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HenryKissinger

Yet $TSLA has lost ~5% in after hours trading. Wat.png

Edit: Wasn't aware of the 100k expectation.

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Remember, stocks don't move based on headlines. They move based on expectations.

If the market priced the stock based on an expectation they'd deliver 100,000 vehicles, 97,000 is a miss.

If the expectation was 100,000 then that was based on the headlines of Elon's leaked email...

Elon claimed they had a chance at 100,000 a few days ago. Based on that this isn't meeting expectations.

Also, the revenue is what matters and the breakdown of 3 vs S vs X indicates they will have significantly lower ASPs and probably will post a YoY revenue decline. That's not great.

Are people really unable to tell the difference between when something is possible versus when it's likely? Maybe it's just my perspective as a physicist, but the gulf between those two things can be immense.

Considering the factory coming online very soon, I think the situation is looking pretty good, actually.

Why do we think they are production limited instead of demand limited? They’ve had to lower ASPs for close to 5 consecutive quarters. That’s not indicative of production constrained.

Having to ship cars to the other side of the planet to the largest electric car market on the planet and pay super high import duties while not having access to local labor (etc) seems like a pretty thorough ball-and-chain on prices compared to what GF3 will enable.

Additionally, they have a significant update to the high end Model S & X coming (three motors), the 2020 Roadster, the Model Y, the Semi, and the Pickup all announced, some of which likely has suppressed demand for their current offerings, which they've been too busy ramping up Model 3 production for to ship. So I think demand is not a problem. And considering they're doing this at a time when their EV credit is nearly completely gone and gas prices are at a near-all-time-low, I think they're doing remarkably well.

...especially considering they don't have a moderately-priced SUV/truck/crossover available yet. None of the top 6 best-selling cars/trucks in the US are actual cars. Model 3 is doing remarkably well considering it's not an SUV, crossover, or a truck.

This really isn’t answering the question. If a company is supply constrained, why would they be reducing prices? That’s literally the exact opposite of what should happen.

Increase the price of any car in the US by over 30%, and I guarantee you'll be suddenly "demand constrained" for that vehicle by your definition.

Ok? And they are decreasing it. I assume the reverse applies?

The decrease in list price is to offset the decreasing tax credit.

E.g. A $60k Model 3 in 2018 with a $10k credit in MA (State + Federal) is now a $50,500 car with a $1,875 credit. (Federal and no State)

Economically speaking the tax credit was always effectively a payment from the government to Tesla. The real consumer price is basically unchanged over the last year.

Secondarily, the backlog has increased which implies they're demand-limited.

The order backlog includes the Model Y, which is a car that isn’t even in production.

Sounds (almost) infinitely production-constrained on the Model Y, then.

Tesla has over 14,000 cars in inventory. They are not production constrained, which is exactly why they keep dropping prices.

That is about two weeks supply, which is extraordinarily low for auto inventory. Typical cars run 8 to 10 weeks inventory.

The broad market was down almost 2% today, and Tesla is a higher alpha stock.

"After hours" effect is mostly from the earnings report

Most of the move was after hours when this report was released. Tesla was only down .6% during the day, despite the higher alpha and the market being down 2%.

Do you mean that Tesla is a higher beta stock? According to Yahoo Finance, its beta is actually only 0.33. Source: https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA

Yes beta, and surprising on the actual beta. It seems my assumption was wrong.

for analysts, it's always "fewer-than-expected"

https://finance.yahoo.com/m/6d74ee60-9cf8-33a6-96ef-133909a1...

Unless it is more than expected.

Right, then it's "fewer-than-hoped"

No, then it’s “more than expected”. Wall Street has been a bull market for 10 straight years. If anything analysts are considerably charitable to companies

might as well call them pessimistic educated guessers.

Lower volume than expected.

I guess 100k deliveries was the magic number investors were hoping for.

And where did they get that number from?

Elon Musk

A number of sources are reporting that Musk said it in an email to employees:

https://www.bloomberg.com/news/articles/2019-09-26/tesla-sur...

On the contrary, he said "had a shot" at 100k, which implies it's unlikely but possible.

Fair enough, I was just answering where the number came from.

… and not entirely unreasonably so, given that Elon Musk teased that number as late as last week: “We have a shot at achieving our first 100,000 vehicle delivery quarter,”

https://www.sbsun.com/2019/09/26/business-briefly-tesla-surg...

It is unreasonable. "Have a shot" implies it's unlikely to occur.

I don't think it implies that at all. To me, having a shot means that it's entirely in the realm of probability.

"He breaks clear of the defender and has a shot at goal" doesn't imply "it's unlikely to happen", but there's a notable chance of it.

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