Perhaps but these concerns often turn out to be moot in the long run.
There’s always the “OMG, Norway demand is falling” only to see it flip the next quarter.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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There’s always the “OMG, Norway demand is falling” only to see it flip the next quarter.
Reflecting on MP3, there are some interesting possibilities suggested by the text.
1. Model 3/Y are listed as LFP - while this could be an hangover from the source document, it could also be true for Model 3 Highland and Model Y Juniper. A new wiring harness and new motors with a 48V architecture could allow LFP to be used for all trims, with the possible exception of Performance.
2. Industrial Heat - Tesla will almost certainly do domestic heat pumps. it is a small step up to industrial heat pumps. For industrial heat storage batteries there are a number of start-ups with useful IP in this area who are probably struggling to raise sufficient finance to commercialise their product. Heat storage batteries come in a number of different varieties, many of them are probably easier to make than regular chemical batteries.
An additional reason why Tesla might diversify into industrial heat is that phasing out the usage of gas in their factories would be a cost saving and would simplify the construction of new factories.
1. Model 3/Y are listed as LFP - while this could be an hangover from the source document, it could also be true for Model 3 Highland and Model Y Juniper. A new wiring harness and new motors with a 48V architecture could allow LFP to be used for all trims, with the possible exception of Performance.
2. Industrial Heat - Tesla will almost certainly do domestic heat pumps. it is a small step up to industrial heat pumps. For industrial heat storage batteries there are a number of start-ups with useful IP in this area who are probably struggling to raise sufficient finance to commercialise their product. Heat storage batteries come in a number of different varieties, many of them are probably easier to make than regular chemical batteries.
An additional reason why Tesla might diversify into industrial heat is that phasing out the usage of gas in their factories would be a cost saving and would simplify the construction of new factories.
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2daMoon
Mostly Harmless
Am I the only one who got an email announcing the Annual Meeting on May 16, 2023?
This notice came from IBKR.
This notice came from IBKR.
If you think that expedite costs for shipping cars from Shanghai are more than £6,000/car, I have a bridge to sell you!
Either way, you just repeatedly acknowledged that Tesla doesn’t have ”unlimited demand”, which was my point all along. Yes, they do need to cut prices in some countries to get sales. If some people think that “unlimited demand” means Tesla will always sell every car they make as long as they bring the prices low enough, guess what: the same applies to every other car company. The important aspect is finding the sweet spot at which the price ensures the demand matches the production capacity, and the question here is whether the new (lower) price can be compensated for by a similar reduction in COGS/unit.
No I'm pretty sure people in the UK has a new found love for paying 5.6 British pound per gallon of gas.
Norway was always a proven case of transport logistics and always obvious. This is different, and not even Tesla’s fault (as proven by the great delivery numbers in most of Europe); this is a UK-specific situation, and it might be worth understanding rather than ignoring.
To a point.
Advertising doesn’t put money into buyers pockets.
Spend $500/ car on advertising, increase the price of the car to maintain margins — fewer people can buy your car.
Reduce price of your cars by $500 and more people can afford your car.
That same $500 works out to even more than an $1000 savings at the end of the mix. Advertising increases the number of people aware of your car, but it can only make your total addressable market smaller in the end.
People talking up advertising as the be-all-end-all assume Tesla has a visibility issue. Considering Musk’s presence and the fact that his mom can pack stadiums, I don’t think visibility is and issue for Tesla.
Your first assumption is wrong, which is believing the initial price was based on some COGS number.
Tesla's price adjustment is practically automated by software, which has zero problem exploiting the British people when they were paying 9 pounds a gallon during the height of the Ukrainian crisis with a sky high sticker price. You have to decouple that with Teslas constant cost reduction, which has barely any bearing how they price their cars.
I can do nothing about it. I’ll simply wait to see if there is still an issue after a few quarters with no signs of improving.
True. But Tesla is lowering prices by more than the possible advertising costs.
Which is great for buyers, no doubt.
You’re not far off. But I’m sure you can come up with another sarcastic reply to this:
Artful Dodger
"Neko no me"
Uh, yes you can. It's not an all-or-nothing sales plan. They moved some inventory in March, and will strive to move the rest before the next shipload arrives. Why is this so hard to understand? What point are you trying to make, that Tesla has 'demand problems'? They do not, they have a business, and are managing it well.
CORRECTED: ( h/t @Chocochip )
New number plate fails to boost March car sales - BBC News | Apr 05, 2023
"The UK's car industry saw its worst March for new car sales in 24 years last month, according to the latest figures."
Sounds like a general sales slowdown in the UK. I'm confident Tesla will handle this with some deft price cuts (paid for by reduced COGS) and cult-like guerrila marketing...
Cheers to the Longs!
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Tesla will charge what they can get away with, but can still make good margins at a much lower price. A few days of discounting still puts meaningful profit in their quarterly pockets because yes, technically you are leaving money on the table if was sold at a later time...however TIME is not something Tesla can ever get back. So make as much money today while you can, this makes perfect sense to me. These are mass produce products and the cars being made tomorrow is cheaper and of more quantity than the ones made today..so why save it as if it's some limited edition collector piece waiting for top dollar?
The new-plate sales bump is in March (and another one in September), not in April. The plates get renewed on March 1st.
Think about it for a minute.
Was “the most popular car in the world” every going to be a $60,000+ car?
Tesla wants to sell millions of cars a year. You don’t get there selling Mercedes priced cars. Musk said it, you can have the most desirable car in the world, but if people can’t pay for it, it’s not going to sell.
You’re missing the point entirely, it’s quite shocking to watch! Nobody argues that Tesla should hang on to their cars until they find buyers at the original price! The point is that they NEED to lower prices in order to get sales, and even those lower prices weren’t enough for them to match last year’s sales. And yes, the level by which prices need to be brought down in order to hit sales targets is how demand is measured everywhere (except on TMC, apparently).
Yes, advertising works only so far.
I’m just saying that Tesla could have started off with advertising to keep ASP a bit higher for a bit longer. (But I’m fine with them not doing that.)
Before unwinding the wave, Tesla delivers 2/3 of their car the last month and like 50% of their cars the last 15 days. This has major risk trying and plenty of discounting happens trying to get as many people to take deliveries as possible. This is why Tesla's ASP always underwhelmed. So many cars are pushed out discounted due to a lack of TIME. I expect ASP to climb when wave is fully unwound because Tesla will actually sell way less discounted cars.
As mentioned earlier global YoY deliveries are the best measurement.
Global Q1 2023 deliveries were certainly higher than global Q1 deliveries 2022.
Price cuts are more effective in some markets and demand can vary by market. Cars can fetch higher net margins in some markets. As well as getting the price right, cars need to be delivered to the right market.
It is also true that demand can vary in some markets on a short term basis for lots of different reasons.
Aside from price, the correct allocation of cars to markets is important.
We will find out what the hit to Q1 margins is in the earnings call.
All the evidence is that inflation has peaked, and Tesla might be able to find some additional cogs reductions.
Another unknown is the extent to which Tesla Energy will contribute to profits and if that compensates for lower margins.
There are so many variables that I don't know why we don't just wait for the official numbers.
So far, nothing about Q1 deliveries and inventory causes me any concern.
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