Long-Term Fundamentals of Tesla Motors (TSLA)

[brianman]

The company says the move makes sense because the number of vehicle variants—models, body styles, engines, transmissions and assorted features— it offers has roughly doubled to about 100.

Good lord.

 

[Norse]

Anyone here who speaks Chinese? If the price of the Model S in China is just $100k, that would be massive.
http://auto.ifeng.com/guonei/20140122/1007699.shtml
translated: http://www.microsofttranslator.com/.../auto.ifeng.com/guonei/20140122/1007699.shtml

 

[ModelS8794]

Anyone here who speaks Chinese? If the price of the Model S in China is just $100k, that would be massive.
http://auto.ifeng.com/guonei/20140122/1007699.shtml
translated: http://www.microsofttranslator.com/.../auto.ifeng.com/guonei/20140122/1007699.shtml

1.1 million yuan is ~$180 thousand, no?

 

[Norse]

1.1 million yuan is ~$180 thousand, no?

Crap, I did not convert it. I just saw the $111k. However $180k for the P85 is not to bad or what?

 

[macman]

Anyone here who speaks Chinese? If the price of the Model S in China is just $100k, that would be massive.
http://auto.ifeng.com/guonei/20140122/1007699.shtml
translated: http://www.microsofttranslator.com/.../auto.ifeng.com/guonei/20140122/1007699.shtml

S85 base model 750k Yuan, about $121k
S85 fully equipped 1.08 million Yuan, about $174k
P85 base model 870k Yuan, about $140k
P85 fully equipped 1.11 million Yuan, about $179k
tax is included for above price

- - - Updated - - -

Crap, I did not convert it. I just saw the $111k. However $180k for the P85 is not to bad or what?

That's indeed a very good price in China. Most of the import car prices are more than doubled compare to US because of the import tax. Base model BMW 740Li is selling for $78k in US. But it's selling for $177k in China. You basiclly get a fully equipped P85 for the price of base 740Li in China. Model S must got import tax break from China.

 

[Norse]

S85 base model 750k Yuan, about $121k
S85 fully equipped 1.08 million Yuan, about $174k
P85 base model 870k Yuan, about $140k
P85 fully equipped 1.11 million Yuan, about $179k
tax is included for above price

- - - Updated - - -


That's indeed a very good price in China. Most of the import car prices are more than doubled compare to US because of the import tax. Base model BMW 740Li is selling for $78k in US. But it's selling for $177k in China. You basiclly get a fully equipped P85 for the price of base 740Li in China. Model S must got import tax break from China.

Yeah, remember it is $130k in Norway, and rated super cheap here. I think this is great, and I believe the tax break might increase since China needs EV, and I expect Tesla to engage a partnership in China.

I guess we could see a PR on this soon?

 

[30seconds]

S85 base model 750k Yuan, about $121k
S85 fully equipped 1.08 million Yuan, about $174k
P85 base model 870k Yuan, about $140k
P85 fully equipped 1.11 million Yuan, about $179k
tax is included for above price

- - - Updated - - -


That's indeed a very good price in China. Most of the import car prices are more than doubled compare to US because of the import tax. Base model BMW 740Li is selling for $78k in US. But it's selling for $177k in China. You basiclly get a fully equipped P85 for the price of base 740Li in China. Model S must got import tax break from China.

What type of BMW or Audi do you get in china for 750k Yuan?

 

[macman]

What type of BMW or Audi do you get in china for 750k Yuan?

You get BMW 535Li or Audi A7.

 

[Norse]

You get BMW 535Li or Audi A7.

Do you speak chinese Macman? Do you know if we can trust this site?

 

[macman]

Do you speak chinese Macman? Do you know if we can trust this site?

Yes, I do. This is a very reputable company and site. They have a few channels of their own on cable/satellite TV.

 

[DaveT]

S85 base model 750k Yuan, about $121k
S85 fully equipped 1.08 million Yuan, about $174k
P85 base model 870k Yuan, about $140k
P85 fully equipped 1.11 million Yuan, about $179k
tax is included for above price

- - - Updated - - -


That's indeed a very good price in China. Most of the import car prices are more than doubled compare to US because of the import tax. Base model BMW 740Li is selling for $78k in US. But it's selling for $177k in China. You basiclly get a fully equipped P85 for the price of base 740Li in China. Model S must got import tax break from China.

Actually lots of luxury car makers raise their price in China because they can and not because of the import tariff. Daimler and others are already making their cars in China and thus are able to avoid the import tariff. But they charge a lot to make more money.

It doesn't look like Tesla is getting much import tariff break, if any. It's probably about 30% import tariff and some other taxes and shipping costs.

Now if Tesla could make their cars in China (though it would have to be via a joint venture), then Tesla could avoid the import tariff and would open the Model S to a lot more buyers in China and China would likely be the top market for Tesla.

 

[30seconds]

Actually lots of luxury car makers raise their price in China because they can and not because of the import tariff. Daimler and others are already making their cars in China and thus are able to avoid the import tariff. But they charge a lot to make more money.

It doesn't look like Tesla is getting much import tariff break, if any. It's probably about 30% import tariff and some other taxes and shipping costs.

Now if Tesla could make their cars in China (though it would have to be via a joint venture), then Tesla could avoid the import tariff and would open the Model S to a lot more buyers in China and China would likely be the top market for Tesla.

based on the price comparisons - that a S85 is the equivalent of a 5-series or A7, I suspect that China will be the #2 market anyways. Plus no need for JV (i.e., IP loss) risk.

 

[macman]

Actually lots of luxury car makers raise their price in China because they can and not because of the import tariff. Daimler and others are already making their cars in China and thus are able to avoid the import tariff. But they charge a lot to make more money.

It doesn't look like Tesla is getting much import tariff break, if any. It's probably about 30% import tariff and some other taxes and shipping costs.

Now if Tesla could make their cars in China (though it would have to be via a joint venture), then Tesla could avoid the import tariff and would open the Model S to a lot more buyers in China and China would likely be the top market for Tesla.

Import tariff is just small part of the total tax. See this article that explains how the tax is charged for imported car in China. http://www.theworldofchinese.com/2013/08/car-manufacturers-and-distributors-on-the-make/ . Tax is charged base on engin capacity. Even if it's not tax break, I guess Tesla took advantage of their zero liter engine. So the total tax is 66%. 75kx166%=124k. It's very close to the price they set in China for the base S85. Most of the import cars in China sell for 2 to 3 times the US price. Combining tax advantage and their direct sales model, Model S has big price advantage in China. In relative term, US cusotmer is paying more than Chinese customer for Model S. In US, the same amount of money buying base model BMW 740Li can buy a base model S85. In China, the same amount of money buying base 740Li can buy a fully loaded P85.

 

[Norse]

Import tariff is just small part of the total tax. See this article that explains how the tax is charged for imported car in China. http://www.theworldofchinese.com/2013/08/car-manufacturers-and-distributors-on-the-make/ . Tax is charged base on engin capacity. Even if it's not tax break, I guess Tesla took advantage of their zero liter engine. So the total tax is 66%. 75kx166%=124k. It's very close to the price they set in China for the base S85. Most of the import cars in China sell for 2 to 3 times the US price. Combining tax advantage and their direct sales model, Model S has big price advantage in China. In relative term, US cusotmer is paying more than Chinese customer for Model S. In US, the same amount of money buying base model BMW 740Li can buy a base model S85. In China, the same amount of money buying base 740Li can buy a fully loaded P85.

Thank you Macman, and the same thing goes for Norway. A BMW M5 starts at 1.5 million NOK, while the model S starts at 460k.
Do you have any prediction for Chinese sales now that you have the numbers?
---
Another article on the subject: http://www.carnewschina.com/2014/01/22/tesla-model-s-will-cost-198-000-usd-in-china/

 

[TD1]

related to Teslas longterm prospects:

I have it from a very good source that BMW i3 is sold out for 2014!
Stop panicing now

They plan to produce only 6000 in 2014

 

[Norse]

related to Teslas longterm prospects:

I have it from a very good source that BMW i3 is sold out for 2014!
Stop panicing now

They plan to produce only 6000 in 2014

That is true. You will have to wait for over a year now.

 

[macman]

Thank you Macman, and the same thing goes for Norway. A BMW M5 starts at 1.5 million NOK, while the model S starts at 460k.
Do you have any prediction for Chinese sales now that you have the numbers?
---
Another article on the subject: http://www.carnewschina.com/2014/01/22/tesla-model-s-will-cost-198-000-usd-in-china/

I think the sales in China could eventually close to US sales. But they need to open more stores and have more super chargers before that happens.
According to the China price information Tesla released, they pay 36.7/81=45% total tax. That's a lot less than other ICE car. They decide to pass on the saving to the consumer. I think that's good move. It will help to reach more poeple.

 

[30seconds]

Another consideration with this pricing is how many order in China will come from buyers who now clearly have a luxury alternative from a company not trying to f*** them over. This pricing really puts pressure on the other companies to reduce prices. I'm not worried at all about brand cachet. Enough Chinese buyers spend time in HK, Cali, Europe to already be convinced. And I'm sure the enthusiasm will spread once their colleagues experience the touch screen, the instant and quite acceleration, the loads of cargo and seating room.

Plus the no direct emissions is a real bonus. Of course right now China's electric production isn't very clean, however it is changing fast with all the new solar and hydroelectric developments.

Longer term this pricing may have just locked in 50,000+ WW demand levels for the Model S through 2017.

 

[Grendal]

The Chinese pricing is the perfect argument for those FUD creators that try to convince others that Tesla doesn't make any money. If Tesla was hurting for money, then why would they dodge this opportunity to make a little extra? No one would fault them for doing so since all the other major manufacturers already gouge China because they can. Tesla chose to stick to their pricing strategy even though they really didn't have to.

 

[sleepyhead]

The Chinese pricing is the perfect argument for those FUD creators that try to convince others that Tesla doesn't make any money. If Tesla was hurting for money, then why would they dodge this opportunity to make a little extra? No one would fault them for doing so since all the other major manufacturers already gouge China because they can. Tesla chose to stick to their pricing strategy even though they really didn't have to.

They chose this pricing strategy many months/years ago and they had to stick to it. Elon said last year that they will charge the same price globally. If they price gauged China, then I would have dumped all of my TSLA and left the company for good. Elon simply stayed true to his word, so the China price reveal isn't actually news, and in my mind is a non-event.

Also, the CNY will naturally appreciate against the USD and pretty soon the margins in China will be huge. I am actually stunned that nobody has mentioned this yet, here or in the media.

This is sheer genius, absolutely brilliant!