Short-Term TSLA Price Movements - 2016

[Julian Cox]

@Krugerrand

Just to set the record straight a wee bit. Please review the Khan Academy interview with Musk where he is quite open about his timing and prediction for a 50% switch to new car production becoming EVs.

I think that was 2013 and he said 12 years. If it was 2014 are you downhearted?

My input apart from agreeing with this kind of timeframe is to do the legwork of figuring out and explaining how and why.

Interestingly I think maybe Musk's reasons why back then were not precisely the same as the ones that are now obvious based on advancements towards full autonomy. If anything the transition will be more violent, not less than Musk had foreseen.

There is also an inherent logical fallacy in discussing a 50% replacement rate unless we are discussing an industry that wants to change and is excited to transition as fast as possible to stay ahead of a competitive curve. None of these business can afford to lose anything like 50% of their customers in ten years without going bust. They will go from perhaps 93% and then collapse to 0% and then some other random number in administration then 0% and so on untill an EV company takes them over and hard wires it to 0% ICE.

For this and other reasons I am on the fence about whether Musk was perhaps genuinely disappointed that excitement to pick up Tesla's lead early on did not occur - even though the expectation does not stand to reason for which I expect he is amply capable. If he is as intellectually impressive as I think he is he will know and would have known all along that these companies cannot compete - the Tesla IR homepage introductory message basically says as much and he probably wrote it. What makes him impressive squared in my view is to go around encouraging ICE manufacturers to compete, complimenting them on their efforts and handing out patents which deflates enmity and simultaneously invites them to implode on themselves if they ever took the bait. Either way they cannot possibly point the finger at Musk or Tesla for trying to harm them as a result of his open encouragement.

If he really is genuinely hoping that ICE manufacturers will see the light and reinvest in EVs and he's such a nice guy that he can't understand why they won't just wake up and smell the coffee in their own best interests then the man has the luck of the devil because his actions are brilliance squared regardless of what drive them and the optimum gains for Tesla will drop into his lap whether he expected it or not.

 

[30seconds]

Kind-of off topic, but I've seen a bunch of Model X driving around this weekend. 2 sig-red, 1 red, 1 white, 1 blue and 1 titanium. The non-car people I was with thought that they were very good looking, but were also skeptical that the 3rd row would be usable since it was so much smaller than a Suburban/ Escalade.

I don't see demand as an issue at all.

 

[BriansTesla]

That's quite a big time frame and I think it's way off base just simply based on what happened in 2008. Even if we assume GM is way better structured now and is doing a better job of managing their money, what percentage of ding to their sales can happen and have them survive without intervention from government and taxpayers? 10%? (Swap out GM and insert any OEM you'd like to view what position they are currently in and will be in in this regard.)

Now perhaps you don't believe Mr. Cox's '50% of new vehicle production will be EVs in 9 years' theory. But if he's right and GM isn't one of those OEMs producing that whack of EVs.....they're done because the tipping point is not 50% reduction in sales. It's a whole lot less than that for every single OEM.



Except, you can't buy something if it's no longer available for sale. So the groups of people you describe can cling to whatever belief system they want, if the ICE vehicles they like aren't being produced then they can't buy one (unless it's a preserved or redone classic car). This is not even mentioning the change to infrastructure and supportive businesses. What happens when gas stations are closing down like dominos set up in a line because there aren't enough people driving ICE's anymore to support them. We already know the margins are thin on the gas side of things, but if people stop stopping and buying gum, coffee etc... then those businesses can't survive. Then all of a sudden, it's the ICE drivers who get to talk about range anxiety. And what happens when repair shops and oil change shops and the like also start closing down because there aren't enough ICE customers to support them all?

All the gas stations won't be gone.... They still have stables, and that's after 100 years.

Edit: The gas stations will just be very hard to find.

 

[ajax]

Elon said that the roof was not enough solar and that additional panels would go on the surrounding hills. Additional land was also needed for security. Show a building site on the Tesla property around the Gigafactory to make your point.

Well, I've tried to avoid bugging everyone with my pet theory on GF2, but since it came up, this is where I think it might go.

Note that when Tesla purchased 1,864 acres adjacent to the original 1,000 acre site, Tesla Motors spokeswoman Alexis Georgeson said "The purchase gives us the opportunity for future growth."

 

[Intl Professor]

It's important, as a country, to understand the winners and losers and the impact on each. Migrating skills, even for highly trained chemists and geologists is not always going to be easy. We're rooting for Tesla here (mostly anyhow) and most are pro renewable. Understanding that real people, not just the Koch brothers are on the other side of history, means that policies that help the transition and help people transition legacy skills and knowledge, are important to managing resistance to change. Basically teamwork on a really big scale, and that is not something I've noticed a lot in our political system of late.

I really appreciate your concern for the humans involved. I'm constantly impressed with the breadth of concern expressed by so many on this thread.

I have some issue with using market capitalization as a measure with some companies like Facebook and Amazon. Perhaps comparison with industrial companies is a better measure. If I, Cringely is to be believed IBM is committing suicide by incompetent management so there are other factors. As either you or another knowledgeable member has observed the problem with oil is also the banks who have traditionally offered vast credit to the fossil fuel industry and other investors who have relied heavily on dividends.

 

[Fallenone]

I am amazed that the world expecting anything else from these negotiations. May be, just may be, TSLA will finally show independence from this oil pricing war freak-outs. Let's keep our fingers crossed.

I wish somebody with good reputation for serious polling gets polling data among those 400K who put reservation for Model 3 as too how their decision to actually put eventual order for the car could be affected (if at all) by the price of gasoline at that time (which is, BTW is non synonymous with the price of oil).

Not really results from a serious poll, but none of the people in line with me I talked with on 3/31 (about 10 of them) or other reservation holders I am in an online group (about 100) have even mentioned "saving money on gas" once.

 

[lango]

For this and other reasons I am on the fence about whether Musk was perhaps genuinely disappointed that excitement to pick up Tesla's lead early on did not occur - even though the expectation does not stand to reason for which I expect he is amply capable. If he is as intellectually impressive as I think he is he will know and would have known all along that these companies cannot compete - the Tesla IR homepage introductory message basically says as much and he probably wrote it. What makes him impressive squared in my view is to go around encouraging ICE manufacturers to compete, complimenting them on their efforts and handing out patents which deflates enmity and simultaneously invites them to implode on themselves if they ever took the bait. Either way they cannot possibly point the finger at Musk or Tesla for trying to harm them as a result of his open encouragement.

If he really is genuinely hoping that ICE manufacturers will see the light and reinvest in EVs and he's such a nice guy that he can't understand why they won't just wake up and smell the coffee in their own best interests then the man has the luck of the devil because his actions are brilliance squared regardless of what drive them and the optimum gains for Tesla will drop into his lap whether he expected it or not.

That IR introduction sure does validate the ICE troubles coming. Good read.

As for the other things... if the move to release patents was to strengthen Tesla's position or maximizing shareholder value and not encourage other manufacturers production, that does not make sense in my view and here is why:

There is basically three things that can happen:

1. ICE manufacturers gets serious about BEV, think they can do it, invest a lot of money in it and then go bust all of them, or like 95% do. Not really important if very few survives unless it is GM, Toyota or VW.

2. ICE manufacturers gets serious about BEV, think they can do it, invest a lot of money in it and some survive, maybe 20%-40% survive.

3. ICE manufacturers are passive about BEV, don't invest in it and survive for longer but eventually die because BEV is a fundamentally better tech and what consumers wants. This is the current scenario unfolding.

In both case 1 and 2, Tesla will get serious BEV competition faster than 3 because of restructuring of the BK companies that will happen and startups forming. So for Tesla long term share holder maximization 3 would be the best and releasing patents and encouraging competition increase the probability of 1 and 2 scenarios and not 3. There is other factors for 1 and 2 though that BK of the ICE companies would make growth much easier for Tesla. There is also of course the brand goodwill of releasing patents and that is incompatible with Tesla's communication and consumer interest to block others.

I don't think we have to second guess Musk and Tesla's intention. Over and over they keep saying the goal is to accelerate sustainable transport and that means more than them doing it.

That said, they of course knew how hard it would be and therefore did not see a problem with removing road blocks. In the end I don't think they care all that much what the competition will do and who it will be.

 

[mrdoubleb]

Well, I've tried to avoid bugging everyone with my pet theory on GF2, but since it came up, this is where I think it might go.

Note that when Tesla purchased 1,864 acres adjacent to the original 1,000 acre site, Tesla Motors spokeswoman Alexis Georgeson said "The purchase gives us the opportunity for future growth.

it would be more logical to place GF2 and GF3 close to where car factory 2 and 3 will be. If not the same site (although why not) at least the same continent.

 

[doctoxics]

Ajax,

Apparently from this figure, posted by ROOW110 back on 9-1-15 in the Gigafactory thread, the Tesla lands around the Gigafactory, even with the new purchases, do not go far enough south to encompass the reasonably flat area that you suggest might be a location for another Gigafactory. As your topographical map shows, other than the current Gigafactory1 site, the rest of Tesla's land is hilly and not suited for a large building. The land just to the north of Gigafactory1 might be suitable for a smaller building. Of course, Tesla could always buy more land to the south to encompass the building site you have identified.

If the US market grows beyond Gigafactory1, a second Gigafactory and car factory on the East Coast might make more sense to reduce transportation costs.

 

[jeewee3000]

TSLA down 1% already pre-market.

Could easily be a -5% day today.

 

[Gerardf]

TSLA down 1% already pre-market.
Could easily be a -5% day today.

Maybe. Japan got hurt, but the European markets are (currently) only down 0,1%.

It will be a very interesting day to see if the market will finally realize Tesla sales are not (significantly) influenced by cheap oil.
For the first time we have 400.00 reservations made while being at a very low price for oil to prove that point.

I predict a short attack trying to depress the SP at opening, below 250 or even 240.
But I would not be surprised to see a strong reaction taking advantage of that opportunity right after that.


P.S. Please do not trade based on my speculation.
Anything can happen today, and I will follow today's SP action with interest.

 

[MartinAustin]

It has climbed up to -0.42% in pre-market.

Sure it could easily be a -5% day, but it could also be a +5% day, it's hard to predict which way TSLA gets affected by the oil sector. (if at all)

 

[jeewee3000]

Yes, seems I got a little carried away with all the worries regarding oil.

Premarket stagnated, so it will be interesting to see what happens during amateur hour.

 

[JBRR]

Sorry I can't remember the source. I read too much stuff every week. I think someone mentioned that it's from a new Elon interview. There are two parts in that statement: 1. the world needs 1 billion Powerpacks to achieve sustainable energy (solar+wind); 2. Tesla can produce them in 15~20 years. The first part is true based on the past Tesla presentations and back on the envelope calculation, it's around 1~2 billion packs. The second part, based on Elon's past interviews, I wouldn't be surprised that he thinks/plans to build that many Powerpacks in that time frame.

Elon states this in the Interview with Vice recently aired on HBO.

 

[jeewee3000]

Speaking of the Vice episode on HBO, I watched it today and I heard Elon say the world needs two billion Powerpacks. Just mentioning it 'cause many throw around the "one billion" powerpacks figure.

 

[vgrinshpun]

I am curious how Elon arrived at this figure. The total world wide electricity production is 22,433TWh. Assuming that about quarter of this can be supplied by renewables directly, and the remaining 3/4 of the renewable generation output needs to be stored to be used at the time of the day when renewable generation is not available, the total requirements for the battery storage would be 0.75 x 22,433 = 16,825TWh.

2B Power Packs are equivalent to only 200TWh, or less than 2% of the 16,825TWh calculated above.

Getting back on topic, Electrek reports that Apple may be planning to use Austrian contract manufacturer Magna for Apple Car. I believe that as news about Apple car get more specific with passing of time, they will be a net positive for TSLA, as it will further validate EV market as anything BUT a commonly perceived by TSLA bears "nitch".

 

[uselesslogin]

I am curious how Elon arrived at this figure. The total world wide electricity production is 22,433TWh. Assuming that about quarter of this can be supplied by renewables directly, and the remaining 3/4 of the renewable generation output needs to be stored to be used at the time of the day when renewable generation is not available, the total requirements for the battery storage would be 0.75 x 22,433 = 16,825TWh.

2B Power Packs are equivalent to only 200TWh, or only about 2% of the 16,825TWh calculated above.

Getting back on topic, Electrek reports that Apple may be planning to use Austrian contract manufacturer Magna for Apple Car. I believe that as news about Apple car get more specific with passing of time, they will be a net positive for TSLA, as it will further validate EV market as anything BUT a commonly perceived by TSLA bears "nitch".

I get the impression that your link is energy production for all of 2014. I don't see anything saying TWh per day or anything like that. So for starters I would think you need to divide by 365. But maybe I missed something.

 

[vgrinshpun]

I get the impression that your link is energy production for all of 2014. I don't see anything saying TWh per day or anything like that. So for starters I would think you need to divide by 365. But maybe I missed something.

Thanks, of course the link included total electricity production - with your correction numbers do make perfect sense.

 

[madodel]

All the gas stations won't be gone.... They still have stables, and that's after 100 years.

Edit: The gas stations will just be very hard to find.

I lived in Lancaster county Pennsylvania for a few years. PITA getting stuck behind a buggy or a hay wagon on a country road, but the tourists love to see them. Even where I live now in PA there is at least one TV news report of a car/buggy accident a year. And there will always be places like Cuba where you can go see old cars. But 100 years from now there won't be many on the roads assuming there will still be refineries and gas stations. But for now, what effect will depressed oil have on TSLA? Pre-market is down $2.00. I guess we will see shortly.

 

[tanner]

Any thoughts on short-term SP this morning? Seems like it'll go down a bit based on maco