I have to believe that as more cars roll off the line in the same amount of time that costs/unit have to be going down some to offset some of the "discount" too. Some fixed costs should remain the same regardless of whether 1500 cars roll off the line in one week or 2000 cars roll off the line in one week (economies of scale).
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I have to believe that as more cars roll off the line in the same amount of time that costs/unit have to be going down some to offset some of the "discount" too. Some fixed costs should remain the same regardless of whether 1500 cars roll off the line in one week or 2000 cars roll off the line in one week (economies of scale).
racer26
Active Member
The argument that margins won't be hurt by discounting 75's is simple - The majority of discounted 75's got sold to people who otherwise would have purchased a 60. Since COGS on a 60 and COGS on a 75 are the same, selling them a 75 for 25% of the difference in price is actually a net gain to margins, not a hit. (The only hit comes from the ones who would have paid for the after-delivery upgrade to 75 later, but I imagine the take rate on that would be relatively low).
Krugerrand
Meow
1) Tesla isn't run like a 'usual' company of its size.
2) Elon (according to his most recent interview) spends 80% of his time at Tesla being an engineer, doing engineer stuff not CEO stuff.
3) Tesla isn't run like a 'usual' company of its size, therefore applying what 'usually' happens at a company the size of Tesla does not apply. This may or may not be something you agree with, but it's how it works at Tesla. People should invest accordingly.
Maybe. Maybe not. Maybe he simply expects his other management team members to do their COO part in their relative sectors. To simply follow company policy that's been clearly laid out. Definitely a looser, here's enough rope to do your job or hang yourself kind of way. Some people can work in a less structured environment, others can't. It's not always possible to discern who can and can not until they've had time in the job and been faced with certain decisions.
Irrelevant question.
Krugerrand
Meow
*yawn*
The 'organization' did not go against integrity or trust. A handful of people did and they might likely pay for that with walking papers. I'm totally okay with the 'weak link/s' being found out now rather than later when they might have an opportunity to do real damage.
CALGARYARSENAL
Member
I'm sorry, but with 30% of the float short, time for the banksters to orchestrate short squeeze. Tesla is too darn boring lately! Goldman upgrade perhaps?
This is a wrong argument that discounted 75 were sold to people only interested in 60. There is no proof anyone has. Plus, if you look at the spreadsheet, 75 is virtually non existent which says people who were planning to buy 75 are actually going for 60. There is an argument that people will eventually upgrade, there is no data behind that. Short term margin impact should be considered.
We shouldn't be too focused on Tesla "guidance". They seem to aim very high and then try to reach the goal, often missing the target. More important is growth, quality, and new technology. Ultimately, Tesla has excelled in all three.
Let us not forget that Tesla is a technology company first and a car and energy company second.
Tesla's technological developments are what separates them from everyone else. Growth in product sales at 50-100 % per annum is a bonus.
racer26
Active Member
There is evidence to show that. Its a well known phenomenon that cars are price elastic - you'll sell more of them if they're cheaper.
Thus, its reasonable to believe that you will sell more 60s than you will 75s, and indeed that's what we've seen.
I am not arguing here about whether or not selling a 60 represents a margin hit. That's been hashed out before, (and it still isn't. Its only a hit when you sell a 60 to someone who would have otherwise bought a 75 absent the option of buying a 60. selling a 60 to a person who would have otherwise bought a BMW or Mercedes is still a net gain to margin so long as a 60 is profitable.)
But selling a 75 to someone who would have bought a 60, by discounting the price of the 75 to the price of the 60 plus say 25% of the differential to the 75 price is not a margin hit. Its a margin gain, because you pulled an extra couple thousand they would not have otherwise spent. I suspect Tesla was smart enough to price this discount at the estimated take rate of the after-delivery upgrade, and so its a net zero action - it just pulls future profit from the upgrade forward into the current quarter when you sold the car.
The 75s are unpopular, because the 60 is adequate for most people's need and costs significantly less. For people who are not price sensitive, they'll go up to the 90 or P100D. So its not surprising to see the 75 is an unpopular option. This is a way of squeezing more money out of the price sensitive 60 buyers who really want a little extra range, but don't want to spend the price of a 75. You're giving them the hardware anyway, so if you can squeeze an extra couple thousand out of them, so much the better.
From Nola_Mike's post, it looks like IB has 94,000 TSLA shares to short this morning
From vgrinshpun's post it looks like Fidelity has no shares to short this morning
For reference sake:
On Tuesday, TSLA lost $3.18 when 150,000 shares to short were available at open on IB and 195,000 in late morning on IB
On Wednesday, TSLA gained $0.46 with 3X,000 shares available in morning on IB
From vgrinshpun's post it looks like Fidelity has no shares to short this morning
For reference sake:
On Tuesday, TSLA lost $3.18 when 150,000 shares to short were available at open on IB and 195,000 in late morning on IB
On Wednesday, TSLA gained $0.46 with 3X,000 shares available in morning on IB
Gerardf
Active Member
I assume this must be the 'hit piece' Niedermeyer was preparing
(for context see the fact / fiction thread https://teslamotorsclub.com/tmc/posts/1755020/)
Docs Reveal: Tesla's Production Capacity Limited To Less Than Half Of Its 500,000 Vehicle Target - DailyKanban
(for context see the fact / fiction thread https://teslamotorsclub.com/tmc/posts/1755020/)
Docs Reveal: Tesla's Production Capacity Limited To Less Than Half Of Its 500,000 Vehicle Target - DailyKanban
Thanks for the explanation. How does it work for a discounted high VIN refresh that comes off the line in August and September? Also for a 75 kwh sold as a 60 kwh?
I admit I was speed reading through this but it seems well formulated.
tl;dr
- Air quality permits for the recently-upgraded paint shop at Tesla’s Fremont plant limit the electric automaker’s production capacity to less than half of its targeted rate of 500,000 vehicles per year
- Tesla says it plans a second expansion of the Fremont paint shop, but has not yet applied for the necessary emissions permit or even put the equipment from its first expansion phase into use.
- If any future expansion or upgrade increases the Fremont plant’s net emissions by more than 6.5% over currently-permitted levels, Tesla’s paint shop will be required to comply with the extremely stringent Lowest Achievable Emission Rate (LAER) standard.
- These regulatory conditions present a serious challenge to the volume goals and production ramp forecast Tesla has publicly set for Model 3
racer26
Active Member
I'm so amazed that the market is behaving like it doesn't believe TSLA is going to post huge over the weekend.
Elon basically just confirmed that 3Q16 is going to be a record (though he didn't say by what metric - his use of the word likely pretty much guarantees its not based on deliveries as a metric, because we already know that's going to happen.)
Weird times.
I assume there must be something wrong with that article about the paint shop restrictions. There's no way TSLA could be planning to produce 500k vehicles in 2018 and not have a plan for how to deal with those restrictions already underway.
Elon basically just confirmed that 3Q16 is going to be a record (though he didn't say by what metric - his use of the word likely pretty much guarantees its not based on deliveries as a metric, because we already know that's going to happen.)
Weird times.
I assume there must be something wrong with that article about the paint shop restrictions. There's no way TSLA could be planning to produce 500k vehicles in 2018 and not have a plan for how to deal with those restrictions already underway.
racer26
Active Member
When shorts are coming to this board and signing up to spam every other post with hyperbolic negativity, and the TSLA / SCTY short is the most crowded and expensive me-too trade I can remember, the recipe for a massive rubber band melt-up is in place. They are frightened of their portfolios being decimated with blinding speed that makes them unable to unwind their short positions at all.
I don't think we will be at all-time-highs anytime soon, but I do think those who hold significant short positions all the way down here in the low 200's will be seriously hurt, and soon.
I don't think we will be at all-time-highs anytime soon, but I do think those who hold significant short positions all the way down here in the low 200's will be seriously hurt, and soon.
racer26
Active Member
On the paintshop restriction -- What's the penalty for exceeding permitted levels under Title V? Perhaps TSLA just intends to violate and eat the penalty until their upgraded permits make it OK again later?
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