Short-Term TSLA Price Movements - 2016

[dandurston]

My understanding is that SCTY has barely started installed equipment in Buffalo, if at all, and they don't expect to have a lot of production until the second half of 2017. So I don't see how the solar roof product being announced today is really going to be selling in volume for at least a year. Am I wrong on this? Seems like Tesla has the powerpack and inverter stuff ready but not the panels.

 

[anon]

My understanding is that SCTY has barely started installed equipment in Buffalo, if at all, and they don't expect to have a lot of production until the second half of 2017. So I don't see how the solar roof product being announced today is really going to be selling in volume for at least a year. Am I wrong on this? Seems like Tesla has the powerpack and inverter stuff ready but not the panels.

I think you are probably right, but the motivation for this now is probably to reassure investors prior to the merger vote. Secondary motivation is that, if the pricing is sufficiently compelling, they might be able to make some large deals with building companies over the next months, in anticipation of full production.

 

[Yggdrasill]

But they Q3 quarterly update letter says "The Gigafactory remains on track to begin cell production later this year for use initially in our energy storage products and later to support volume production and deliveries of Model 3 in the second half of 2017."

That seems to confirm that it is not yet producing any cells.

This statement is a bit fudgeable. For one thing, tomorrow is later this year. (Producing cells to go into sellable products.) The reveal for today might be using prototype cells which can't be sold because they don't have the right quality yet. Another thing is that this could be the status from September 30th, end of Q3. I'm not sure if they would say if they started up production October 5th.

 

[Hogfighter]

I'm hoping tonight will do a lot to erase that.

Elon says SCTY is a no brainer. It obviously is for him - his personal fortune is heavily hitched to both wagons.

I don't think that's what he means when he says its a no brainer though. Evidently, some of TSLA and SCTY's largest investors agree with him. A highly-differentiated end-to-end product with a consistent customer-facing image throughout is only possible when you have both the batteries AND the solar under one roof. Additionally, buying a Tesla car dramatically changes a customer's electricity usage profile, and so many of them will reconsider where their energy comes from at the same time.

I absolutely agree that SCTY is having a boat anchor effect on TSLA, but I believe that reaction on the part of the market is wholly unfounded, disconnected from any real risk profile that might be associated with it. That means its the sort of misvaluation that's ripe for taking advantage of - as many of us have been doing with the arbitrage play. Its amazing to me that the arbitrage gap is still so large. Sometime in the next 20 days, it will become apparent that this is a done deal, and the gap will close (though I'm not sure which stock moves to close the gap - I'm hoping SCTY, since its the smaller of the two). SCTY looks like a money pit on paper, but its being exceptionally hamstrung by the capital markets. They're creating a self-fulfilling prophecy by raising SCTY's rates in response to a perceived increase in risk. SCTY has risk-free cashflows for the next 20 years but is financing the asset that generates them. Bad rates can turn that investment upside down, and so banks raising SCTY's rates is actually CAUSING the meltdown they're trying to guard themselves against. If TSLA can secure better financing rates, those assets easily generate positive cashflow during TSLAs most capital intensive time period.

I actually think that TSLA buying SCTY now is one of the more brilliant business moves of my lifetime, in part because of how widely misunderstood it is. I suspect it will not be appreciated for its brilliance for quite some time. That's pretty typical of things Elon does though. It isn't until way too much later for anyone to catch up that they realize how ahead of the curve his decision making was.

"I don't know why Ditka chose to lose the first 4 games of the season, but that's what he's Ditka!"

 

[Ovulation]

My understanding is that SCTY has barely started installed equipment in Buffalo, if at all, and they don't expect to have a lot of production until the second half of 2017. So I don't see how the solar roof product being announced today is really going to be selling in volume for at least a year. Am I wrong on this? Seems like Tesla has the powerpack and inverter stuff ready but not the panels.

I agree! But you can't sell an integrated product without presenting one of the main things, let's see what we rolls out ... I would definitely buy the metalsnake (another first world problem solved)

 

[CALGARYARSENAL]

Man.....I just stopped in at Chinook Centre Tesla store and had a look at the white Model S. Has there been an interior change or something? It was so darn beautiful. For some reason it impressed me a lot more than ones I sat in a year and a half ago. It certainly had the wow factor with the lovely leather interior. I need one now. Edit: maybe it was because I was bearish back then??? Crazy!

 

[racer26]

My understanding is that SCTY has barely started installed equipment in Buffalo, if at all, and they don't expect to have a lot of production until the second half of 2017. So I don't see how the solar roof product being announced today is really going to be selling in volume for at least a year. Am I wrong on this? Seems like Tesla has the powerpack and inverter stuff ready but not the panels.

With the Pana agreement, its possible that Pana is producing the product somewhere else right now and will transfer production to Buffalo later.

 

[dennis]

Seems stronger than that. I read it as contingent on completion of acquisition. Non-binding letters of intent are typically revocable at any time for any reason.

There have been two official communications on this - the Tesla blog post and Panasonic press release. Both specifically say Non Binding LOI. Panasonic title is "Panasonic Begins Discussions on Collaboration with Tesla Motors in Photovoltaic Cell and Module Production"

 

[esk8mw]

I think your estimate doesn't reflect the truth. One needs to check how many VINs actually reported, rather than just subtracting the lowest from the highest VINs. It is because Tesla sometimes reserves batches of VINs, e.g., maybe just didn't use at all. One clear example is the second quarter during the facelift, a substantial amount of VINs were skipped, which is similar to this Q but due to AP2.0. Now we all know Q2 number isn't good. I am not implying Q4 wouldn't be good.

That's a rather bold assertion. I have yet to see any evidence of VIN skipping. Do you have any evidence? There are times when VINs are seemingly "skipped" because they do a run of inventory cars, but we end up seeing these VINs for sale in inventory, and the cars are ultimately sold and the VINs are in circulation. If you have evidence of large numbers of VINs that vanished into thin air I'd be very interested to see them. Tesla batches builds, not VINs - VINs are issued (more or less) sequentially and then the build order can be based on a number of factors. Again, no evidence I'm aware of that VINs are held back or batched, but I'd love to see it if you have it.

Where's the evidence VINs were skipped for AP2.0? There's no way to tell yet. Whatever numbers you think may have been skipped could very well show up in US or overseas inventory in the next 2 months. There's also plenty of entries in the S order tracker to show the VIN trend and there's no solid evidence of VIN skipping. Here's a sampling of recent VIN assignment dates and VINs:

9/26 - 164,xxx
10/4 - 166,2xx
10/11 - 167,745
10/17 - 169,xxx
10/18 - 170,xxx
10/19 - AP 2.0 ANNOUNCED
10/23 - 170,xxx
10/26 - 170,xxx
10/27 - 171,xxx

That looks like a steady, strong trend to me. Where's the skipped VINs?

 

[trils0n]

Has there been an interior change or something? It was so darn beautiful. For some reason it impressed me a lot more than ones I sat in a year and a half ago. It certainly had the wow factor with the lovely leather interior. I need one now.

I counted over 2 dozen small changes in the interior between my 2013 and the new 2015-2016s. Same basic style, but lots of the details have been refined, and the overall effect is impressive. And the new seats look much better. EDIT: These small changes have rolled out gradually over the years, not just one big refresh or anything

 

[vgrinshpun]

Did you get a chance to look at the Powerpack site? Is this new pricing?

Build your Powerpack Energy Storage Solution | Tesla

Wondering what your thoughts are. Obviously you are the best source we have on this topic

They did not update the pricing yet, perhaps they are planning to do this after the tonight's presentation.

 

[cluster]

That's a rather bold assertion. I have yet to see any evidence of VIN skipping. Do you have any evidence? There are times when VINs are seemingly "skipped" because they do a run of inventory cars, but we end up seeing these VINs for sale in inventory, and the cars are ultimately sold and the VINs are in circulation. If you have evidence of large numbers of VINs that vanished into thin air I'd be very interested to see them. Tesla batches builds, not VINs - VINs are issued (more or less) sequentially and then the build order can be based on a number of factors. Again, no evidence I'm aware of that VINs are held back or batched, but I'd love to see it if you have it.

Where's the evidence VINs were skipped for AP2.0? There's no way to tell yet. Whatever numbers you think may have been skipped could very well show up in US or overseas inventory in the next 2 months. There's also plenty of entries in the S order tracker to show the VIN trend and there's no solid evidence of VIN skipping. Here's a sampling of recent VIN assignment dates and VINs:

9/26 - 164,xxx
10/4 - 166,2xx
10/11 - 167,745
10/17 - 169,xxx
10/18 - 170,xxx
10/19 - AP 2.0 ANNOUNCED
10/23 - 170,xxx
10/26 - 170,xxx
10/27 - 171,xxx

That looks like a steady, strong trend to me. Where's the skipped VINs?

There were essentially no 163XXX 165XXX 168XXX reported. Normally, about 5~20 were reported for each 1k VINs. Since the facelift, only one 135XXX and two 136XXX reported until today.

 

[electracity]

Is he, I didn't hear it but I guess so and are this PPA deals really so evil? since SunEdison people go almost paranoid when they hear solar^^

It's not a question of PPA's being inherently bad. It's a question of short term funding and interest rate risk. If Tesla Energy/solarcity sells the post merger PPA contracts they can remove the risk and show GAAP profit (or loss) on each PPA sale.

Solarcity was playing at being the bank and took on interest rate risk that used to make banks fail. Tesla acquires some of these problems from older sales, but needs to not continue adding risk.

The Rives are lucky they are related to the CEO of Tesla. With the announcement of Panasonic running the Buffalo factory, they failed at everything except making themselves affluent.

 

[tander]

Thought this might be useful for people, just a list of possible/likely relevant near term events. I'll leave the interpretation up to you. Let me know if I'm missing anything.

Today: new products razzle-dazzle, possible take deposits on new products
Week of Nov 1: merger update, possible SCTY Q3 report, possible report deposits on new products, probably analysts do final weigh in regarding merger and update recommendations for TSLA & SCTY most analysts currently recommend hold, maybe take sides if enough info is dumped
Week of Nov 7: election, win for Trump green stocks likely go down, win for Hillz green stock likely go up
Nov 16: merger scheduled to close
Nov 30: possible OPEC announcement

Edit: removed monthly numbers

 

[TrendTrader007]

It's beyond many of the posters on this forum. Every time anything happens that could possibly cause a short term hit to the SP, even before any details are known, we get at least 80 emotional posts stating that it's an awful deal etc. A recent example was all the negativity surrounding the Panasonic production of solar modules in NY. During the CC an analyst who covers both SCTY and TSLA said that was what convinced him that the SCTY plant in Buffalo was a good thing. A couple of days ago Vlad, Shoneluct and I disagreed on what the Panasonic partnership means. The analyst could be wrong of course, but 80 emotional posts complaining about something that could be a huge plus before we even know what it means clearly demonstrates a lack of due diligence.



I think that the only substantial risk is short term, with options.

I'm doing exactly the opposite.



Are you sure?


That's probably incorrect, unless there's a powerpack 3 coming soon, because the new cells, by themselves, will provide about a 20 percent greater capacity.

I agree with all your points
TSLA is not a gamble far from it. I have all the confidence in the world in this company and especially Elon
All my Roth as well all my accounts are 100% in TSLA (taxables with 120% exposure)
Those who bet against Elon will be severely shortchanged

 

[EinSV]

There were essentially no 163XXX 165XXX 168XXX reported. Normally, about 5~20 were reported for each 1k VINs. Since the facelift, only one 135XXX and two 136XXX reported until today.

How much participation is there from Asia? I don't recall seeing any of the folks tracking VINs predicting the dramatically increasing sales in China last quarter, which may suggest that there are holes in the reporting system rather than in VIN numbers.

 

[JRP3]

However, why develop a variant that will only be in use for about two months?

Isn't that essentially what they did with the 100kWh pack? Old format cells packed tighter. I'd expect them to do the same with Powerwalls/Powerpacks. Previously I speculated the improved 100kWh packaging came from developments for the new 2170 form factor packaging and they saw a way to use it before the 2170's were ready for prime time.

 

[Jonathan Hewitt]

Week of Nov 7: election, win for Trump green stocks likely go down, win for Hillz green stock likely go up

Funny you mention that just now. The market just started selling off decently on rumor that the FBI is reopening the investigation into Hillary's emails.

 

[racer26]

How much participation is there from Asia? I don't recall seeing any of the folks tracking VINs predicting the dramatically increasing sales in China last quarter, which may suggest that there are holes in the reporting system rather than in VIN numbers.

Precisely:

Occam's razor. There is a simple explanation (that there is a sampling bias in who reports VIN assignments here) which is much more likely than the alternative (that TSLA is skipping large bands of VINs for no apparent reason).

 

[Gerardf]

Week of Nov 1: TSLA monthly numbers
.......
Dec 1ish: TSLA monthly numbers

As far as I am aware, there are no monthly Tesla numbers. I assume you refer to the monthly estimates / guess of insideEVs on the US delivery numbers.