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These demand concerns are surprising to me. Tesla has so much demand it's ridiculous.
The used car market is the best signal, because Tesla, being a firm with a lot of monopoly power, unilaterally sets prices for new Tesla cars and then accepts whatever backlog comes with that, but in contrast the used market is basically an almost perfectly competitive auction involving many used car firms, and so it provides clearer econometrics indicating how much people actually want Tesla cars.
I just checked the US used car market as an example since it's Tesla's main market. On average, 2022 Teslas are selling for several thousand dollars more than the new price from Tesla.com, although that’s comparing just the base new vehicle price with no extras. I see this regardless of whether I look on Cars.com, CarMax, Carvana, Edmunds, TrueCar, or Kelly BlueBook. You can get a fresh new Tesla for less money than one made earlier this year with a previous owner plus wear and tear from 10k+ miles of usage simply by being willing to wait some uncertain number of months for delivery. Even when I sort prices lowest to highest for all model years, I see for example that the cheapest 2020 Ys are listing for about $58k and most of them are around $62k. This data indicates strongly that Tesla is voluntarily and benevolently choosing to charge less than the fair market equilibrium price.
This picture aligns perfectly with what we heard on the Q2 earnings call about demand being so strong they don’t even bother to spend time thinking about it and they think prices are embarrassingly high. I don’t think anything has changed much in the last 10 weeks except for production growing.
Additionally, Tesla's limited menu options also indicate overwhelmingly strong demand. Still today you can't buy:
Model 3 long range
Model Y standard range
Model S/X with a single motor, less than 670 horsepower (Lamborghini Huracán is ~630 hp), less than 100 kWh of battery, and no fancy gaming computer
Tesla's entire lineup is sold in just five standard paint colors. The Model Y is likely to pass the Toyota Corolla next year to become the best-selling vehicle by unit volume, yet the Corolla has thirteen paint colors despite being an economy car mostly being bought by people wanting to save money on car expenses. A luxury comparison might be the Audi Q7 with nine paint options, or the Lexus RX with ten. If you want a car that's dark blue, light silver, dark grey, cream, brown, green, beige, orange, yellow, or any other popular color, you're either getting secondhand work done on your new Tesla or you're buying another brand.
If demand were actually a concern at all, would Tesla continue to keep such a small selection on offer? No, of course not.
To play devil's advocate, the demand fears are around China (and to some extent Europe because apparently people think electricity now is as expansive as gas )
Simply not much to be done about the demand fears until we get data that disproves it, which means we're not get the demand fears to go away until Nov at the earliest since it seems Shanghai is still exporting vast amount of the 1st month cars to Europe)
We all know know and have known that whenever Tesla does something or changes something on Wall St, the first two word mentioned are "demand concerns".
These demand concerns are surprising to me. Tesla has so much demand it's ridiculous.
The used car market is the best signal, because Tesla, being a firm with a lot of monopoly power, unilaterally sets prices for new Tesla cars and then accepts whatever backlog comes with that, but in contrast the used market is basically an almost perfectly competitive auction involving many used car firms, and so it provides clearer econometrics indicating how much people actually want Tesla cars.
I just checked the US used car market as an example since it's Tesla's main market. On average, 2022 Teslas are selling for several thousand dollars more than the new price from Tesla.com, although that’s comparing just the base new vehicle price with no extras. I see this regardless of whether I look on Cars.com, CarMax, Carvana, Edmunds, TrueCar, or Kelly BlueBook. You can get a fresh new Tesla for less money than one made earlier this year with a previous owner plus wear and tear from 10k+ miles of usage simply by being willing to wait some uncertain number of months for delivery. Even when I sort prices lowest to highest for all model years, I see for example that the cheapest 2020 Ys are listing for about $58k and most of them are around $62k. This data indicates strongly that Tesla is voluntarily and benevolently choosing to charge less than the fair market equilibrium price.
This picture aligns perfectly with what we heard on the Q2 earnings call about demand being so strong they don’t even bother to spend time thinking about it and they think prices are embarrassingly high. I don’t think anything has changed much in the last 10 weeks except for production growing.
Additionally, Tesla's limited menu options also indicate overwhelmingly strong demand. Still today you can't buy:
Model 3 long range
Model Y standard range
Model S/X with a single motor, less than 670 horsepower (Lamborghini Huracán is ~630 hp), less than 100 kWh of battery, and no fancy gaming computer
Tesla's entire lineup is sold in just five standard paint colors. The Model Y is likely to pass the Toyota Corolla next year to become the best-selling vehicle by unit volume, yet the Corolla has thirteen paint colors despite being an economy car mostly being bought by people wanting to save money on car expenses. A luxury comparison might be the Audi Q7 with nine paint options, or the Lexus RX with ten. If you want a car that's dark blue, light silver, dark grey, cream, brown, green, beige, orange, yellow, or any other popular color, you're either getting secondhand work done on your new Tesla or you're buying another brand.
If demand were actually a concern at all, would Tesla continue to keep such a small selection on offer? No, of course not.
This poster wrote a pretty informative piece on the situation in China where the 3/Y competitors are fiercely trying to take marketshare under cutting Tesla on price while adding more stuff.
So it's not a huge concern since 20M cars are sold in China/year and all this competition including Tesla accounts for like 5% of sales. There are plenty of cake for everyone. However I do believe people are looking at this wrong and sees the competition as a bad thing. The competition is actually giving us insight into how much they have to do just to push their cars out for revenue. All of these companies beside BYD are not making a profit. And BYD is only making a 3% profit margin while Tesla is like 5x of this(probably 8x if Tesla just sold cars in China with the gigafactory). So yes these cars are adding 5 screens, Nvidia chips, foot massagers, whatever...while Tesla is taking out sensors and doing gigacasting. Seems like there's only one company here trying to be profitable while the others are bleeding investor's cash.
A few here on TMC comptemplating buying TSLA on margin. I strongly advise against it. Buying on margin only exaggerates the highs and the lows of TSLA.
Do I expect TSLA to reach ATH within the next six months? Yes.
Would I put myself in a position where my shares can be forceably taken from me via a margin call? Never.
Funds needed within two years should not be placed in the stock market, not in any stock let alone a 2X beta stock. Either you believe in Tesla's continued Mission or you don't. Guessing where TSLA will be by NASDAQ close today, next week or next month is a fools game. Too many people are looking for a quick buck. Patience is required.
Today my next-door neighbour approached me while I was in my garage and started asking questions about by Model 3. The basics: range, how do you charge, how long does it take to charge, is it a comfortable ride. I was excited to tell him (Lexus owner) about my positve experience. What I found interesting is that he seemed more excited than me for validating the BEV experience. I have had my Model 3 for over four years and only today has he approached me asking questions about BEVs. What did it take? I have no idea. It just takes time. As with Tesla, TSLA will blast off you least expect it. Will TSLA go up 10X in a year like it did in 2013 and 2020? No, however a 2X or 3X event is likely.
What most of us here on TMC are forgetting is that Tesla is still a big secret for almost all people on this planet, including financial analysts. Very few have the time to research Tesla on a daily basis like we do here on TMC to determine whether or not TSLA is a good investment. We are a fraction of <1% of 1%. We know Tesla like noone else. So let's not expect outsiders to know everything we know, when we know it. It takes time. The time will come. Patience will be rewarded.
Wouldn't it be hilarious if the judge wants it to go on simply to right the wrong that is Twitter. Perhaps by some beneficial ruling based upon the testimony which dictates a reduced price per share for the purchase, if not an outright handing over of control of the company to Elon. (based upon a recent posting indicating the Chancery Court has this power)
You will get different reactions to your opinion based on whether the respondent is more for the mission or the pure stock performance. The mission is really anti-destroying the competition because that generally puts more EVs on the road faster. Pure stock performance would want to crush the competition and would not share the SC network. IMO, while sharing the network will likely result in reduced costs, possibly increased profits, I have a hard time giving legacy access due to their absolute resistance to the obvious / stupidity. I realize that the mission suggests that we throw them a bone.
I see this point a lot about other car companies going out of business being bad for the mission, but I'm still not convinced of that because the global limiting factor is going to be battery raw material supply.
If we measure based on something like barrels of annual oil consumption eliminated per ton of nickel or per ton of lithium, Tesla has something like 30% better efficiency than everyone else and the gap is widening with the new Y design. So unless there's something about these other companies that can compensate for their inferior success at the one thing that matters more than all else, it seems like the corner case solution of allocating it all to Tesla is going to get us there fastest. I don't expect that as the most likely outcome but I think technically it would be fastest for getting off liquid fuels.
To play devil's advocate, the demand fears are around China (and to some extent Europe because apparently people think electricity now is as expansive as gas )
Simply not much to be done about the demand fears until we get data that disproves it, which means we're not get the demand fears to go away until Nov at the earliest since it seems Shanghai is still exporting vast amount of the 1st month cars to Europe)
We all know know and have known that whenever Tesla does something or changes something on Wall St, the first two word mentioned are "demand concerns".
Fears of demand will never go away. So many are convinced that people don't want EVs and that they aren't the future, others will quietly admit that but insist that because a company has been making gas cars for 100 years that means they will out compete Tesla at some point.
Um…how many Twitter followers do you have and how many do you add per day?
Additionally, if you could point me to your curriculum vitae so I might get a better understanding of why you unequivocally know better on this topic. That’d be super helpful.
This poster wrote a pretty informative piece on the situation in China where the 3/Y competitors are fiercely trying to take marketshare under cutting Tesla on price while adding more stuff.
So it's not a huge concern since 20M cars are sold in China/year and all this competition including Tesla accounts for like 5% of sales. There are plenty of cake for everyone. However I do believe people are looking at this wrong and sees the competition as a bad thing. The competition is actually giving us insight into how much they have to do just to push their cars out for revenue. All of these companies beside BYD are not making a profit. And BYD is only making a 3% profit margin while Tesla is like 5x of this(probably 8x if Tesla just sold cars in China with the gigafactory). So yes these cars are adding 5 screens, Nvidia chips, foot massagers, whatever...while Tesla is taking out sensors and doing gigacasting. Seems like there's only one company here trying to be profitable while the others are bleeding investor's cash.
Very informative and it is great (yes, competition is good for Tesla) to see all these new models available and shipping. And the details are great as well, but very hard to tell, from the objective perspective of a Chinese buyer, how these all stack up against one another.
Does anyone know of a matrix that compares the relevant specs of these? I'm going to guess that Tesla China is on top of this and has a working matrix to price accordingly as well as develop features accordingly, but it would be great to see if any are actually beating Tesla in any area with some features.
TSLA 10 The white California TSLA 10 License Plate is produced as it appeared on Elon Musk’s Tesla Roadster before it was launched into space atop Space X’s Falcon Heavy vehicle on February 6, 2018, the date Musk’s Roadster became the first standard roadworthy vehicle sent into space. California...
Is this real? What the hell is going on? Isn’t TWTR signing off on the deal? Does the judge even have the power to force a trial that neither party is interested in now?
I think Elon is rolling that dice or has knowledge that he won't be able to raise the capital to complete the purchase. So offering the full price basically moved the ball to get out from this with "just" a 1Bn price tag.
Is he still hoping bank financing gives him an out? In his letter to Twitter, Musk says he will do the deal “pending receipt of the proceeds of the debt financing.” (Per the terms of the deal, if the bank financing falls apart, he needs to pay only a $1 billion breakup fee.) The banks have already committed to their $12.5 billion — as long as a deal happens by April 2023. Is Musk hoping they try to back out?
Could Twitter stop Musk from using the banks as an out? One route would be to ask the judge to have the banks say in writing that they remain committed to funding the bid. The company could also ask Musk for a letter saying that he is unaware of any conditions that could impede the deal closing.
Do the banks wish they had an out? The leveraged loan market, which Musk is partly relying upon, has weakened in recent months. If the Citrix deal is any indication, the banks lending to Musk, led by Morgan Stanley, could be sitting on big lending losses. Note: They cannot change the terms of their lending agreement.
Also I wonder if it would be legal to purchase a ton of options at the current price for Elon.
No. They'd file a stay. Which is just a pause. And likely with a very short deadline (the original merger requires closing within 2 business days of parties agreeing everyone has met their obligations).
There'd be no motion for dismissal until after the deal was closed.
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