Tesla shares tank after U.S. discounts doubled on key models • Hacker News Board

Re: Tesla shares tank after U.S. discounts doubled on key models

#131

Post by nikau » Fri, Dec 23, 2022, 10:44 AM UTC

akmarinov wrote: post #92

bamboozled wrote: post #71

Earlier quoted context omitted.

Tesla does software really well ? What ?

Compared to BMW, they’re light years ahead. There’s been 12 updates to Teslas in the last month OTA, BMW did one in 2022 and any car with iDrive 7 (their first to support OTA updates) had to be taken in to the dealer to do the update. Also looking at the apps, sending a command through Tesla’s app is instant, meanwhile BMW’s app makes you look at a spinner for 2 minutes. I’m sure Tesla’s likely cutting corners somewh…

Counterpoint - I just want android auto.

Re: Tesla shares tank after U.S. discounts doubled on key models

#132

Post by jacquesm » Fri, Dec 23, 2022, 10:48 AM UTC

snovv_crash wrote: post #127

oblio wrote: post #115

Earlier quoted context omitted.

Tesla sells luxury vehicles (by world standards) and there are only so many people who can afford them. Either Tesla stops growing at this rate, or they will have to "stoop" to cars costing $15k, in which case their profit margins will drop like a rock.

So why doesn't VW just sell premium cars if it would make them more money?

Because there is a lot of money to be made selling lots of a cheaper product if you can produce it profitably. Besides that dealers are typically willing to sell such smaller vehicles at or near their own purchase price counting on the recurring income for service and fleet sales of such vehicles tend to be quite profitable because there is only one signature but a very large amount of money involved.

Mercedes is a nice example of a premium brand, they make more money per car and a bit more money in total on lower volume. VW (or rather, the VAG group) is simply a different kind of company. But their profits are nothing to sneeze at.

Re: Tesla shares tank after U.S. discounts doubled on key models

#133

Post by mutatio » Fri, Dec 23, 2022, 10:48 AM UTC

jacquesm wrote: post #111

mutatio wrote: post #78

Earlier quoted context omitted.

It's not really about units sold though is it? I guess yes, usually it's a good approximation, but you could sell a single unit for $5bn and have a superior net profit. Tesla's profit margin looks to be ~15%, whilst VW is at 3% - I'd love to know what it does to those numbers. Tesla's net income for Sept 2022 actually appears to be much higher than VW, if I am interpreting the numbers correctly.

Usually profit margins shrink as volume goes up. You can't sell that many cars into the premium segment simply because the segment doesn't support the volume. VW sells a ton of cheap and small vehicles.

Isn't net profit absolute though, i.e. directly comparable between the two organisations. Long tail of cheap vehicles probably does help VW stay resilient long term (perhaps in the current economic climate / recessions).

It seems targetting volume could be detrimental to net profits under current/recent market conditions. Selling fewer, supposedly more upmarket vehicles has allowed Tesla to out perform VW.

Re: Tesla shares tank after U.S. discounts doubled on key models

#134

Post by clappski » Fri, Dec 23, 2022, 10:51 AM UTC

repsilat wrote: post #105

gorgoiler wrote: post #64

The notion of “share price” is something I haven’t ever really understood. As I understand it, if four people are queueing up to buy stock A for [$10, $9, $8, $7] and four other people are in line to sell for [$10, $11, $12, $13] then the people at the front match up and swap one unit of stock for $10, and the stock exchange lists A as being last valued at $10. Stock B’s order books have four buyers at [$10, $1, $1,…

> Do exchanges give us insight into what their order books actually look like, instead of just quoting the last price where a buyer and seller matched? They do. I haven't seen depth info past the best bid/offer (maybe exists? I'm not an expert), but I see the bid and ask prices with sizes in my broker's app in realtime. "Last price" is just one useful bit of information. The theory behind showing the last price is th…

> haven't seen depth info past the best bid/offer (maybe exists? I'm not an expert)

Most exchanges will provide arbitrary depth in way of a pure order feed. From that you can construct your price book, which gives you the levels of depth.

Some just expose the price book, some price book and order feed, some just order feed.

Some anonymize the order feed, some don't (I think typically in equities it's anonymized although not my asset class, but other markets e.g. power need to be de-anonymized and you can see the other buyers and sellers submissions).

However, that data doesn't represent the market price - I would look to constructing the fair price using the trades made on the exchange rather than the outstanding orders. From that you can create different lenses to view the fair price - e.g. volume weighted, time weighted, other types of averages.

Re: Tesla shares tank after U.S. discounts doubled on key models

#135

Post by mpol » Fri, Dec 23, 2022, 10:52 AM UTC

jacquesm wrote: post #111

mutatio wrote: post #78

Earlier quoted context omitted.

It's not really about units sold though is it? I guess yes, usually it's a good approximation, but you could sell a single unit for $5bn and have a superior net profit. Tesla's profit margin looks to be ~15%, whilst VW is at 3% - I'd love to know what it does to those numbers. Tesla's net income for Sept 2022 actually appears to be much higher than VW, if I am interpreting the numbers correctly.

Usually profit margins shrink as volume goes up. You can't sell that many cars into the premium segment simply because the segment doesn't support the volume. VW sells a ton of cheap and small vehicles.

So then BMW and Mercedes:

BMW - Market cap: $58.47 billion - Q3 units sold: 587,795

Daimler - Market cap: $85.59 billion - Q3 units sold: 517,800

Re: Tesla shares tank after U.S. discounts doubled on key models

#136

Post by qikInNdOutReply » Fri, Dec 23, 2022, 10:52 AM UTC

fragmede wrote: post #100

bamboozled wrote: post #71

Earlier quoted context omitted.

Tesla does software really well ? What ?

The bar for car software is pretty low. Eg https://www.theverge.com/2022/12/14/23508088/volkswagen-soft...

They usually outsourced software to the supply empire, and well, imagine software development, but in a waterfall, bureaucratic, cheapest first wins empire that is trimmed to produce one iterration per car version at best or the ocassionaly at service update.

If you want to become more agile and want to sell software as modules and updates, this quite physical seperate dependcy hell comes back to bite you. Its basically waterfall for every update.

BMW munich software department was famous for having no developers. Just specs and architects. People who were doing software developer "internships" there, were failed at some universitys cause that would have been a "NoCode" internship.

Software in this world was not a living product, thats regularly updated, its a off the shelf part made to specifications.

They tried to change in recent years, in reaction to tesla, but i highly doubt they can pull it off. Maybe in eastern europe, they have a developer/software culture.

Re: Tesla shares tank after U.S. discounts doubled on key models

#137

Post by xiphias2 » Fri, Dec 23, 2022, 10:52 AM UTC

randomsearch wrote: post #124

Gibbon1 wrote: post #123

Earlier quoted context omitted.

Musk is what we call a dummy. He could have bought GM for close to what he paid for twitter.

Bit OT but generally speaking if you care about company culture and want to build something great, acquiring mature companies is not the way to go. You end up with an alien culture you can’t integrate into your own. This is why Apple only buy companies they absolutely have to, and specifically early stage where the culture has not ossified yet. So don’t buy GM - or Twitter…

It can be done with Twitter, the problem was that Elon got too emotional about it. Icahn was already looking forward to a proxy fight and just kicking out people without changing the product too much, but Elon buying his lots of shares was an easier way to make hundreds of millions in profit.

Re: Tesla shares tank after U.S. discounts doubled on key models

#138

Post by snovv_crash » Fri, Dec 23, 2022, 10:55 AM UTC

jacquesm wrote: post #129

snovv_crash wrote: post #125

Earlier quoted context omitted.

> VW sells a ton of cheap and small vehicles Which inflates their unit numbers, exposes them to downturn risk, and doesn't really do much for their bottom line.

> Which inflates their unit numbers No, they are real sales. > exposes them to downturn risk On the contrary, those models are the most successful ones during an economic downturn. > and doesn't really do much for their bottom line On the contrary, those models are the mainstay of their business. Really, three out of three, why bother?

Real sales, yes, but this is why comparing sales by units doesn't mean very much relative to stock price.

Tesla has ~25% margins, VW has 3% margins. A recall, unsold stock or component shortages can quickly put VW in the red. This is what I mean by downturn risk, economic downturn is not the only potential problem manufacturing companies run into.

> Really, three out of three, why bother?

This level of communication isn't constructive.

Re: Tesla shares tank after U.S. discounts doubled on key models

#139

Post by xiphias2 » Fri, Dec 23, 2022, 10:57 AM UTC

mcv wrote: post #112

akmarinov wrote: post #85

Earlier quoted context omitted.

Like announcing he’s taking the company private and then backing out? Something like that?

Musk has shown plenty of erratic behaviour around Tesla as well. And especially with the Twitter drama, I think Tesla might be better off without him.

He gets crazy whenever there's a crash crunch, but when it was the Model 3 ramp up period it was much harder. Now he should just do nothing and it would be better for all companies involved.

Re: Tesla shares tank after U.S. discounts doubled on key models

#140

Post by t0mas88 » Fri, Dec 23, 2022, 11:05 AM UTC

snovv_crash wrote: post #127

oblio wrote: post #115

Earlier quoted context omitted.

Tesla sells luxury vehicles (by world standards) and there are only so many people who can afford them. Either Tesla stops growing at this rate, or they will have to "stoop" to cars costing $15k, in which case their profit margins will drop like a rock.

So why doesn't VW just sell premium cars if it would make them more money?

Because it would make them more money per car but not overall. And they aren't competitive in that segment with the assets they have. They would have to design different models, scale down production etc, a pivot of the company.

A better comparison is Mercedes or BMW, they're in a similar market segment and not selling 10x more cars at 1/5th the price live VW is. Still their market caps are lower than Tesla and their profits are in the same region (depends on which quarter you look at which one is ahead).