Short-Term TSLA Price Movements - 2016

[tanner]

Tesla said they would release quarterly deliveries by the third day following the end of the quarter; that would be by Sunday. Last quarter, they announced deliveries on the second day following the end of the quarter.

Okay, thank you! So anywhere from Saturday to Monday, I suppose. Any idea how it will influence the price?

 

[Fallenone]

Is it economically feasible to scale that quickly?

Say they want the first 200k Model 3's and another 200k model S & X to be delivered by end of 2018. They need to up their production by 400% by end of 2018. Their CapEx for 2015 is $1.6 billion which means they need to raise at least another $6 billion in order to fulfill this (I'm just guessing here with simple math btw I'm no analyst). Who's gonna give them this kind of money when many firms are still skeptical about BEV and major competitors trying to kill them all the time? Remember gigafactory alone is a $5 billion investment through 2020, and that's only expecting 60% growth year over year. Not to mention the insane amount of logistics involved in equipment and people they have to add. Does this make sense or is my analysis too amateurish?

I have no doubt Tesla's demand is extremely strong and they'll sell every car they can make, but I guess my question is whether their inability to fulfill the demand affect them negatively in anyway?

I vaguely remember came up with 2b to complete GF1, 2b to add assembly lines, 1b to kickstart GF2, 1b to expand stores and SC. Pretty close to your 6b. But mine was for now to 2020.

 

[SBenson]

He is trying hard to pop the stock, but he claims he isn't worried about stock price There are double bookings in this count. Some people reserved multiple cars (a father-son duo reserved ten in store). When Elon said "Model 3 orders, whether in store or online, are limited to two per person", did he mean minimum of two? Glad to see the Tesla software engineers help out Elon with the reservation count.

But don't worry. The reservation count will vanish from quarterly reports, just like the Model X reservation count that vanished long ago. Or the Powerwall count.

I reported this as trolling.

 

[windgrins]

BMW 3 Series

The base Model 3 is $1,519 cheaper than the BMW 328i at dealer average negotiated price paid of $36,519 in California zip code 90210 on True Car with essentially the same 0-60 in under 6 seconds performance specs. The BMW is getting 5.8 seconds 0-60.

This is before fuel savings and maintenance savings that essentially undercut the BMW by at least $1000 per year on average mileage. This is before any applicable incentives. Deducting the expected $3750 Federal Tax rebate still in force for a year at unlimited volume after expiry of the first 200,000 units sold in the US. Over a three year ownership period, the base Model 3 undercuts the base BMW 328i by conservatively at least $8000 before an expected improvement in residual value retention owing to the lowered running costs.

Note the base model BMW 320i at $30,672 dealer average price paid significantly underperforms the Base Model 3 in terms of driving performance.

The base BMW 328i offers additional range between fueling and faster highway refueling (offset by the price of fuel which may cost the user time to earn while at work) while lacking the ability to fuel passively and independently of user attention while parked at home or destination or during highway rest stops.

The base Model 3 offers the ability to fuel passively while parked at home, destination or highway at significantly reduced cost per mile but offers a lower range between fueling (charging). The base Model 3 is equipped with significantly more advanced electronic technology and benefits from a higher safety rating and a lower center of gravity which may contribute to better road holding, handling and assist with roll-over resistance incorporated in the aforementioned safety improvements.

All in all BMW is absolutely and completely screwed unless you are a traveling salesman and someone else you don't care about is footing the gas bill either that or you you are willing to pay $4000 each for a pair of kidney shaped air intakes or $2125 each disregarding the effect of any available incentives. Under all other circumstances, Electric Vehicles just got cheaper than gasoline vehicles and that is all she wrote.

Hi Julian,

They are sort of running scared over at Seeking Alpha! Even "Always Dubious" admitted he put a reservation in for a Model 3. Anton is writing articles trying to explain that GM will use a consortium for SuperChargers, and Cparmerlee is acting oblivious to the entire thing. It's full fledged chaos in the bear camp there!

 

[windgrins]

And I'd been having such a good time petting the Unicorns.

Hang out on Seeking Alpha for about two days and you'll get plenty of Dog FUD to chew on. Most of it is total nonsense but it's kind of fun watching the back flips that shorts can reach for to justify a short.

 

[dc_h]

So at 125k reservations, I suspect the Model 3 is booked through 2018. At 300k to 400k booked through 2019. At 700k to 800k booked through 2020.

Now, my daughter starts driving in 2020. Should I be worried?

Skip that. What production schedule seems reasonable at this point? How does pushing the booked through date lead start to feed demand for reservations? That is, if I am worried about being able to buy a Model 3 in 2020, when when do I place my reservation?

Elon has already made public a China factory in 2017. I think with incentives the cost of an assembly plant in China will be less than 500 million. The new line in Fremont will also be about 500 million. The paint system and stamping presses are largely already in place in Fremont and their Chinese partner will offset capex for Tesla. I don't think any capital raise is needed in 2016 and to be determined if any capital will be needed to ramp up M3 to over 500,000 by the end of 2018. LG will be making more of the electronics. GF will be producing batteries and Panasonic will continue to increase capacity in Japan. Based on the fit and finish of the M3 test cars, they seem like they are going to be ready to move much more rapidly to initial production and scaling this up. The more out there option would be to move more manufacturing to Europe. If they have demand for 200,000 cars in Europe, local production makes more sense. A mass produced car needs shorter supply lines and faster delivery.
If they have at least two plants, the first 100,000 US orders should be delivered in the first half of 2018. If we get our 16,000 Q1 deliveries and Elon announces a second factory for M3 and signals 500,000 cars by 2018, I'm curious how that will affect the stock. I think with the employee cars going first, they may ramp up faster than expected. If they clear out the employee orders by the end of 2017, they will have a clean production process entering full steam in early 2018. This would push growth above 70% through 2020 and really get us back on track for blind faith pricing.

Having them on the same continent also allows the cars to deliver themselves.

 

[Curt Renz]

Is it economically feasible to scale that quickly?

Say they want the first 200k Model 3's and another 200k model S & X to be delivered by end of 2018. They need to up their production by 400% by end of 2018. Their CapEx for 2015 is $1.6 billion which means they need to raise at least another $6 billion in order to fulfill this (I'm just guessing here with simple math btw I'm no analyst). Who's gonna give them this kind of money when many firms are still skeptical about BEV and major competitors trying to kill them all the time? Remember gigafactory alone is a $5 billion investment through 2020, and that's only expecting 60% growth year over year. Not to mention the insane amount of logistics involved in equipment and people they have to add. Does this make sense or is my analysis too amateurish?

I have no doubt Tesla's demand is extremely strong and they'll sell every car they can make, but I guess my question is whether their inability to fulfill the demand affect them negatively in anyway?

Welcome to the TMC. Your concerns are well considered. However, Model 3 reservers know they’ll have to wait a while, just as Model S and Model X reservers understood. Yet they all made deposits. Long term shareholders have also exhibited understanding and patience.

Tesla has the reservations and brand cachet, which its far longer established competitors lack. Wall Street bankers understand this, even if short sellers do not, and threatened industries pretend not.

Granted, all of the necessary expansion cannot be accomplished overnight. But the general plans had already been laid out for building the Model 3. They’ll just have to be applied at a larger scale than originally anticipated. Greatly increased funding can do that. If massive funding had not been applied to the Apollo project, the first steps on the Moon may have had to wait until 2069 if ever, rather than 1969.

 

[BriansTesla]

He is trying hard to pop the stock, but he claims he isn't worried about stock price There are double bookings in this count. Some people reserved multiple cars (a father-son duo reserved ten in store). When Elon said "Model 3 orders, whether in store or online, are limited to two per person", did he mean minimum of two? Glad to see the Tesla software engineers help out Elon with the reservation count.

But don't worry. The reservation count will vanish from quarterly reports, just like the Model X reservation count that vanished long ago. Or the Powerwall count.

A blind man can see around corners better than anyone.

 

[Dennadyne]

I ordered 2 and got confirmation of 2, charged $2k. I wish they charge me $4k and booked 4 cars under my name. I asked but they said 2 is a firm limit. If Tesla really want to see high number, they would allow each person to reserve 10.

In Eden Prairie I was told that it is 2 per credit card, for what it's worth. I reserved 2 and was charged for two.

 

[The Blue Owl]

If I were younger I could buy either an S or X without taping anything but about 3/4 of my social security check. We reserved 2 M3 yesterday, one possible for either my son or my brother who would take over. If the market goes up substantially because of TSLA I would feel better about getting an X and might then keep the M3 reserves for relatives or apply toward the X. Not interesting, except for an n of 1 who would likely switch as you suggest.

You haven't asked, but what the hell. Buy an S or an X now, if you can afford it. What better way to stay young?

 

[jhm]

I need some help bridging the gap to my two model 3's. Our i3 lease runs out June 2017.

I've thought of a few possibilities, lease another one, lease a bolt for 2 years (please no) or buy a Tesla CPO Mod S and sell once I have my Model 3's. Not sure how these three options compare financially but of course I would prefer to buy the model S. Advantage of this, it moves me up in the Model 3 line correct? I haven't seen CPO owners mentioned specifically.

Yeah, I'd consider a CPO or new 70.

I'd like to see Tesla offer an upgradable lease. Lease a new Tesla for 36 months with the option to terminate the lease without penalty when buying a new Tesla vehicle. So this would be a perfect bridge to a new Model 3 or to some unexpected technology upgrade.

 

[FURY]

Would this not be an opportune time for TESLA to sell...the company?

Would this not be a necessary time for several other companies to buy TESLA, for a myriad of reasons?

Thank you very much

Fury

 

[MikeC]

Would this not be an opportune time for TESLA to sell...the company?

Would this not be a necessary time for several other companies to buy TESLA, for a myriad of reasons?

Thank you very much

Fury

The only reason Elon would sell is to accelerate the transition to sustainable transportation even faster. And no one is going to do it faster than Tesla is doing it right now.

 

[FANGO]

I have to say I am left with the feeling that big oil/auto/Koch is going at TSLA with hard ammo and that we might see billions of dollars thrown at TSLA to try to make it fail.

Anyone with same thoughts, or am I just being too negative?

Let them waste their money. I hope they put endless ads all over the place. Give their money away to artists and filmmakers. Spend every last cent. They're going to lose anyway so we might as well bankrupt them while we're at it.

 

[FANGO]

I'd like to see Tesla offer an upgradable lease. Lease a new Tesla for 36 months with the option to terminate the lease without penalty when buying a new Tesla vehicle. So this would be a perfect bridge to a new Model 3 or to some unexpected technology upgrade.

This was done for the Roadster. But they needed help selling Roadsters. They do not need help selling S/X.

 

[Sancho]

As a long-time AAPL investor, I recall dozens of times the company would post terrific earnings, or make important product announcements, and the stock would post just a modest gain the next day. It would often take a week or two for the full effect to kick in to the stock price.

Pick your theory why: weak longs selling the news, options players maximizing profits (in this case, there was a lot riding on keeping the closing price of TSLA today under 240) or many people not paying as close attention as we do, and the news takes time to trickle down.

Whatever the reason, I learned over time to trust my reaction to events, not the market's immediate reaction. I'm really stoked by what I've seen in the last 24 hours. Eventually the market will be too.

 

[neroden]

I vaguely remember came up with 2b to complete GF1, 2b to add assembly lines, 1b to kickstart GF2, 1b to expand stores and SC. Pretty close to your 6b. But mine was for now to 2020.

So suppose they raise it all at once. At this point, Tesla has $200 million on hand in reservation payments, and has $6.8 billion of likely orders (assuming everyone orders the base model) which they can use as collateral for a loan from Wall Street. They can probably get most of this in a loan with a good interest rate if they want to.

 

[madodel]

Hi Julian,

They are sort of running scared over at Seeking Alpha! Even "Always Dubious" admitted he put a reservation in for a Model 3. Anton is writing articles trying to explain that GM will use a consortium for SuperChargers, and Cparmerlee is acting oblivious to the entire thing. It's full fledged chaos in the bear camp there!

They are not all bears or shorts. I doubt they spend time posting 10's of thousands of attacks on Tesla because they are so clueless or just enjoy being contrary. A number of them are most likely paid shills who spend their days being paid to come up with pure FUD to try to destroy Tesla. Elon chews them up and spits them out on his own schedule. It is fun to watch.

 

[FredTMC]

As a long-time AAPL investor, I recall dozens of times the company would post terrific earnings, or make important product announcements, and the stock would post just a modest gain the next day. It would often take a week or two for the full effect to kick in to the stock price.

Pick your theory why: weak longs selling the news, options players maximizing profits (in this case, there was a lot riding on keeping the closing price of TSLA today under 240) or many people not paying as close attention as we do, and the news takes time to trickle down.

Whatever the reason, I learned over time to trust my reaction to events, not the market's immediate reaction. I'm really stoked by what I've seen in the last 24 hours. Eventually the market will be too.

Near term catalysts:

Reservation updates
Q1 deliveries
Analyst upgrades and comments
Model 3 Reveal Event "Part 2"

 

[neroden]

The whole Coca-Cola was sold for $25 million in 2019. Today at 200 billion, that's about 10,000 fold. Plus it gave out huge amount of dividend for all these years. If she learned how to properly value a business, she would have bought lots of shares later even if she missed at the very beginning. That's a perfect example that learning investment is very important.

Well, see, what happened was that ... it was Prohibition... she drank a lot of alcohol... she thought "Why would anyone want fizzy sugar water instead of a gin and tonic?".... she just couldn't believe that soda would remain popular... a reasonable mistake to make, arguably.

There are undoubtedly-great companies which I won't touch because for the life of me I don't understand why anyone ever buys any of their products. That makes them unsafe companies for me to invest in, because if people do stop buying their products *I won't notice what changed* or why it happened.