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

[Nolimits]

Design is a mix of function (specifications), cost and aesthetics.

Sometimes function and cost lead to compromises on aesthetics.

We need to see the Highland Model 3s on the road and in a range of different colors. and we need to understand the gains in function and the reductions in cost.

In future there may be an opportunity to improve the aesthetics while delivering the same specs for the same price.

Imagine the new highland refresh in roadster red or Ultrared.

As an investor, $3k upcharge for Ultrared would be tasty. They may still produce “older/current” model3 due to demand but w lower price and jack up the new highland w higher price for margins.


Then imagine model Y w the new front end. Wow…

Megafrunk

https://twitter.com/x/status/1646691343111196672

You just made my evening.
The CT is a beast!!!!

 

[FSDtester#1]

Dude.... there were like 500 people like you on this forum over the last 10 years.
My main concern is not Tesla selling cars but Tesla becoming a monopoly. GM, Ford, VW, Toyota all have insane amount of debt that they are barely capable of servicing now. Legacy auto will be dead without government bailouts. They cannot afford a price war with Tesla. Tesla can and it will be ruthless.

I am seeing a lot of replies to posts I can't see.... hmmmmm

 

[Chunky Jr.]

Megafrunk

https://twitter.com/x/status/1646691343111196672

out : Funkadellic
in : Frunkadelic

 

[Chunky Jr.]

If I get a tshirt in that same pattern of the wraps for prototype cars, no one will notice how much weight I've gained since college.

 

[Ogre]

out : Funkadellic
in : Frunkadelic

FRUNKENSTEIN

 

[2daMoon]

FRUNKENSTEIN

Or, for the beer lovers...

STEINENFRUNK

 

[Ogre]

While on the topic of Frunkenstein. It’s likely the tent thing in font if the truck is one of these or something quite similar.

Ford built a mobile wind tunnel from shipping containers - Autoblog

Instead of taking new cars to the wind tunnel, Ford's bringing the tunnel to the factory.

www.autoblog.com

Not for testing aerodynamics or things like that, it tests cabin noise at speed and effects of wind on the vehicle. Chucks 80mph wind at it.

Here’s the wiper tested at 80mph.

https://twitter.com/x/status/1646664717828784128

Note 80mph is the wind generated by the tent thing, the vortexes created by the wiper break the speed of sound.

PS: it’s on a turntable so you can test what it’s like doing 80mph in reverse.

 

[betstarship]

...is anyone else seeing every conversation they have regarding anything Tesla, Twitter, or SpaceX turning into an argument about what Elon Musk says? double points if its by family and friends?

 

[JusRelax]

I'm sure someone will try to convince themselves that Tesla has just decreased COGS in Berlin by 5-10% to account for this new additional round of price cuts.

https://twitter.com/x/status/1646701473705738242

If you had stopped your post there, I would have liked your post, because that is a statement that I completely agree with. Yes, I do believe COGS in Berlin has decreased since the last price cut in Europe!

I'd hate to break it to you, but you may want to take a few pointers from @Gigapress , because his bearish points are better than yours.

 

[Hiline]

Are you saying there is more demand than there is production at current prices? If that statement is true, why is there a need to reduce prices?

This is literally by definition. Nobody cuts prices when there is more demand than supply. Anyone arguing against this is not worth listening to. I'm with you that the dollars would be more wisely spent on educational marketing than on price cuts. I do subscribe to Elon's philosophy of building a superior product that sells itself, and this strategy worked well in the past before Tesla got to this scale. To sell several million vehicles per year, they need to inform people about their superior product. There's a whole business discipline for this called marketing.

 

[Singuy]

I'm sure someone will try to convince themselves that Tesla has just decreased COGS in Berlin by 5-10% to account for this new additional round of price cuts.

https://twitter.com/x/status/1646701473705738242

How the world has changed in one year. I never thought it imaginable that Tesla Automotive would reach zero growth in earnings so quickly. PE ratio valuation will likely take a hit, down to 30 to 40. Mid $150's might be the share price for a year or so.

We should discount 12% off the Q3/4 2022 peak pricing ASP just based on fx. If you haven't noticed, euro strengthen substantially since the massive price increases which a lot of it was used to offset the weak EURO due to the energy crisis they were having.

 

[khill]

This is literally by definition. Nobody cuts prices when there is more demand than supply. Anyone arguing against this is not worth listening to. I'm with you that the dollars would be more wisely spent on educational marketing than on price cuts. I do subscribe to Elon's philosophy of building a superior product that sells itself, and this strategy worked well in the past before Tesla got to this scale. To sell several million vehicles per year, they need to inform people about their superior product. There's a whole business discipline for this called marketing.

Exactly my point. Thanks.

 

[Dikkie Dik]

Finally price cuts on S & X in the Netherlands, price difference with the US was getting ridiculous imo.

LR S is now at €105K and LR X at €114K.

 

[Ogre]

This is literally by definition. Nobody cuts prices when there is more demand than supply. Anyone arguing against this is not worth listening to. I'm with you that the dollars would be more wisely spent on educational marketing than on price cuts. I do subscribe to Elon's philosophy of building a superior product that sells itself, and this strategy worked well in the past before Tesla got to this scale. To sell several million vehicles per year, they need to inform people about their superior product. There's a whole business discipline for this called marketing.

I feel compelled to drag out this chart right now.

When people talk about "Demand" in vague terms and complain about price drops, they need to keep in mind that Tesla has massively increased production over the past 2 years and after a certain point, they simply run out of people who can afford cars at a given price point. If Tesla is pricing correctly for demand and their production increases 50%, they absolutely must decrease prices to sell those cars. Look at the chart. There are only 2 ways you can maintain prices while increasing production:

• The vehicle was mis-priced to begin with. (was priced too low)
• Never mind... there is only one way. The alternative is you don't sell what you've produced.

Tesla isn't dropping prices to maintain sales, they are dropping prices as their production is massively expanding. Every $1 price drop increases the number of people who can afford Tesla's cars. Advertising can't increase the number of people who can afford your car. It does the reverse.

Edit/ PS: As interest rates go up the price of vehicle people can afford goes down as well.

 

[khill]

I feel compelled to drag out this chart right now.

When people talk about "Demand" in vague terms and complain about price drops, they need to keep in mind that Tesla has massively increased production over the past 2 years and after a certain point, they simply run out of people who can afford cars at a given price point. If Tesla is pricing correctly for demand and their sales increases 50%, they absolutely must decrease prices to sell those cars. Look at the chart. There are only 2 ways you can maintain prices while increasing production:

• The vehicle was mis-priced to begin with. (was priced too low)
• Never mind... there is only one way. The alternative is you don't sell what you've produced.

Tesla isn't dropping prices to maintain sales, they are dropping prices as their production is massively expanding. Every $1 price drop increases the number of people who can afford Tesla's cars. Advertising can't increase the number of people who can afford your car. It does the reverse.

View attachment 928281

As I have mentioned before, the world hasn’t run out of people who can spend 50K or more on a car. The TAM for cars priced above 50K is about 8M or maybe slightly lower that in 2023. Why assume there are no more people who can afford a Tesla and hence they have to reduce prices? Why not inform people who can already afford it the unique features of a Tesla and why it’s so far superior than other products? What’s wrong with that?

 

[Singuy]

As I have mentioned before, the world hasn’t run out of people who can spend 50K or more on a car. The TAM for cars priced above 50K is about 8M or maybe slightly lower that in 2023. Why assume there are no more people who can afford a Tesla and hence they have to reduce prices? Why not inform people who can already afford it the unique features of a Tesla and why it’s so far superior than other products? What’s wrong with that?

What have Tesla done already is unprecedented. They have surpassed BMW in US luxury car sales in 2022 by 130k and almost DOUBLED Mercedes US volume. This is on the back of pretty much two car models vs like 10+ from the other company's.

Now Tesla is guiding for Honda total US sales(over 900k) in 2023. Tesla haven't lowered their ASP to Honda levels, not anywhere close. However at almost double the ASP, they are planning on pushing out mass market numbers again with 2 car models.

So it's not a matter of running out of people who can afford 50k cars. ICE is still competition, and you saw that only a little over 50% of the people are willing to buy EVs. Then you add the fact that Tesla doesn't provide enough micro product segmentation because they have like 2 cars for people to consider. So yeah, they are running out of people at this stage even though they wildly outperformed against anyone's expectations. Name another car company that is selling almost half a million cars per quarter with an ASP of 50k using only 2 car models...like no one ever in the history of automobile.

 

[Tes La Ferrari]

When you make something 12+ inches longer than everyone else's it's possible there are side effects other than internet whining.

Agreed; know the feeling.

Wait, we are still talking about the Cybertruck’s wiper here, aren’t we ?

 

[JusRelax]

I think these are some comparison drawings based on the Project Highland leak of what the new M3 may look like? TBH, I'm not quite sure what these are, but it at least gives a pretty good idea of what that leaked M3 may look like fully unclothed. When I saw the leak, I was pretty apathetic to the new design, but these sketches IMO look great.

https://twitter.com/x/status/1646748814517346305

 

[NicoV]

Are you saying there is more demand than there is production at current prices? If that statement is true, why is there a need to reduce prices? Two things happen when there is a lot more demand than there is production - you see backlog that extends to many months, and to reduce the backlog Tesla increase prices and we have seen this in the past. And the opposite happens when demand is less than production at current prices - backlog goes down and Tesla then reduces prices. We have seen this too.

I am not saying there is less demand because there is a better product out there OR that there is competition for Tesla. My only point is that because of higher interest rates, weak macro economic conditions, increase in production capacity and probably for many other reasons, Tesla at this point in time has more production than demand and is having to reduce prices. Macro is not something that Tesla can control. So it is what it is. ASP in Q4’22 was 52K. My guess for ASP in Q123 is going to be around 48K or less. I am not criticizing Tesla in anyway. I was saying instead of doing only one thing (which is to cut prices), Tesla should also consider doing other things to generate demand which maybe potentially more cost effective and also they serve to inform people who may not be aware of why a Tesla is 1000 times better than everything else - whether that’s Autopilot, FSD, OTA, more range, better performance, superior charging network or so many other things that make Tesla such a no brainer.

Why assume that everyone who is in the market for a car knows that Tesla is a far far superior product? Why not spend some money to dispel the myths around EVs, and also show case the unique things that only a Tesla can do? I find it quite strange that so many people continue to choose BMW, Mercedes, etc. when a Tesla is so much superior in so many ways. How many of those people really know that they are choosing a far inferior product in almost every way (other than maybe better interior material quality)? How many people really know that a Model 3 is cheaper than a Camry when looked at from a TCO perspective? So why not communicate this and generate more demand that way rather than only doing one thing - which is to cut prices? Cutting prices increases affordability, yes, but it doesn’t automatically also convey the facts about why a Tesla is so much superior in pretty much every way, and that there is nothing in the market that even is comparable to a Tesla?

By the way, more price cuts just happened today in many of the European countries once again (not a surprise to anyone who knows the current demand story). Once again, please understand that I am only advocating that informing people via traditional methods is a worthwhile thing to do. The cost of doing so is a lot less and Tesla can exhaust demand at each price point before reducing prices.

Model S is now 106K, used to be 114K iirc in Belgium.
Now that’s a price that I find reasonable for a Mode S. Maybe I’ll finally switch to a new Model S.

See what that price drop did to (my personal) demand?

 

[khill]

Model S is now 106K, used to be 114K iirc in Belgium.
Now that’s a price that I find reasonable for a Mode S. Maybe I’ll finally switch to a new Model S.

See what that price drop did to (my personal) demand?

I am not against price drops. I am saying also consider advertising to inform people who are not knowledgeable that a Tesla is a far superior product compared to the ICE vehicles they choose to buy. It doesn’t have to be an either / or - it can be both. Increase affordability to those who are aware but couldn’t afford at a higher price but also increase awareness so that those who can afford but don’t have proper information also buy a Tesla.