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Tesla cuts prices as Model 3 deliveries narrowly miss estimates

bloomberg.com

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

#61

Post by cjhopman »

mikestew wrote: post #12
hinkley wrote: post #2

The second line in the article: > Prices cut by $2,000 to partially offset shrinking tax credit. At that cost range I don’t know if I could ever know my customer well enough that I would be confident that a 3% price break would get more sales but what do I know. Also, this feels more like PR. What fraction of the cost of a Tesla is the battery pack? Weren’t those supposed to be getting cheaper due to all of the autom…

At that cost range I don’t know if I could ever know my customer well enough that I would be confident that a 3% price break would get more sales but what do I know. Would I have purchased a Nissan Leaf eight years ago had it not been for the $7500 federal tax credit? Damned right, I would have. But since we're buying one anyway, I'm not turning down free money. My point is, I wonder if there ought to be a moratorium…

The tax credits aren't for the consumer, they're for the manufacturer.

> The early adopters are going to buy one regardless,

Some of them will. The idea that there's isn't a demand curve for early adopters is insane.

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

#62

Post by IshKebab »

dominotw wrote: post #45
qroshan wrote: post #22

Earlier quoted context omitted.

At $50B Market Cap, Tesla should be delivering at least $2B Annual profits. It's clear Tesla has run through higher margin demand. There aren't many people in the world who can afford a $50,000 car. Tesla is a niche market car, but priced as a mass market (like iPhones) product. Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that

Wouldn't they be used as self driving pods in future? 50k is low end for that.

In the far future. Tesla is unlikely to be able to wait 20+ years for driverless cars to become a reality.

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

#63

Post by kadendogthing »

dqpb wrote: post #48
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…

My feeling is that there is a coordinated media attack against major US tech companies.

And how do you explain the past couple of years of uncritial, overly positive media coverage these companies have received? The media coverage that has created a rabid fanbase that surrounds these tech-personalities, making it near impossible to discuss the reality of the tech and finances of these companies?

Having to face consequences for your actions isn't a conspiracy. People reporting on these realities is not a conspiracy. It's long, long over due.

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

#64

Post by andrewtbham »

golfer wrote: post #44
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…

People are skeptical of Tesla because people are skeptical of Elon. His dozens of misleading statements and half-truths over the years have caught up with him.

This narrative doesn't resonate with me. Forward looking statements are speculative, especially when you're innovating new technologies.

I personally trust Elon Musk and I am a large investor. I don't expect him to hit all his targets, but I trust him to only raise money on the heels of good news.

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

#65

Post by cjhopman »

golfer wrote: post #46
wnorris wrote: post #10

Earlier quoted context omitted.

The market for EVs is expanding. As Tesla starts shipping worldwide they will find the sweet spot for the US. Big takeaway here is they are very profitable producing at current rates. As they bring out new models they will continue to grow at 30-50% per year.

> "they are very profitable producing at current rates" You don't know that. They had one big, profitable, immaculate quarter in Q3 by pulling all demand forward and using every accounting trick in the book to show profit. There is no guarantee there will be another quarter like that. In fact, if Tesla's earnings history shows anything, it's that losses will be even bigger than before.

q3 was also helped by the fact that, despite increasing the total amount of tesla's sold by ~66%, they opened only 1.1% new service centers and only 3.2% new superchargers. The tesla experience is going to be incredibly degraded as time goes by.

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

#66

Post by gamblor956 »

luckydata wrote: post #53
johnvanommen wrote: post #43

Earlier quoted context omitted.

Once Jaguar, Porsche and Audi are able to produce electric cars in quantity, things are going to get interesting. For instance, I was recently looking at the Jaguar I-Pace, and was stunned by how long the wait and how high the markups are. Clearly there's a demand for a $100,000 electric car, but things are going to get difficult for Tesla once the competition arrives.

Competition has been arriving for quite a while though. Having just bought a Tesla, I can tell you I'm starting to appreciate more than just intellectually the huge network of chargers and other infrastructure that company has laid out. It's not perfect but anyone else wanting to play in this market will need the same, and Jaguar is in no position to do it. I don't think anyone at Tesla is losing any sleep over Jagua…

I live in a nice part of LA and I see as many iPace's as Teslas, and the iPace has only been available for about 3 months locally.

And the iPace owners are absolutely glowing in their reviews of the car in a way I've never heard Tesla owners get. Indeed--while most Tesla owners I know talk their heads off about the charging network[1], they tend to be defensive about the actual quality of the car itself in ways that luxury car buyers shouldn't be.

[1] While Tesla has a geographically large charging network, it's density is pretty horrible. In DTLA for example, you're 9 miles away from the closest Supercharger, and condo/apartment dwellers are SOL for installing their own unless they want to pay excessive fees to have one installed in their parking spot. There are a number of standard EV chargers through the downtown area, and the number of non-Tesla chargers exceeds the number of Tesla-only chargers by a factor of at least 10:1.

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

#67

Post by gamblor956 »

300bps wrote: post #54
qroshan wrote: post #39

Earlier quoted context omitted.

Huh? Did you compare Q3 and Q4 numbers, the growth has pretty much reached steady state. 90,000 per quarter is what Tesla will be and probably 500 Million annual profit. 50% profit growth is delusional at this stage

Q32018: 55,800 Model 3s delivered. Q42018: 63,100 Model 3s delivered. That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.

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.

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

#68

Post by microtherion »

300bps wrote: post #54
qroshan wrote: post #39

Earlier quoted context omitted.

Huh? Did you compare Q3 and Q4 numbers, the growth has pretty much reached steady state. 90,000 per quarter is what Tesla will be and probably 500 Million annual profit. 50% profit growth is delusional at this stage

Q32018: 55,800 Model 3s delivered. Q42018: 63,100 Model 3s delivered. That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.

Yes, but during Q3, weekly production ramped up from ~2000 to ~4200. During Q4, weekly production stayed pretty much flat.

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iqPFhpeWEIS...

Article: https://www.bloomberg.com/graphics/2018-tesla-tracker/

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

#69

Post by ivraatiems »

andrewtbham wrote: post #64
golfer wrote: post #44

Earlier quoted context omitted.

People are skeptical of Tesla because people are skeptical of Elon. His dozens of misleading statements and half-truths over the years have caught up with him.

This narrative doesn't resonate with me. Forward looking statements are speculative, especially when you're innovating new technologies. I personally trust Elon Musk and I am a large investor. I don't expect him to hit all his targets, but I trust him to only raise money on the heels of good news.

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.

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

#70

Post by gamblor956 »

jpollock wrote: post #18
izacus wrote: post #9

Earlier quoted context omitted.

In what way is it a price increase, why did Tesla count tax credits when advertising price in the first place? Isn't that dishonest, since the cars price tag was higher and the government gave them money?

The purchaser factors the tax credit in, so the removal of the credit will have the same effect as an increase in price. The salesman will _definitely_ make the purchaser aware of the credit, in the same way that a mortgage broker makes you aware of the tax benefit on mortgage interest (in the US). That doesn't make them dishonest.

Mortgage brokers also don't include the mortgage interest deduction when marketing mortgage rates or mortgage products, so it's not comparable.
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