbers of shares held short didn't fall all that much. Rather, much of the rally came from longs and new shareholders who wanted to ride this up escalator buying in. When TSLA started down after the 250-255 price range, it started hitting stop losses set by rookie shareholders and quickly worked its way back down. Nonetheless, this was a rally primarily the work of longs because the numbers of shorts didn't change dramatically during the rally and the subsequent readjustment in SP.
I see the next rally for TSLA as being more of a shorts-inspired rally, however, which will have additional thrust added by longs. We have just over 2 weeks before the Q2 delivery numbers come out. Which of the shorts are aware of the threat these numbers pose? Consider that there are two kinds of shorts: uber-bears and smarter shorts. The uber-bears and going to hold their short positions until either Tesla goes bankrupt (not likely) or until their brokerage gives them such a huge margin-call that they have little choice but to sell (much more likely). When the uber-bears fall, it will be during the MOASS (mother of all short squeezes), but don't hold your breath for this quite yet. The smarter shorts are aware that Tesla hit 2,000 vehiciles/week already and there are reports out of substantially higher production levels. We're interested instead with what the smarter shorts are planning, because awareness and logic are involved in their decision making. My point is that in just over two weeks when Q2 delivery numbers are announced, this could be an extremely perilous time to be short on TSLA, and most of the smarter TSLA shorts will have either gotten out by then or hedged their bets by then (by buying calls that expire beyond the first week in July). Buying calls might be the preferred method of hedging bets by smarter shorts since it does not directly cause TSLA stock price to change. Buying calls only delays the timing of getting out for the shorts, however. The smarter shorts will indeed exit if TSLA starts heading up because the fundamentals look promising and Tesla is delivery at last on the manufacturing side.
So, if you think that a good amount of the smarter shorts trading in TSLA will either get out in the next two weeks, you should plan accordingly. The shorts have found that 215 has been a pretty solid support level in recent weeks. Waiting to get out of your TSLA short doesn't make sense, then, right? Well, we have this thing called Brexit that has been causing lots of fear in the macros lately, and I think some of the smarter shorts are hanging in there, hoping the macros plus FUD plus creative shorts trading mischief will bring TSLA below 215 and start a cascade to lower prices, where they will exit TSLA. As time to July 1 gets closer, however, the shorts are going to get nervous, and a moderate rally could prompt many to jump ship. If they can't bust 215 this coming week it really does not make sense to stay in TSLA as a short, and even if they do bust 215 and get out at a lower number, their exit will bring TSLA right back up.
So, my point is that the first few days of July is an important time and the shorts will either succeed in breaking through 215 or they won't and either way quite a few of them are going to plan to close their short positions prior to July 1. It is in our best interest to understand the timetable. The reason for the shorts to throw in the towel is because their thesis is all but shot now. Tesla has the money in the bank to reach the Model 3 production ramp-up. Demand is not a problem once Model 3 begins production, and TSLA has just introduced demand levers that should carry S and X in sufficient numbers through the Model 3 launch. The Model 3 is not a weirdmobile and has great ability to draw orders. TSLA has in recent weeks shown that it can get the S and X production line humming without too many problem cars being produced, and with production expertise comes the likelihood of Tesla ramping up Model 3 successfully on or near its target date. Bob Lutz was wrong, Tesla can indeed build the X. So, the referee has just blown the two weeks warning whistle, and the only thing the shorts have working for them at this point is the macro situation with Brexit. Please keep these factors in mind when analyzing your stock moves in the near term.
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Excellent post Papafox! Have a great Hawaii Saturday late morning.
Edit: you're right: the last thing the smart shorts had left was a delivery miss, which won't happen.
Edit: you're right: the last thing the smart shorts had left was a delivery miss, which won't happen.
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I am cautiously optimistic. All of us that have been readers/contributors to the ST thread over the last few years have seen lots of FUD perpetrated by people and businesses with deep pockets.
Long term TSLA will be a good investment. Be careful with short term investments and predictions.
I am a long term bull with stocks and leaps but I have just a little invested in short term options....
I appreciate your view AlMc because the short-term is so dang hard to predict with TSLA. My hope is that if the shorts can pull TSLA below 215 that some of our longs don't sell out of fear, because I think any dip would be short-lived. Personally, I'm optimistic that we're soon going to be moving in an upward direction.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
But unfortunately there are smart longs (strong longs) and stupid longs (weak longs). Just like there are smart and dumd shorts. You have this continuum from worst to best: "strong short" - "weak short" - "weak long" - "strong long". But don't get your judgment clouded because you are a strong long - there are still too many weak longs.
Uncertainty over Brexit (macros) and the delivery numbers released ( I expect them to be excellent....18k is my prediction) coupled with evidence of the FUDsters pulling out all the stops has me 'short term' positioned with a strangle.
I hope the put part of that goes to 'zero'
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