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

[ℬête Noire]

Damn now Tesla gonna have to price the Model 3 $35,037.

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.

 

[xav-]

Anyway my 2 cents on this.. I think trump is right with tariffs... the one thing though I strongly disagree is putting tarifs on raw materials like steel.

Companies import steel to manufacture goods like cars. When you put tariffs on steel you negatively impact American manufacturing. You put American companies like Tesla (trying to put this back on topic somewhat) at a disadvantage over companies that manufacture overseas. You also add more incentives to American companies to go manufacture overseas.

I think tariffs on luxury finished goods (like BMWs and Mercedes imports) would be a lot more efficient. They are flooding our country with goods and paying nearly 0 tariffs on them. At a minimum we should theaten them of high tariffs if they don't manufacture more in the US just like they do In China.

 

[Cheburashka]

When people start to worry about their beers, I wouldn't call that FUD when looking at the stock market reaction:

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

Anyway my 2 cents on this.. I think trump is right with tariffs... the one thing though I strongly disagree is putting tarifs on raw materials like steel.

Companies import steel to manufacture goods like cars. When you put tariffs on steel you negatively impact American manufacturing. You put American companies like Tesla (trying to put this back on topic somewhat) at a disadvantage over companies that manufacture overseas. You also add more incentives to American companies to go manufacture overseas.

I think tariffs on luxury finished goods (like BMWs and Mercedes imports) would be a lot more efficient. They are flooding our country with goods and paying nearly 0 tariffs on them. At a minimum we should theaten them of high tariffs if they don't manufacture more in the US just like they do In China.

Mostly agree but the other point of view is that China will dominate the market and undercut America's sovereignty, making its economy reliant on import of foreign raw materials, which opens a whole other can of worms .

 

[FreeOfPge]

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.

 

[rsomrek]

Because Tesla doesn't use steel in the vehicle....

Check this electrek article out. As you'll see, the use of aluminum is fairly limited in the Model 3 body; it's primarily steel with the exception of the doors, frunk/trunk.

I think tariffs on luxury finished goods...would be a lot more efficient. They are flooding our country with goods and paying nearly 0 tariffs on them. At a minimum we should theaten them of high tariffs if they don't manufacture more in the US just like they do In China.

As a patriotic American stockholder, I love to see everyone buying inexpensive USA-branded items imported from wherever and increasing my dividends. The only thing more delightful is paying less for each item as a consumer. Hate to think of an import tariff on my big screen TV, my latest and greatest iPhone, or that wonderful Ivanka line of women's clothing.

You have to sympathize with FreeOfPge above. How is he to run his business when raw materials increase 25% in 12 hours not because of supply and demand but rather due to an off-handed comment made without consultation with those who know better.

 

[ℬête Noire]

Check this electrek article out. As you'll see, the use of aluminum is fairly limited in the Model 3 body; it's primarily steel with the exception of the doors, frunk/trunk.

Yup. Hopefully my sarcasm was evident.

<ouch> We had to immediately raise our prices 4% just to cover costs.

Hope you can keep your sales steady, good luck.

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.

I'd be somewhat surprised if Tesla in the short run gets hit like you. They likely have longer term supply contracts, although maybe even buyers of that volume and stability regularly have contracts with pricing tied to index?

Also the high tech components, especially items in battery (although it's enclosure may get hit?), are going to dilute this increase.

 

[EVNow]

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.

That's because Trump tariff will probably not going into effect. After the March 13th PA-18 special election, it may get quietly dropped.

Weird thing is PA-18 won't even look like what it does today, because of court ordered redrawing.

 

[Uncle Paul]

The purpose of tariffs is not to increase the price of goods, but to protect your domestic producers from other companies selling for less than their costs of production to force those domestic producers out of business. Then they raise their prices to what ever the market will bear.

Increasing domestic production of steel and aluminum will make the American economy stronger and the foreign companies weaker. In case of war we will have our own, in house production. No longer dependent on foreign sources.

 

[pilotSteve]

"we have the best government that money can buy" - Mark Twain

 

[xav-]

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.

Thanks for sharing. That reinforces my view that while the US needs more tariffs in general, adding more tariffs on something like steel is a terrible idea and can only hurt manufacturing.

 

[xav-]

The purpose of tariffs is not to increase the price of goods, but to protect your domestic producers from other companies selling for less than their costs of production to force those domestic producers out of business. Then they raise their prices to what ever the market will bear.

Increasing domestic production of steel and aluminum will make the American economy stronger and the foreign companies weaker. In case of war we will have our own, in house production. No longer dependent on foreign sources.

You forget why companies import steel! They import steel to build factories, to build cars and many other things.

If steel in the US is similarly priced than overseas then I personally agree with you. But if it is more expensive than overseas (which I suspect it is because I know that the US steel industry is very protected), you put our companies at a disadvantage. You give them more reasons to outsource and they become less competitive.

I buy a $100k Mercedes I only pay 2.5 percent tariff tax. GM imports steel to manufacture cars in Michigan.. how much is the tax again?.. makes no sense.

We have seen this movie before anywhere... did it do anything good? If there was something good that bush ever did we would know....

 

[ℬête Noire]

The purpose of tariffs is not to increase the price of goods, but to protect your domestic producers from other companies selling for less than their costs of production to force those domestic producers out of business. Then they raise their prices to what ever the market will bear.....

That's a longwinded trip to; The point of tariffs is to raise prices. Sure the intention in raising prices this way is to distort market forces to boost margins for local producers of the goods but raise prices is indeed what it's meant to do.

Increasing domestic production of steel and aluminum will make the American economy stronger and the foreign companies weaker. In case of war we will have our own, in house production. No longer dependent on foreign sources.

That is the simplistic drivel rationale for it that history keeps showing to be wrong. Over and over and over, again.

There isn't much Al smelted in the US, and this won't really change that, because it doesn't make a lot of economic sense to do that here due to current cost of inputs (primarily electricity). Trying to push rope, fight reality in this way doesn't end well.

-- -- -- -- --

P.S. I also noticed a few people under the impression that imports of consumer goods, rather than intermediate processed goods like steel, from China aren't also subject to duties. This is generally not the case, although it's very detailed and complicated schedule to nail down what gets priced on what.

 

[RayK]

Speaking of Tarrff's and Solor, What happen to Real Goods Solar, Inc? March 2014 they were trading $56K. Now down to $1.10!

OT:

RGSE Split History

TL;DR Three reverse splits of 1:20, 1:20 and 1:30. In other words, the $1.10 today would have been worth $13,200 back just before the first reverse split in May 2015 occurred.

<sigh> I had Real Goods Solar install my system back in Nov. 2010. ROI is supposed to happen around 2023. Overall I'm happy with it (after a couple of issues with the microinverters) but now I get the feeling that I'll be on my own if any warranty issues arise; starting in 2035 for the panels. Good thing I never invested any money in the company - besides what I paid to install the panels.

 

[Sportstick]

Anyway my 2 cents on this.. I think trump is right with tariffs...

He's just looking after his own self-interests again. Notice...no tariff on Stormy Daniels.

 

[PhaseWhite]

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

 

[LCR1]

Y'all realize he majority of steel and aluminum comes from canada, right. The same country we have the NAFTA treaty with.

 

[Webeevdrivers]

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.

 

[Webeevdrivers]

Y'all realize he majority of steel and aluminum comes from canada, right. The same country we have the NAFTA treaty with.

Yes. Trump said he wouldn’t mind seeing NAFTA scrapped.

 

[LCR1]

Yes. Trump said he wouldn’t mind seeing NAFTA scrapped.

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

 

[Tam]

...In case of war...

It is fine to sacrifice because of patriotism but it is a mistake to do that because I would take that from someone who has not only one, not only two, not only three, not only four, but five Vietnam war draft deferments.

It's also a mistake to accept that it's ok to apply tariffs on China goods AS LONG AS it's the war that Donald Trump products and his family products will refuse to fight: