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

[Singuy]

Bonzai! Some say people won't buy a Tesla now, because prices will keep dropping, but they forget a couple of things:
- Some people are happy with the current price (or any price) and buy anyway;
- Doubters will wait until Tesla raises prices again and wil buy then to avoid even higher prices (like you say).

Nothing like a 500 bucks increase causes people to fomo in. People just want that uptick as confirmation where the bottom is.

 

[mongo]

So you think that in the what 2 weeks since the last USA price cut Austin has ramped enough to cover the price reductions?

My thoughts?
I think the official IRS IRA guidance gives certainty.
A 2 weeks post price drop helps clear out order backlog and higher CoGS vehicles.
The price point wouldn't necessarily be set based on costs now, but rather for the average cost over the time period. So the question might be, "Will Austin ramp enough in this price's time frame (Q2 for reporting) to match their projection?"
(Presupposing we know what GM they want, if they even care vs OM)

 

[jerry33]

Yeah, I don't remember these articles as heavy SUVs started outselling sedans...

No problem. With only two Hummers per quarter it will be a while before parking garage load capacity will be an issue.

 

[Krugerrand]

It is surprising to me and these continued cuts appear to contradict Tesla's statements earlier this year about how sensitive vehicle order rate is to pricing. Not long ago they insisted that demand is very strong and that the price cuts resulted in orders double the rate of production. They also said they don't want long order backlogs.

So what happened? Maybe the effect was short-lived. Maybe automotive market macros have deteriorated substantially since then. Maybe Tesla expects production is ready to ramp fast at Berlin and Texas. Quarterly reports from Tesla and other OEMs should help us understand more. I hope Tesla will discuss these pricing moves in depth on the call. Right now the only guidance we have was Elon saying a few days ago "Tom, we’re not 'starting a price war', we’re just lowering prices to enable affordability at scale". It would also be helpful if Tesla leaders explain more of their rationale for why they still aren't advertising and whether lack of awareness could be substantially improved with a paid campaign.

Two of the top-voted questions on Say are related to this:

That’s fair - except. How much do you want to bet the questions are asked and answered exactly how they have been in the past?

‘Our cars are too expensive. We must continue to cut costs and improve efficiencies so that we can reduce the cost of our vehicles and transition the world to sustainability as quickly as possible.’

And Zach will reiterate exactly what he said in the last ER about GM no longer being the correct metric to view the financials. And once again that will be ignored.

The result will be the usual discontent, panic, and ‘Tesla is lying’ bs we’ve gotten every single time Tesla does something a different way while proving quarter after quarter, year after year, that nobody outside the company knows squat.

 

[generalenthu]

Feels like quite the pandemonium from the price cuts. Well deserved by the legacy auto, I'd say.

Source: seeking something..

 

[Singuy]

View attachment 929928

Feels like quite the pandemonium from the price cuts. We deserved by the legacy auto, I'd say.

Haha I think it's safe to say investors of anything auto hates this price cut more than Tesla investors today...lol.

 

[Hiline]

The price point wouldn't necessarily be set based on costs now, but rather for the average cost over the time period.

You don't think prices are set based on both supply and demand?

 

[Krugerrand]

My guess is as Zach has been finishing up this quarter’s numbers it became clear there was more room to cut pricing, which combats some of the fed induced crapola, the tighter monetary situations so many people are experiencing, and serendipitously coincides with continued production growth.

 

[Zero CO2]

upon review of all the price cut hand wringing here is my conclusion

people cannot handle price transparency ... they would rather be lied to and manipulated by a dealer network ... i guess
Telsa has been transparent

• input costs are higher we have to raise prices ... here is new higher price
• input costs are lower we can lower prices ...here is the new lower price

most people cant handle the truth

 

[Captkerosene]

“It would also be helpful if Tesla leaders explain more of their rationale for why they still aren't advertising and whether lack of awareness could be substantially improved with a paid campaign.”

This is the exact same thing I brought up just a few days ago…

Tesla is advertising. Maybe you didn't notice Elon's media blitz, but it's not just a coincidence that he's out doing all these interviews. Does anyone think Elon wants to be out talking to these people right now?

 

[SO16]

View attachment 929928

Feels like quite the pandemonium from the price cuts. We deserved by the legacy auto, I'd say.

Source: seeking something..

Yeah, that is only the beginning…

https://twitter.com/x/status/1648656940363382784

 

[Webeevdrivers]

Even though Tesla is not going to lower prices more in China for now, the market is pricing in the possibility of Chinese EV manufactures throwing in the towel for the US market due to what Tesla is doing. There's absolutely no way for these EV manufactures to gain any traction when their cars are 20-30k more than a Tesla since they don't quality for the tax credit plus shipping cost/import tax/etc. Company like Nio pride themselves on battery swapping, which is a major infrastructure build that cost way more in the US using US labors, then add to the fact they need service centers and delivery centers.

I believe it's safe to say new chinese EV competitors are DOA, and legacy auto are barely hanging on since lots of them use Chinese sourced materials.

But weird that they are not adjusting Canada. It’s definitely cheaper to buy in the US and import it to Canada now.

 

[mongo]

You don't think prices are set based on both supply and demand?

I think it's myopic to only focus on one set of factors.

Nintendo didn't match Wii production (or pricing) with demand because they foresaw market saturation which would leave them with underutilized capacity. Instead, they picked a build rate and let the backlog be what it was.

Tesla is selling into a larger market where cars are replaced with cars (repeat sales for forseeable future). They are prioritizing volume maximization over profit per unit. Area under the curve allows this to still increase operating profit.

Further, Tesla is ramping with a supply chain ecosystem to manage. They set their parts orders months ahead of time and need sales aligned with those orders. Otherwise, effective cost goes up due to excess inventory.

Steady state OEMs: inventory is up/down 5%, adjust incentives accordingly

Ramping Tesla: we're going to build 20% more cars this quarter, lower prices to get the orders lined up. -What if we overshoot and backlog gets too high?
-Raise 'em back up.

 

[insaneoctane]

Can someone confirm that IF you qualify for the full US IRA credit of $7,500, then the MY LR has never been more affordable in the US? $49,990 - $7,500 = $42,490. With or without rebate, has the MY LR ever been $42.5K before?

EDIT: The lowest price I can find was $48,990 for about 2 months in Feb/Mar 2021. There was no US Federal rebate available at the time. So, while if you consider the US IRA rebate makes the MY LR the most affordable ever, Tesla is collecting $1K more per car and has far greater economies of scale today vs Feb 2021...

 

[Unpilot]

I'm pretty sure that reality is what people are upset about.

Maybe...certainly not me.
Here is what I am upset about:

1.Highway deaths trend is not good, as this chart shows. Almost 48 thousand in 2021. If only someone was working on a solution/s

Historical Car Crash Deaths and Rates - Injury Facts

Between 1913 and 2021, the number of motor-vehicle deaths in the United States increased 1,018%, from 4,200 deaths in 1913 to 46,980 in 2021.

injuryfacts.nsc.org

2. Hundreds of thousands of pre-mature deaths due to particulate matter from ICE car's and trucks. If only someone was working on a solution/s

New study quantifies the global health impacts of vehicle exhaust - International Council on Clean Transportation

Study links ambient PM2.5 and ozone specifically caused by vehicle exhaust emissions to ~361,000 premature deaths worldwide in 2010 and ~385,000 in 2015 On-road diesel vehicles were responsible for nearly half of the health impacts of air pollution from vehicles worldwide in 2015, and two-thirds...

theicct.org

3. Wars and climate change due to extraction and burning of fossil fuels. If only someone was working on a solution/s

So I am upset about all the nonsense spewed when we should be ALL be pulling towards a better future.

 

[TesslaBull]

Who still pays for an iphone? There are so many incentives with iphones I just trade in my old and get a new one for no additional cost or 100 bucks. These promotions are a dime a dozen around black Friday, which is 2 months after release.

Who pays for an iphone?...everyone who gets tricked into thinking they are getting a "free" phone while paying outrageous monthly fees. They are just hiding the price from you while laughing all the way to the bank.

 

[bkp_duke]

Yep, must be earnings day . . . care bears are out in force.

Bullish AF

 

[Ogre]

Not the same vehicle. Today's base MY has bigger battery (with additional 35 mi of range) and AWD vs the one you're comparing- those enhancements make it more valuable.

Yes, the MY LR that I mentioned dropped $16K in 4 months. That's significant.

Again. MY LR is exactly the same price it was when I bought in Feb 2021.

You fell in love with a bubble price based on inflated commodities. Musk told us outright that price was coming down. Lots of people didn't listen.

Two years ago when I bought my Model Y for $50k I was thinking I was paying too much. General perception was that EVs were overpriced then. They were relative to the competition. 2022 was a big fat auto-pricing BUBBLE. Across the whole industry. It was a gift while Tesla was growing their factory.

The bubble burst. Not just Tesla, the whole industry is feeling this. They rest is just slower to react. You can see inventories building up for a lot of companies.

 

[FreqFlyer]

I do think Tesla should raise prices in a few weeks which actually causes more buying. Just like stocks, people want the rock bottom prices so they wait..until price goes up and then they fomo in.

No, people will just sit on the sideline for prices to go back down again. The market has been trained and the market controls what Tesla sells at, not the other way around.

 

[jabloomf1230]

Yeah, that is only the beginning…

https://twitter.com/x/status/1648656940363382784

The market for BEV pickups is still quite limited. The CT will do okay since it is so unique and it's a Tesla. Honestly, the more that I look at recent CT articles, I'm beginning to think that the CT will create its own market niche. It's kind of a goofy looking big car/SUV.