Model 3 reveal effect on other luxury car sales

[seattlite2004]

Cool graphic: Tesla Model 3 On Verge Of Dramatically Disrupting Mercedes, BMW, & Audi | CleanTechnica

 

[FlatSix911]

Cool graphic: Tesla Model 3 On Verge Of Dramatically Disrupting Mercedes, BMW, & Audi | CleanTechnica

Cool chart, but I'm a bit skeptical that Tesla can produce 5,000-6,000 Model 3 per week starting in July ... maybe by December
That said, I would love to see Tesla dominate the US Small Luxury Car Segment.

Tesla Model 3 On Verge Of Dramatically Disrupting Mercedes, BMW, & Audi | CleanTechnica

Now consider that the Model 3 will soon deliver into this same segment monthly volumes between 21,600 (at 5,000/week) and 26,000 (at 6,000/week). Let’s call it 24,000 per month — that’s over 62% of the entire segment’s average volume in 2017.

It is more than the BMW, Mercedes, and Audi sales combined volume, which have been very happy to have the lion’s share of the segment to themselves up till now. Thus, there can be no question that all the incumbents in this segment are going to be massively disrupted.

 

[Barklikeadog]

24000 per month? Did Elon create the graph?

 

[SageBrush]

That chart is making two assumptions I would love to be true but remain to be seen:
That the sales come from within that segment
That Model 3 sales have staying power.

I'm not arguing against the chart so much as saying that it makes important assumptions

 

[Brando]

Q3 + Q4 = 24 weeks x 1000 =24,000

x2,000 =48,000
x3,000 =72,000
x4,000 =96,000
x5,000=120,000

Not so sure anyone outside US will get Model 3 before 2019. We shall see.

PS - aren't we already seeing +2,000/week??

 

[TT97]

Q3 + Q4 = 24 weeks x 1000 =24,000

x2,000 =48,000
x3,000 =72,000
x4,000 =96,000
x5,000=120,000

Not so sure anyone outside US will get Model 3 before 2019. We shall see.

PS - aren't we already seeing +2,000/week??

The chart is 24,000 per month, so 144,000 for all Q3 & Q4.

 

[wdolson]

Urban myth. You saw what happened with your own eyes, you just didn't know where to look. Sometimes if you are too close to a problem, it looks normal. Were you a real estate investor or security trader?

You must have read something different than I wrote. You're sort of tearing me a new one here while also pretty much repeating what I said in a different way.

The financial crisis that brought down GM started with the banks and investment firms making home loans without sufficient collateral. Much of it was fraudulent application information and false disclosures on packaged financial products. When they let greed alone determine financial planning, it caused an unsustainable banking system which collapsed like all Ponzi schemes do, taking down everything from large commercial bond filings, to entry level credit cards.

The derivative market drove the dodgy mortgages. The derivative market was allowed to get going because of bank deregulation. An analyst who saw what derivatives could do the world economy, he felt strongly enough about the risk he tracked down Alan Greenspan in a restaurant and explained what could happen. Greenspan refused to do anything about it because he didn't believe anyone would be so selfish as to put the world economy in that level of danger.

You have extreme housing prices, which reduces consumer's buying power, followed by a housing price collapse and credit crunch, and nobody had the money for cars.

2007 when this all started, US auto sales were 16 million. In under two years that number would fall to 10 million. I'm not sure how many companies survive that kind of hit in that short of time. Automakers with less pension investments, less invested in R&D, and less % of their total sales in the US market survived better, but barely. It is entirely plausible the global automotive industry could have effectively collapsed if GM shuttered their doors. Supply chains have been global since before this century started. A company the size of Toyota, VW, GM, or Ford shutting down, would cause thousands of vendors, many very large companies in their own right, to shutter their doors as well. And the 3rd tier would have stood no chance at all, the smaller businesses that make up most the jobs in the world.

Using the term "fixed" was not the absolute best term to use, but the costs they couldn't control along with the reduced sales brought them down. We essentially said the same thing in different ways.

To get this back on topic (all things Tesla), I would not call Elon a "fiscal conservative" and of course neither did you. Sometimes, fiscal irresponsibility is the path to future success and Elon is demonstrating that. Sometimes deficit spending, whether it be the private sector or the government, is the wise and prudent strategy. It depends. What is brilliant about Elon is he has put the the horse (infrastructure - superchargers, gigafactory, robotic automation) before the cart (his cars) and profitability be damned. He has built a solid foundation for spectacular success by being fiscally progressive.

I was talking about political commentator Rick Wilson who is a traditional fiscal conservative. I'm a fan of fiscal responsibility, both personally and in government, but there are times when it's necessary to spend money.

Self regulation is admirable, when it works. Unfortunately, the bigger the industry and the higher the financial stakes, the less incentive for self regulation, take the oil industry for example. Elon and Tesla Motors is kind of in a self regulating no man's land right now. The implication for BEVs is huge for the future. The question of whether the government should give tax credit incentives for BEVs (as they do for ICE vehicles through oil industry subsides and tax breaks) is a questions that remains controversial. Apparently Elon thinks that incentives for BEV purchases should be eliminated and I assume he feels the same about ICE incentives. In addition, Elon is pushing the transition to FSD and government's roll in that transition is open to question. Is Elon, and the auto industry as a whole, more capable of regulating that technology or are government bureaucrats? As a former appointed member of a governmental regulatory agency, I can tell you that in my case, I am a firm believer that the primary purpose of government is to "protect the health, safety, and welfare" of the general public. The private sector does not have the incentive to do that since self preservation, often at whatever cost, is the primary factor.

Cars need to be regulated to at least some degree. Arguments can be made about where to draw the lines, but few believe there should be none.

Although I am a big fan of Elon, I worry that success will lead to overconfidence and increased arrogance - hubris - the feeling that he can do no wrong. His compulsive and addictive personality could lead to problems, both personally and fiscally, in the future. I will continue to scrutinize him and his ventures as the future unfolds before my eyes.

Elon is human and has limits to his abilities. There was a study of the risk taking of a number of CEOs and they found Elon was the least risk taker of the bunch. He looks like a risk taker because he's such a big thinker, but he doesn't try anything he hasn't already proven is possible. His worst problem is with time. He tends to underestimate how long things take.

 

[SageBrush]

The derivative market drove the dodgy mortgages. The derivative market was allowed to get going because of bank deregulation.

Pretty much, but the root problem is lack of mandatory transparency in derivatives leading to inaccurate risk evaluation.
The Repubs have rolled back the transparency controls the Obama admin pushed through.

 

[RobStark]

)
That the sales come from within that segment
That Model 3 sales have staying power.

1) Not all 3 Series, C Class, nor A4 sales come from within the segment. People move up as they get older and incomes grow.

2) The future is uncertain. Not certain 3 Series, C Class,or A4 sales in the future will equal or surpass current sales. More likely Model 3 sales grow than 3 Series, C Class or A4.

 

[McRat]

"GM and Chysler didn't fail and Ford hit the skids because of unethical business practices. In part they were making cars people didn't really want"...
...
The derivative market drove the dodgy mortgages. The derivative market was allowed to get going because of bank deregulation. ....

The first one is false and what I refuted. GM didn't start making cars people didn't want until AFTER the collapse. They were in climb mode when the banks wrote bad loans they couldn't cover. The beginning of 2007 was great for automakers. Their product lineup didn't change a lot when sales climb returned to positive numbers after 2009. In fact, if the banks didn't puke their guts up, 2009 would have a been a new record. A midsized 310HP lightweight diesel of a revolutionary design was finished and tested at great cost which would have improved CAFE for light trucks and SUVs 10-25%. It fit in everything. Autonomy was being developed, EREVs were almost production ready, their #1 SUV lineup had downsized versions being released, etc.

2009 destroyed dozens of projects. If it was not crucial to the survival of the company in the next 30 days, it got the axe. Except the Volt.

The derivatives market was always simply gambling with other people's assets. In 1994 it collapsed Orange County, California into bankruptcy, and became international news. Orange County had more jobs, money, and residents than some states or countries. It is like LA without all the ghettos and it has a middle class.

So the danger was well known in 1994, which had nothing to do with Republican influence. I contend the number of first and second mortgages and quick paper gains made greedy investors thirsty for higher gains. Hence derivatives became a popular way to expand a real estate loan portfolio. Sort of like building a house on a pier in a tsumani zone, then selling some of the pier footings to pay for the house.

 

[Stellavator]

Easy to sell as many as you can possibly produce when you have a 2 year old waiting list.

The real question is what will be the sustainable rate of new orders after the backlog is cleared.

Only then will you be able to see what Tesla's market share is relative to others in the class.

The graph only shows how quickly Tesla can produce when orders outstrip production capacity. Again, easy when you have a backlog waiting to be filled.

 

[McRat]

Easy to sell as many as you can possibly produce when you have a 2 year old waiting list.

The real question is what will be the sustainable rate of new orders after the backlog is cleared.

Only then will you be able to see what Tesla's market share is relative to others in the class.

The graph only shows how quickly Tesla can produce when orders outstrip production capacity. Again, easy when you have a backlog waiting to be filled.

For Tesla the company, since it's running at about 50% export, demand will be excellent for at least 2 years, regardless of the US market.
But the US market itself has fewer mandates, and EV acceptance while growing, is not growing at the levels required to sell 250,000 BEVs a year for the next few years unless something dramatically changes.

If the $36,000 version of the Tesla cannot be produced at a profit in the next two years, they could have issues with simple demographics. They will run out of $50k-$150k buyers who are willing to try an EV for the first time.

 

[electracity]

Perhaps the best way to evaluate Tesla's possible sales is to segment the total car market by price point. I expect that most model 3 buyers' first choice was not a four door sedan.

How many buyers in Tesla's market areas spend $35K or more per year on a new vehicle? What percentage of those buyers does Tesla need to capture to sell 10,000 cars per month?

 

[wdolson]

The first one is false and what I refuted. GM didn't start making cars people didn't want until AFTER the collapse. They were in climb mode when the banks wrote bad loans they couldn't cover. The beginning of 2007 was great for automakers. Their product lineup didn't change a lot when sales climb returned to positive numbers after 2009. In fact, if the banks didn't puke their guts up, 2009 would have a been a new record. A midsized 310HP lightweight diesel of a revolutionary design was finished and tested at great cost which would have improved CAFE for light trucks and SUVs 10-25%. It fit in everything. Autonomy was being developed, EREVs were almost production ready, their #1 SUV lineup had downsized versions being released, etc.

I see where I miswrote. It wasn't so much they were making cars people didn't want, they were making cars people weren't buying because of the financial situation. My bad.

The derivatives market was always simply gambling with other people's assets. In 1994 it collapsed Orange County, California into bankruptcy, and became international news. Orange County had more jobs, money, and residents than some states or countries. It is like LA without all the ghettos and it has a middle class.

So the danger was well known in 1994, which had nothing to do with Republican influence. I contend the number of first and second mortgages and quick paper gains made greedy investors thirsty for higher gains. Hence derivatives became a popular way to expand a real estate loan portfolio. Sort of like building a house on a pier in a tsumani zone, then selling some of the pier footings to pay for the house.

I grew up in Monterey Park. My (now-ex) brother-in-law lived in Garden Grove during his first marriage. I left LA before 1994, but I know the demographics and economy of Orange County well. Many people were fleeing LA County for Orange when I was a kid.

I sort of was on the fringes of the libertarian Party for a while. Philosophically it sounds good, and I knew a few fairly rabid libertarians (my sister still is). I came to the conclusion that social libertarianism could work to a degree. As long as someone isn't doing something that puts others at risk and anything they are doing with others is consensual, leave them alone.

Economic libertarianism is essentially economic anarchy. In an anarchy, it will work if everyone is very good at self regulating their behavior and realizes their behavior could harm others. Some people are excellent at this and a large chunk of the population are reasonably good at it. But there are always a few bad actors who don't care about others. From brain studies about 1-2% of the population are sociopaths and they think differently. They have no conscience.

The regulators and cops aren't there for the people who would do right without them, they are there to curb the behavior of those who would do just about anything if they gained from it. The economic libertarians have been influencing economic decision making for the last 20 years. Alan Greenspan was one of them, he actually dated Ayn Rand for a while.

After the 2008 debacle, Dodd-Frank got pushed through, but it was weak compared to what was in place before the 90s. And even that is being dismantled by the freebooters. If they continue, we may see a crash worse than 2008.

 

[RubberToe]

Oh please, don’t be that hardcore fanboy. Tesla do have an advantage of mass production of EVs but saying that they will continue to have a 5 year advantage is just wrong.

To all my European friends, heres some news about the Daimler electric vehicle effort. Looks like maybe Germany may also be running on Elon time. Either that, or maybe mass producing all those EVs is a bit trickier than one might think...

The headlines reads that "Daimler denies reported battery shortages causing electric car delays". For those not familiar with subtleties of German to English translation, let me give you the actual translation: "Daimler confirms reported battery shortages causing electric car delays"...

"Handelsblatt mentioned the new Mercedes’ S-Class plug-in hybrid as well. The German source stated that unnamed sources inside Daimler revealed that it’s not coming to market until 2021..."

"We are on target, there are no delays"...

Daimler Denies Reported Battery Shortages Causing Electric Car Delays

 

[Brando]

I came to the conclusion that social libertarianism could work to a degree. As long as someone isn't doing something that puts others at risk and anything they are doing with others is consensual, leave them alone.

Economic libertarianism is essentially economic anarchy. In an anarchy, it will work if everyone is very good at self regulating their behavior and realizes their behavior could harm others. Some people are excellent at this and a large chunk of the population are reasonably good at it. But there are always a few bad actors who don't care about others. From brain studies about 1-2% of the population are sociopaths and they think differently. They have no conscience.

The regulators and cops aren't there for the people who would do right without them, they are there to curb the behavior of those who would do just about anything if they gained from it. The economic libertarians have been influencing economic decision making for the last 20 years. Alan Greenspan was one of them, he actually dated Ayn Rand for a while.

After the 2008 debacle, Dodd-Frank got pushed through, but it was weak compared to what was in place before the 90s. And even that is being dismantled by the freebooters. If they continue, we may see a crash worse than 2008.

Fine review of the last crash.

 

[FlatSix911]

Perhaps the best way to evaluate Tesla's possible sales is to segment the total car market by price point. I expect that most model 3 buyers' first choice was not a four door sedan.

How many buyers in Tesla's market areas spend $35K or more per year on a new vehicle? What percentage of those buyers does Tesla need to capture to sell 10,000 cars per month?

Unfortunately, the 2 door sedan is almost dead ... the 4 door sedan and crossover SUV are now the vehicles of choice

Coupes keep coming; Sales don't Two-door cars don't sell in America. And yet they keep coming.

The watchers of the auto industry will point out that two-doors -- whether they are coupe hardtops or two-door convertibles -- are not at the top of the American shopping list. Consumers might appreciate their looks. They might covet one -- a Corvette, for example. And they might even occasionally buy them with mass-market zeal, such as with the Ford Mustang. But in the daily grind of building and selling vehicles that U.S. consumers want, it is four-door sedans, it is increasingly four-door crossovers, and it is pickups, usually with four doors.

For the first 11 months of 2015, coupes represented just 2.6 percent of all new-vehicle registrations, according to Tom Libby, IHS Automotive analyst. That was down from 3 percent for the same period two years earlier and 3.3 percent the year before that. Convertibles represented 0.8 percent of registrations in the first 11 months of 2015, he says, down from 1 percent two years earlier.