Interesting NYT Article on Aluminum Supply -- Does This Affect Tesla's Prices?

[BlueTan85]

Turns out banks including good ol' Goldman Sachs, are rolling in the dough by buying up supplies of aluminum, pushing up prices for all kinds of things from soda cans to ... cars?

http://www.nytimes.com/2013/07/21/b...um-but-to-banks-pure-gold.html?pagewanted=all

Considering the amount of aluminum Tesla buys, I wonder if this has affected their bottom line yet, or may in the future?

 

[Doug_G]

If true, that's a price manipulation scheme, pure and simple.

I rather doubt it would have a material effect on Tesla, though.

 

[keys]

Didn't Elon complain about aluminum prices in some interview, joking something like "makes me want to start an aluminum company". But indeed, that would be market cornering and is obviously illegal. Then again, lots of tricks banks pull are 'illegal'...

 

[brianman]

Didn't Elon complain about aluminum prices in some interview, joking something like "makes me want to start an aluminum company". But indeed, that would be market cornering and is obviously illegal. Then again, lots of tricks banks pull are 'illegal'...

Let's run with this a little.

If he started an aluminum company that provided aluminum to Tesla exclusively, what would be illegal about that? Perhaps unprofitable for that aluminum company but I'm not clear why it would be illegal.

 

[JPP]

Even though there is a lot of aluminum in a Tesla, there are a lot more soda & beer cans being cranked out around the globe....

 

[jerry33]

Even though there is a lot of aluminum in a Tesla, there are a lot more soda & beer cans being cranked out around the globe....

And, unlike steel, 100% of it could be recycled.

 

[rolosrevenge]

And, unlike steel, 100% of it could be recycled.

Um, steel is 100% recyclable.

 

[ItsNotAboutTheMoney]

Um, steel is 100% recyclable.

What he means is that the steel is not as valuable when recycled, becauseof varisble properties. Aluminum is very recyclable and typicakky used up to 50% old to new even for high grade uses. I presume that aluminum is cheap enough that it's not worth additional processing in the recycling to bring the recycled stuff up to purity of the fresh metal. Aluminum is so recyclable that the vast majority of aluminum in use is recycled.

The USA's rate was 65%, and of course higher where there's a deposit thancnot. Maine is also a bittkr bill state so all plastic bottkes exceot cider and dairy have a 5c depodit. Don't see many discarded drinks containers around here. If you don't want to redeem, a homekess person will.

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Let's run with this a little.

If he started an aluminum company that provided aluminum to Tesla exclusively, what would be illegal about that? Perhaps unprofitable for that aluminum company but I'm not clear why it would be illegal.

He wss refering to Goldman Sachs.

 

[Krugerrand]

It appears you have some stuck keys on your keyboard or you're typing with your toes. :wink:

 

[aronth5]

CapitalistOppressor did a great job assessing the cost of Aluminum.

Over the last 6 months the per pound cost of aluminum has decreased by about 9%. In the past year it has been relatively flat. This should definitely help Tesla's goal of a gross margin target of 25% for the rest of the year assuming the cost of aluminum doesn't spike. Excluding the battery pack and labor costs one would presume the cost of aluminum is high on the list. Is there any information on how much aluminum is used in the Model S so we can better understand how this impacts gross margin?

http://www.infomine.com/investment/metal-prices/aluminum/6-month/

Thank you, I've been wanting to look into this!

First pass at a guess for aluminum usage -

Car weight - ~4,700 lbs
Batteries - ~800lbs
Tires/wheels - ~150lbs
Rotors/Brakes/Suspension - ~300lbs
Interior Stuff - ~600lbs

Thats like 1,850lbs so far, so even if you give yourself 300-400lbs of wiggle room, 2500lbs of aluminum seems reasonable on a first pass.

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Which would mean only $250 worth of savings for every 10 cent reduction in price? Ouch.

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Like 0.3% swing in Gross Margin if the ASP is $90k? I'll take it.