Short-Term TSLA Price Movements - 2015

[ibcs]

What a wicked day! Sold at 230 and bought back at 224.68. Today worked out amazing except for the nerves!

 

[aznt1217]

Panasonic can slowly, and in a very non-innovative way, make a clone in 12 months. I agree it feels like they are not inclined to do so, but are we saying that the business model is to act as the marketing front end to Panasonic?

software and engineering collaboration. Relationships matter and I think Tesla indeed did release its patents but what about the stuff not on paper..

 

[mejojo]

"Open Patents" does not mean you get the engineering to implement them.

If you believe Panasonic can build it, then you think that Tesla has a team that any other company can get.

Maybe that's true, but it doesn't appear so.

 

[SteveG3]

Someone help me out. I am sure Tesla is doing a great job with the software/firmware, liquid cooling/heating, modules, case, testing, marketing etc. But the competitive advantage here is the cost/kWh here which is a characteristic of Panasonics cells or maybe even Samsung or another. They are essentially taking a product from Panasonic (even the GF output is still kind of Pansonic's output) and wrapping it in a module and marking it up and selling it.

Now there is nothing wrong with that, everyone has suppliers and just about any business can be described that way. But, here is the question, why didn't panasonic do this? What keeps them from doing it even now? Particularly since Elon keeps saying he doesn't care about competition. Tesla doesn't have any cell output itself. This announcement strikes me a little bit like "look how great Panasonic's products are, we created this great application for it".

Thoughts?

interesting question Austin. I think Gtoffo's post #5966 is the reason Tesla has such a large opportunity. What's more, Tesla is unusual in its level of risk taking. Tesla is mission oriented with an entrepreneurial/engineer leader. Most companies large enough to make a GigaFactory size move have professional career management, and are more "keep the ship from crashing on my watch" oriented (or worse) more so than mission oriented. I'd expect they'll build GFs when they see it's worked for Tesla... but it will take most corporations several years to create plans, get a BOD to sign off on such plans, and build the GF before it's producing large volumes.

- - - Updated - - -

For those in the know, $250/kWh is nothing less than earth shattering. Nobody can touch this price. Everybody will want to install grid storage at this price. A Texas utility, Oncor, planning to install 10GWh of storage in 2018, subject to the regulatory approval. Just to make sure the scale registers here, this is 2/3 of the GF yearly production, planned in 2018. As part of the regulatory approval Oncor commissioned study that supposed to justify the expense ($5.2B). The study was based on $500/GWh installed price. Tesla was the front runner as a supplier of this storage, and supplied their 400KWh battery for the currently running pilot project.

Elon's revelation on the pricing for grid storage pretty much cements this deal. We might hear about first year or two of the GF stationary storage output already reserved...

We are on the cusp of the historic squeeze...

See my previous post on this for more details/links

Thanks for pulling together the pieces and making this so clear vgrinshpun!

 

[FluxCap]

What a wicked day! Sold at 230 and bought back at 224.68. Today worked out amazing except for the nerves!

Gap fill next week into blowout ER like Causa said and vgrin's data confirms, more confident than I have been in a while. Tense to be sure!

 

[Derek Vinyard]

I don't believe we will hear from many (any?) analysts before the ER/CC as they do not want to build out a model without more facts about margins/income stream potential which should come from the ER/CC. I hope that this, and some new info at the shareholder's meeting, will give significant positive momentum to TSLA.

I added to trading shares today at $221 and added another 35 June 19 270s to an already sizeable position 'gambling' that we do see some upward movement.

agree with you and have to correct my previous assumption...the ER is getting very close...

 

[austinEV]

interesting question Austin. I think Gtoffo's post #5966 is the reason Tesla has such a large opportunity. What's more, Tesla is unusual in its level of risk taking. Tesla is mission oriented with an entrepreneurial/engineer leader. Most companies large enough to make a GigaFactory size move have professional career management, and are more "keep the ship from crashing on my watch" oriented (or worse) more so than mission oriented. I'd expect they'll build GFs when they see it's worked for Tesla... but it will take most corporations several years to create plans, get a BOD to sign off on such plans, and build the GF before it's producing large volumes.

I get that argument. Tesla is brave were Panasonic is timid, which I accept. But once TM proves that there IS a large market there is no fear and no reason to be timid. Trying to understand the "moat". We periodically ask this question about the Model S too. it goes like this: "anyone can take laptop cells, wrap a car around it and make a tesla killer". Our standard answer for that is "That is true. But they WON'T because they would have to compete with their ICE lineup and make billion dollar investments in lines and battery capacity. They cannot get serious about competition without invalidating their current business model". I accept that for cars and it seems to be playing out with each passing quarter with no serious interest from other automakers. But that moat doesn't work for the energy storage market. Once TM creates the market, it would be no big deal for other battery makers to enter the market. Now that is fine, the market is vast, and it won't really matter. Unless Panasonic does it. which they should...

Edit:
Ok, let me answer myself. If other cell makers do it, that is fine because the market is vast and TM will welcome the competition. Panasonic has little reason to screw its biggest customer since they make their margin on the cells and trying to capture TM's margin too is probably not worth killing the golden goose.

 

[jhm]

For those in the know, $250/kWh is nothing less than earth shattering. Nobody can touch this price. Everybody will want to install grid storage at this price. A Texas utility, Oncor, planning to install 10GWh of storage in 2018, subject to the regulatory approval. Just to make sure the scale registers here, this is 2/3 of the GF yearly production, planned in 2018. As part of the regulatory approval Oncor commissioned study that supposed to justify the expense ($5.2B). The study was based on $500/GWh installed price. Tesla was the front runner as a supplier of this storage, and supplied their 400KWh battery for the currently running pilot project.

Elon's revelation on the pricing for grid storage pretty much cements this deal. We might hear about first year or two of the GF stationary storage output already reserved...

We are on the cusp of the historic squeeze...

See my previous post on this for more details/links

Holy ****! Now we know what utility scale means for a transmission company. That's a $2.5B sale by 2018. For context, transmission is about 31% of the power bill. Cutting cost in that segment will lower every ratepayer's bill.

I bet Texas really wishes they had gotten the Gigafactory now.

 

[MikeC]

I get that argument. Tesla is brave were Panasonic is timid, which I accept. But once TM proves that there IS a large market there is no fear and no reason to be timid. Trying to understand the "moat". We periodically ask this question about the Model S too. it goes like this: "anyone can take laptop cells, wrap a car around it and make a tesla killer". Our standard answer for that is "That is true. But they WON'T because they would have to compete with their ICE lineup and make billion dollar investments in lines and battery capacity. They cannot get serious about competition without invalidating their current business model". I accept that for cars and it seems to be playing out with each passing quarter with no serious interest from other automakers. But that moat doesn't work for the energy storage market. Once TM creates the market, it would be no big deal for other battery makers to enter the market. Now that is fine, the market is vast, and it won't really matter. Unless Panasonic does it. which they should...

Edit:
Ok, let me answer myself. If other cell makers do it, that is fine because the market is vast and TM will welcome the competition. Panasonic has little reason to screw its biggest customer since they make their margin on the cells and trying to capture TM's margin too is probably not worth killing the golden goose.

Panasonic already does energy storage, but apparently not at the cost/efficiency that Tesla is now able to. I think the moat is the same as with the cars: packaging the cells, software, and rapid innovation.

 

[Perfectlogic]

Wow just saw Elon's tweet about the $250/kwh utility pricing that is indeed the real kicker, surprising to me there isn't more focus on it in the thread. Utility is by far the largest market for batteries as they manage nearly all power production and distribution, and at this pricing I'm sure its a nobrainer to use Tesla's storage solution. Centralized storage also seems more efficient than decentralized due to it being much cheaper per kwh and less is needed for the same effect.

 

[jhm]

If the battery takes off

we will be needing Gigafactory II and III real quick. When will these be revealed?

Anyone scouting sites? Can this be financed by Tesla?

Yes, Tesla and partners can self finance. Consider a price of $250 per kWh at a cost of $150. This leaves $100M gross profit per GWh. So by the time a GF has produced 50 GWh, it has paid for itself and can go on to finance the next GF.

 

[jhm]

"Open Patents" does not mean you get the engineering to implement them.

If you believe Panasonic can build it, then you think that Tesla has a team that any other company can get.

Maybe that's true, but it doesn't appear so.

That's right, and I recall Musk mentioning that he views the Gigafactory not merely as a factory, but itself as a product. Tesla is building a very large and complex machine that turns out battery packs. So anyone can use the patents if they like, but what they really need is a GF.

 

[vgrinshpun]

And the floodgate opens... Edison International teams up with Tesla for battery storage projects, with two commercial projects that expected to be in place in 2015.

 

[Zzzz...]

Someone help me out. I am sure Tesla is doing a great job with the software/firmware, liquid cooling/heating, modules, case, testing, marketing etc. But the competitive advantage here is the cost/kWh here which is a characteristic of Panasonics cells or maybe even Samsung or another. They are essentially taking a product from Panasonic (even the GF output is still kind of Pansonic's output) and wrapping it in a module and marking it up and selling it.

Now there is nothing wrong with that, everyone has suppliers and just about any business can be described that way. But, here is the question, why didn't panasonic do this? What keeps them from doing it even now? Particularly since Elon keeps saying he doesn't care about competition. Tesla doesn't have any cell output itself. This announcement strikes me a little bit like "look how great Panasonic's products are, we created this great application for it".

Thoughts?

Bolding is mine. But at price $350 per kW/h retail Panasonics cells cost $150, wrapping(assembly labor, sensors, electronics) cost $100, distribution is another $100.

Do Panasonic have better distribution channels down to retail homeowners? Tesla have got such exposure through SolarCity.
Could Panasonic mass produce those 10 kW/h $3500 battery packs? Or Panasonic would find only this much orders and no highly automated assembly/competitive supply chain prices.

But if Panasonic would see market, figure out distribution, and would have enough orders to get good pricing from supply chain - then Panasonic would sure enter the market. They already got some designs and compete on the same storage market, only those designs are based around prismatic cells.

 

[vgrinshpun]

Gap fill next week into blowout ER like Causa said and vgrin's data confirms, more confident than I have been in a while. Tense to be sure!

Would that be $245.89 to $254.40 Gap from October 10? I would gladly take it...

BTW, I love the car you sponsored, the staggered wheel setup looks awesome :biggrin:

 

[mejojo]

The information I got from my Solar City salesperson is that Tesla batteries will not be integrated into Solar City systems (at least at retail, non-pilot, non-commercial....meaning not mine) for another 18 months or so.

In the meantime, Solar City sells just their existing battery system that is only useful for grid outage. So, at least from Solar City offerings, you could stand up your Tesla battery alongside your solar system and feed the battery from the grid, your house through grid + battery, and feed the grid with your solar. In about 18 months apparently SC will be able to integrate that Tesla battery in some way.

When Elon spoke about leapfrogging grid implementation in underdeveloped areas, I'm not sure if he was talking about some future capability, or some other way of integrating with solar that SC is not going to be doing right away.

 

[anticitizen13.7]

I want to comment some more on last night's event, and the general market's reaction today. As I predicted early this morning, there was not any positive price movement today.

The focus of the financial media coverage has been on the Powerwall, its price, and how it would be used. This coverage is misplaced, because the real deal here is the Powerpack, which will allow businesses to reduce energy costs or even become energy independent of utilities in some cases. Powerpack's infinite scalability means that renewable electricity can be captured and stores on an unprecedented level.

It's going to take awhile for this to sink in. I'm talking months or maybe even years. So don't expect this to move the stock price much in the near term, but do expect great things over the long haul. This changes everything, just like Model S did. A tall block of batteries may not be as sexy as a luxury sedan with 691 HP on tap, but in the long run I think the block of batteries may actually be the most game changing product Tesla offers in this decade.

 

[Zzzz...]

n the meantime, Solar City sells just their existing battery system that is only useful for grid outage.

No. Daily cycled battery could earn some $ by buying cheaper 10kWh at night time and lower consumption at peak rate by 10kW/h.

Will economics of new Tesla PowerWall product will work for you?

 

[FredTMC]

And the floodgate opens... Edison International teams up with Tesla for battery storage projects, with two commercial projects that expected to be in place in 2015.

Excellent! Thx for sharing

 

[mejojo]

No. Daily cycled battery could earn some $ by buying cheaper 10kWh at night time and lower consumption at peak rate by 10kW/h.

Will economics of new Tesla PowerWall product will work for you?

I am stating what Solar City is telling their customers....for the near term, the ONLY battery system Solar City is integrating (for regular customers) is the non-PowerWall battery, that they have already been selling, which only kicks in when the grid goes down.