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Tesla cuts prices as Model 3 deliveries narrowly miss estimates

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Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#111

Post by mulmen »

FireBeyond wrote: post #107
mulmen wrote: post #84

Earlier quoted context omitted.

I live in Seattle, east of here there is one BMW dealer on my way home and next closest BMW dealer is in Boise, Idaho. I can’t drive to my home town and visit a dealership. That means an electric BMW would need a range of 1,000-1,200 miles to be remotely comparable to an ICE car or Tesla. Putting universal chargers at existing gas stations or buying an entire brand and converting to charging makes way more sense.

Except for the BMW dealership in Yakima you mean? Or if you go via PDX.

PDX is the opposite direction of my part of Idaho from Seattle. Taking that route would add hundreds of miles.

The dealer in the tri cities or Yakima is out of the way and the one in Spokane would add a couple hours of driving time.

There are no dealers on the direct route home for me. Realistically I could only stop at one.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#112

Post by csours »

wnorris wrote: post #4

The production and delivery numbers they came out with were very good and higher than most had expected. These numbers will allow them another profitable Q4 likely higher than their Q3 numbers. The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs. The reaction looks like a big overreaction as the…

> "The production and delivery numbers they came out with were very good and higher than most had expected."

Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#113

Post by JumpCrisscross »

qroshan wrote: post #105
JumpCrisscross wrote: post #78

Earlier quoted context omitted.

> At $50B Market Cap, Tesla should be delivering at least $2B Annual profits P/E ratios aren’t effective for high-growth or quickly-declining companies. The PEG ratio attempts to compensate for this.

Exactly my point. US demand growth is done. There will be International pent up demand will be done in Q1. Q2 and Q3 will show that Tesla has pretty much plateaued. Profit growth is even lower

Companies can grow in a shrinking market by stealing share. I’m no Tesla bull, but you’re casting a loose prediction with far more certainty than it merits.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#114

Post by gamblor956 »

mulmen wrote: post #76
gamblor956 wrote: post #67

Earlier quoted context omitted.

If Tesla was expecting 50% annualized growth, or even growth comparable to their recent historical trends, they would not have cut the price tag on every model of car they sell.

That... isn’t how economies of scale or elasticity of demand work.

I think you might need to brush up on your understanding of demand elasticity curves.

Tesla is dropping the sticker price of their vehicles because they think that demand for their cars is at least somewhat elastic with respect to sticker price, and they're in a better position than you or me to have the data and analysis on this. (Tesla has also announced that this is why they're dropping the price so I'm not sure why you're arguing this point?)

Economies of scale are not related to this drop in price. Economies of scale refers to it being cheaper to product an product at scale due to efficiencies in the use of the largely fixed-cost capital expenditures. Companies don't usually drop prices due to EOS until at least a quarter or two after they've reached that point in the production cost cycle, largely to confirm that they've actually reached EOS operationally, and some company's retain the efficiencies from EOS as profit until/unless they need to for competitive market reasons.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#115

Post by FireBeyond »

waisbrot wrote: post #99
FireBeyond wrote: post #27

Earlier quoted context omitted.

They also tried to include "cost of gas savings" in some of their "line item" website pricing.

TCO seems like an entirely reasonable figure to advertise. It's a hard number to trust, but I'm not sure how that gets fixed except by trying to regulate advertisement in general.

I think putting a number of "$x" on a page, and only when you click into the details, seeing "Estimated fuel cost savings: $y" as one of the line items there is totally misleading.

TCO is a reasonable figure to discuss, especially when changing paradigms. It's not, however, reasonable, to include in a line item for vehicle cost that is not in any possible practical way to attain (at least the fed credits are more concrete) - imagine you go into a Tesla dealership and it says "$35,000" and you say "Sold!", and they reply "Great, that'll be $38,000".

"But...?" "Oh, that price was only to give you a TCO after you factor in three years of gas you're not buying now! It's not an actual discount or credit".

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#116

Post by xutopia »

MBCook wrote: post #8
qroshan wrote: post #3

Tesla is definitely hitting the demand ceiling. It's a good thing Musk isn't producing 10000 M3 per week. The current rate of ~4500 per week is enough to meet demand. In fact, expect continuous price drops from Tesla as it struggles to drum up enthusiasm

I’m not pro-Tesla, I think they’re horribly mismanaged, but let’s be real. The Model 3 is selling well, and ONLY in the US. Even if they hit peak demand they can just start selling to Europe and China (planned for later this year) and they’ll have plenty of new customers.

I live in Montreal and I see a few Model 3 all the time regardless of where I drive.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#117

Post by toomuchtodo »

csours wrote: post #112
wnorris wrote: post #4

The production and delivery numbers they came out with were very good and higher than most had expected. These numbers will allow them another profitable Q4 likely higher than their Q3 numbers. The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs. The reaction looks like a big overreaction as the…

> "The production and delivery numbers they came out with were very good and higher than most had expected." Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable.

They are maximizing for profit on each unit sold. Presumably, they’ll have had a reduction in debt to service with payments made from upfront higher margin vehicles.

It’s not a problem as long as they stay ahead of the curve margin wise. Lots of market demand outside of the US, which is why vehicle manufacturing firehose is pointed at Europe and China now with the US tax credit reduction.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#118

Post by twblalock »

luckydata wrote: post #85
twblalock wrote: post #74

Earlier quoted context omitted.

Other brands have dealerships all over the country where they could install chargers. I'd say the barrier to doing that is pretty low. For example, if every BMW or Audi dealership had some charging spots for owners of their cars, it would probably have more nationwide coverage than Tesla's Supercharger network. The dealerships are also frequently located in convenient places near major highway exits, etc.

You don't go charge a car to a dealership though. I charged mine yesterday in the parking structure next to the mall in Colma while getting ice cream with my son. Sorry but no, that's not a valid suggestion.

I'm assuming most electric car owners would charge their cars at home and make use of Superchargers/dealership chargers on road trips.

Being able to charge at your local shopping center is nice but it's not a necessity for electric car ownership.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#119

Post by bdhess »

csours wrote: post #112
wnorris wrote: post #4

The production and delivery numbers they came out with were very good and higher than most had expected. These numbers will allow them another profitable Q4 likely higher than their Q3 numbers. The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs. The reaction looks like a big overreaction as the…

> "The production and delivery numbers they came out with were very good and higher than most had expected." Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable.

What are you comparing it to when you say "relatively expensive"? I've read reviews comparing it favorably to a BMW 3 Series, which is in the same price range.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#120

Post by OldFatCactus »

martythemaniak wrote: post #91
ivraatiems wrote: post #69

Earlier quoted context omitted.

Characterizing lying to the SEC and calling a Thai cave rescuer a "pedo" as such is stretching the definition of "forward-looking statement." Musk has always been largely bluster, but now the bluster is hurting people, and his companies as well. He's the biggest liability Tesla has. I don't know what he's done to earn my trust, or any investor's.

> I don't know what he's done to earn my trust, or any investor's. The ~20x ROI since IPO has made many people trust him. Tesla itself is a marvelous success, with no established car maker able to match them yet. It is far more likely that your personal dislike of him is making you see a distorted reality.

Match them at what?
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