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

[EVNow]

How does that explain the progressive price cuts throughout March for the inventory listings? How does it explain the 3,000 free SuC miles for taking delivery of ANY model or variant before end of quarter, if Tesla is happy to have cars available on the lots in the next quarter? Did Tesla decide that up to £6,000 off the regular price is no big deal? Is that “smart business”, as you call it?

Can’t have it both ways, I’m afraid.

The way Tesla normally works is to pre-sell all cars coming in. But if those cars (which may have been ordered months ago) are not taken by the person who ordered - they try to quickly sell the car in the same quarter. If too many people are not taking their cars .... then they start offering incentives, so they don't have to try to find new buyers.

Tesla doesn't offer incentives for no reason, its always to move the cars quickly.

Ofcourse, this may or may not indicate need for price cuts or anything to do with next quarter. Ofcourse, sometimes they do - as in what happened in China this quarter. We'll know soon ... if Tesla cuts prices in UK.

 

[Singuy]

Model Y prices pretty much went down to what they were 2 months ago.

 

[Ogre]

I’m sure the bears are going to be foaming at the mouth with “Margin collapse” after these price cuts but holy hell this one hell of a price war from Tesla.

I mean…this is cutthroat. To lower prices again on models that fully qualify for the tax credit when the competition is losing half of the EV tax credit they enjoyed Q1 is just downright not fair. Can’t imagine what Ford and GM along with the rest of legacy auto are thinking right now.

Also, the 4680 version officially being added to the order page along with Austin hitting 4K is good news for 4680 production yields and greatly increases the amount of Tesla directly receives from the battery production

Next year this time, prices will likely be even lower.

Tesla isn't screwing around with other EVs. They are too busy chopping the ICE industry off at the knees.

 

[Ogre]

Model Y prices pretty much went down to what they were 2 months ago.

The interesting thing is that the AWD model is listed on the config page so anyone can buy it now without having to dink around.

Hopefully Texas will hire a 3rd shift and catch up with Berlin.

 

[Artful Dodger]

I mean…this is cutthroat. To lower prices again on models that fully qualify for the tax credit when the competition is losing half of the EV tax credit they enjoyed Q1 is just downright not fair. Can’t imagine what Ford and GM along with the rest of legacy auto are thinking right now.

You think that hurts? Imagine if Tesla could find a way to sell the Model X LR below $80K ? That'd just scooch under the price cap, and be IRA-eligible now that made-in-Japan 18650 cells qualify. That'll sink a few Tahoes...

 

[FSDtester#1]

I’m sure the bears are going to be foaming at the mouth with “Margin collapse” after these price cuts but holy hell this one hell of a price war from Tesla.

I mean…this is cutthroat. To lower prices again on models that fully qualify for the tax credit when the competition is losing half of the EV tax credit they enjoyed Q1 is just downright not fair. Can’t imagine what Ford and GM along with the rest of legacy auto are thinking right now.

Also, the 4680 version officially being added to the order page along with Austin hitting 4K is good news for 4680 production yields and greatly increases the amount of Tesla directly receives from the battery production

I agree . The first thought that came to me was that the quarter just ended and
Tesla already knows their gross and net margins for Q1. So they are probably content with both Q1 margins and P&D and decided they are in a comfortable enough position to make more price reductions. They are ramping production and likely seeing COGS going down even further. Basically bullish for TSLA and not so much for other EV makers. I would love to have the initial reaction video for Mary after seeing this change.

 

[Ogre]

Also, S3X prices down a bit more. $1000 on the 3 and about 5% on the S/X. So the loss of the rebate only increases the 3 cost by $2,750

https://twitter.com/x/status/1644185049992945665

 

[StarFoxisDown!]

You think that hurts? Imagine if Tesla could find a way to sell the Model X LR below $80K ? That'd just scooch under the price cap, and be IRA-eligible now that made-in-Japan 18650 cells qualify. That'll sink a few Tahoes...

I honestly think Tesla should do a full redesign of the X with their new manufacturing method but keep the falcon wing doors that makes it possible to retail the X at $80k. Do the whole works, front/rear casting, 4680 so they get the direct credits for the battery production.. Do away with the S entirely and devote the entire production line to the X. With the EV tax credit as it is, the S is useless. At least with the X and a major redesign, it’s somewhat possible to get it down to 80k.

 

[Artful Dodger]

Also, S3X prices down a bit more. $1000 on the 3 and about 5% on the S/X. So the loss of the rebate only increases the 3 cost by $2,750

https://twitter.com/x/status/1644185049992945665

Indeed, doesn't eligibility for the full $7,500 IRA rebate also depend upon the buyer having a certain taxable income? As we work our way down to these lower-$$, higher-volume levels we will reach a point were people are perfectly happy with a $3,750 rebate because they would not be paying enough in Federal Income Tax to benefit from a higher rebate.

For other folks, getting a $1,000 instant cash discount on their shiny new 3SR may be more attractive* than waiting until next year to get a slightly larger rebate.

Clever market placement! But I'll wait to hear from @unk45 before I decide...

Cheers!

*'specially if you put that $1K into TSLA

 

[Artful Dodger]

Do away with the S entirely and devote the entire production line to the X.

I agree on the updates for the Model X. I do think the Model S Plaid remains in production as the Flagship of the fleet... (see what I did there? 216mph w.Carbon brakes?) I think S remains as is until the Roadster is released, then Tesla will have a new top-of-the-line model.

But yes, unboxed X would be incredible. Imagine $80K ASP w. 100K/yr deliveries (unboxed does double in the same space, amirite?) and 50% g.m. That's like $4B gross profit on X...

BTW, keep the Japanese 18650s in the Model X, and release the Plaid+ w. Kato Rd 'high-silicon' 4680 structural pack. Elon teased 125KWh capacity? Would that give 500 miles range in a Plaid+ Model S?

 

[AndrewZ]

Model X AWD was below $80k before the 2021 Refresh, maybe it can go back down without changes

X AWD price is down $26k since the start of the year, you could buy a tax credit 3 SR with the difference in the X Plaid price since the start of the year

 

[Ogre]

The only thing I continue to be baffled on with Tesla’s strategy is why not, when you’re going through a major production expansion in the US, offer a discount on FSD monthly subscription to something like $149 or even $99/month for the rest of 2023 and it goes back to $199/month on Jan 1st 2024. Get people hooked on FSD with a cheaper monthly price and I guarantee you people will end up keeping the monthly subscription considering how much more advanced FSD will be 8 months from now. This feels like a no brainer which would keep Tesla ‘s margins at least a bit protected during this period of price drops.

I don't think Tesla is going to push hard on FSD until it is a bit more fully baked.

Right now it's in a bit of an odd state in terms of how you market it. Not sure it needs to be fully out of beta, but when you buy it you shouldn't have this other step where you sign up for the beta to get the full features.

 

[FreqFlyer]

I honestly think Tesla should do a full redesign of the X with their new manufacturing method but keep the falcon wing doors that makes it possible to retail the X at $80k. Do the whole works, front/rear casting, 4680 so they get the direct credits for the battery production.. Do away with the S entirely and devote the entire production line to the X. With the EV tax credit as it is, the S is useless. At least with the X and a major redesign, it’s somewhat possible to get it down to 80k.

Or just do both since they are on the same line and re-engineer them to share more parts. OR..........just wait and make a new gen on the new gen platform and enjoy margins that would make Goldman Sachs have envy.

 

[StarFoxisDown!]

I don't think Tesla is going to push hard on FSD until it is a bit more fully baked.

Right now it's in a bit of an odd state in terms of how you market it. Not sure it needs to be fully out of beta, but when you buy it you shouldn't have this other step where you sign up for the beta to get the full features.

V11 isn’t perfect by any means but it is a step change for FSD. I’ve seen enough anecdotal footage plus the limited tracking data we do have is already showing quite a noticeable increase in miles driven per disengagement.

I do think the next 6 months will see dramatic improvements as data skyrockets.

 

[MC3OZ]

Or just do both since they are on the same line and re-engineer them to share more parts. OR..........just wait and make a new gen on the new gen platform and enjoy margins that would make Goldman Sachs have envy.

I doubt that there is an easy / quick option.

It depends on what is happening with the Roadster.

A new common platform for Model S/X and Roadster is possible.

But I would not divert engineering resources away from Gen3 or a van to do this.

Model S/X and Roadster are lower volume models, that probably limits the capex and resouces that are justified short term.

Things like a move to a 48v architecture, new motors or a new battery pack might not involve major capex and may yield significant savings.

 

[SO16]

I agree on the updates for the Model X. I do think the Model S Plaid remains in production as the Flagship of the fleet... (see what I did there? 216mph w.Carbon brakes?) I think S remains as is until the Roadster is released, then Tesla will have a new top-of-the-line model.

But yes, unboxed X would be incredible. Imagine $80K ASP w. 100K/yr deliveries (unboxed does double in the same space, amirite?) and 50% g.m. That's like $4B gross profit on X...

BTW, keep the Japanese 18650s in the Model X, and release the Plaid+ w. Kato Rd 'high-silicon' 4680 structural pack. Elon teased 125KWh capacity? Would that give 500 miles range in a Plaid+ Model S?

In 2018, the model X 75D started at 80k.

So it’s possible.

 

[insaneoctane]

Strike true Peter Pan.
View attachment 925770
How is this even legal?

 

[Ogre]

V11 isn’t perfect by any means but it is a step change for FSD. I’ve seen enough anecdotal footage plus the limited tracking data we do have is already showing quite a noticeable increase in miles driven per disengagement.

I do think the next 6 months will see dramatic improvements as data skyrockets.

Agree!

But you suggested they push the product aggressively. I think there is a higher bar they should cross before they push hard on it.

For example, when they feel comfortable removing the "Coming Soon" label from Autosteer on City Streets. Then I could see them pushing a bit harder on it.

 

[Right_Said_Fred]

I like Tesla’s timing of these new price drops. The stock market usually doesn’t react well to them but with a holiday and the weekend coming up, the negative impact on TSLA may be limited. The media will have a few days to move on to other, more shiny objects.

 

[Ogre]

I like Tesla’s timing of these new price drops. The stock market usually doesn’t react well to them but with a holiday and the weekend coming up, the negative impact on TSLA may be limited. The media will have a few days to move on to other, more shiny objects.

Also, we're pretty close to the earnings call so we'll get much better perspective on the impacts of the pricing changes during that call.