Brian45011, your point is well taken that average selling prices of Tesla vehicles dropped in Q4 of 15, but when you delve into the cause and effect relationship, the waters become murky. I agree with you that inventory was sold in an effort to make the 2015 guidance, but is that selling of inventory an excuse for discounting, or is it simply selling what was available to sell at the appropriate price for those vehicles? The term "discounting" implies that demand was the culprit in Q4 and discounts the real problem, which was the slow ramp-up of Model X that quarter. I see 4Q15 as a quarter with production issues that led to a selling of inventory in an effort to make guidance, but I don't see this as a demand issue. It was a production issue.
If you point to Model 60 being sold with 75kwh battteries in 3Q16 as discounting, I would partially agree with you, because the production line is ready to roll faster now and less-expensive offerings are needed to keep demand slightly ahead of production capability. I say "partially agree" because the 60s sold have been rather well optioned and because either with the current owners or prior to their CPO sale to a second owner, these cars will likely all be upgraded to 75kwh versions and part of the "discount" will be recouped.
Let me add that the current need to tweak demand includes the realization that Tesla is passing through a bit of a demand valley, caused by negative press associated with the autopilot fatality plus the Osborne effect of approaching 100kwh battery and Autopilot 2.0 hardware releases. Demand after these temporary situations are resolved could be noticeably stronger than at the moment.
Last edited:
