Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[lklundin]

- They are STRONGLY trying to upsell people from the Standard to Standard+. Making people do physical work to get the Standard (must visit a store or call them on some arcane device called a "telephone"), and then once they do, give them the temptation of knowing they're REALLY driving a Standard+, and need only visit the website to upgrade it at any time! This is a great financial move.

And this is how the German media typically react today, in the words that don't need translation of "der Spiegel":

"Teslas 35.000-Dollar-Auto floppt"

 

[Thekiwi]

So the profitability of leasing seems insanely good for Tesla?

Take the $35K or $39.5k models - somewhere around $17-$22K in lease payments to tesla, plus whatever tax credit Tesla gets (Does that also include state level stuff?), and at the end of period Tesla takes back ownership and can sell it for well north of $25K (They can turn on any software limited features & FSD)

I dont think there is any other car vendor that can push a button and enable thousands of dollars of meaningful upgrades too a used car - its just a beautiful thing.

 

[EinSV]

One additional benefit of having Autopilot standard is that it should act as a "gateway drug" for FSD upgrades. Once customers get to experience how good Autopilot is, they will be much more likely to want the full suite of features available through an FSD upgrade.

It should be a very useful tool to nullify the FUD around Autopilot's capabilities and eventually result in a higher percentage of customers opting for FSD.

 

[lklundin]

Tesla coming to grips that they can’t make profit on a $35k car.

Poor execution.

This change is similar to the initial introduction of the Model S, which had a 40 kWh variant
that saw so few orders that it was quickly cancelled with those (all?) 40 kWh units actually
sold in reality having a software limited 60 kWh.

It's efficient execution to stop having the overhead of offering variants that very few want to buy.

 

[guidooo]

So the largest competitor is the Leaf. The 60kWH Leaf has the same starting price as the SR+ Model 3 (47K euro), so I don’t know who will buy that one now that the SR+ is available.

Besides that, seems the 3 is entering the same price range as the BMW i3; while even the 3 SR+ has considerable more WLTP range. Yes, they are different cars. And it is still possible to buy an i3 cheaper then a 3. But i don't think the average BMW buyer wants a bare BMW without any options. So, starting today i consider them in the same price class and thereby competing for the same group of buyers.

If the i3 is part of BMW's strategy to comply with the upcoming EU emission regulations in the short term; then they better change plans (or pricing) soon.

 

[schonelucht]

I endorsed the post after the fact. Can you please add me to the list? fly4dat.

Nah, I already discounted your opinion, contrary to those that did make the list.

 

[KarenRei]

Summary:

* Bearish: can't keep selling endless AWD+P in Europe. Dang Was hoping they'd only need to drop down to LR RWD this quarter, but oh well. I don't really get why LR RWD is off-menu. Surely their margins are great on it - and people who want efficiency are going to be tempted to downgrade rather than upgrade.

* Bullish: demand secured, low-end margin secured, base SR still "available" but you have to jump through hoops to get it and they can silently kill that off later. Leases look very profitable.

Missing piece of the puzzle is Raven. That'll be demand-and-margin secured for S+X.

 

[lklundin]

It seems ridiculous until it happens. They're obviously much more confident this year and I'm interested to see what the 22nd brings.

Tesla's commitment to actual FSD in three years brings this movie scene to memory (starting at 2m13s):

(I am not quite sure how anyone can be sure that in three years the legislation will allow for autonomous ride hailing)

 

[SPadival]

Google Translate

In this regard, the agreement between FCA and Tesla to avoid fines on emissions "is over several years", pointed out Manley, who however did not want to reveal the costs of the agreement: "it is a commercial issue, the costs are data that do not they must be disclosed. They must be maintained within the company to protect the agreement with Tesla ".

Sounds like Tesla is negotiating with other manufacturers to join the pool and hence stopped FCA from disclosing.

Funding secured

 

[lklundin]

Are you implying Tesla is morally obligated to not upsell their customers?

IMO Tesla is morally obligated to offer every 2016 reservation holder the opportunity to buy a $35K Model 3 or whatever the advertised base price was in their country.

If they are enticed to spend more that is their choice.

Everyone else who decided later? Tough bananas.

I believe Tesla is legally bound to do so, since that is in the financial interests of its share holders.

I mean, if Tesla's production constrained deliveries were deliberately made to create less than maximum profit, then Tesla would (in principle) expose themselves to a class action suit from the share holders - even the SEC might have something to say about that.

 

[brian45011]

Not sure if this was pointed out yet... for the leases of M3s, Tesla keeps the fed tax credit right? $3750 now, etc...

Tesla has so many NOLs to carry forward that the tax credits are not usable. Leases will require setting up Automotive Variable Interest Entities to give those investors the benefit of the tax credits

 

[RobPet]

The word on the street is that the LR RWD is also off-menu available in NL/Belgium for €53,000 (-€5,300 compared to AWD or +€5,200 to SR+).

 

[brian45011]

This is a sign that Tesla hasn't been actively campaigning for the tender, which is bad; they should be actively campaigning. Why aren't they? Incompetence? Lack of staffing?

Maybe you could PM Brian Scelfo.

 

[Mokuzai]

I am not quite sure how anyone can be sure that in three years the legislation will allow for autonomous ride hailing

There have been suggestions that Tesla start with a driver supported hailing service to start. With a fleet of lease returns they could invite non owners to come drive for them until autonomy is a thing.

Or of course they can sell those off as necessary to the used market.

 

[AlMc]

TT007 posted, so the SP is f*cked. We'll hit the bottom at $260 today

Just my Neural Net output trained from previous market reactions when TT posted

While I rated this 'funny' and do respect TT007's passion for bullishness, I have noted over the last roughly two years that his positive posts usually are a decent 'negative indicator' for short/medium term price action.

 

[Swampgator]

The word on the street is that the LR RWD is also off-menu available in NL/Belgium for €53,000 (-€5,300 compared to AWD or +€5,200 to SR+).

It's not on the US menu either. Only Standard Plus, AWD, and P

 

[NicoV]

Besides that, seems the 3 is entering the same price range as the BMW i3; while even the 3 SR+ has considerable more WLTP range. Yes, they are different cars. And it is still possible to buy an i3 cheaper then a 3. But i don't think the average BMW buyer wants a bare BMW without any options. So, starting today i consider them in the same price class and thereby competing for the same group of buyers.

If the i3 is part of BMW's strategy to comply with the upcoming EU emission regulations in the short term; then they better change plans (or pricing) soon.

In other words, Model 3 will eat up the market share of the big competitors, leaving only base Leaf and Zoe with a market of their own.

 

[Words of HABIT]

Perhaps one reason Musk doesn’t want to build out GF1?

In his biography, I remember reading Steve Jobs' son pointed out that the original design for the Spaceship Campus had an, er, unfortunate organic resemblance. The design was changed.

 

[Big Blue 1011]

Steve Jobs never had a son.

That will come as a surprise to Reed Jobs.

 

[Prunesquallor]

Steve Jobs never had a son.

Sigh.
Steve Jobs: Family photo album