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Short-Term TSLA Price Movements - 2015

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I think this is pretty reasonable set of assumptions, although I really hope it is more like 55-60K. CPO may be interesting add to revenue numbers - especially if (as Jackl1956 said) that they are able to put some upgrades in (TACC, seats, D even?).

Unlikely you will get major changes to the car like TACC or D... heck even the sound package isn't feasible to add after delivery because all of those require quite extensive hardware changes to the car, and in the case of the D I believe they even have to change a decent chunk of the framing in the front to handle it.

TACC (which in turn means all the autopilot hardware), means two new sensors in the front and back, the radar (plus associated new front grill and bumper and wiring), Change the windshield, headliner, and rearview mirror to add the camera... and associated wiring. These are just changes we know would have to be made, and the windshield by itself is like a 1400$ item, nevermind the rest of the car changes.

Sound Studio not only has the added speakers (which isn't a big deal I suppose) but actually has an added amplifier inside the main head unit (that giant touchscreen has more going on behind it than just an LCD display). If I am not mistaken the whole touchscreen assembly is something like 2,500$ by itself.

The seats would also likely be cost prohibitive since they aren't likely to stick the old seats in anything and therefore no recovered costs, so whatever the full item price is for brand new Recaro seats, add that on (I'll give you a hint, it is probably more costly than the 3,500 the charge you when you first order the car.
 
Actually I didn't see convincing proof that P85D range issue gets resolved in latest firmware update. http://www.teslamotorsclub.com/showthread.php/40722-P85D-efficiency-up-after-6-1/page14
It is clearly not conclusive. However, it is encouraging that no one is getting worse range and some are getting better range. The description of the range mode, however, is why it appears to me that it has been released on some level at least into that option. But there is no official announcement and it is not in the release notes so it is hard to tell what Tesla is doing here and what is going on with the software updates.
 
It is clearly not conclusive. However, it is encouraging that no one is getting worse range and some are getting better range. The description of the range mode, however, is why it appears to me that it has been released on some level at least into that option. But there is no official announcement and it is not in the release notes so it is hard to tell what Tesla is doing here and what is going on with the software updates.

I followed this so closely and I honestly don't understand why people are so riled up. The VAST majority of vehicles do not achieve the ranges provided on the stickers. This shouldn't be news to anyone, Tesla just gets unfair scrutiny by the forum addicts like ourselves. Range varies on usage conditions... no news here. While it's true that the claim that range is not impacted because of the AWD was false in the very beginning-- it'll be made right with more optimization. At some point they needed to draw a line in the sand. Either way you look at it Tesla was going to get complaints. The only difference was whether or not the people making them had the car in their hands or not. In the range thread-- it said that the torque optimization description was present already.

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Anyone know what CPO program gross margins are for other car companies?

That's going to be tough to extrapolate due to dealer incentives and manufacturer incentives to get the cars off the books. Based on my personal experience (of trading a car in and seeing it relisted on the dealer page)-- I believe it can be somewhere in the range of 15 - 25% (varies widely), essentially paying for light refurbishment and peace of mind while saving on the initial depreciation hit. I think we'll see something around the middle 18-20% mark-- I can see Tesla retrofitting in seats from the D customers who need to take delivery of Peformance seats because these are newer.
 
From the firmware 6.1 thread:

Received a response from Jerome on a few things. (Jerome seems to be the go to guy for answers these days)

Most notably:

"
Torque sleep and improved range for Dual Motor vehicles is included in versions 2.2.139 and later regardless of the selected Range Mode setting. However, the amount of this improvement will be increased by enabling Range Mode which has other vehicle control modifications in addition to the HVAC behavior."

So, no more complaining about it only working in range mode. :p
 
Positive news on how the future will look, - from Tesla Facebook:

"We opened our largest Supercharger Station in Europe in Køge, just south of Copenhagen, Denmark. It has 12 Superchargers and is the first one in Europe with a solar canopy."

20 Km from home :)

This is another one in recent times where they have put up Solar (last I was looking they are doing the same thing at Barstow, CA), I am glad to see them start to roll this out more on the Superchargers since hopefully that means financially they have the money to spare on it and it is no longer a question of solar vs one more supercharging location.
 
Anyone know what CPO program gross margins are for other car companies?

I suspect it's going to be very hard to compare Tesla's CPO to other manufacturer's. The way it works for most other manufacturer's is dealers buy cars, dealer and manufacturer agree on what cars they bought should be handled as a CPO vehicle, dealer technicians carry out required inspection and any remedial work on the vehicle, dealer submits paperwork to this effect to manufacturer and manufacturer provides a warranty for the car, dealer sells the car (which may have price limits as agreed with the manufacturer), dealer pays a fixed or percentage of the sale price to the OEM.

Depending on the last bit the OEM might have more upside based on what the car sells for or may not. But in general they almost certainly have floors to limit their risk (beyond the limits provided by the inspections/remedial work) on the warranties. The dealer ends up bearing a significant amount of the risk here since if they can't sell the vehicle for more than what they paid for it, put into it in inspection, remedial work and the floor for the CPO program they lose money.

With Tesla they are all the parties so their potential upside should be higher since they're taking all the risk. But they also are taking all the risk of the potential downside that they can't sell the car for more than they put into it. On the other hand Tesla is shipping all the cars back to California for inspection/remedial work and probably just ships the car from there to the owner meaning they have a broader market available to ensure they can sell the vehicle. Other OEMS/dealers could move cars around to maximize profit as well, but I suspect it's not as much of their business model as it would be with Tesla.
 
I suspect it's going to be very hard to compare Tesla's CPO to other manufacturer's. The way it works for most other manufacturer's is dealers buy cars, dealer and manufacturer agree on what cars they bought should be handled as a CPO vehicle, dealer technicians carry out required inspection and any remedial work on the vehicle, dealer submits paperwork to this effect to manufacturer and manufacturer provides a warranty for the car, dealer sells the car (which may have price limits as agreed with the manufacturer), dealer pays a fixed or percentage of the sale price to the OEM.

Depending on the last bit the OEM might have more upside based on what the car sells for or may not. But in general they almost certainly have floors to limit their risk (beyond the limits provided by the inspections/remedial work) on the warranties. The dealer ends up bearing a significant amount of the risk here since if they can't sell the vehicle for more than what they paid for it, put into it in inspection, remedial work and the floor for the CPO program they lose money.

With Tesla they are all the parties so their potential upside should be higher since they're taking all the risk. But they also are taking all the risk of the potential downside that they can't sell the car for more than they put into it. On the other hand Tesla is shipping all the cars back to California for inspection/remedial work and probably just ships the car from there to the owner meaning they have a broader market available to ensure they can sell the vehicle. Other OEMS/dealers could move cars around to maximize profit as well, but I suspect it's not as much of their business model as it would be with Tesla.

The reason I ask is that TM is not getting the full 25+% GM on new car sales with the trade in value taken off and I doubt there is a 25%+ margin on CPOs. If true, should TM just get out of the CPO business?
 
The reason I ask is that TM is not getting the full 25+% GM on new car sales with the trade in value taken off and I doubt there is a 25%+ margin on CPOs. If true, should TM just get out of the CPO business?

For dealers used cars usually have more margin than new. CPO has more margin than non-CPO used cars. New typically is a very tiny margin or basically at cost with the hope of selling extras (warranty, paint protection, service plans, etc). Based on what people have been saying most of the trade valuations they've been giving are low compared to the normal wholesale market. So I don't think it's impossible for Tesla to get 25% margin on CPO cars. I'd bet on something more like 10-15% though, 20-25% seems like a stretch to me though.
 
The reason I ask is that TM is not getting the full 25+% GM on new car sales with the trade in value taken off and I doubt there is a 25%+ margin on CPOs. If true, should TM just get out of the CPO business?



I don't think it is just about margin. First they will see additional top and bottom line revenue along with free cash flow that will help finance other investments in the business. Second it allows then to better control the quality and price of the used market - much like a traditional CPO program would for most car makers. Finally I would not be surprised if (maybe not now, but in a few years) they are able to add features / capacity - replacing / upgrading the battery for high mileage cars is the most obvious, but I am sure there are others.
 
For dealers used cars usually have more margin than new. CPO has more margin than non-CPO used cars. New typically is a very tiny margin or basically at cost with the hope of selling extras (warranty, paint protection, service plans, etc). Based on what people have been saying most of the trade valuations they've been giving are low compared to the normal wholesale market. So I don't think it's impossible for Tesla to get 25% margin on CPO cars. I'd bet on something more like 10-15% though, 20-25% seems like a stretch to me though.

This is why I asked the original question. I suspect TM gets a much larger margin on high dollar new car sales (versus dealers) and lower margins on used/CPO, less costly cars (versus dealers). Why not just let the market set the price for the used cars moving forward and focus on producing new cars?
 
This is why I asked the original question. I suspect TM gets a much larger margin on high dollar new car sales (versus dealers) and lower margins on used/CPO, less costly cars (versus dealers). Why not just let the market set the price for the used cars moving forward and focus on producing new cars?

Right. Maybe this has little to do with maximizing profit and more to do with providing the best Tesla buying experience for buyers who don't want to buy new? Other dealers aren't likely able to fully determine the condition of the vehicle. Probably won't sell an extended warranty for them. Can't service the vehicle for the buyer. Can't deal with getting the account for the vehicle transferred. Probably won't do a very good job of educating the buyer.
 
The VAST majority of vehicles do not achieve the ranges provided on the stickers..

No, they do. The average vehicle achieves the average mpg on the sticker, unless the company cheats on it. Perhaps your result is different because you drive more inefficiently than most. I routinely beat EPA range and mileage because I drive more efficiently than most. Average that with everyone else and you get the number on the sticker.

The people complaining about range just need to learn to use the energy gauge or have other factors involved (bad road conditions etc). I've had no problems getting or beating "ideal" range in any tesla.
 
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