What is stopping the legacy guys from changing their business models? Any company that has been around as long as they have (Ford est. 1901) is because of their ability to do just that. Japanese manufacturers of all types have proven time & again that while they may not be the greatest innovators they are the best at making everything they touch better. To say "they will always be different" doesn't take into account the fact that Tesla was garbage from their inception to 2010 and only became profitable in 2020. Tesla is not the be all and end all of the automotive industry. They are pioneers in terms of EV production but that's it.
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What is stopping the legacy guys from changing their business models? Any company that has been around as long as they have (Ford est. 1901) is because of their ability to do just that. Japanese manufacturers of all types have proven time & again that while they may not be the greatest innovators they are the best at making everything they touch better. To say "they will always be different" doesn't take into account the fact that Tesla was garbage from their inception to 2010 and only became profitable in 2020. Tesla is not the be all and end all of the automotive industry. They are pioneers in terms of EV production but that's it.
Franchise laws prevent the switch. It’s killing them. Ford is trying to sell almost direct with their EVs but still have to share tremendous margin with dealers. No legacy auto maker can sell direct. It’s pretty laughable.
Fact is, Tesla operates differently than legacy OEMs because they aren’t nearly as tied down with regulation. They can set price efficiently and they reap all the benefits of price changes.
I’m also not blindly defending or promoting Tesla. Everything I’ve stated is fact and easily searchable. I’m not anti-legacy OEM by any means but they have structural challenges in the US of doing business.
Toyota CEO and President Akio Toyoda to step down
Toyoda, 66, is the grandson of the carmaker's founder and has served as chief executive since June 2009.
www.cnbc.com
it has happened
There was some balance to all this. Last fall, when Tesla pricing was higher, buyers were also able to get thousands of $$ more for their Tesla, or other make trade ins. Many could trade in their old Tesla for a new one with no out of pocket costs. Now that trade values have dropped significantly, new car pricing has also begun to decline. The delta between the total costs of buying/trading in has adjusted so that the dollars out of pocket are not as great as earlier buyers are complaining about.
Setting this aside, Tesla knows that in order to sell all the cars they are ramping up to produce, they will need to make a compelling offering to convert the masses from Gassers to EV. They will accept lower margins (still the best in the business) in order to financially justify new owners to choose to trade in their old gassers to a new tech EV. This matches the Tesla goals of accelerating the transition away from gas/diesel.
Setting this aside, Tesla knows that in order to sell all the cars they are ramping up to produce, they will need to make a compelling offering to convert the masses from Gassers to EV. They will accept lower margins (still the best in the business) in order to financially justify new owners to choose to trade in their old gassers to a new tech EV. This matches the Tesla goals of accelerating the transition away from gas/diesel.
Personally I think those expecting the auto industry to be the same as it ever was are living in the past. Smug projections based entirely on legacy manufacturers previous actions are short-sighted. Tesla, though certainly not perfect, has defied the odds from the beginning. IMHO those who bought before the price drop and continue to complain and proclaim "the end is near!" are only compounding their pain by not enjoying their new cars. Elon isn't monitoring this board and won't be offering any compensation based on the whining level.
but it keeps your head on a swivel -- kinda like dealing with Tesla.
The Big 3 spent $15 million on lobbying last year. The US can't function without them (2008 bailout is proof of this). The legacy companies can have any law or policy written or re-written any time they choose. If a different model suits them they will have the laws changed. Sure, it's a much larger ship to steer or course correct but it will when it suits them.
Tesla is a very small fish in the automotive pond. When they want to scale they will need more governmental alliances. Every gov't is going to want their 'pound of flesh' and no one can do anything about it. You think China isn't taking a large chunk? History tells the tale and it's been the same story forever.
Just to add, when China decides they no longer need Tesla they will walk in and take over the factory(ies) and no one can stop them.
Elon will pay attention when ALL other current manufacturers plus the plethora of new ones get to the same production levels and all the current owners he just screwed never buy one again. The worst thing any business can do is screw their current clientele. They are the easiest to retain and the best marketing force possible.
Tesla defied no odds. Any company could have gone to China and given their first born but we all know it's a lose lose scenario. Look at Hong Kong for example. Once China took over they stole billions from their own people and then went back on every concession they agreed to. When you play with dictators the house always wins.
What!?! Are they reading this thread?Toyota CEO and President Akio Toyoda to step down
Toyoda, 66, is the grandson of the carmaker's founder and has served as chief executive since June 2009.
it has happened
$15M in lobbying is pocket change. Its not much lobbying money spent. The franchise laws are by state and the dealer associations in those states lobby far harder than the OEMs. The dealers will never let the OEMs change those franchise laws as they have far more power in their respective state governments. Tesla spent billions for Giga Texas and they couldn't get past the dealer lobbying to change Texas laws.
Also, you call Tesla a small fish but it has one hell of a balance sheet. They have a net cash position of over $10 billion netting out debt. They also earn more income than both Ford or GM so its a pretty powerful small fish.
China might sometime think about confiscating Tesla.
But the political fallout worldwide? Priceless.
I don't think they'll risk it when they have to import 100% of their energy and 50% of their food.
This is an interesting read and expands on the China situation: Who’s Really at the Wheel of Tesla in China?
I believe it was a promotion they were offering to get you to accept delivery before the end of year
I think the real point there is.......only one man is in charge.
If tomorrow he wakes up and decides Elon is an enemy, or a fool to be advantaged, then there's no one he listens to ballsy enough to say 'no'.
I don't think he's so naive or isolated as to believe, as Putin did, that such an outrageous maneuver would be accepted. Could be wrong...
More likely, they'll try Taiwan before their population ages out.
Yes, let's try to be objective here. How exactly could Tesla have taken the necessary action without angering some customers?
- Should they nave not lowered prices? Demand was clearly slipping.
- Should they have dragged out the decreases over a long period of time? Then would be customers just sit and wait.
- Should they have given refunds to customers dating back to Dec 1? Nob 1? Mar 1? No matter the date, there are unhappy people.
Q4 21 - Q2 22 had a lot of price hikes, and the people who were about to but hasn't committed the $250 order fee were unhappy. Why didn't anyone warn me this would happen? Yet businesses who employ this practice (commit now or else) tend to get backlash as well.
In the dealership model, when it's getting close to the end of the month and the dealer faces another interest payment for the stock on the lot, they're ready to deal quickly. How is Tesla's actions different?
Me personally - not a fan of the giant drop in the price of the Performance as it certainly impacts the cost of a potential trade in for an R1S next year. I would have loved the 2022 trend of zero depreciation as I could have done the swap for 10k or less. Now, probably 25k. But it was an abnormal situation in the first place.
first time in my lifetime seeing car values increase after purchase. had to end, and likely badly. so it did. lasted all of 15 months.
They should have priced their cars accordingly from the get go.
They're not the first ones to be burned by market changes. No other manufacturer I can think of has gone out and knowingly screwed their current customers to recoup their losses or retain market share. They took the short term hit for the long term gain.
Seeing as most on this board think Tesla is the be all and end all of EV's, Elon shouldn't have had to drop his prices at all. If Tesla's are so much better and seeing as they make more profit per car than any other manufacturer, Tesla could have easily absorbed the short term loss and kept the current owners satisfied. Now they're going to lose customers because who wants a car with an unpredictable resale value.
All of this is Business 101.
There's no disputing that COVID and the used car market was a once in a lifetime occurrence but that has nothing to do with the recent price drops.
You said a lot of words, but you didn't actually answer my question. What should have been the prices at what date? How should they have handled the rapidly developing tax credit return? Is your answer just applicable to your experience, or are you thinking of all the others? You're speaking emotionally, not objectively.
Unless you slept through the start of the 21st Century, dynamic pricing is now Business 101. Who got screwed? Tesla buyers (CT aside) have a contracted price. Ford and Chevy/Caddi buyers- they have a reservation but not a contracted price. It can change dramatically (see the Hummer sales).
Virtually every non Tesla EV buyer is being forced to pay ADMs, effectively handing their tax credit to the dealers. Chevy slashed the price of the Bolt. Scarcity has always translated to higher pricing. And when there is sufficient choices and supply, it stops. How is that different?
The rebate is based on delivery date, not order date. And right now, EDD for some orders are already pushing in April. So...your feeling is most likely wrong.
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