Short-Term TSLA Price Movements - 2016

[MitchJi]

@MitchJi I would not expect much profit from TE this year... it is a nice bonus if it comes, but if they are sourcing cells on the open market given the Samsung cell shipments, then costs aren't likely to be particularly low. Still, it is very hard to pin down the COGS at that point, so it's really a black box when it comes to TE margins this year, hence profit might be elusive. Of course, things probably change a lot if they use Panasonic's output, or when they use the Gigafactory's output. If they aren't using Panasonic's output for this, to me, that means they are committing all that output to vehicles which is a good thing for production expectations.

I believe that by the end of the year that their TE profits will be substantial, and be growing quickly. The impact on the SP should also grow quickly when the market sees the rapid growth of profits. Right how TE is having zero impact on the SP, with a small contribution from TE, largely because the market doesn't realize it's happening. I believe by the end of either Q3 or or Q4 the profits will be too large to ignore and the following quarter when they show rapidly growth...
Energy Sales: A Catalyst for Tesla Motors, Inc. in 2016? -- The Motley Fool

While not all of this segment's increase in revenue can be attributed to growing Tesla Energy sales, the company does at least cite it as a key contributor to the revenue segment's growth; the year-over-year growth was driven primarily by "increases in pre-owned vehicle sales, Tesla Energy sales, and maintenance service revenue," Tesla said in its first-quarter 10-Q filing. Assuming a third of the incremental revenue in the segment came from Tesla Energy, the new segment could already represent about 2.2% of the company's total sales -- enough to become a meaningful driver of the company's overall business if rapid growth continues. And given Tesla CEO Elon Musk's recent remarks that Tesla Energy sales could eventually approach Tesla vehicle sales, the company's optimism suggests growth isn't slowing.

Clarification:
If the Motley Fool estimate of 2.2% in Q1, which seems reasonable, is correct I think obtaining enough impact from TE to increase the SP is almost a slam dunk. If this only grows to something like 8% in Q3 and 20%16% in Q4 which seems reasonable considering GF cell production investors will have to take it seriously. It could look like a snowball rolling down hill.

One more comment:
At the SH Meeting Elon said something like:
"Highly speculative, he thinks that TE will produce revenue about equal to cars and that it will ramp faster than cars."

That makes sense because it's clearly much easier to produce TE Products than cars. He thinks that Tesla can ramp cars to 500k by 2018. It's obviously much easier to get TE to that volume than cars. I used an estimate,of half the f Tesla's income could come from TE, when I tried to estimate the SP in 2018-2019.

If that sounds unreasonably high to you please let us know what you think is a more accurate figure with your reasons. IF that starts to happen it will clearly blindside most of the,market.

 

[dc_h]

Clarification:
If the Motley Fool estimate of 2.2% in Q1, which seems reasonable, is correct I think obtaining enough impact from TE to increase the SP is almost a slam dunk. If this only grows to something like 8% in Q3 and 20%16% in Q4 which seems reasonable considering GF cell production investors will have to take it seriously. It could look like a snowball rolling down hill.

One more comment:
At the SH Meeting Elon said something like:
"Highly speculative, he thinks that TE will produce revenue about equal to cars and that it will ramp faster than cars."

That makes sense because it's much easier to produce TE Products than cars. He thinks that Tesla can ramp cars to 500k by 2018. It's obviously much easier to get TE to that volume than cars. I used an estimate,of half when I tried to estimate the SP in 2018-2019.

If that sounds unreasonably high to you please let us know what you think is a more accurate figure with your reasons.

Getting data on TE pricing will be interesting as TE grows. It will inform us on price elasticity and the market size. If TE is growing twice as fast as TM, the margins should be much higher and should stay higher until growth slows. With a big head start and no one investing on their scale, margins should stay above TM until at least 2020.

 

[Buddyroe]

Sorry if I missed a post on this, but does anyone remember about a year ago when Tesla hired a guy who was supposedly one of the leading researchers in battery technology to start working for Tesla on June 1st of this year. He was under contract somewhere else so he couldn't be hired immediately. I was expecting some kind of announcement. Did that fall through?

EDIT: Well, a simple google search gave me my answer very easily:

Tesla's new battery expert will do "whatever it takes" to improve battery performance

 

[neroden]

Tesla does not need nor should prioritize 100% geographic coverage.

Oh yes they do need to.

You know I've been telling people *not* to buy Teslas for the last year? This is because in this area new owners *can't get them serviced* at a reasonable price. Tesla is not informing future buyers of this, which has already led to buyers feeling "bait-and-switched". It's already doing serious reputation damage to the company. It will do more reputation damage if it's not fixed ASAP. This is the weak point which could allow GM or someone else to eat into Tesla sales. Imagine the advertisements showing Tesla owners stranded because the nearest repair shop is 600 miles away, and then pointing out how close the nearest GM shop is. I could write the campaign right now, and it would be pretty devastating.

If Tesla's offering direct delivery of cars to an area, they need to offer a service center in the area. Period.

Obviously people who are ordering their cars in another jurisdiction and importing them know what they're getting into.

 

[dmckinstry]

If Tesla's offering direct delivery of cars to an area, they need to offer a service center in the area. Period.

Spokane, WA doesn't have a service center, but it does have a service tech.
In most cases I consider that to be a reasonable compromise.

 

[neroden]

Spokane, WA doesn't have a service center, but it does have a service tech.
In most cases I consider that to be a reasonable compromise.

That would do!

 

[dakh]

One more comment:
At the SH Meeting Elon said something like:
"Highly speculative, he thinks that TE will produce revenue about equal to cars and that it will ramp faster than cars."

This is very observant of you to notice that part! This statement still leaves a lot of room for interpretation because the time horizon is not specified, but yea makes a lot of sense!

 

[RobStark]

Oh yes they do need to.

You know I've been telling people *not* to buy Teslas for the last year? This is because in this area new owners *can't get them serviced* at a reasonable price. Tesla is not informing future buyers of this, which has already led to buyers feeling "bait-and-switched". It's already doing serious reputation damage to the company. It will do more reputation damage if it's not fixed ASAP. This is the weak point which could allow GM or someone else to eat into Tesla sales. Imagine the advertisements showing Tesla owners stranded because the nearest repair shop is 600 miles away, and then pointing out how close the nearest GM shop is. I could write the campaign right now, and it would be pretty devastating.

If Tesla's offering direct delivery of cars to an area, they need to offer a service center in the area. Period.

Obviously people who are ordering their cars in another jurisdiction and importing them know what they're getting into.

No they don't.

With you and all of your cohorts telling people not to buy Tesla they are production constrained.

Tesla has built great brand equity, number #10 in the automotive world according a recent study by a Wall Street firm knocking VW and Lexus out of the top 10 with virtually zero paid marketing and no paid tv/radio/print commercials.

Let GM sell to the electric buyers in the boonies.

Tesla has never planned nor ever plans to own 100% of the BEV market.

Let others get the least profitable and most expensive to service sales.

Tesla can just cherry pick the lowest lying fruit. At least for the foreseeable future.

 

[techmaven]

Clarification:
If the Motley Fool estimate of 2.2% in Q1, which seems reasonable, is correct I think obtaining enough impact from TE to increase the SP is almost a slam dunk. If this only grows to something like 8% in Q3 and 20%16% in Q4 which seems reasonable considering GF cell production investors will have to take it seriously. It could look like a snowball rolling down hill.

One more comment:
At the SH Meeting Elon said something like:
"Highly speculative, he thinks that TE will produce revenue about equal to cars and that it will ramp faster than cars."

That makes sense because it's clearly much easier to produce TE Products than cars. He thinks that Tesla can ramp cars to 500k by 2018. It's obviously much easier to get TE to that volume than cars. I used an estimate,of half the f Tesla's income could come from TE, when I tried to estimate the SP in 2018-2019.

If that sounds unreasonably high to you please let us know what you think is a more accurate figure with your reasons. IF that starts to happen it will clearly blindside most of the,market.

Well... on the conservative side, I'm thinking that TE really isn't a story for 2016. Ideally, Tesla can max out Panasonic's capacity out of Japan for vehicles, and then TE is stuck sourcing cells at "normal" volume cost from the likes of LG and Samsung SDI. Only if Tesla cannot make enough vehicles would there be leftovers for TE at the $125-$150/kWh cell cost. Let's say they manage to ship 100 MWh this year. (2x the size of the big Hawaii project). Priced at $470/kWh, say they source the cells at $300/kWh, add 30% for the pack structure, BMS, etc. That's $390/kWh in costs. Say another $20/kWh in overhead, so $60/kWh in profit margin. At 100 MWh, that's $6 million in profit. That's just not all that much money, even if you double or triple that.

Next year, however, as the pilot phase of the Gigafactory comes online, there will be a mix of TE and vehicle cells. The first 3-4 months of production is likely all TE. That could be as much as 2-3 GWh of just TE cells at very, very low cost. Let's say the TE COGS all in price is $165/kWh at that point. If they sell it for the original $250/kWh price, that's > 50% margin. 1 GWh would be $85 million. 3 GWh would be $255 million. Of course, Tesla could sell at much higher than $250/kWh.

Basically, whatever is happening with TE in 2016 is a small appetizer to what is likely to happen in 2017.

 

[eloder]

Oh yes they do need to.

You know I've been telling people *not* to buy Teslas for the last year? This is because in this area new owners *can't get them serviced* at a reasonable price. Tesla is not informing future buyers of this, which has already led to buyers feeling "bait-and-switched". It's already doing serious reputation damage to the company. It will do more reputation damage if it's not fixed ASAP. This is the weak point which could allow GM or someone else to eat into Tesla sales. Imagine the advertisements showing Tesla owners stranded because the nearest repair shop is 600 miles away, and then pointing out how close the nearest GM shop is. I could write the campaign right now, and it would be pretty devastating.

If Tesla's offering direct delivery of cars to an area, they need to offer a service center in the area. Period.

Obviously people who are ordering their cars in another jurisdiction and importing them know what they're getting into.

Why?

I ordered a smart electric drive the other year. The delivership would deliver anywhere in the nation if I paid the right price, and they have even larger gaps than Tesla for service/maintenance.

If Tesla limited deliveries only to existing service centers, they wouldn't be close to the juggernaut they are today

Also back on track, Model 3 on public roads video posted in the M3 subforum:

Model 3 Spotted on the Highway

This definitely looks like one of the existing pre-production models already seen out in the wild months earlier (the matte black one), but I do wonder if this may have any signals for finalizing the "pencils down" design.

 

[Zhelko Dimic]

Clarification:
If the Motley Fool estimate of 2.2% in Q1, which seems reasonable, is correct I think obtaining enough impact from TE to increase the SP is almost a slam dunk. If this only grows to something like 8% in Q3 and 20%16% in Q4 which seems reasonable considering GF cell production investors will have to take it seriously. It could look like a snowball rolling down hill.

One more comment:
At the SH Meeting Elon said something like:
"Highly speculative, he thinks that TE will produce revenue about equal to cars and that it will ramp faster than cars."

That makes sense because it's clearly much easier to produce TE Products than cars. He thinks that Tesla can ramp cars to 500k by 2018. It's obviously much easier to get TE to that volume than cars. I used an estimate,of half the f Tesla's income could come from TE, when I tried to estimate the SP in 2018-2019.

If that sounds unreasonably high to you please let us know what you think is a more accurate figure with your reasons. IF that starts to happen it will clearly blindside most of the,market.

I heard this as "eventually", my interpretation is 10 years. Maybe 5-7. But not one or two.

Buyers of these systems need to change mindsets. Systems need to be installed and prove cost effective. Budgets to be approved. Strategic direction to be chosen by senior management and approved by boards. Big companies move slow, and they're buyers here, and you don't create billions dollar marketplace overnight.

Having said that, it's human nature to overestimate short term growth, and underestimate long term growth; so yeah, in 10 years this could be business you can buy countries with...

 

[neroden]

Why?

I ordered a smart electric drive the other year. The delivership would deliver anywhere in the nation if I paid the right price, and they have even larger gaps than Tesla for service/maintenance.

And how well are they selling? Q E D.

 

[neroden]

No they don't.

With you and all of your cohorts telling people not to buy Tesla they are production constrained.

Tesla has built great brand equity, number #10 in the automotive world according a recent study by a Wall Street firm knocking VW and Lexus out of the top 10 with virtually zero paid marketing and no paid tv/radio/print commercials.

Let GM sell to the electric buyers in the boonies.

See, that's the sort of attitude which can seriously get Tesla in trouble. It would be quite harmful if this attitude took hold within Tesla, so I hope it doesn't. It's precisely the *opposite* of the "Teslas are good anywhere" attitude which Tesla had from 2008-2015 -- the Ranger service, among other things, was specifically to avoid this bad attitude.

All the major carmakers, for years, would sell certain BEV models only in California, or later, only in a select list of states. What were these cars referred to as? You know. What reputation did the carmakers get for doing this? You know.

So far, every time I've talked to Tesla Service or Sales, absolutely every employee has said "Yes, of course we need to have service centers in those places (upstate NY, Montana, etc.) for Model 3." So I think they understand that they need to do it. But it's not happening...

 

[vgrinshpun]

It looks like the rate of incoming MS NA orders for the past month was outpacing the total MS production, although the NA deliveries comprise only about 52% of total. This confirms the trend of increasing MS demand, as per the Tesla communications: Website wait times for delivery change

 

[30seconds]

a bit OT - but when this happens to Tesla it is widespread news/ FUD

Failure To Refuel - 2016 Toyota Mirai Long-Term Road Test

When it happens to Toyota (cough, big ad $$$, cough) no one hears boo about it

Same goes for Mercedes "self-driving" system that is currently being advertised all over my TV (LED - substantially larger, better picture & more efficient than any tube TV)

 

[VanE]

Does any of you know how much time/cars it took to change the front of the MS? It looks to me that the change was only a few parts in total and they would be able to do such change quite effortlessly (especially since they change/upgrade the car consistently through the year). Or was this change part of a bigger upgrade that stopped the production lines for quite a while?

I'm asking because it seems to me that they had a great quarter for production and that this change would've been the only hiccup (that we know of) in the production process this quarter.

 

[DrJohnM]

It looks like the rate of incoming MS NA orders for the past month was outpacing the total MS production, although the NA deliveries comprise only about 52% of total. This confirms the trend of increasing MS demand, as per the Tesla communications: Website wait times for delivery change

Oh no - not production constrained!

 

[vgrinshpun]

It looks like the rate of incoming MS NA orders for the past month was outpacing the total MS production, although the NA deliveries comprise only about 52% of total. This confirms the trend of increasing MS demand, as per the Tesla communications: Website wait times for delivery change

EDIT: there was wrong link in the original post above. The correct link: Website wait times for delivery change

 

[dc_h]

Saw this in the Belgium thread, could the P100D be here?
Tesla is secretly adding over 50 hp to the Model S P90D Ludicrous based on 3rd party testing, what does it mean?

 

[CALGARYARSENAL]

Longer the base higher the space boys and girls. Very happy with where we currently sit. Bears getting pretty frustrated, based on tweets.