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This sounds a plausible explanation.

Another interesting detail is the timing of this announcement: just before the Q4 delivery report. This looks deliberate too.

It suggests that the P&D report might be released today (potentially before trading opens), and maybe they timed it so that any price reaction would be mixed into the price reaction of the Q4 deliveries?

But I have no idea whether this is bullish or bearish. :D
Before the event we’re all obsessed with the p&d number. But surely the interesting bit is going to be:
x thousand MICs have been produced and pending delivery to customers before end of Jan. Daily production rate at Fremont is now YYY and at Shanghai is ZZZ with phase 1 ramp complete by ddd. Guidance for 2020 is !!!

I’d expect to get at least some of these blanks filled in today, though of course the rest will have to wait for the results and conf call.
 
From reading more of twitter, the consensus is they'll hack the grids and turn off electricity, plus block the straight of Hormuz to cut oil. Actually, not sure what would be the point in the latter, I believe U.S. is a net exporter of oil, don't really need it.

Have a care for the world economy. Asia runs on Middle Eastern oil.

The Strait of Hormuz is the world's most important oil transit chokepoint | JUNE 20, 2019
The Strait of Hormuz is the world's most important oil transit chokepoint - Today in Energy - U.S. Energy Information Administration (EIA)

chart4.svg


If the world economy goes south, everyone will suffer. But even more importantly in this instance, the US has lost the hard-earned trust of erstwhile friends and allies, which implies much greater volatility, uncertainty, and a growing insularity that threatens to become entrenched, with long-term consequences.

The problem with backing the Iranian regime into a corner is that the zealots increasingly have absolutely nothing to lose and a proven predilection for violence and mayhem, while moderates have repeatedly failed to impose change.

Emotionally, I'm perfectly OK with the killing of a Grade A thug, which is who Suleimani was. But realistically and politically, it sadly further confirms the US as a rogue, careless, friendless, irrational actor.

How exactly can the Republican Guard hardliners be dissuaded from aggressive retaliation? The Iranian economy has already cratered. And what exactly are US options aside from bombing here and there? Bombing everywhere?

Let's remember we had arduously arrived at a working agreement with Iran that was supported by all the relevant countries including China and Russia.

How do we come out of this better than going in? How long does it go south, and how does it go "north" again?

Tesla benefits from slowly, predictably, and transparently rising oil prices. Will the European Commission maintain very significant penalties for emissions if wild swings in the price of oil trigger a global recession that threatens to bankrupt domestic industry?



Speaking of no worries about the long-term...

Excellent. It's important to be cognizant of the sheer numbers of similar-sized crossovers/SUVs being sold in all the world's principal markets - I've posted them more than once. I expect Model Y to become "the car" in many places, be built in greater numbers than any Tesla before, and further drive down costs. Rational competitors must know the train's picking up pace.

By the way, Audi belatedly realized something was up in the Netherlands:

december 2019 totaal: 42.270
1 Tesla Model 3 12.062
2 Audi E-tron 3.037
3 Nissan Leaf 1.068
...
39 Tesla Model S 238
...
42 Tesla Model X 192

The last 2'000 e-trons sold in the latter half of the month.

Meanwhile in the new year: registraties bijgewerkt t/m 1 january 2020 totaal: 14
1 Ford Fiesta 2
2 Suzuki Swift 2
3 Suzuki Vitara 2
4 Toyota C-HR 2
5 BMW 7-serie 1
6 Nissan Micra 1
7 Renault Scénic 1
8 Volkswagen T-Roc 1
9 Volkswagen Tiguan 1
10 Volvo S60 1

The list actually stops here.
We've clearly reached the point where demand for EVs has been completely satisfied.
 
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Mod: 44 posts with good discussion or vaguely funny jokes about IRAs moved to their own thread, so they will be easier to find if anyone looks. But then I locked the thread... it's all been said. Anyone ignoring three moderators' warnings in this thread will be swatted.
Roth v Traditional IRA
--ggr
Vaguely funny. It must have been one of my better jokes.
 
Oil futures spiked significantly on news of conflict escalation with Iran.

Times like these should highlight the advantages of driving a car whose fuel source is shielded from geopolitics, extreme price volatility and potential supply disruptions.
Quite amazing that a country where the population is so adverse to sending their children to war in the middle east isn't jumping into solar + ev with both feet. Sustainable domestic energy is probably the greatest national security play the US could make.
 
Info on the price cut from Bloomberg:

The price was lowered to 323,800 yuan ($46,500) from 355,800 yuan. After subsidies from the Chinese government, prices start from 299,050 yuan, Tesla’s website showed.”
Bloomberg - Are you a robot?
So the purchase price is below the psychological threshold of 300k RMB.

As far as I know, this is the first departure of Tesla’s policy of selling their cars for the same price worldwide - plus taxes/shipping/duty.

I expect this will rocket the Model 3 to the top of the market in China.

VAT for cars was lowered to around 10% in early 2019, but Tesla got even the 10% VAT exempted:

China to exempt Tesla cars from 10% purchase tax

"Tesla sees China as one of its most important, growing markets, and the exemption from a 10% purchase tax could reduce the cost of buying a Tesla by up to 99,000 yuan ($13,957.82), according to a post on Tesla’s social media WeChat account.

Sixteen variants - all the Tesla models sold in the country - are listed on a document issued by MIIT on its website, including Model S, X and 3."​

The MIC Tesla is exempted too, and Tesla has now passed through the VAT cut to customers.

Just to note on this price cut, as I posted before, China listed auto prices include 13% VAT but do not include Purchase tax (which was previously 10% but Tesla is now exempt). The EV subsidy is paid to the company and not to the customer in China, so this subsidy is additional revenue to that paid by the customer.
To convert from China to US pricing, you need to: China List Price of ¥299k / (1 + 13% VAT) + ¥25k Subsidy = ¥289k or $41.5k.
So the China MIC SR+ pricing is now just $1.5k above the current US SR+ price of $39.99k, previously MIC was ~$7k more expensive.

The price reduction is likely due to:
  • The recent addition to the subsidy list.
  • China's suspension of further auto parts tariffs which had been set to begin in mid December.
  • Strong progress on ramping up the production line with labour hours per car already looking close to design specs.
Presumably these price cuts will be passed on to all customers that have already made orders.
This will appear a great goodwill gesture and will cause a lot of social media/word of mouth marketing. It will also avoid the usual discontent when early customers pay higher prices.
I think today's price cut prior to first deliveries was likely always Teslas plan in a best case scenario where tariffs/subsidy and production ramp all went smoothly.

I guess the remaining $1.5k price premium over the US SR+ is due to tariffs paid on parts imported from the US (net of the tariffs Tesla pays in the US on parts imported from China).

Production cost will continue to reduce due to the following factors, but its difficult to know if prices will continue to lower past the US equivalent pricing to reflect the lower production cost in China, or whether it will just make higher margins.
  • Ramp up of Battery and Powertrain shop in China which will significantly reduce tariffs paid on parts imports from the US.
  • Lower production costs as production ramps due mainly to: Less depreciation per car, less staff hours per car, less scrap per car
 
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So the China MIC SR+ pricing is now just $1.5k above the current US SR+ price of $39.99k, previously MIC was ~$7k more expensive.

Does China have the equivalent of the U.S. "Destination & doc fee" of $1,200? If not or if it's much lower, then the price gap might be even smaller.

Edit, I just checked the Chinese Tesla site, and there doesn't appear to be any destination fee:

upload_2020-1-3_11-35-32.png
 
Does China have the equivalent of the U.S. "Destination & doc fee" of $1,200? If not or if it's much lower, then the price gap might be even smaller.

Edit, I just checked the Chinese Tesla site, and there doesn't appear to be any destination fee:


Interesting, I thought they had the same doc fee everywhere.
So it looks like the prices are now largely the same in US and China.
This likely means the Tariffs Tesla US pays on parts imports from China are ~ to the tariffs Tesla China is paying on the Powertrain/Batteries/Seats/Other Components, Tesla China is currently paying on imports from the US.
 
For a bit of perspective - about 1.2 million cars over the 300k rmb price point were sold in China in 2018. That market is projected to grow by 8+% CAGR over the next 5 years.
China Luxury Car Market | Growth, Statistics, Industry Forecast 2019-2024

Tesla bears have focused too much on the waxing and waning of the Chinese EV market. That’s obviously misguided.

Can Tesla grow to take 20% of the luxury vehicle market in China? That would be just about right for GF3 cranking out 150k Model 3 & 150k model Y per year. That would be about $15 Billion in revenue, for those keeping score at home.

There is a really good perspective on Tesla’s potential in capturing China market share by Alex Potter, analyst at Piper Jaffray. He understands the China luxury vehicle segment better than anyone, and doesn’t think Tesla can get to 20% market share so easily. Listen to this interview as to why, super insightful:

‎Tesla Daily: Tesla News & Analysis: Interview: Alex Potter of Piper Jaffray (12.11.19) on Apple Podcasts

Btw, he is very bullish on TSLA, and owns a Model 3.
 
Official car registration numbers for December in Norway are out.

First screengrab lists car models sold in december.
Antall = count, hittil = YTD, Denne mnd = this month.
The number in front of model names indicate YTD ranking.

ModelsDec19.png


The second screengrab shows car brands total sales in 2019:

Brands2019.png



Source: Registreringsstatistikken – Opplysningsrådet for veitrafikken
 
More stats from 2019 car sales in Norway.


Registered 142 381 new cars, 5548 less (- 3,8 %) than in 2018.

Zero emission vehicles had 42,4 % of the 2019 market. In 2018 they had 31.2 %.

Average CO2 for all new cars registred in 2019 was 60 g/km, 11 g/km lower than in 2018.

16.0 % had diesel engines compared to 17,7 % in 2018.

25.9 % were hybrids compared to 29.0 % in 2018.

1928 vans with zero emissions were registered. Up 20.3 % from 2018.


Source: Bilsalget i 2019 – Opplysningsrådet for veitrafikken