Drop in interest in EV's and further Tesla price cuts

[Pauld999]

Tesla signals more price cuts ahead as report warns of slump in demand for new electric cars

"Difficult times" are ahead for the UK's 2030 target to ban petrol and diesel cars, Auto Trader warns, saying "we are in danger of veering off-track".

news.sky.com

I wonder where this is heading?

 

[Cardo]

It’s Sky, so nowhere.

Tesla state they still have more demand than they can supply. Even with the newer, lower prices they still have 10% plus margins. They’re going for economies of scale.

But the media love to have a bash at Tesla, despite still making tons of money and hitting their estimates. I wonder why that might be?

 

[OfficialMark_H]

Nearly posted this myself this morning, if you read the article it then says “The Society of Motor Manufacturers and Traders (SMMT) reported 76,233 new battery electric car sales in the first quarter of this year, up 18.8% on last year's levels.”

Another headline to grab the attention of the people that don’t like EV’s

 

[qwickshot]

Autotrader are also reporting enquiries are well up on last year for EVs.

Prices are down because supply is well up.

 

[KB2022]

great news, frankly, the more people in EVs [whatever the brand] the better. every time i wind down my window these days for fresh air i just get ICE fumes coating my asthmatic lungs.

 

[starise]

Yes, people are so disinterested in EVs, Teslas are being sold faster than they can be made, all causing a disinterest in EVs.
Not sure exactly how that works.

 

[Zilla91]

Yes, people are so disinterested in EVs, Teslas are being sold faster than they can be made, all causing a disinterest in EVs.
Not sure exactly how that works.

Which part of the UK is Pennsylvania?

 

[Durzel]

Which part of the UK is Pennsylvania?

Pennsylvania · Chippenham SN14 8LD

Chippenham SN14 8LD

maps.app.goo.gl

 

[UrbanSplash]

No way demand is higher than supply in the uk. Quite the opposite. Probs walk into a new car if you wanted. Can’t see that changing, unless they drop prices even further. Probs will at some point. Such a luxury brand.

 

[Zilla91]

Pennsylvania · Chippenham SN14 8LD

Chippenham SN14 8LD

maps.app.goo.gl

Touché

 

[starise]

Yeah tell em' Pffffffffffft!

 

[Wattsisname]

Yes, people are so disinterested in EVs, Teslas are being sold faster than they can be made, all causing a disinterest in EVs.
Not sure exactly how that works.

Sky are probably not disinterested when they fallaciously suggest that people are uninterested in EVs; they usually have an axe to grind in support of their advertisers and the Republican Party. Sadly, the $ 787 million damage settlement ( for lies) is probably a drop in the ocean to News Corp.

 

[starise]

Sky are probably not disinterested when they fallaciously suggest that people are uninterested in EVs; they usually have an axe to grind in support of their advertisers and the Republican Party. Sadly, the $ 787 million damage settlement ( for lies) is probably a drop in the ocean to News Corp.

This wouldn't be the first biased media prop I've read. We get it here too. Mostly from states that rely on the fuel industry for their taxes.

 

[Zilla91]

Sky are probably not disinterested when they fallaciously suggest that people are uninterested in EVs; they usually have an axe to grind in support of their advertisers and the Republican Party. Sadly, the $ 787 million damage settlement ( for lies) is probably a drop in the ocean to News Corp.

Do you realise Sky and Sky News are no longer owned by Murdoch and hasn't been for a few years now.

Also for a channel that had a dedicated climate change news bulletin and who bang on about all the environmental stuff they do, I highly doubt they have an axe to grind.

 

[Wattsisname]

Do you realise Sky and Sky News are no longer owned by Murdoch and hasn't been for a few years now.

Also for a channel that had a dedicated climate change news bulletin and who bang on about all the environmental stuff they do, I highly doubt they have an axe to grind.

Quite so re Sky. The family owns Fox of "Trump was cheated"infamy.
Perhaps I should read the whole article which, it seems from the posted snippet, relies on Autotrader's opinion.

 

[Hurricane]

If Tesla can still sell more cars than they can make, as some affirm, why have they cut prices so drastically over the last few months?

 

[GlynG]

No business sells its products for less than they can get people to pay for them, Prices drop if there is a resistance to purchase at the price offered. There are no genuine discounts either - no such thing as a free lunch.
Tesla is absolutely not in the position to be able to sell everything it manufactures otherwise what sort of financial sense would it make dropping prices, business is there to make money not do all potential customers a favour - a business is not your friend.
Discounts are offered to shift stubborn stock.
The pursuit of profit is what drives a company, Tesla specifically has cut prices to shift its old stock, It has new production facilities ramping up and also looking at new designs and new vehicles, If profit wasn't the "be all and end all" you wouldn't be removing tiny cheapo bits like a temperature sensor that costs a few pence unless the focus is on achieving that little bit more profitability - milking everything out of the stuff you manufacture.

Tesla isn't in the same position it used to be, They have serious competition, they no longer lead the way in software and their CEO has lost focus, too busy sacking people, buying companies and I believe he has a starship to replace after the last one - "Unexpectedly disassembled itself" on take off.

 

[GeorgeSymonds]

If Tesla can still sell more cars than they can make, as some affirm, why have they cut prices so drastically over the last few months?

Valid question..

Tesla haven’t sold more cars than they’ve made in any of the last 4 quarters using their own data.

Inventory levels are higher than ever

Wait list/delivery times are shorter than ever

Musk has never been shy at making as big a margin as possible, any suggestion price reductions are him giving to the world as opposed to helping him sell excess production is amusing. The quarterly finances show a bit of a battering compared to previous quarters.

UK Tesla Q1 sales are down notably on last year, yet EV sales overall are up.

In the US, take delivery of an MS or MX this quarter and you now get 3 years free supercharging, another sweetener to help shift cars.

 

[WannabeOwner]

If Tesla can still sell more cars than they can make, as some affirm, why have they cut prices so drastically over the last few months?

Valid question..

Good question indeed

UK Tesla Q1 sales are down notably on last year

Model-Y first arrived here Q1 last year - a lot of interest in that - including me! (sure, they had to make them to fulfil the order backlog, but maybe they were busy with LHD in other countries up until that point and then did a big batch of RHD / RoRo ship charters etc. for UK)

My tea-leaf gazing is:

More production coming on stream. Need to create a market for those cars, and driving people from competitors to self seems reasonable. Price drop will help with that.

Prices have been regularly increased over the last year or two. Some of that was supply issues (so reasonable to expect prices to come back down as that eases), but some was also to reduce the backlog. Tesla (unlike other marques) didn't want "years of waiting". So put the price up to put some people off. That only partially worked, so they put the price up again ... and again. So their margin has been higher than even they needed / expected, and higher than pre-pandemic.

The Q1 financials were "as expected" and "slightly better" in places, and yet Tesla took a massive hit on stock price. I have no idea why. Maybe Musk telling investors that there was a lot of value in shipping FSD as the existing fleet would all become money-earning RoboTaxis. The investors know that they just don't believe that's "any time soon" (same as 99.9% of folk here )

But their Q1 margin, given the recent price cuts, was stronger than expected, so either their "reduce component count" is working - or components price is returning to pre-pandemic levels (as we hear for other industry sectors).

Also, "lots of inventory" at each quarter end needs to be considered in terms of overall numbers. If Tesla are making 2x as many cars as last year, then having 2x as much inventory at each quarter-end seems reasonable (actually, for me, I'd be happy with a higher number). Tesla are making "for stock", and then matching to customers orders, so if they choose to make "Lots of black ones" then that will be excess inventory at end of quarter, and if anyone wants a car in a hurry they have to compromise on "Any colour you want as long as it is black". If the inventory is shifted in Month 1 of the quarter that covers the period when no boats are arriving from China.

So for me the price drop is to encourage people away from other brands, at a time when more production capacity is coming on line, and to also start a price war before the other brands re good and ready. "We've got our ducks in a row, don't sit on our hands waiting for them to be ready too"

Time will tell of course ...

 

[CWT3LR]

I think the point Auto Trader was trying to make was that searches for EV have fallen by a third. We can speculate why - high purchase price both new and second hand (in relative terms as well as absolute compared to ICE), high recent cost of electricity both retail and commercial pushing up charge costs in relative and absolute terms compared to fossil, the initial buzz around EVs now being more muted, insert your own pet theory here.

But what is highly amusing is the usual crowd of Tesla fanatics taking it as a personal attack. And then in turn proposing conspiracy theories for Murdoch hating Tesla, media bias, hatred of electric vehicles by every single journalist, ....