EVNow
Well-Known Member
Because they want to maximize the revenue and delay introduction of SR as long as possible.
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
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Perhaps the new target will be 38,900 with Premium-ish package. I don't expect the MR to be produced once the new (cheaper) battery pack design is in production in required quantity. Tesla will want to simplify production.
This may not be a popular opinion here but I don't see a realistic path to the 35k base model (Atleast not without a different business model. The true cost of the Premium package is probably < $2k . If they can't offer that base price then it seems conceivable that Tesla will sweeten the offer with a slightly larger battery at a slightly higher price.
IMHO To make the 35k base model profitable Tesla should/could offer additional unlockable software features and services. Acceleration profiles is one that would be easy. The MR and AWD non P Model 3s are likely being nerfed in performance for segmentation reasons, Tesla could unlock more revenue by monetizing these along with other features and services (Video streaming, premium music etc) just like they did by breaking out Ludicrous now on the S/X P model again.
gene
Supporting Member
It is the $5000 package that gets you vegan leather, upgraded audio, electric seats, rear seat heaters and glass roof.
Singer3000
Member
Don’t know how I feel about these rumours of Tesla partnering up with other Auto companies to provide the drivetrain for vans and trucks.
As a human being, this is great news. As an investor, it seems a shame to forfeit such a huge market in exchange for only a couple of grand of profit per vehicle.
As a human being, this is great news. As an investor, it seems a shame to forfeit such a huge market in exchange for only a couple of grand of profit per vehicle.
Smokey4141
Banned
Physically Unable to Perform....
Good question...... And soon, foretelling of the future...
skitown
Member
From the article, an ex-employee was quoted saying:
Yep, and I got one or two of those calls from Las Vegas Tesla sales people, telling me exactly that, about the $7500 Federal Tax Credit ending soon (I am so sick of hearing about it frankly) and I ought to get my Model 3 and why haven't you yet I mean you've had your reservation since, let's see--"March 31, 2016"--we both said in unison. I told him I simply don't care about the tax credit, and I am sitting this Model 3 craze out until the State of New Mexico gets a Tesla store and service center, even just one, so that we don't have a two-Tesla household with the closest service center 400 miles away, the risk for us just feels too high, considering how much service my S has required over the years. So the sales guy said "well there's no point in us holding on to your $1000 reservation anymore because it's not needed" and I said "okay well how fast can I get it back" and he gave me all these different options including a gift card (!? hell no) and I said I look I just want a check and he said oh well that is the slowest method, like up to 60 days' wait. So I said well hold on to the reservation a little longer as we still wanna buy the car but we're waiting, like I said, and also, we wanna see Tesla pump out 300,000 or 400,000 3's out of the factory before we get one, just to make sure Tesla's worked out a lot of the glitches, again given the number of issues, most admittedly minor, but all requiring service (including multiple drive units and replacement of the entire DC charging system). The sales guy, his talking points exhausted, surrendered, and we said bye and that was that. I still eagerly await getting a 3 but we're sitll in waiting mode. I wonder how many other people Out There are in a similar situation--absolutely positively getting a 3 eventually, especially if they're already an S owner, but taking their sweet old time (which is driving Tesla crazy).
[I will add that it blows my mind that a brand-new 100kWh Model S, with dual motor, 2nd gen seats, all the latest whistles and bells and a 300+ mile range, now costs LESS than my ancient, pre-parking-sensors-let-alone-Autopilot-etc Model S85 did in 2013. So it is extreeeeeeeeemely tempting to finally replace my Model S which hits 95000 miles tomorrow, with a spanking new "faster, cheaper, better" S... the heck with the 3!]
FWIW - we had a couple Model 3 reservations as I was hedging that perhaps one could be rolled over into a Model Y. After we got our Model 3, I decided to cancel the 2nd Model 3 reservation and the refund was nearly immediate. Not sure of exact timing, but like a couple days or something. I was surprised how quick it was after all the chatter I’d read on TMC about slow refunds. Your mileage may vary.
EVNow
Well-Known Member
In the past they have provided useful revenue without any strategic issues. So, I don't see a downside.
Tesla will always have patches of time when they are not production constrained. That would be the time to make some money through these deals - like perhaps between Q2 and start of SR production. A few quarters after starting SR but before Y starts, etc. Atleast I hope, their production capabilities keep going up and surpassing the demand with the current lineup.
That acronym is for a different club. You are looking for the other TMC (troubled and manic club). This is the Tesla Motors Club.
EVNow
Well-Known Member
On the issue of swing trading - I thought I'd just back test.
From May of 2017 there were 7 instances of buy and sell - assuming a low of 305 and a high of 350. You could make $31.5k in the last 21 months - with just $30.5k investment (100 shares). That is over 50% annualized returns.
You could improve this by using trailing limits, rather than static limits.
From May of 2017 there were 7 instances of buy and sell - assuming a low of 305 and a high of 350. You could make $31.5k in the last 21 months - with just $30.5k investment (100 shares). That is over 50% annualized returns.
You could improve this by using trailing limits, rather than static limits.
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Chunky Jr.
Supporting Member
humbaba
sleeping until $7000
Just remember, providing a drive train is essentially free money for Tesla (no risk of sales, etc., its just produce what you are paid to) and in no way prevents them from entering those markets. It could also give Tesla an opportunity to (essentially) beta test a different drive train without bearing all the risks themselves.
For example, say you have an idea for how to approach the drive train of a truck. You think it's good, but to really prove it out you need production. Someone else is offering to pay you money to produce the drive train at a profit, and they bear the market risk. You learn from the production, take your lessons learned, and eventually produce a new drive train for your own trucks. In other words, someone else is paying you to do R&D.
Let's say it works out great for the this other auto manufacturer and they get some good EV trucks selling as a result. This is a win for the Tesla mission (accelerating EV adoption), but is it really that great for the auto manufacturer? What do they really have to show for it? That they outsourced the drive train, but they have no in-house knowledge built up. Unless Tesla sells them production rights at the end of the day they are beholden to Tesla.
The way I see it is the only way this can work out for the other manufacturer is if they use the deal with Tesla to get a jump on the market and develop their own technology in parallel. That could work, but it depends on them becoming competitive with Tesla before Tesla enters the market segment -- and quite frankly, if they were able to then they wouldn't need Tesla to help them.
So I see no way in which Tesla is forfeiting anything. In fact, they are getting paid for R&D. I'd be more worried about the other guy. Maybe they'll have a contract that protects them better than it looks, but since Tesla is bargaining from a position of strength I really doubt it.
I was just doing some very rough math (speculation really) on what a SR Model's cost reduction could be relative to a current MR model. I'd love to have someone more knowledgeable about the likely cost reductions critique my estimates:
Guesstimates for Model 3 SR Cost reduction vs Model 3 MR:
Glass roof to metal: $1,000
Cloth Seats: $250
Standard Audio: $250
Drive Unit Cost Reduction: $150 (Using cheaper inverter)
Standard Battery:
[email protected] would be ~240 Miles EPA
MR Pack estimate 62KWh*$150 = $9300
SR Pack estimate 55KWh*$125 = $6875
= $2425
So current MR base price of $42,900 could come out to $38,825 keeping margin targets the same.
I guess if they can significantly increase volume they can reduce fixed costs per unit
like depreciation and they can probably squeeze out some more labor savings, then if Tesla were to also take a margin hit they could make a small profit at $35,000.
Guesstimates for Model 3 SR Cost reduction vs Model 3 MR:
Glass roof to metal: $1,000
Cloth Seats: $250
Standard Audio: $250
Drive Unit Cost Reduction: $150 (Using cheaper inverter)
Standard Battery:
[email protected] would be ~240 Miles EPA
MR Pack estimate 62KWh*$150 = $9300
SR Pack estimate 55KWh*$125 = $6875
= $2425
So current MR base price of $42,900 could come out to $38,825 keeping margin targets the same.
I guess if they can significantly increase volume they can reduce fixed costs per unit
like depreciation and they can probably squeeze out some more labor savings, then if Tesla were to also take a margin hit they could make a small profit at $35,000.
It would also improve their economies of scale wrt all of their drivetrain manufacturing.
anthonyj
Stonks
Why is it such a sin to think that demand is slowing from the ridiculous 25,000 units they sold in December. Obviously they can’t sell 25,000 every month in the USA at this price point. Obviously demand is slowing. Declining demand doesn’t mean that demand isn’t strong. So, it’s not bearish to say that demand has been slowing from its peak.
Silent Ludicrosy
Supporting Member
My perspective on the price drop: it’s like the referral program is still here except now you get your reward immediately when you buy the car, in cash, without having to spam people with a referral code. Word of mouth advertising will still happen and Elon is still grateful for it.
Okay so if they didn't cut prices, there will not be 2 SR waiters next month so who will be buying the MRs without a price cut in this example? If your answer is 2 MR waiters..then a price cut essentially doesn't do anything for now right? So my statement still stand, it's another way of saying there's not enough demand at current price level.
It's absolutely a sin because the BMW 3 series sell at a rate of 33k/month world wide. Tesla can probably make about 25k M3 cars a month. So they need to move this many Model 3s world wide/month at least because Elon guided a demand of 500k Model 3s/year in a recession and they can only make 350k cars in 2019. So I don't see why Tesla cannot at least gather enough demand of 70% of the 3 series in 2019. If Tesla's real reason to reduce the price due to demand issue at current production rate then the Model 3 is not as popular as we think.
adiggs
Active Member
My own view of things - if Tesla's got a partner they believe to be motivated to make and sell as many all electric vans and trucks as they can, and they just need Tesla to be the partner that supplies them with as all of the drive trains they can sell, I'd love it. Teslas total revenue will apparently drop as they won't be building the whole vehicle and selling that, but the business is also simplified and that market gets an excellent all-electric vehicle in volume, sooner and faster.
The key is that partner needs to be big in that market and not just be doing compliance volumes - you want a partner that's in Tesla's ear every quarter about more packs and motors; Tesla's holding the partner back and if only Tesla would just get the Gigafactory built all the way out a few quarters faster, and ramp the packs and motors faster, then they could sell more trucks and vans sooner.
Tesla gets to simplify their own operation (build packs and motors), and don't need to worry about an assembly line, building up the industry delivery chain, etc..
They key is the partner, and it isn't their name. It's their attitude. Are they ready to sign on to accelerating the advent of sustainable transport, by putting what they know together with what Tesla knows, and together putting more vehicles into the market, sooner, than either can on their own? I'd love to see that.
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