Wait a minute - haven't you been claiming that Q4 sales (86,555 vehicles) were higher than the steady-state demand due to pull-forward demand from Jan-Mar of 2019? The current product mix has far less gross margin and revenue per vehicle than 2018Q4, so even if sales eventually reach that Q4 level operating cash flow will be less until unit sales increase well beyond the Q4 level.
Yeah, so I don't think that's true, and it's an important point regardless of what we think about the state of post-tax-incentive-cliff and polar-vortex influenced U.S. demand.
Let's look at the raw ASP data from Europe:
EUR/USD is at around 1.13, USD/CHF is at parity.
Yeah, I know it's self-reported, VAT and tariff and logistics expense encumbered, but the fact is that in Germany you
cannot configure a Model 3 cheaper than €54.780, or $61,900:
And, to the extent we trust user reported data, the average ASP is €64.5k+, or $72,800+:
With average VAT of ~15%, tariffs of 10% and transportation costs of ~$2,000 that is still an effective ASP calculated back to the Fremont factory in the $54k range. That's all post price-reduction turmoil prices.
(Wondering whether
@schonelucht concurs.)
Assuming they reach similar effective ASP in China sales as well (which I presume they do, they are in control of their prices), even if the average N.A. ASP is in the $50k range due to SR+, price cuts and all the other measures, the EU/CN ASP is pulling that up by about 5%.
There are major car companies whose
entire margin is 5% ...
So I think Model 3 ASP will be just fine.
Model S/X is a wildcard and I agree that there are several signs that it's not going to look very rosy in Q1 in terms of absolute figures (production, deliveries and revenue). But they seem to have introduced cost cutting measures, plus they have eliminated the lowest margin variant which was like 50% of all their S/X sales.
This is looks like a classical "effective EV luxury car market monopolist is maximizing cash cow income" measure to me. They had to maximize S/X revenue until now to keep the growth story alive, but now the Model 3 is the growth story and the S/X products can just generate cash.
And then there's the upside wildcard of their re-negotiated 18,650 cell supply contract with Panasonic. If indeed their cell costs improved by ~30% then Model S/X margins could stay pretty healthy, despite lower Q1 sales. There should be lower per unit depreciation/amortization overhead due to the S/X lines being pretty mature, much of the initial capex should already be off the depreciation schedule.
So I'm not fully convinced about your bearish Q1 ASPs and margins view. Yes, it could happen, Tesla has this knack for surprising bulls for the worse, but the signals are super conflicting.
