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

[Singuy]

About gaming.

Look at the portz. Unity and Unreal. Sure Tesla can license 50 year old Atari games for pennies but I now look at what they are thinking about..Fortnite.

Essentially this is the beginnings of a Tesla app store, taking a chunk of revanue from microtransactions or just providing the platform.

So no porting games is not a waste of time. What are apps stores money makers for phones? Games....

 

[KSilver2000]

Frequently adjusting the price by small amount (both ups and downs) should be fine. It's a way to draw news and buyer's interest.

Does Tesla still have a person in charge of marketing? They shouldn't cut cost in this area. Do something on the internet will cost very little but bring huge benefit. Some say there is no demand issue. I don't agree. Have more demand than production is much better than barely balance demand and supply.

Frequent, regardless of how small or large, price changes is definitely not the way to drum up news and interest in a positive way. As you say, marketing is necessary. That’s how you generate interest, not price changes. That is what companies with demand problems do. It’s really no different than all other mainstream ICE makers having sales and rebates. Do you ever see Porsche or Land Rover having frequent sales/rebates/incentives?

 

[skidme]

Jaguar Land Rover is having their going out of business sale soon.

 

[Chocochip]

If you take one person's narrative on Monday and then a different persons narrative on Tuesday, arguing the narrative has changed is a little odd.

He was actually right on point in saying the demand for the Model 3 was theoretical based upon a $35k car, and that there's a finite market for mid-sized sedans, and their success in that market depends on how crowded it is with similar cars (similar from the point of view of an average customer looking to spend $35k). That isn't rocket science, or FUD or any other hyperbole, it's pretty rational.

Have you heard of this thing called the "Tesla stretch"? Sure, there's a certain market for a $35k car, and a smaller market for a $45k car, but what tends to happen with Tesla is that some of the people who buy a $45k Model 3 would not spend that money on any other car. Part of it is the inherent savings of driving an EV, but part of it is the desirability of these cars. Now, clearly there were many people who put down a deposit in 2016 expecting to be able to buy a $35k Tesla, and some of them would have given up in the meantime, but let's not forget that the EV market is a constantly expanding one, while the ICEV market is contracting. In the end, that is fundamental to TSLA as a growth stock and the reason why it's not valued the same as any other automaker. So, for these reasons, one soft quarter (although the debacle with the Europe & China deliveries contributed to that) should not be sufficient to conclude that demand has softened.

Tesla themselves recognize the market is growing at a fixed pace, and there will be competition from traditional makers at that price point. Ergo, they need to continue to lower costs, they need to diversify their offerings (Model Y, maybe a truck) and they need to increase volumes. If the market can support 700,000 cars a year, and they're struggling to make half that, they're letting others in.

Wait, I'm confused... so now it's a supply problem? If they're struggling to produce half of the potential demand, how can demand be soft?

 

[mongo]

Frequent, regardless of how small or large, price changes is definitely not the way to drum up news and interest in a positive way. As you say, marketing is necessary. That’s how you generate interest, not price changes. That is what companies with demand problems do. It’s really no different than all other mainstream ICE makers having sales and rebates. Do you ever see Porsche or Land Rover having frequent sales/rebates/incentives?

Tesla doing a price change is marketing. Look at all the free articles they get when they do it.

 

[Pras]

As much as it sounds random, Tesla must be using some scientific approach to pricing changes. I am assuming they have some pricing model / team which regularly meets to adjust the demand and supply. For example they increased $400 on 3s and offset that with 2.5k on s+x. This will redistribute demand mix a little.

 

[Joe F]

We’ve been at war for years. This is the battle of Winterfell right here.

Not a fair battle. Tesla can borrow a Dragon from SpaceX.

 

[KSilver2000]

Tesla doing a price change is marketing. Look at all the free articles they get when they do it.

Not all news is good news.

 

[SunCatcher]

Talked to a guy yesterday on the phone minutes after he had a crash in his Model 3. It was on an LA fwy at 70 mph. Hit by a truck his car rolled 4 times. He was fine. That’s the kinda’ car I want my family in!

Would love to see the dash cam footage of that... and then to see it show up on all the local news broadcasts, showing how safe Teslas are. I mean, that would surely happen, right?

 

[Chunky Jr.]

for sure they will recognize the difference in prices

Sorry, I meant the stock price, not the price of the car which they would definitely notice. I edited my earlier post to clarify

 

[Pras]

Not all news is BAD news.

Fixed it for you.

 

[Zaxxon]

Essentially this is the beginnings of a Tesla app store

I've been hesitant to mention that, as it's certainly possible that they're 'just' porting Unity/Unreal because they want a game or two. But having both of those running on the system would also be... Well, if not a prerequisite for an app store, a very big draw for developers to an app store.

 

[MarcusMaximus]

As much as it sounds random, Tesla must be using some scientific approach to pricing changes. I am assuming they have some pricing model / team which regularly meets to adjust the demand and supply. For example they increased $400 on 3s and offset that with 2.5k on s+x. This will redistribute demand mix a little.

As far as I can see, they only lowered the SR S/X, right? I’m thinking their order mix was bifurcated between Model 3 and LR S/X, and their cost structure is optimized around having an even mix of SR and LR. So, they decrease the SR pricing slightly and increase Model 3 slightly to push some small % of higher end Model 3 buyers to S/X.

 

[elasalle]

Talked to a guy yesterday on the phone minutes after he had a crash in his Model 3. It was on an LA fwy at 70 mph. Hit by a truck his car rolled 4 times. He was fine. That’s the kinda’ car I want my family in!

Story with pics should make some news .. (with his permission)

 

[MarcusMaximus]

Not all news is good news.

Not all news is bad news either.

 

[KSilver2000]

As much as it sounds random, Tesla must be using some scientific approach to pricing changes. I am assuming they have some pricing model / team which regularly meets to adjust the demand and supply. For example they increased $400 on 3s and offset that with 2.5k on s+x. This will redistribute demand mix a little.

If Panasonic cell shortage was really the issue with production being constrained, how would this help Tesla reach 90k deliveries?

 

[kakamora]

Frequent, regardless of how small or large, price changes is definitely not the way to drum up news and interest in a positive way. As you say, marketing is necessary. That’s how you generate interest, not price changes. That is what companies with demand problems do. It’s really no different than all other mainstream ICE makers having sales and rebates. Do you ever see Porsche or Land Rover having frequent sales/rebates/incentives?

Agreed they should follow the Apple play book here on pricing. There was only one large Iphone price change at the beginning, but after that they held their premium pricing constant.

 

[Zaxxon]

As far as I can see, they only lowered the SR S/X, right? I’m thinking their order mix was bifurcated between Model 3 and LR S/X, and their cost structure is optimized around having an even mix of SR and LR. So, they decrease the SR pricing slightly and increase Model 3 slightly to push some small % of higher end Model 3 buyers to S/X.

No, the LRs were reduced, as well. I've got one on order.

 

[azaz]

not scientific but think Model 3 demand is going quite well right now....inventory count on the site shows usually 10+ orders a day for my zip

 

[Zero CO2]

Talked to a guy yesterday on the phone minutes after he had a crash in his Model 3. It was on an LA fwy at 70 mph. Hit by a truck his car rolled 4 times. He was fine. That’s the kinda’ car I want my family in!

I guess that is not news worthy

Thanks for sharing the video. I agree 90K deliveries in Q2 are needed, but I doubt we will get that. The recent price cuts are a bit concerning for the short term

Re the Video - Few things that stood out for me from that clip that demonstrates the misinformation out there.
1) "Tesla is misrepresenting the battery cost which is closer to 240 at the cell level"
2) "There was no supply issue" Panasonic themselves confirmed that TSLA was cell starved in their conf call.
3) "The best possible thing that can happen for TSLA is if other EOM decide to maintain stats quo and go slow" that said he does acknowledge the lead that TSLA has and the fact that its widening. I would have expected some mention of Autonomy, Maxwell, Product roadmap, Vertical integration.

There were some interesting points in there but I find it hard to believe the points above.

Talking about pace. I have not seen anything like GF3 being built in 5 months. Someone need to give them credit for hitting those aggressive deadline no?

I love this analyst he is constantly focusing on some battery cost numbers that he read in some report .blah ... blah.. blah .. but there was a definite change in his tone here ... I think he wants to scream at the top of his lungs to all the CNBC viewers .. "I cant do this any more ... I love Tesla ... FU all ICE advertisers ... there I said it.... I guess I wont be invited back to CNBC "