Careful you’re saying something negative here so the hive mind will downvote you lol.
You can tell when Elon shifted tone from being so insistent tht demand exceeded supply until investor day when he said “there’s a strong demand impact on lowering prices.”
1) uhh…duh?
2) yah Tesla could sell infinite model 3s if the prices were cut to $15k but then Tesla wouldn’t be profitable if that happened now would it?
3) combine with what Elon said on Twitter about pedal to the metal even if he has to sell cars at negative margin and there, despite all the pedantic responses from TMCers the past week (check my post history) they just refuse to see what’s coming, which is a relentless attack on margins out of necessity.
These price cuts will keep happening, especially as main street really starts to feel a recessionary environment this year, and Teslas growth story will be challenged due to its evaporating margins.
I can already foresee debates here in August about Tesla doing great because of increased car sales (even if only at 30% growth and dangerously approaching sun 15% gross margin) and that it’s undervalued. Contrast this with early 2022 when everyone said “50% growth and 30% auto gross margin long term baby!!!!” You know who you are..:like 80% of this board lol.
Q1 gonna be bad. Just admit it, will be better for your mental health!
Again, Tesla going to be biggest company in the world, I believe FSD and some form of robotaxi eventually happens (just debated a cruise employee friend at Stanford last weekend on this lol), Tesla energy will be meaningful (+ insurance + charging + eventual App Store), and the fact that I have to qualify all that is sorta sad.
I miss the times where optimism was based on the long term product projections and a general financial market sizing direction, not the defense of long term financial projections that are incredibly volatile and subject to the often ridiculous assumptions of the given poster. And posters calling Tesla/Elon a company “not trained in deception.” Lmao.
It’s like people have gone from placing their spiritual allegiance from organized religion to politics/investments.
Do you know how to present a persuasive argument without ad hominem insults and excessively negative tone? If so, why do you persistently choose to write in this manner? How does that help make the community better?
As shown in the charts linked by dhanson, Tesla's prices have simply returned to where they were before the pandemic on an inflation-adjusted basis (about 10% higher), except for Performance/Plaid variants which have gone from crazy-expensive to more reasonable. However, that actually might tend to increase overall average margin by convincing more customers to upgrade, because now the gap between base variants and P variants is smaller than ever. It's really not clear how many cars Tesla actually sold at the super-high prices they set in last March, because average revenue per vehicle only rose by a few thousand dollars over the rest of 2022.
Meanwhile, Tesla's average cost per car is trending down since Q3, management has repeatedly stated that prices of raw material inputs and shipping have been plummeting, and this year the proportion of Model Y in the mix is going to increase substantially. We're also going to be shipping cars far less distance on average and Berlin and Austin won't be dragging down average margins like in 2022.
Tesla also informed us on Investor Day that at the new prices the rate of orders still greatly exceeds the rate of production, and the most recent short-term trend is the prices creeping back up in response to this.
Expectations of imminent refresh and HW4 deployment also may have contributed to a short-term demand pocket. Beware of over-extrapolation based on short-term variation.
At no point has Elon said cars would be sold at negative margin to push more growth. On that Twitter Spaces discussion which I assume you are referring to, he said in the worst case Tesla would go to 0% margin this year, but I'm pretty sure the point he was making is that if there is a severe short-term recession Tesla will not slow down growth because the mission demands it and because that will leave them ready to push much more volume when good times return.
Long-term financial projections for this enterprise are inherently volatile. The error bars are huge, especially because we're dealing with ridiculous exponential growth and multiple simultaneous technology disruptions. I doubt even Tesla's own internal projections for 10 or 20 years into the future have much precision.
Here's what matters for the long-term:
1) Tesla has a huge lead in stationary storage with Megapack XLs and there are compelling reasons to believe that the gross margins will be 50%, if not more, at today's prices of $420/kWh and up. There's a huge amount of room to reduce price and make excellent profits as this business scales, and we need to grow volume by at least 25x relative to current production rates.
2) Tesla makes cars that millions of people want and many millions more will want after they learn about the cars. The barrier presently is affordability, and the company presented a clear and credible plan for cutting the costs in half from $35-40k to $17-20k. Due to the extremely nonlinear relationship between vehicle price and quantity demanded and also due to the giant wave of consumer acceptance of EVs that's still just in the early adopter phase, it's safe to project that demand will be an order of magnitude larger than today's 2M/yr level *if* Tesla drops ASP to something like $30k. With an average cost somewhere around $20k, that would be ~$10k gross profit per car and ~33% gross margin, even better than 2022.
How about, instead of vaguely telling everyone else how bad their modeling is, you present your own -- with specifics -- and provide the rationale?
Now if you'll excuse me, I'm late for the local Tesla cult meeting and I don't want to miss my chance to smoke the hopium pipe at the beginning of the ceremony.
www.pv-magazine.com
or show some documentation about how they’ve taken a start up of Tesla’s ilk through innumerable obstacles of decimation and transformed it into a $600B+ company with a set of impeccable financials and the very real potential of becoming a multi trillion dollar company as soon as WS is done milking the dummies. Camp 3 is waiting -
