Short-Term TSLA Price Movements - 2016

[esk8mw]

Just as a rough update on Model X deliveries in the quarter, I was seeing X deliveries in the 7,000-9,000 VIN areas delivered at the end of Q2 and here's some text from the Model X Sept delivery thread:

"Confirmed 8/24, Production start 9/7ish, Production complete 9/14, original delivery est. Oct 15th (my wedding date), but DS just called and scheduled me for a 9/27 delivery!! on East coast in Decatur!

VIN 189XX Black 60D X 6 seater premium, AP, blk leather, smart air, high amp charging, tow hitch.."

There's plenty of room for error in VIN counting, so take with a grain of salt, but I see the X deliveries will be a huge part of total deliveries in Q3 and Tesla is clearly succeeding in producing and shipping faster than originally expected.

Model X deliveries are not going to disappoint this quarter. I follow the X threads pretty closely to get a feel for how things are progressing and it seems like pretty much everyone is getting a sept delivery, aside from later non us orders of course. There are at least 3 deliveries in the 203xx and 204xx range scheduled for sept and they aren't all in sf - at least one is in Miami fl. As you noted, people's timelines suggest that production is crushing it lately.

Add in these inventory blowouts and large in transit numbers at the front end of the quarter...feeling pretty bullish.

 

[TrendTrader007]

Model X deliveries are not going to disappoint this quarter. I follow the X threads pretty closely to get a feel for how things are progressing and it seems like pretty much everyone is getting a sept delivery, aside from later non us orders of course. There are at least 3 deliveries in the 203xx and 204xx range scheduled for sept and they aren't all in sf - at least one is in Miami fl. As you noted, people's timelines suggest that production is crushing it lately.

Add in these inventory blowouts and large in transit numbers at the front end of the quarter...feeling pretty bullish.

i think Tesla will beat Q3 and Q4 delivery targets handily and i wouldn't be surprised if they meet or even exceed the 50000 H2 target by the end of the year, Q3 as well as Q4 deliveries as well as a successful capital raise in Q4 plus successful merger with SCTY, positive news on M3, GF as well as positive surprises on Tesla energy toward end of Q4--- i see multiple potential catalysts that can and most likely will propel TSLA much higher

 

[AlMc]

i think Tesla will beat Q3 and Q4 delivery targets handily and i wouldn't be surprised if they meet or even exceed the 50000 H2 target by the end of the year, Q3 as well as Q4 deliveries as well as a successful capital raise in Q4 plus successful merger with SCTY, positive news on M3, GF as well as positive surprises on Tesla energy toward end of Q4--- i see multiple potential catalysts that can and most likely will propel TSLA much higher

I hope you are right because if you are I am retiring

 

[SPadival]

I think a short term positive will be the V8 software update - this makes the Autopilot fairly idiot proof with the "disabled until you stop/start" feature - so we should see less and less competition for the Darwin award and the corresponding negative press coverage about the Autopilot.

Another medium term positive - as others have previously pointed out - Chevy Bolt should really be called LG Bolt - with most of the critical components supplied by LG and GM bolting (no pun intended) them together to a Buick Encore body/chassis. So GM has very little skin in the BEV game. Shorters like Chanos and his (paid?) underlings on SA claim TSLA has no battery tech IP of its own, and yet praise the GM Bolt as a durable competition to the Model 3! But every single critical IP in the car has come from LG. Hypocrites much?

 

[MikeC]

At the risk of reigniting the demand debate, looks like they're really going for a blowout q3: Want a new Tesla? You can have one today.

They're probably emptying the pipeline - diverting orders that would have been delivered overseas in Q4, instead becoming US inventory cars. I'm very bullish on this ER. General sentiment is still low, and we know Tesla is really going for this one.

 

[Alketi]

At the risk of reigniting the demand debate, looks like they're really going for a blowout q3: Want a new Tesla? You can have one today.

They're probably emptying the pipeline - diverting orders that would have been delivered overseas in Q4, instead becoming US inventory cars. I'm very bullish on this ER. General sentiment is still low, and we know Tesla is really going for this one.

Sharing this story because it pertains to Q3.

My friend took a test drive of a Model S this past Sunday, looking to get a 2-year-lease in advance of his Model 3 reservation. On Monday (the last day of the 2-year-lease) he signed up for an S60 lease. Estimated delivery was Oct/Nov.

On Thursday (3 days later) he received a call from Tesla stating that they had a "similar" car available now and would like to offer it to him. It was the same color and with the same options he ordered, except it also had a Moon Roof, which he did not order. The person stated the Moon Roof would be thrown in for FREE.

My friend played it cool enough that the Tesla salesman then offered him an addition $1200 off the lease down payment. Naturally, at this point, my friend agreed. His delivery is now slated for the last week in September.

So, yes, if this is any indication, Tesla is pushing to deliver everything they can this quarter, and even providing some incentives to do so.

 

[mmd]

Only one data point for sure but it appears EM/TM pulling out all the stops to move cars, giving discounts on new cars:

https://forums.tesla.com/forum/forums/new-inventory-cars-are-going-15k

That link is not accessible. Looks like I have to sign up. Any summary? Thank you.

 

[MikeC]

That link is not accessible. Looks like I have to sign up. Any summary? Thank you.

 

[dennis]

But now with the Bolt and it's low-cost cells, we need to take Audi's electric SUV seriously, in my opinion. I think it will be good competition for the Model X. We'll see. As long as they can get the cost down (which it appears LG Chem has succeeded in doing), I think Audi can make good electric cars. Same goes for BMW, Mercedes, Lexus, etc. I think it's only a matter of time before all these manufacturers get into the game and come out with long-range EVs. And I think those cars will be competitive. I'm not selling they will outsell Tesla. Just saying there will be competition.

We shouldn't forget that the BEV's from Audi/BMW/Mercedes/etc. won't just be competing with Tesla cars, they will be competing with the Tesla ecosystem: buying experience, Supercharger network, over-the-air updates, crowd sourced map data for Autopilot, tight feedback loop between sales/service/manufacturing/engineering, much faster execution, etc. It is a daunting and probably unwinnable game of catchup.

 

[Oil4AsphaultOnly]

Sharing this story because it pertains to Q3.

My friend took a test drive of a Model S this past Sunday, looking to get a 2-year-lease in advance of his Model 3 reservation. On Monday (the last day of the 2-year-lease) he signed up for an S60 lease. Estimated delivery was Oct/Nov.

On Thursday (3 days later) he received a call from Tesla stating that they had a "similar" car available now and would like to offer it to him. It was the same color and with the same options he ordered, except it also had a Moon Roof, which he did not order. The person stated the Moon Roof would be thrown in for FREE.

My friend played it cool enough that the Tesla salesman then offered him an addition $1200 off the lease down payment. Naturally, at this point, my friend agreed. His delivery is now slated for the last week in September.

So, yes, if this is any indication, Tesla is pushing to deliver everything they can this quarter, and even providing some incentives to do so.

As great as that sounds, I'm a little dismayed. The last time they emptied the pipeline, the quarter after deliveries were actually down. If this is how Q3 is being blown out, then even if they achieved 26k deliveries in Q3, their 50K H2 goal might not be attainable as Q4 might not deliver as many as in Q3. 2200/wk avg. in Q4 (12 weeks to account for holidays) would mean ~26.4k produced, but minus 5k into the pipeline and we might only see 21k delivered. But that'll be something to watch for next month.

 

[Yggdrasill]

I don't have a hard figure yet, but found this at the Battery University

High energy and power densities, as well as good life span, make NCA a candidate for EV powertrains. High cost and marginal safety are negatives.

This was in contrast to what they said about NMC. So empirically they must not cost the same.

I wouldn't in any way trust Battery University when it comes to cost estimates. For one thing, they are talking completely in generalities, completely independantly of cell format, production technology, etc. Another thing is that they don't update the cost estimates regularly. For instance, they consider LCO cheaper than NCA, yet LCO uses much more of the expensive Cobalt. It's understandable, given that LCO was developed in the early 90s, while NCA was developed in the late 90s, so it probably was true at some point that NCA was more expensive than LCO. But today, NCA is likely cheaper.

If fact, I belive that today, NCA is cheaper than all the other li-ion chemistries, possibly except LFP. Per kWh, at least. The fact is that raw material costs are becoming an increasingly larger part of the total cost of the battery, as manufacturing costs are falling. This means that storing ~66% more energy per kg of raw material compared to the next best chemistry is a huge advantage. True that NCA needs some expensive Cobalt, but so does NMC, just less. And Manganese is more expensive than Aluminium.

 

[Runarbt]

We shouldn't forget that the BEV's from Audi/BMW/Mercedes/etc. won't just be competing with Tesla cars, they will be competing with the Tesla ecosystem: buying experience, Supercharger network, over-the-air updates, crowd sourced map data for Autopilot, tight feedback loop between sales/service/manufacturing/engineering, much faster execution, etc. It is a daunting and probably unwinnable game of catchup.

More importantly, rhey will compete against audi/bmw/mercedes ICE ;-)

 

[schonelucht]

Although I'd love to see this discussion close, but there's a little details missed in this exchange. The comparisons are apples and oranges, since Panasonic supplies cells to Tesla in a commodity format, one that they've fully depreciated the entire factory and tooling on (osaka plant). While LG is supplying pouch formatted cells to GM, to which their tooling costs haven't been fully depreciated yet. So Panasonic and LG's material costs might be the same, but their operating and capital costs are definitely different.

I find it hard to believe that Panasonic had enough spare capacity to produce 18650's before Tesla came along. On the contrary, I understood that in the early days there were severe shortages in available batteries up to a point that it held up Tesla's production. Remember also that in 2011 the plan was to sell some 20k cars. I think Panasonic already invested heavily in upgrading capacity for Tesla to accommodate the much higher demand. The only difference would be in having to deliver a specialty format. Something that Tesla is now also asking of Panasonic...

 

[schonelucht]

Model X deliveries are not going to disappoint this quarter. I follow the X threads pretty closely to get a feel for how things are progressing and it seems like pretty much everyone is getting a sept delivery, aside from later non us orders of course. There are at least 3 deliveries in the 203xx and 204xx range scheduled for sept and they aren't all in sf - at least one is in Miami fl. As you noted, people's timelines suggest that production is crushing it lately.

Add in these inventory blowouts and large in transit numbers at the front end of the quarter...feeling pretty bullish.

Same thing for Europe. I think Tesla will be able to deliver nearly the full backlog from 3 years of orders in just a single month. Should be a total blowout.

 

[schonelucht]

As great as that sounds, I'm a little dismayed. The last time they emptied the pipeline, the quarter after deliveries were actually down. If this is how Q3 is being blown out, then even if they achieved 26k deliveries in Q3, their 50K H2 goal might not be attainable as Q4 might not deliver as many as in Q3. 2200/wk avg. in Q4 (12 weeks to account for holidays) would mean ~26.4k produced, but minus 5k into the pipeline and we might only see 21k delivered. But that'll be something to watch for next month.

Seems like now is a very good time to order a car. There have been too many reports of people having been able to haggle down on the price to ignore. There really is a shift in policy : if you are willing to accommodate and receive your car this quarter still, Tesla is willing to accommodate on price. While before I took 24k cars as an optimistic scenario, I think with recent information I now believe it is the expected scenario and anything over 25k becomes the new optimistic for me.

 

[mrdoubleb]

I find it hard to believe that Panasonic had enough spare capacity to produce 18650's before Tesla came along. On the contrary, I understood that in the early days there were severe shortages in available batteries up to a point that it held up Tesla's production. Remember also that in 2011 the plan was to sell some 20k cars. I think Panasonic already invested heavily in upgrading capacity for Tesla to accommodate the much higher demand. The only difference would be in having to deliver a specialty format. Something that Tesla is now also asking of Panasonic...

Don't forget that Pana used to be a major player in producing the world's laptop and camera batteries. Then as those gadgets started to get smaller rapidly, the battery became an obstacle and manufacturers changed to other formats/cells/chemistries and Pana was left with unused capacity. They kind of missed the boat... but this was opportune time for Tesla.

And as far as I can recall, the real reason for not enough cells for Tesla was because Panasonic wanted to be sure of sustained demand before restarting the factories it mothballed. When you think about it rationally, they were dealing with a small startup and a market segment (EV) that has failed to capture demand time and time again in the past.

 

[mrdoubleb]

As great as that sounds, I'm a little dismayed. The last time they emptied the pipeline, the quarter after deliveries were actually down. If this is how Q3 is being blown out, then even if they achieved 26k deliveries in Q3, their 50K H2 goal might not be attainable as Q4 might not deliver as many as in Q3. 2200/wk avg. in Q4 (12 weeks to account for holidays) would mean ~26.4k produced, but minus 5k into the pipeline and we might only see 21k delivered. But that'll be something to watch for next month.

Right, that is a valid concern. As long as we scrape by at just around 80k total for the year, I am not worried, so even if Q3 is 26k and q4 is 24k (i.e. less), we should be OK. But if January 3rd wakes us up to a significant drop in Q4 (20k-ish), we would have a rough start to 2017 until late Q3 proof of M3 production start.

On the other hand, that leaked internal memo from Elon puts them in a hard position too. They will have to meet positive cash flow expectations now, so the element of surprise is gone and investors may require proof of Q4 numbers (at least reaffirming 80k delivery goal for 2016) before they are willing to go along with the next round of fund raising. They will want to be sure Q3 is not just smoke and mirrors.

 

[aubreymcfato]

I read the last ~200 hundreds of messages in this thread, thanks for everyone in being so clear and detailed.
As I'm a newbie investor there is something i don't really understand: the current spread between SCTY and TSLA stocks.
(see You Really Don't Want to Make 150 Percent? Huh.)

The article suggests that "that spread indicates most merger arbs either don't believe it will or think that, if it does, layering SolarCity's cash burn on top of Tesla's own sizable challenges will seriously damage the currency they'd end up owning -- namely, Tesla's stock."

So, as I understand it, people think that the merger either fails or it's a problem for Tesla. So they are shorting TSLA (which has fewer options) via SCTY.

There is a fair consensus among you folks that the merger is a risk but TSLA and EM can pull it out, meaning:

• the merger will pass
• the merger will be a short-term risk but a long-term success

So my question is: why investors (institutional or not) are not buying SCTY? There can be a reason why EM and others are OK with SCTY stock sinking?

I'm long (I bought other SCTY at 18.90, because my previous purchase was at 30, too high)
but I wonder if I'm risking too much and not seeing something.

 

[schonelucht]

Tesla is now offering two week old inventory with 50 miles on it for an average 7k discount. They are clearly aiming for a blow out quarter in terms of deliveries. At a cost of roughly $1.5M in profit, you could call it even cheap. Must Tesla wait until after the release of the quarterly report for a capital raise or can they already go for October of the stock price jumps after the release of just the number of deliveries?

 

[kenliles]

with most of the critical components supplied by LG and GM bolting (no pun intended) them together

No - you have to own that one- sorry--
It was fully intended- wear it proudly