Any thoughts of the price of the model 3 going up if the steel/aluminum tariff goes thru?

[Webeevdrivers]

And how's that's worked out since he's been saying it?

Negociations are still ongoing. Ask me in a month.

 

[Tam]

...DJI still up month over month. You can't really use a day chart as evidence...

It's true that down on one day doesn't mean down on all days but I need to take it seriously!

It's like when famous Olympic skater Nancy Kerrigan was crying in pain and yelling "Why, why, why..."

I need to take that seriously. She din't cry for nothing! She did because a guy attacked her and tried to break her bone so she wouldn't be able to skate anymore.

It's not prudent if I claim a few minutes of her crying is not an evidence that she can't skate any more so let's allow the guy to continue to break her bone!

 

[LCR1]

FWIW, my small (25 employee) family business uses ~90,000 lbs of flat sheet galvanized .0356" steel a week. It is similar to what is used in the auto industry. The product we manufacture is ~80% steel. On Wednesday we purchased flat sheet at ~$27.00 sheet, on Thursday we paid ~$34.00 a sheet. The mills are not waiting to see if the tariffs go into affect. We had to immediately raise our prices 4% just to cover costs.

Not sure the percentage of steel in a Model 3, but lets say it's 25%, that would equate to ~1% price increase to cover cost. Or a 1% cut off the bottom line.

In 25 years of running this business it is the only time anything like this has ever happened. During the Bush tariffs we had similar increases, however at a slower pace, something like a 6 months. Our steel cost literally jumped 25% in 12 hours.

So the supplier is blaming a tarrif that doesn't even exist. Sounds like they got one over on you. When a supplier tried something like that at he Hyd play I worked I simply canceled the order and sent out bid requests to all of the competitors. They eventually called back by lunch to give us the same pricing we had before the imaginary supply shortage showed up. If you couldn't hold out for one day on an order it sounds like you need to figure some warehousing out and lower your holding cost.

 

[FreeOfPge]

So the supplier is blaming a tarrif that doesn't even exist. Sounds like they got one over on you. When a supplier tried something like that at he Hyd play I worked I simply canceled the order and sent out bid requests to all of the competitors. They eventually called back by lunch to give us the same pricing we had before the imaginary supply shortage showed up. If you couldn't hold out for one day on an order it sounds like you need to figure some warehousing out and lower your holding cost.

Wrong.

Here is exactly how things happened:
1.Wednesday: Markets are normal.
2. Thursday: a) tariffs announced b) mills announce no new orders will be accepted* for March 1st** c) mills announce all customers will be placed on allocation. d) prices rise

There are only a handful of steel mills or "competitors" in the USA and only 2 that truly serve the west coast. We of course called "all" competitors, in this case "all" being the other one. As usual, they were priced higher so we ordered from the main supplier.

Now, Tesla could have a contract -usually 1 year long- with a supplier agreeing to buy a certain amount at a certain price. This is unlikely because these contracts become void in situations like this and us buyers end up paying more for the steel as a trade off for stability. More likely, Tesla could have hedged prices with options. Either way, its hard to speculate on what they may or may not have done and an entirely different conversation probably being debated on the investors thread anyway.

The big difference between Tesla and our business is that Tesla probably buys directly from the mills while we buy through a service center. Although, many large companies also buy through service centers so who knows. Any company buying from a mill will get material at quoted prices from the day their order was placed 2 months ago. However, they will pay a higher price 2 months from now (actually from when mills begin taking orders again) should prices fall.

We stopped buying from the mills years ago.

* This includes all customers no matter the size - Tesla too
** Orders are currently placed 2 months in advance

 

[dhanson865]

Because Tesla doesn't use steel in the vehicle....and that fellow isn't a mouthpiece so an entity with a large stake in having the tariffs to boost Al prices so good to take his citation-free number at face value.....oh wait.

Straight from the model 3 repair guide for body shops:

Yellow = steel
red = steel
blue = steel
anything else = aluminum

 

[Wnuk]

 

[Tam]

...

Come on! The citation of $75 was a few post ago and now you are freshly citing $175!

The ink has not been dried and it has already gotten worse and worse!

 

[xav-]

Obviously this will escalate. The EU has already responded saying they will put Tarrifs on certain American goods. Harley’s, Levi’s etc. Canada will do the same. Since about half of all Tesla’s are exported this will effect them as well as other auto manufacturers. If Canada puts a let’s say a 15 percent tariff on cars coming out of the US as retaliation for the steel tarrifs we won’t be getting either a Tesla or a Leaf unless we import the leafs from the Japanese factory. We’will Look at European EV’s closer when the time comes. We’ll look for Canadian goods first, then Mexican, then European then Chinese then anywhere else before buying American. American will go the same but in reverse order of course. Only makes sense. Gotta stand with your country. The world is going to change in the next couple
years.

What are they gonna do considering that they don't buy anything from us?

Do you understand what $800 billion trade deficit mean?? That's $2.5 billion that we ship overseas everyday.

What are they gonna escalate with? Harley's and levis? Trust me there are likely 5 times more Mercedes and BMWs in Los Angeles County alone than Harley's in the entire European Union.

 

[xav-]

The real risk to Tesla (And others) is a trade war, not the price of materials going up slightly. Imagine 25% tariffs being placed on Tesla's sold in the EU, China or elsewhere... Hopefully cooler heads will prevail but these are the latest headlines:

Trump tweets: "Trade wars are good, and easy to win"
Source: Trump tweets: 'Trade wars are good, and easy to win'

"Trump said the U.S. may levy a 25 percent tax on cars exported from the European Union, which could impact popular brands sold stateside"
Source: Trump threatens to slap retaliatory tariff on European cars as trade war talks heats up

And for history buffs, here's what happened the last time:
Smoot–Hawley Tariff Act - Wikipedia

There's already a 25 percent tax on Tesla's sold in China!

There's also a 10 percent tax on American cars sold to the European Union.

In the meantime the Foreign car imports in the us are taxed at 2.5 percent

That makes absolutely no sense.

 

[Webeevdrivers]

What are they gonna do considering that they don't buy anything from us?

Do you understand what $800 billion trade deficit mean?? That's $2.5 billion that we ship overseas everyday.

What are they gonna escalate with? Harley's and levis? Trust me there are likely 5 times more Mercedes and BMWs in Los Angeles County alone than Harley's in the entire European Union.

Well, they (the EU) buy Teslas. And.so do we in Canada. We also buy Nissan Leafs for example (made in Tennessee). The two EV’s we were considering are both made in the USA. Now both will be off our list if there is a trade war as well as every other product made in the USA. Like most countries we tend to bring up our families to try and buy Canadian products first. And if you can’t buy it from a Canadian manufacturer then buy from an ally like the USA. The president of the USA is enacting this tarrif under the pretense that Canada as well as the EU are threats to the security of the USA. Therefore Canada and all the EU countries are enemies of the USA.. Not a good idea to support the enemy by purchasing goods from them. Its just the way trade wars go. No big deal, there’s always alternatives for products but trade wars definetly have a trickle down affect. Hopefully cooler heads prevail but we all gotta do what we all gotta do.

John.

 

[davedavedave]

So the supplier is blaming a tarrif that doesn't even exist. Sounds like they got one over on you. When a supplier tried something like that at he Hyd play I worked I simply canceled the order and sent out bid requests to all of the competitors. They eventually called back by lunch to give us the same pricing we had before the imaginary supply shortage showed up. If you couldn't hold out for one day on an order it sounds like you need to figure some warehousing out and lower your holding cost.

The market reaction is a global one, and it's affecting all suppliers, globally:
https://www.washingtonpost.com/news...e-u-s-aluminum-market/?utm_term=.1b32f1e74a93
Updated: With Tariffs Back On, U.S. Steel, AK Steel Soar

Over the past 100 years, whenever tariffs like this have come into play, there's been months and months of negotiations and miles of runway. 30% tariffs with 4 days notice is unheard of, and simple irresponsible.

 

[ℬête Noire]

What are they gonna do considering that they don't buy anything from us?

WTF? EU imports roughly 1/2 T$ of US goods&serivecs/year.

Countries & Regions | United States Trade Representative

Do you understand what $800 billion trade deficit mean?? That's $2.5 billion that we ship overseas everyday.

In exchange for more stuff shipped here for us to use and enjoy. That's how capitalism works. Cash in exchange for goods. But the not-so-worthy-of-wringing-hands nature of the trade deficit goes beyond that. Basically, it comes down to the US$ has somewhat inflated value so we are getting such a good deal on what is imported that we import a lot of stuff, and the nominal purchase price of our exports likewise is somewhat artificially deflated.

Why the Trade Deficit Isn't the Problem You Think It Is

But say it was as much a problem you supposed; How is making wide swathes of US manufactured goods MORE expensive going to help increase exports? That impact is going to far outweigh any boost to steel & aluminum you'd see here....same as it did last time, and the time before, etc.


---- ----

But here's the real kicker! These tariffs, besides in the way they are helping China outlined above, don't really hit China.

Trump steel tariffs to hit these 8 countries the hardest — and China isn’t one of them

Oh, and the top of that list? Canada, about 1/3 T$/year trade going each way. Trade difference is effectively a rounding error, just a couple percentage points (and favouring the US last I saw). Oh yeah, that's definitely something the US wants to blow up and put in jeopardy to get trade sheet more balanced.

Face it, Trump's peddling a whole big sack of Fist-pumping Jingoist Stupid....and you're getting sucked in.


P.S. Those few marque items listed; Levis, bourbon, & Harley Davidsons are very specifically chosen to target GOP leadership held Congress districts/states. That's the symbolism of them, to remind McConnell & Ryan that this crap will come home to their own doorstep if they don't do something about it. This is a fairly regular thing.

 

[sandpiper]

Calculations are that steel or aluminum increase will be less than $100 per vehicle per Stuart Varney on the news this am.

Canada is the US's biggest aluminum supplier. And certainly we should be punished. You just know that the first time there's trouble, Canada will leave the US hanging without an adequate supply of aluminum to support US industry.

Our Prime Minister is busy playing dress-up with his kids in India for two weeks, while the Drumpf is has the flamethrower out lighting up brush fires in every corner of the globe. What a mess. :-(

 

[svp6]

It's kind of funny to hear how we will slap tariffs on BMW and Mercedes that are flooding our country - considering many are produced in US. In fact, just earlier this year BMW was bragging its Spartanburg plant was the largest U.S. automotive exporter....

It gets too complicated - large companies are transnational, and nothing is purely US, EU, or Chinese. I sure wish there will be a little more thought going into this decision.

Current governing team seems as confident as the wave of people who promoted Brexit for all Britain's woes. Now that the deed is done, the same confident crowd are scratching their heads what exactly will happen once current trade agreements expire by default.

If there is one guarantee for the average person, is that he or she will bear the costs of whatever happens. But I am sure we will have Mexico pay for the wall.