TSLA Investor Discussions

[Citizen-T]

Edit: where did you see they doubled the total cars in 3 weeks? I just see that they build the 100th car, but they'd had 10 Founders + ~10(?) test drive cars back on ~6/22. That leaves 80 cars build in the last 8 weeks. Did I miss something?

Anyway, 20k/year run rate is about ~1150 in 3 weeks. Even at 30k/year that's ~1725 in 3 weeks. They'll never hit a production rate of 3200 or 6400 cars per 3 weeks. They could make it though even at the 20k/year rate if they don't miss a step:

8/20-9/10 = 200 cars
9/10-10/1 = 400 cars
10/1-10/22= 800 cars
10/22-11/12 = 1150 cars <-- 20k/year run rate
11/12-12/3 = 1150 cars
12/3-12/24 = 1150 cars

total = 4850 cars

So, it's certainly possible, though it's a high volatility target since missing a step somewhere along the line cuts off a lot of end year production.

In the last blog post which was posted 08/02 (three weeks ago) GeorgeB says that there are 50 total cars. Today there are 100. Double.

Elon said with almost certainty that they would be above the 20k/year run rate by the end of the year, but I agree, they aren't going to hit 3200 cars a week in the last 3 weeks of the year. I wasn't saying that they were going to, I was just pointing out that when you double the total number of cars on the road every 3 weeks it may look slow at the beginning, but numbers like 5000 are well within reach after just a few doublings.

In summary, it wasn't supposed to be a prediction as much as a demonstration. Your scenario path to 5000 is likely much closer to reality, except that I would allow the rate to climb to more like 1200 cars in 3 weeks before growth stops completely.

 

[strangethingintheland]

In between GB's two most recent postings, there were 13 production days (assuming M-F production). Indications are they were producing 2+/day at the beginning of that period, yet their mean production rate was almost 4/day, which suggests, using a reasonable approximating function for growth, they were producing roughly 5-6 cars per day at the end of that period. Similar extrapolation (again this is still rough) suggests producing slightly more than 25/ day by the end of September, in order for cumulative production to exceed 500 by the end of Q3, a target EM suggests they will certainly/at least make. Cash flow positive occurs at ~32-35 per day (working back from EM's 8K or so positive cash flow comment at stockholders mtg). Putting this all together (and my rationale for posting this in the investor thread) suggests that TSLA could be at their lowest cash point as early as mid-October. I see that as a major risk reduction point, as it means they are not going to run out of cash. IMHO, that threshold is even more significant for risk reduction purposes than hitting their 5K end of year target.

 

[xhawk101]

In between GB's two most recent postings, there were 13 production days (assuming M-F production). Indications are they were producing 2+/day at the beginning of that period, yet their mean production rate was almost 4/day, which suggests, using a reasonable approximating function for growth, they were producing roughly 5-6 cars per day at the end of that period. Similar extrapolation (again this is still rough) suggests producing slightly more than 25/ day by the end of September, in order for cumulative production to exceed 500 by the end of Q3, a target EM suggests they will certainly/at least make. Cash flow positive occurs at ~32-35 per day (working back from EM's 8K or so positive cash flow comment at stockholders mtg). Putting this all together (and my rationale for posting this in the investor thread) suggests that TSLA could be at their lowest cash point as early as mid-October. I see that as a major risk reduction point, as it means they are not going to run out of cash. IMHO, that threshold is even more significant for risk reduction purposes than hitting their 5K end of year target.

I agree

 

[ibcs]

Thank you for your analysis. I'm Sig. #121 and was told late September or early October by my rep this week. Counting the Founders (41) and Roadster (244) owners I should be within the first 500 vehicles or #406 if my calculations are correct. Getting a confirmed date will certainly boost my confidence in the magical 500 number being obtained. I may not take delivery by the end of third quarter, but if it in route that counts for me.

 

[kenliles]

here we go again... - now that all the other JP catastrophes have proven false, cash flow and production perfection are all he has left. Seems to think the stock will only hold this level if they make production and turn positive can flow

Tesla's 'BS to Book' Ratio Says It All - TheStreet

 

[Norbert]

here we go again... - now that all the other JP catastrophes have proven false, cash flow and production perfection are all he has left. Seems to think the stock will only hold this level if they make production and turn positive can flow

He starts considering the possibility that Tesla might actually make it, as he comments on what he expects to happen then.

 

[Arnold Panz]

here we go again... - now that all the other JP catastrophes have proven false, cash flow and production perfection are all he has left. Seems to think the stock will only hold this level if they make production and turn positive can flow

Page 2 - Tesla's 'BS to Book' Ratio Says It All - TheStreet

This article is so stupid that it defies description. A company intending to make money that doesn't, and/or has negative cash flow, is definitely a huge red flag and investors should be extremely wary. In Tesla's case, however, this seems to me to be entirely intentional! They knew they were going to stop selling the Roadster, and there would be lag before they got a lot of Model S's out the door. So how does his "BS to Book" ratio prove anything?! I'd be wary of stocks when things don't go according to plan, but it seems like Tesla is more or less on schedule with exactly where they intended to be.

I don't own Tesla stock (yet) because I figure I've got enough money tied up in the company at the moment, but an article like this paradoxically really makes me want to invest because if this is the best this guy can come up with, they must really be in good shape!

 

[kenliles]

He starts considering the possibility that Tesla might actually make it, as he comments on what he expects to happen then.

yeah- I noticed that as well; A first for JP;
I think he's starting to hear the crows fly in for his pie

 

[zack]

Looking back over the past week or two, it looks like tsla is ripe for another mini profit-taking session.

 

[DriverOne]

Elon Musk:
> One of the things that I've been really emphatic about is that in 2013 we'll produce at least 20,000 units and the gross margin will exceed 25%

Let's run some basic EPS numbers. The average selling price I pulled from thin air.

20,000 cars x average $80,000 price x 25% margin / 105,000,000 shares outstanding = $3.81
25,000 cars x average $80,000 price x 25% margin / 105,000,000 shares outstanding = $4.76
30,000 cars x average $80,000 price x 25% margin / 105,000,000 shares outstanding = $5.71


20,000 cars x average $70,000 price x 25% margin / 105,000,000 shares outstanding = $3.33
25,000 cars x average $70,000 price x 25% margin / 105,000,000 shares outstanding = $4.17
30,000 cars x average $70,000 price x 25% margin / 105,000,000 shares outstanding = $5.00

We have a range of EPS between $3.33 and $5.71. Give a P/E ratio of 20 (again, pulled from thin air) we get a stock price range of $66 and $114. Not too shabby. As for when we might hit those numbers? Perhaps when we see 5,000 cars/quarter being produced with an order rate to consume 20-30,000 cars annually.

 

[joefee]

"As for when we might hit those numbers? Perhaps when we see 5,000 cars/quarter being produced with an order rate to consume 20-30,000 cars annually."

and short term $38 when sig 200-300 get delivery dates or $28 if not!

 

[Model S Man]

DriverOne, that is gross margins not EBIT margins you are forgetting about $350 - $400mm of SG&A and R&D in your calculations as well as interest expense and eventually a tax rate.

Using your numbers 20,000 units at 25% gross margins and $80k ASP you would get $0 to $50mm in profits or about $0.00 to $0.45c in EPS in that scenario without taking into account interest expense or eventual taxes. Using a 20x P/E would get you $9.00

At 30,000 units and the same ASP and gross margins you would get $250 - $300mm in profits or about $2.40 to $2.90 in EPS again without interest or taxes. At 20x this EPS you would get $48 - $58.

hope this helps

 

[DriverOne]

Thanks for correcting my naive math. I like the spreadhseet that Johan produced earlier in this thread: TSLA Investor Discussions - Page 228

 

[zack]

I was right. Expect a climb toward $31 and another profit-taking day within the week.

 

[kenliles]

TSLA shorts just released- approaching 30M an all time high;
It's show time Elon and Tesla;
as an avid long, I'm thrilled at the opportunity - crank up the production boys!!

Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com

 

[Norbert]

TSLA shorts just released- approaching 30M an all time high;

Woa... if the trend continues, we'll have 31M in two weeks. They must get encouraged by all the "profit taking" comments here...

And there must be a lot of balance coming from the more "bullish" who start buying when the shorts cause the price to go under $30.

I guess we are in for quite a ride.

 

[Johan]

TSLA shorts just released- approaching 30M an all time high;
It's show time Elon and Tesla;
as an avid long, I'm thrilled at the opportunity - crank up the production boys!!

Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com

Short interest not droppin??? They're gonne get burned!!!don't these people see the resevations??? Dont't they see great reviews? I'm gonna re-buy in at below $30.

 

[nygiants242]

What exactly does this mean?

Also, how are you guys going to play next week? The downgrade really hurt today, and I am still waiting for an entry point. Don't want to be too late... how is production doing relative to expectation? A bit behind?

Thanks!

 

[Grendal]

What exactly does this mean?

Also, how are you guys going to play next week? The downgrade really hurt today, and I am still waiting for an entry point. Don't want to be too late... how is production doing relative to expectation? A bit behind?

Thanks!

It looks like they've begun the first step in the ramp up two weeks ago. They went from one car a day to probably four cars a day. Next week we'll probably see eight to ten a day. To answer your question, Tesla has continued to say they're on track to do 5000 by the end of the year. The other number is 500 by the end of this quarter which is still quite possible.

 

[kenliles]

I wonder if this is anything like what Elon has in mind for the upcoming announcement

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