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Tesla's Supercharger Team was recently laid off. We discuss what this means for the company on today's TMC Podcast streaming live at 1PM PDT. You can watch on X or on YouTube where you can participate in the live chat.
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TheTalkingMule
Distributed Energy Enthusiast
Agree- this is the early stage of the transition I've been watching to see (disclosure: I have a very small, long stock position in SCTY). The earliest monetization the better from my perspective. They still hyperbole the belief that better monetization prices should come later- I disagree in general. Solar-Storage is a self competing economic over the 20 year term of these contracts. There' nothing but lower prices for contracts of today imo. [Also not a fan of YieldCos for the same reason)- Now that they are making this transition- I'll be accumulating slowly over the next months if they continue this transition- My investment will be inversely proportional to the contracts they hold instead of sell
666 would be more approriate
jhm
Well-Known Member
So SCTY is taking its quarterly beating. Look at a one year chart. Same thing happened right after the last two ERs. It is now back to the level it was at in February. If the price holds at this level, it could indicate that things have bottomed out.
I for one am more optimistic about SolarCity today than three months ago. I see that the company is responding to challenges and setting a new course.
Even short-term traders should be able to see the potential for the price to return to the $30s within a few months. Even shorts may want this price to return so that they can short into next ER all over again.
I for one am more optimistic about SolarCity today than three months ago. I see that the company is responding to challenges and setting a new course.
Even short-term traders should be able to see the potential for the price to return to the $30s within a few months. Even shorts may want this price to return so that they can short into next ER all over again.
TheTalkingMule
Distributed Energy Enthusiast
At some point customer acquisition cost can either drown the organization or destroy the business model from within. Monetizing all the way out to 20 years is an amazing step and a huge positive, but sales cost is going to come down industry-wide some day soon and SCTY needs to be ready for it.
It's all well and good to pay a sales force $.55/W when you have no other choice, but Germans pay about $.02/W in sales cost. Some day very soon local US installers are going to have that level of demand and if SCTY is still quoting prices with $.55/W in sales cost.....well that's just not good. We can't have a scenario where $2/W installs with a 30% credit are being sold to people who would be much happier under a PPA if it were leaner.
I'm sure SCTY has a solution to this and can just eat the sales cost as they wind down their door-to-door model in late 2017, but it worries me. Sales cost(at least as it's included in new pricing) MUST be less than half of the 2015 average in relatively short order. Relative to the work these guys have already done to get the business model where it is today, these concerns may seem minuscule. But these are my concerns.
Anyone have thoughts on price points for 2018 LEAPS? $60's, $70's, $80's, $90's? I just want to put in a $.12 order on something and let it sit a few weeks. $70's at $.12 perhaps?
This is clearly the number you identify with. You must be delighted today, in your deep and abiding hatred of everything SolarCity. Congrats Mr. 60606 (666) your short position must have paid off handsomely today. Did you close it or are you expecting another 25% drop in short order? What is your prediction for when SCTY goes to zero? 1year? Two months?
I just got Jan18 20s at 5.25. Kind of feels like stealing.
PaulRocket
Member
Is anyone willing to provide a short summary from the conference call or does anyone have a link to the transcript?
Completely agree- In fact I don't believe acquisition costs will even take the same form 10 years from now; 'Panels' will be sheets, sub-layered with super-capacitive integrated storage. I'm a fundamental believer that Solar-Storage will enter self-destructive accelerated stages (ala semi-conductor). It will soon (a few years) be it's own (and only) competitor- and unlike fossil based power has virtually no bottom to it's cost. Power will be a near-free commodity in 20 years imo.
The entire profile of the business will modify over that time frame. SCTY will have to be very nimble. I'll stay acutely and cautiously invested.
I like that buy. On way to play scty is to assume that Musk can only let it get so bad before intervening. One way to look at solarcity strategically is that they will spend a few years right sizing the company. Once they turn cash flow positive it may be possible to put an accurate value on the contracts they hold.
More SCTY for me this morning at a cheap price. I love earnings!
Averaging down has worked well for many here. Cough.
gigglehertz
Member
More SCTY for me this morning at a cheap price
Me too, though sadly not that many shares. I helped my girlfriend set up at a brokerage acct so she should profit as well. Now I REALLY need them to do well.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
jhm
Well-Known Member
I agree that SolarCity absolutely must get a grip on sales cost. Consider that they were just about $10M short of being cash positive (on their metric that allows for project financing). Now consider the impact has sales cost just been $.10/W lower. On 214 MW, that would have saved $21.4M in cash outflows. So $0.97/W on sales cost totally screwed up what could have been an amazing turn around. Had they kept sales cost below just $0.45/W, they would have been cash positive to the tune of about $90M. And with that kind of turn around, we could have seen the share price launch back up.
Long-term, I don't know where sales cost should go. That depends a lot on what competitors are willing to spend to grab market share. But short-term, whatever they can trim off of sales costs will make big difference for cash and share price.
hockeythug
Active Member
Edit: Sorry, wrong company
SolarCity (SCTY) Lyndon Rive on Q4 2015 Results - Earnings Call Transcript
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TheTalkingMule
Distributed Energy Enthusiast
I don't know too much about what their operational plan was for Nevada, but having to drop shovels and walk out was clearly a punch in the financial nuts. Perhaps that was to be a vital piece in the shift to more efficient sales process.
Taking the long view I applaud them for taking the hit and just leaving the state entirely. I some ways I wish more public companies would make such principled decisions that maybe aren't the best thing for stock prices. As an investor waiting for profits.........
So long as they stay on par with local installer's sales costs they are fine, and as of today they are fine. As I've said a bunch of times, that dynamic is going change at some point and when it does it will happen overnight. When the time comes, SCTY better be ready to pivot away from giving sales guys $100k in commissions.
Taking the long view I applaud them for taking the hit and just leaving the state entirely. I some ways I wish more public companies would make such principled decisions that maybe aren't the best thing for stock prices. As an investor waiting for profits.........
So long as they stay on par with local installer's sales costs they are fine, and as of today they are fine. As I've said a bunch of times, that dynamic is going change at some point and when it does it will happen overnight. When the time comes, SCTY better be ready to pivot away from giving sales guys $100k in commissions.
Buying a ton here. Should clarify, bought a ton at $16.60. It might go lower, but far to many people are comparing SolarCity to SunEdison, and ViventSolar and are failing to mention any of the factors that make SolarCity unique. Even the analysts didn't seem to understand why SolarCity is fundamentally different from other "solar companies". Solacity is more than a solar company! Also, SolarCity has access to close to unlimited capital.
SolarCity isn't borrowing money to burn through cash and doesn't lose money on every PPA. SolarCity is investing the cash it received into solar ASSETS. There is a very low chance that a large number of Salacity customers will default, and there is a very high probability that many of them will renew. Additionally, once battery storage enters the equation, every SolarCity customer will buy one. This will force the utilities to work with SolarCity on net metering, or something like it, that provides reasonable compensation to people with solar for energy. SolarPanel installation offsets utility infrastructure costs.
As Lyndon put it, unless the utilities ignore the existence of Solar, and continue to expand the current infrastructure without calculating for Solar, the utilities are responsible for any added costs to customers. If utilities include solar in the equation, it results in a reduced costs of energy to customers.
Once the Solar Panels have been fully paid for, customers with PPAs can renew at a significantly reduced rate. Almost all the money SolarCity will bring in from these customers will be profit, and SolarCity's margins will be extremely high. This will provide SolarCity will a lot of flexibility when it comes to charging less than the utilities.
100% certain we hear from Lyndon or Elon any day now. Also, the Gigafactory event is in 2-3 weeks. Anyone know the date?
SolarCity isn't borrowing money to burn through cash and doesn't lose money on every PPA. SolarCity is investing the cash it received into solar ASSETS. There is a very low chance that a large number of Salacity customers will default, and there is a very high probability that many of them will renew. Additionally, once battery storage enters the equation, every SolarCity customer will buy one. This will force the utilities to work with SolarCity on net metering, or something like it, that provides reasonable compensation to people with solar for energy. SolarPanel installation offsets utility infrastructure costs.
As Lyndon put it, unless the utilities ignore the existence of Solar, and continue to expand the current infrastructure without calculating for Solar, the utilities are responsible for any added costs to customers. If utilities include solar in the equation, it results in a reduced costs of energy to customers.
Once the Solar Panels have been fully paid for, customers with PPAs can renew at a significantly reduced rate. Almost all the money SolarCity will bring in from these customers will be profit, and SolarCity's margins will be extremely high. This will provide SolarCity will a lot of flexibility when it comes to charging less than the utilities.
100% certain we hear from Lyndon or Elon any day now. Also, the Gigafactory event is in 2-3 weeks. Anyone know the date?
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