Could someone plain state why Tesla reduced prices in China? Trying decipher the real reason and not spin.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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To increase sales to keep up with increased production (balance supply and demand)
I've read a more than a few articles that reference Tesla "slashing prices" in China. Not 1 of them reported fairly that there were several price increases over the last 12 months. Does anyone have a list of all the price increases in China since the factory opened? It would be very interesting to see the correlation between SP and the price of the model3 and Y.
Tesla obviously choose to save margins over sales when introducing price increases, now they have better data to help them with pricing and production going forward.
Cheers to the longs
Tesla obviously choose to save margins over sales when introducing price increases, now they have better data to help them with pricing and production going forward.
Cheers to the longs
Only Tesla would know. Grace Tao, VP of Tesla, China said that cost control is behind the price adjustments.
This rhymes with Elon Musk stating that Tesla is seeing deflationary forces in play.
Edit: Source of Grace Tao quote:
Gigapress
Trying to be less wrong
Good info but some adjustments need to be made to more accurate estimate the impact on margins relative to Q2 and Q3.
Tesla had already been doing 65k+ in some months when allowed to operate without lockdowns. In June before the upgrades they produced 71k. Also, production thus far post refresh has been 87k and 88k, so I wasn’t counting on the 90k goal. 88/71 = 24%. Not sure how I originally got 20% this morning; probably a mistake. 50% production jump is definitely too high if we want to compare costs in order to estimate margins prior to Q4 and Q1 price drops and now.
4k hiring increase was a 25% bump in headcount, which matches the bump in production, but it’s unclear how much of that 4k person hiring increase had already happened in Q3 when Tesla achieved the “nearly 30%” auto margin (ex Ber & Tex and credits). Much of the increased labor spending at the factory probably already was hitting the Q3 cost numbers and thus won’t hit Q4 and beyond any extra. Overall a ~10% improvement in labor cost per car probably was achieved with the upgrades.
In any case, with such a big productivity increase, foreign exchange changes, declining materials and parts costs, it’s definitely possible that Tesla’s costs have now declined by 10-15% from Q3, enough that margins out of Shanghai could remain constant or possibly even be higher in 2023 than in Q3 2022 when they were likely in the low 30% range.
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I'd like 250 consecutive of the latter, please, for the remainder of the trading days this year..
bkp_duke
Well-Known Member
Fred pushing the FUD that in China everyone there is protesting, not buying (not going to link is garbage here).
That doesn't pass the sniff test, however, because the Tesla CN website is down, and unless someone organized a DDoS, you don't see that with in-person complaints.
That doesn't pass the sniff test, however, because the Tesla CN website is down, and unless someone organized a DDoS, you don't see that with in-person complaints.
KBF
Model X owner (formerly Cdn Signature Model S)
Can any of us imagine Ford dropping prices on their Lightning when they're already losing so much money per truck?
This is what certain people are missing: Tesla has had a demand problem since the Model 3 game out (well, for most of their existence): too much demand. They had to raise prices because it's a big pain to deal with impatient customers who have to wait for months (to years in some cases), and Tesla's customer communication has never been a strength. It's inefficient, and longer wait times does complicate certain things - it's hard to adjust prices when people are locked in if the economy changes (shortages, etc).
So raising prices was the solution to their original demand problem - even though they already had very high margins from a profitability perspective. Reducing the backlog made a lot of sense. But their goal is still to electrify transportation, so reducing prices now makes a lot of sense, too - they're not here to be a niche producer.
Back to Ford - they have high demand (my wife's dad has to wait 6 months for his Lightning), but in reality they still have to raise prices due to an *expense* problem. Problem is those that purchased it already hane locked it prices, to cover production over the next several months to a year (don't know the exact #). With inflation, their bleeding will only get worse. Ford gambled, caring more about marketing and virtue signalling, and will pay for trying to look more competitive than they really are...
My biggest problem these days is that if it stays low, I almost feel bad for essentially stealing shares from panicked people. My original cheap shares were a way higher risk... I hope it stays low into next week when I get more dry powder to play with (and I don't touch margin...).
Artful Dodger
"Neko no me"
Do people get bored of designs, or are new designs pushed out as part of planned obsolescence to trick them into wanting a new one?
I'm not sure so I assume it's a bit of both. Plenty of popular vehicles maintained the same or darn near the same design for a decade or more. Chargers, F150s (most trucks really), 4Runners etc.
Gotta be frank - the return is on a better future for him and any children he has along with everyone else. We invest to help the company and in return cherry is the top.
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thesmokingman
Active Member
That should be common knowleddge or at least those following cuz there were quite a few articles highlighting the 8x margin Tesla has over Toyo. The crazy part is think of the environmental impact Toyota causes versus Tesla for that profit.
Mike Smith
Active Member
His source is 'several groups of recent Tesla buyers on Weibo'. Seems solid.
verystandard
Member
I just woke up and prepared to see a sea of red. Am I still dreaming?
Or the market confirmed that TSLA is gonna be the winner of this price cutting battle with a nice vote of green? Will find out more on monday
EVNow
Well-Known Member
I've always felt the price increases over the last 2 years was temporary - because of Covid supply issues. So, it is natural for the prices to come down. Did people really assume the prices will stay up as supply issues get resolved (and potential recession kicks in) ?
Ofcourse its going to reduce GM, but if someone assumed the high GM during Covid would never go down, they were wrong to start with.
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I think this dynamic changes depending upon how many are on the roads, brands with relatively low production numbers are rewarded moreso for consistency because you see them less often and associate certain designs with those brands. Bentley does the same thing, Ferraris are pretty unmistakable, get into the real extremes and you can put a 2022 Koenigsegg Jesko next to a 2000 CC8S and they're remarkably similar.Remind us of what generation the Porsche 911 is on? How's that workin'?
Here's every single generation of Porsche 911 | Top Gear
Here's every single generation of Porsche 911
It's time to choose your favourite version of that annoyingly good German sportscarwww.topgear.com
But it's less of a good thing when you see them all over the place
StealthP3D
Well-Known Member
Tesla doesn't drop prices to kill competitors, they drop prices to expand sales. If it kills competitors, so be it, but BYD is probably more resilient to getting "killed" by this move than most of the rest.
I'm not sure that's always a foregone conclusion. In the past Elon has talked about driving down cost to maintain a healthy margin AND reduce prices.
Porsche seems to do well with very little design change. They
are possibly the most profitable large scale ICE manufacturer.
Subtle changes, unless you are an aficionado that knows
the difference.
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