Short-Term TSLA Price Movements - 2016

[renim]

I think you only got half my point. If the auto industry as a whole can get to 8 million long range EVs by 2025, this really is a disaster for the oil industry because EVs will continue to double every couple of years. So by early 2030s, nearly all new vehicles are electric and the existing fleet of gas vehicle declines about 6% every year. This is way less oil demand than OPEC is hoping for.

I put this moderate scenario up to challenge tftf to bound his expectations about how quickly an auto company can grow into the EV market. He was smart enough not to take the bait. Tftf is not in the position to affirm that yes GM can grow EVs at 40% per year. Not that it is not posible, but that it does not serve his bear argument. And yet tftf wants to claim that traditional automakers can out compete Tesla. Fine, but then tftf would need to affirm that GM or somebody could at least hit this modest growth scenario. If a.traditional automaker cannot grow EVs faster than 40% annually, it really cannot catch up to Tesla which has proven it can grow EVS at 50% or more.

So tftf is smart enough to know that he could neither affirm nor deny that any automaker could hit my moderate growth scenario. He would have exposed the contradiction of his own rhetoric.

So Tesla is playing a very special role. The only way for competitors to slow Tesla's growth is to grow into the EV market faster than Tesla is growing. But this comes at a cost of destroying the ICE industry at an accelerated pace. So Tesla is the pacesetter in this race. For now, all incumbents want to keep the pace as slow as possible, but this strategy simply cedes market share to Tesla and any other EV makers moving at pace with Tesla. So Tesla is the pace setter. If you grow as fast as Tesla you keep your share relative to Tesla. If you are slower than Tesla your lose share to those keeping pace with Tesla. Every auto major should make it their goal to sell a certain multiple of EVS to whatever Tesla can put on the market. Anything short of that is losing market share in the EV market. Seriously, the auto industry should have sold over 500k long range EVS last year to keep pace with Tesla selling 50k. Will they be ready to deliver at least 1 million in 2017, 2 million in 2019, 4 million in 2021? If it really takes decades for the auto industry to change, can they really afford to sit on their hands for another 5 years? The industry does not set the pace. Tesla is setting the pace.

Globally Tesla is not setting the pace in sales number, Tesla is maintaining a 10% (+- 1%) market share in plugin vehicles. Put another way. The global plugin market is maintaining the same YOY sales growth as Tesla
Tesla is definitely setting the pace in battery production and sales revenue and of course style. Tesla is leads the plugin market in most metrics except number of vehicles sold, and rate of growth.

In Europe, Mitsubishi's PHEV version accounted for 15% of the brand's volume and 55% of Outlander sales in January to November 2015. Considering the price of a an Outlander PHEV compared to say a Mirage or Outlander Sport, that is even more significant. Mitsubishi Europe sells 50,000 Outlander PHEVs in two years | Automotive Industry News | just-auto

The market is growing at the same rate as Tesla, its ALL good

 

[ZachShahan]

For 2016 I am looking for TSLA to break $325 by Dec 31st.

Positive catalysts:
1. Model X ramp, reviews and orders
2. Model 3 reveal - not too crazy to build, but class leading specs
3. Gigafactory coming on line to show visibility to support Model 3 launch & decline in battery costs
4. Model S continued orders > 35,000 / year or any sort of refresh to show that S + X can support ~100,000 / year in demand
5. Additional autonomous upgrades/ updates to show Tesla leadership
6. China uptake of Model X

To me the theme of the positive catalysts show that Tesla revenue can approach $10B before Model 3 launch and exceed $20B within two years of launch. At 20% GM & continued technical leadership in 2016 the company will really be set a bigger move with Model 3 launch in late 2017. At this point I think many investors will see Tesla as more Apple than Mercedes in terms of business model.

Things that I don't think will have major negative impact in 2016
1. Any single incident of a failure like we are talking about now (although I will buy if stock drops more than 10%)
2. More announcements other car companies that they will be producing a electric car
3. Continued low oil prices
4. US presidential elections
5. Anything that Google does

Good summary. Very, very much in the same boat.

Was looking for more buying opportunity with a slow X ramp (and a bit worried about the ramp happening as fast as planned), but feel like the big challenges are surpassed. Took the stock drop as an opportunity to buy more today, and looking forward to 2016 being similar to TSLA's breakout year.

 

[jesselivenomore]

It is not true that EVs won't cannibalize other EVs and only take away from ICE sales.

The car market is huge, and there will be room for many EVs in the future, this I agree. But right now, due to fast moving technology, primarily on the battery front, EVs will absolutely take away from eachothers sales.

At around the same price range, roughly same specs, but only half the battery range, there is zero reason anyone would buy a Leaf over a Bolt. Similarly I expect the Model 3 to have better specs across the board and better technology compared to the Bolt, all at the same price point. Noone in their right mind will buy a Bolt or Leaf over a Model 3.

The reason why there are many auto brands and models today is because in each segment, once you strip away the outer aesthetics, most models are the same when it comes to specs and technology. One day, when battery technology matures, the same will be the case for EVs and many brands will thrive.

But today, we are on an exponential curve in battery advancement and price reduction. This means there is a real competitive edge in coming out with the cheapest battery, and thus more money to put into the rest of the car making it better than other EVs in every way. This means if the Model 3 is what I expect it will be(competitive in specs with the BMW 3 series), the sales of every other similarly priced EV will plummet.

 

[tlo]

TSLA on its way up after hours.

I think the small uptick is due to this - Tesla confirms the Model 3 is on track and reaffirms unveiling in March | Electrek

 

[maoing]

That's great news.

Tesla Director of Global Communications Khobi Brooklyn confirmed to Reuters on Wednesday that “Model 3 is on schedule” and the company still plans to unveil the prototype in March and start selling the car in 2017.Preorders are expected to become available at the unveiling.

 

[jesselivenomore]

Also, when it comes to mass adoption, 200 mile range and $35k price is not the key. Those are merely minimum requirements, but guarantee nothing.

While those specs are definitely tipping points for someone who is actively trying to go green, this does not represent the masses.

Rationally, the true key for mass adoption is a 200 mile $35k EV with comparable features and performance with a $35k ICE.

The Bolt is not that. Which is why while it may take away all of the Leaf's sales, it will never become mass adopted.

The Model 3 has a chance of becoming the first mass adopted EV. That is why the stock is valued as such.

 

[anticitizen13.7]

Hmm... this thread got pretty nasty again today, but people do tend to get mad when lots of money is at risk, or if they have lost lots of money being on the wrong side of price movement.

I would say that being fired up is generally not a good thing when it comes to markets. People who are "fired up" tend to want to take action, or trade more. I would say that typically enriches the brokerage that is collecting fees. Be as cold as a lizard or a snake and the money is yours in the long run.

What will push TSLA upwards is good numbers: dramatically increased revenue from Model X, healthy margins, and free cash flow. What is important is for Tesla to grow in a sustainable manner and continue to secure market share in the overall automotive market. If the car market is a pizza that is partly BEV topping and partly ICE toppings, Tesla needs to do 2 things: (1) Make sure the ICE part of the pie shrinks (2) Secure a sustainable area of the profitable portion of the BEV area of the pie. Apple pushed smart phones to touch screen form factor. They are a minority in the market overall but make the best margins. The goal is not to conquer all, but to conquer the best area.

 

[jhm]

Globally Tesla is not setting the pace in sales number, Tesla is maintaining a 10% (+- 1%) market share in plugin vehicles. Put another way. The global plugin market is maintaining the same YOY sales growth as Tesla
Tesla is definitely setting the pace in battery production and sales revenue and of course style. Tesla is leads the plugin market in most metrics except number of vehicles sold, and rate of growth.

In Europe, Mitsubishi's PHEV version accounted for 15% of the brand's volume and 55% of Outlander sales in January to November 2015. Considering the price of a an Outlander PHEV compared to say a Mirage or Outlander Sport, that is even more significant. Mitsubishi Europe sells 50,000 Outlander PHEVs in two years | Automotive Industry News | just-auto

The market is growing at the same rate as Tesla, its ALL good

I was think specifically of battery electric vehicles with more than 200 miles range, not hybrids, but fair enough. It is all good, specifically that all plug-in vehicles move autos from full reliance on oil to electricity including renewables. Plug-in hybrids may well be a gateway for consumers to get positive experiences with electric vehicles. Volt owners I know tend to have a very positive attitude about BEVs and want one in their next vehicle purchase. So yes it is all good. And it does show that consular adoption can grow by 50% per year. I happen to think as better products come on the market adoption will accelerate, but it's nice to know that that 50% is doable.

 

[Oil4AsphaultOnly]

The point many are making here is that the only real point of differentiation between a Fit and a Bolt is that one is electric (with no fast charging network...). The cars look and perform the same. Yet one is much more expensive.

I'm dumbfounded that a tesla owner would make such a statement. Musk isn't selling EV's as being just better for the environment. He made the claim that EV's are just plain better than ICE's. The bolt will accelerate faster than the sonic, ride smoother, handle better, and cost less to own and operate. It will simply be a better car than the sonic.

someone compared 100k versa sales to 17k leaf sales in another thread, but failed to recognize that the leaf sold despite having such a crippled range. The Bolt won't be viewed as being crippled and should fair better - setting 17k as the floor for their sales.

How is this relevant to Tesla's short-term price? I'm saying that the "cheerleaders" are wrong to pooh-pooh the Bolt, but right that it won't affect the model 3's future. Some in the market will recognize the Bolt's positives attributes and incorrectly see it as beating the model 3 to market. So no net gain/loss.

 

[anticitizen13.7]

How is this relevant to Tesla's short-term price? I'm saying that the "cheerleaders" are wrong to pooh-pooh the Bolt, but right that it won't affect the model 3's future. Some in the market will recognize the Bolt's positives attributes and incorrectly see it as beating the model 3 to market. So no net gain/loss.

I honestly do not like GM at all, but I applaud their solid effort with the Bolt. This is a real car that is useful. This is a relief after the disaster of the Faraday presentation earlier this week.

 

[ZachShahan]

The ghost of Eds is sobbing :crying: like Moaning Myrtle as this news breaks. 507 total in production is more than 5x what Eds predicted :biggrin:

That's a simple joke, but I also think it's important. You could say it demonstrates Elon's/Tesla's ability to overcome big hurdles quicker and better than knowledgable, sensible people would expect. (making a bunch of assumptions here )

 

[FredTMC]

I think the small uptick is due to this - Tesla confirms the Model 3 is on track and reaffirms unveiling in March | Electrek

Yep that's gotta be the reason for the AH uptick.

Quite frankly I never thought for a minute that tesla would delay the March model 3 unveiling. Clearly the design (styling) is completed and so there's zero reason to delay the March unveiling. PLUS, tesla definitely wants to start taking pre-order money and the prestige of having tons of pre-orders on the books

 

[ZachShahan]

I like the numbers. It gives me some reassurance that Tesla can pull it off. The MX launch really had me concerned about the company's priorities. I think they are in a much better position than they were 2-3 months ago and I feel that the share price will reflect that tomorrow.

The fleeting glimpse of the Gigafactory photos that briefly appeared are encouraging as well. There is no doubt Tesla requested the pics be removed. All good signs.

I agree with you. But I think these things are things closely following Tesla enthusiasts and investors see now, but the market largely won't see (or react to) for a few months. Reminds me of when TSLA was ~$30-40 and it seemed like such an obvious buy.

We'll see.

- - - Updated - - -

The future has not played out yet. But we are headed for the lower end of the imagined future right now. In 2020, if I posted that they disappoint with only 501000 delivery, by then we'd be betting on a future of $500 or $1000 stock price. It's all relative to the stock price. Like today. Low end of the imagined future is <$230, High end is >$300. This quarter we are not heading for the high end.

Yes, I've been here long, that's why I don't buy into the hype and also do not give TSLA slack for overpromising stuff that they cannot execute. Look around, a lot of long term supporters are changing their tune. I am sure I am not the only one taking the wait and see stance. Anyway, it's not me or people on this forum you need to convince. It's those who do not follow this forum closely that you need to convince. They see guidance was 50k ~52k and result actually come in at ~50k. What will they think?

I think Elon explained on the last 2-3 calls why guidance as lowered and why it could easily hit the lower end of guidance. The question was, were/are there more uncertainties that would hurt Tesla (low S demand, more X production problems). So far, things are looking good. They aren't 100% definitely good, but if they were, the stock price would be much, much higher and the benefit of investing would be much lower (since everyone would have already done so).

 

[eloder]

I'd like to hear what makes it a compelling car. It has 150 hp, 0-60 in 7 seconds (this should be the calling card for EVs), limited storage/utility, basic materials, nothing new tech-wise and very limited ability to travel thanks to no fast-charging network. It also looks exactly like much cheaper cars that perform in basically the exact same way. So it is a $37,500 car that looks like, performs and has the same utility (leaving aside the lack of ability to travel, which gives it far less utility) as a $17,000 car. The one difference - it's electric (boogie-woogie).

Please tell me why anyone other than someone who desperately wants an electric car (to the point where they'd pay double), can't afford a Model S and is unwilling to wait for the Model 3 would buy this?

Same reason I am leasing an 84 mile Leaf instead of sticking with an ICEr for another three years. It's just a superior experience compared to an ICE.

My new favorite trick is not having to de-ice my windshield thanks to instant heat and a powerful heater.

I guess you could say the timing will be a big factor (Bolt timing is probably more concrete/realistic than Model 3 availability). Some people (like myself) also prefer hatchbacks or smaller cars. While a Model 3 will replace my Leaf because I loathe car dealers, I still would rather be in a small hatchback.

 

[FredTMC]

Shanghai straight down from the open. Now down 5%

probably gonna hit the first breaker.

Come on China communists. Manage this thing. You already control everything else there. Sheesh

 

[anticitizen13.7]

Shanghai straight down from the open. Now down 5%

probably gonna hit the first breaker.

Come on China communists. Manage this thing. You already control everything else there. Sheesh

They pretend they control everything over there :biggrin: My contacts in Shanghai and Shenzhen say it's an illusion that keeps the peace. The problem is that this is something of a novel situation for everyone, from novice investors who got into the market late, to the officials who are trying to keep a lid on any panic that might be brewing. Everyone, even smart people, often get things wrong and mess things up.

The system has a lot of moving parts and it may be the Rube Goldberg contraption that nobody can control.

 

[CALGARYARSENAL]

Shanghai straight down from the open. Now down 5%

probably gonna hit the first breaker.

Come on China communists. Manage this thing. You already control everything else there. Sheesh

They just closed the market completely. If this isn't the beginning of a ultra bear market I don't know what is. Hope is not a strategy. Plan accordingly.

 

[FredTMC]

They just closed the market completely. If this isn't the beginning of a ultra bear market I don't know what is. Hope is not a strategy. Plan accordingly.

I think the first breaker is a 15min timeout. Unless they just changed the rules on the fly.

nevermind. It reopened and then went to 7% and probably now closed for the day as you've noted.

 

[dha]

They just closed the market completely. If this isn't the beginning of a ultra bear market I don't know what is. Hope is not a strategy. Plan accordingly.

The CSI 300 crashed last summer and settled around 3000 in late September (from a high of around 5300). Yes U.S. markets got a bit jittery around that time but cooler heads ultimately prevailed while people shouted gloom and doom from the rooftops.

Chinese markets seem to be re-testing those lows from last year. Almost there...

 

[MikeC]

If this isn't the beginning of a ultra bear market I don't know what is.

I agree with that statement.

I'm not worried about China, I think Tsipras will give in and raise the debt ceiling...sorry, I get my crises-du-jour mixed up. I fail to see how China surpassing the US as the biggest economy in the world at a slightly slower velocity changes the outlook for TM in any meaningful way. These non-TSLA-related drops have historically been quickly forgotten and in retrospect are usually good times to buy.