Short-Term TSLA Price Movements - 2016

[Papafox]

Here are trading charts for this week. TSLA has been up on two days and down on two days. What's interesting is that the top of the peak (or bottom of the valley, on down days) has occurred between 10:00am and about 10:45am on all four days. After the peak or valley the stock has a tendency to gravitate in the conservative direction, in the direction towards the previous day's close. Both of the down days have been down days for the market. One of the up days was an up day for the broader markets and one was a mixed day for the broader markets.

 

[schonelucht]

Burst of VINs issued for Model S over past 30 days. See Model S Deliver Tracker thread.

1609xx issued on 9/10
167745 issued on 10/11

Annualized rate over 81,000 for Model S alone.

It's a great burst indeed. What's puzzling is that (relatively) no-one is reporting actually having been assigned a VIN in that range. And 167745 is not the latest by far. The factory has already produced 168447 too. Which is puzzling in itself, because the 161xxx series were produced in the first week of October. Why does production skip 7000 numbers? The first logical explanation that comes to mind is that the factory is only doing overseas orders in the beginning of the quarter. But the reported facts contract this theory. There were at least 9 US bound cars produced the last weeks of which 7 ended up in inventory. Seems like the pressure to fulfil overseas orders by the end of the quarter isn't very large. The other logical explanation is that Tesla is pre-allocating VIN ranges, maybe for inventory. Maybe, but why does it not end up on the public inventory list? That inventory list also opens up a few questions. It saw super great activity in September with cars being added and removed at a rate of 10 to even 100ers a day. Since October? Barely any movement at all. A few cars got added, even less got removed and that was it. Even the CPO list saw more action! On that CPO list I have a funny observation too. Tesla does not list any car newer than two years in the US. None. It does so however in much smaller markets so it's hard to believe that were no trade ins for young cars in the US. Of course we know Tesla has a huge interest in keeping the price of used Teslas at least near their resolve value guarantee. Probably related. It opens the question how much of Tesla larger inventory is actually used cars though.

All in all, a lot of questions.

 

[vgrinshpun]

@vgrinshpun thanks for the research and the charts. I think the main conclusion is that Tesla sales past beyond the nuisance phase and are now deeply hurting the Big 3 Germans who normally control that market. People often point to how profitable those companies still are despite Tesla - which may be true, but every Model S sold is a lost sale for them. So it's lost revenue/profit either way - and it's a loss in the most profitable segment.

At first Tesla was ignored as a garage firm, then they ridiculed it for lack of luxury/quality. The first year Tesla beat them it was all about "bit these are only early adopters, this is not sustainable". What's going to be their excuse now?

I can't wait to see the X cause the same damage to the luxury SUV market.

The problem for storied German manufacturers is that I do not think that they can suffer double digit declines in sales year after year AND still have vast resources required to develop new electrified platforms of vehicles on accelerated schedule (they are late! ).

I think situation will turn downright ugly for them with the arrival of Model 3.

Regarding the sales and who is stealing them from whom, I think there is perhaps additional dynamic in play. The buyers in the Oberklasse segment are becoming more aware of the onslaught of Model S, and although have doubts on whether to buy Tesla, are in a waiting mode: to see if the Germans which they repeatedly bought cars from will come with BEVs competing with Tesla, or, if they do not, to see how this will play out to see if they should buy a Tesla after all.

The bottom line is that as these buyers are seating on the fence, Oberklasse sales are suffering, while Model S sales are growing 50% YoY.

The bottom line is that whether a particular Model S sale steals from the Oberklasse peers or not, the effect is the same: existence of Model S sucks air out of the segment sales.

If German Oberklasse manufacturers do not come with alternatives to Model S, the gate will open and the lifetime buyers of their products will start defecting in increasing numbers. I do not believe that they have till 2020 to come up with a real alternative to Model S. It might already be too late.

 

[Xpert]

Historically, there are 12 production weeks in each quarter. In Q3 they produced 25,185 vehicles, or 2098 cars/week. This is consistent with their guidance, given that they started at roughly 2,000 per week and peaked at 2,200.

For the Q4, assuming that average run rate will be 2,300 cars per week for 11 weeks, the total production will be 25,300. Assuming that they will partially empty the transit pipeline similarly to Q4 2015, we can assume 27,500 - 28,000 deliveries in Q4.

Yes, TSLA at $200 is a gift.

There are 13 weeks from 10/1 to 12/31/16...so no production for 2 weeks or I missed something?

 

[vgrinshpun]

There are 13 weeks from 10/1 to 12/31/16...so no production for 2 weeks or I missed something?

During the Q3 ER call Jason Wheeler mentioned that there will be two weeks when production will be shutdown in Q4.

 

[dakh]

There is some truth to this. Service centers must be expanded and workers must be trained well before volume production and deliveries begin. Tesla can't wait till the last moment if it is planning to produce 100k-200k model 3s in 2nd half of 2017.

As an anecdote, one of my colleagues got a new fascia model S in August. Says, he mainly bought the car for AP. He is not quite happy with quality of trims, molding etc. and is frustrated that he can't even get into service. He is now trying to return it using the guarantee program, even though (I think) he will lose the sales tax on the car. So, yes, service centers must be established well before launching the cars.

So I'm a reservation holder for Model 3. The best purchasing experience they could possibly deliver is if they'd just drop the car off into my driveway. I don't need showroom/dealer until something breaks. The whole business model that assumes one needs to spend a ton of money on all this crap that lots of people don't care about is flawed. If they can save me money by not catering to the few that need a lot of hand-holding, I'd be happy. I didn't ever need to call Amazon for any reason or go to their store, I don't see a reason Tesla can't pull a similar trick off.

 

[bh1783]

The problem for storied German manufacturers is that I do not think that they can suffer double digit declines in sales year after year AND still have vast resources required to develop new electrified platforms of vehicles on accelerated schedule (they are late! ).

I think situation will turn downright ugly for them with the arrival of Model 3.

Regarding the sales and who is stealing them from whom, I think there is perhaps additional dynamic in play. The buyers in the Oberklasse segment are becoming more aware of the onslaught of Model S, and although have doubts on whether to buy Tesla, are in a waiting mode: to see if the Germans which they repeatedly bought cars from will come with BEVs competing with Tesla, or, if they do not, to see how this will play out to see if they should buy a Tesla after all.

The bottom line is that as these buyers are seating on the fence, Oberklasse sales are suffering, while Model S sales are growing 50% YoY.

The bottom line is that whether a particular Model S sale steals from the Oberklasse peers or not, the effect is the same: existence of Model S sucks air out of the segment sales.

If German Oberklasse manufacturers do not come with alternatives to Model S, the gate will open and the lifetime buyers of their products will start defecting in increasing numbers. I do not believe that they have till 2020 to come up with a real alternative to Model S. It might already be too late.

The German Oberklasse is in bigger trouble than that. Lexus hasn't updated the LS platform in over ten years. Hyundai's Genesis G90/Equus already sells as much as the German Oberklasse in the US. They also lost many of their top designers to Asian car firms: Albert Biermann, Christopher Chapman, Peter Schreyer, Luc Donckerwolke.

 

[stealthology]

After spending an embarassing number of hours on Google, I am 100% certain next week's product unveiling is next gen Autopilot hardware, ready to ship. In an effort not to turn this into an essay (and my level of exhaustion at the moment), I'll spare the details except for this cool tidbit, which I admit is probably just a coincidence:

Back in 2014, Elon tweeted about a 'D' car and 'something else' (AP1). Tweet to reveal time was 8 days (11/1 - 11/9). Tweet to reveal for next Monday's unveiling is 8 days as well (11/9 - 11/17). Coincidentally, he stirred up a media storm a week or so beforehand talking about colonizing Mars (2014).

Oh yeah, and this guy seems convinced as well.

Order Monday, and you won't need to buy another car before Level 4 autonomy.

 

[Mario Kadastik]

Why does production skip 7000 numbers? The first logical explanation that comes to mind is that the factory is only doing overseas orders in the beginning of the quarter. But the reported facts contract this theory. There were at least 9 US bound cars produced the last weeks of which 7 ended up in inventory. Seems like the pressure to fulfil overseas orders by the end of the quarter isn't very large. The other logical explanation is that Tesla is pre-allocating VIN ranges, maybe for inventory. Maybe, but why does it not end up on the public inventory list?

I think the inventory list that they show on the website isn't reflecting the showroom models that are brand new. I think someone has to trigger an available for inventory sale for each car that transitions to this mode. What I've seen tracking EU inventory in countries where I could actually get a car for Estonia (all except France, Norway and UK) is that the inventory is down to almost nothing. Right now there is just one car in Belgium and 4 in Sweden and they've been selling them slowly off. I expect new cars to arrive shortly and go to showrooms. They may or may not become available at the end of the quarter, but I seriously doubt we'll see an onslaught of inventory cars before mid to end of November. Right now it's better to force people to pre-order their cars, the inventory sales can take December as then the cars pre-ordered couldn't be delivered this quarter anyway while right now they still can be.

And it's quite easy to monitor Teslas CPO inventory, they have a basic AJAX interface that is the same for all countries, but the access URL depends on the country. The response is a JSON that's easy to parse in python for example so I have a script that runs once a day for 7 countries and send me an e-mail on what's changed. Usually what changes is that the cars drive a bit and discounts drop a 100€ or so I could probably make an easy tool that correlates odometer change and discount change and could probably work out what their discount formula is, but don't have time for it right now

 

[RobStark]

The German Oberklasse is in bigger trouble than that. Lexus hasn't updated the LS platform in over ten years. Hyundai's Genesis G90/Equus already sells as much as the German Oberklasse in the US. They also lost many of their top designers to Asian car firms: Albert Biermann, Christopher Chapman, Peter Schreyer, Luc Donckerwolke.

Hyundai has sold 1297 Equus and Genesis 10 G90s 2016 YTD according to goodcarbadcar.net

 

[graphix25]

Back on topic: Next Monday's product unveiling. For those who have spent some due diligence on this, are we pretty sure it will be next gen Autopilot hardware? I think it's very likely. Like last weekend's treat, I'm thinking he'll provide details Friday or this weekend.

One theory I had is that Musk wants to catch people off guard by not acting like it's a big deal, then the whole 'a win can feel like a win' for first time in a while, kicking things off for the seriously jam packed schedule for the remainder of the year.

10/17: Product unveil
10/26: Earnings
10/28: SCTY/Tesla Solar roof and Powerpack 2.0 unveil
11/1: Tesla will provide more details on merger financials
11/17: Vote

Such exciting times then next year when the final Model 3 is shown and begins shipping it only gets better. Looking out further, Tesla is on the road to $2000+ a share by 2030 with $400B in revenue and $40B in net profits. Through blood, sweet and tears I have built up a position of a 1000 shares from 15 stock buys throughout 2016. No more Tesla for me as I have to be somewhat sensible in the % of Tesla in my investment spectrum. Average price ironically is the same at today price of $200 per share so I have not made a dime, yet.

Some thoughts on Oct 17th
Multi-core nvidia based architecture, redundant hardware and next generation sensors would all be required to support Level 4 autonomy. The hardware cost to make this happen has to add at least $4-5k to the production cost for the necessary custom kit. I'm hard pressed to think Tesla is ready to make this leap in Q4, 2016. But damn, if it's true and this what is about to happen I could not be more excited. This would open the path to Level 4 by 2018 which would give them a 3-5 year lead over the rest of the industry. The model S and X are basically $100k cars being purchased by the wealthy folks so they can absorb the added price. It's going to shock the world if Oct 17th is autopilot 2.0. Demand is going to go crazy in Q4 and well into next year for the model s/x. The stock price is bound to follow at some point.

My family, friends and co-workers all think I'm nuts. Outside of those on TMC I have yet to find someone who has the faith, belief and vision of what Tesla will one day become. Model 3 is on order, Tesla roof maybe in the future and *sugar* ton, or is that american ton or metric ton of Tesla stock. I love those boys on Talking Tesla. The best tesla podcast out there. Check it out.

 

[STARR X]

So I'm a reservation holder for Model 3. The best purchasing experience they could possibly deliver is if they'd just drop the car off into my driveway. I don't need showroom/dealer until something breaks. The whole business model that assumes one needs to spend a ton of money on all this crap that lots of people don't care about is flawed. If they can save me money by not catering to the few that need a lot of hand-holding, I'd be happy. I didn't ever need to call Amazon for any reason or go to their store, I don't see a reason Tesla can't pull a similar trick off.

I agree. My 2012 MS was delivered to me at work as at that time, Georgia did not have a showroom and the service center was just opening. To have a car delivered to you is a pretty cool thing and a lot less headache then going to the dealer.

 

[Mario Kadastik]

I agree. My 2012 MS was delivered to me at work as at that time, Georgia did not have a showroom and the service center was just opening. To have a car delivered to you is a pretty cool thing and a lot less headache then going to the dealer.

Local delivery at house takes a lot of manpower hours. Consider if there are 6000 cars to be delivered in a month in a region for example (125k per quarter could easily give many regions such numbers). This is 200 cars per day every day said month or 300 cars per workday. If one person can deliver one car per hour (that's optimistic as there's driving time to and from customer + paperwork + intro to car) and the workdays are 8h, then that requires 25-40 persons doing deliveries all day long every day. If the time is more like 2-3h, then multiply by that factor. At a service center it can be streamlined and a handover can take 0.5-1h and nothing is lost on travel to-from. Meaning you gain factor of 5 or so in efficiency.

 

[bh1783]

Hyundai has sold 1297 Equus and Genesis 10 G90s 2016 YTD according to goodcarbadcar.net

Equus was discontinued for the G90. Launch was delayed in the states because they sold too many in Korea. Something like 30,000 the first half of 2016.
Hyundai Motor’s Genesis EQ900 orders exceed 27,000 units, above this year’s sales goal - Pulse by Maeil Business News Korea

 

[vgrinshpun]

The German Oberklasse is in bigger trouble than that. Lexus hasn't updated the LS platform in over ten years. Hyundai's Genesis G90/Equus already sells as much as the German Oberklasse in the US. They also lost many of their top designers to Asian car firms: Albert Biermann, Christopher Chapman, Peter Schreyer, Luc Donckerwolke.

As far as German automaker troubles are concerned, I, somehow, think that Tesla presents a much bigger one than Lexus and Hyundai.

 

[vgrinshpun]

Germany sends letter to drivers of Model S a warning letter . http://www.reuters.com/article/us-tesla-germany-idUSKBN12E0VC

In the related news, Self-Driving Mercedes will be programmed to sacrifice pedestrians to save the driver. https://www.fastcoexist.com/3064539/self-driving-mercedes-will-be-programmed-to-sacrifice-pedestrians-to-save-the-driver

 

[schonelucht]

In the related news, Self-Driving Mercedes will be programmed to sacrifice pedestrians to save the driver. https://www.fastcoexist.com/3064539/self-driving-mercedes-will-be-programmed-to-sacrifice-pedestrians-to-save-the-driver

The headline is a little click-baity. In the actual interview he says that it is better to save someone you know you can save for sure (the driver) versus trying to save bystanders of which you aren't so sure. Would be interesting to know Tesla's position on this dilemma. I know you keep more on top of this, maybe you have a quote from them that's relevant?

 

[mutle]

Germany sends letter to drivers of Model S a warning letter

Interestingly, from what is currently known about the letter, it is basically the information presented in the Autopilot disclaimer, "keep your hands on the wheel", "you have to be attentive 100% of the time". Completely redundant. There was also a mention that they're asking Tesla to change the name.

 

[vgrinshpun]

The headline is a little click-baity. In the actual interview he says that it is better to save someone you know you can save for sure (the driver) versus trying to save bystanders of which you aren't so sure. Would be interesting to know Tesla's position on this dilemma. I know you keep more on top of this, maybe you have a quote from them that's relevant?

No I don't. I doubt they will touch this with a 10ft pole, at least now, when they are so vilified in the press regarding their autopilot...

 

[NOLA_Mike]

Germany sends letter to drivers of Model S a warning letter . http://www.reuters.com/article/us-tesla-germany-idUSKBN12E0VC

In the related news, Self-Driving Mercedes will be programmed to sacrifice pedestrians to save the driver. https://www.fastcoexist.com/3064539/self-driving-mercedes-will-be-programmed-to-sacrifice-pedestrians-to-save-the-driver

LOL, the last line from the article:

In the meantime, you should probably buy a Mercedes, but avoid crossing the road if you see one coming.