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The S-curve of EV adoption is still in full swing. The reality of the S-curve is that it is not a perfect S, but it is still happening.
Battery prices are falling off a cliff. EV prices will fall with battery prices, thus increasing sales. I really wouldn't worry about adoption. As Tony Seba says, this stuff is like gravity. You can't stop it.
Cannot believe after such a horrible Q1 delivery number, TSLA now is higher than Monday and last Friday close.
$176.15 now
Any news that causes this to happen?
Tesla California sales in 2023 are a good metric for testing whether the CEO's political activism has caused mass left-wing aversion to the Tesla brand such that vehicle sales have been harmed.
Why this matters:
California's government provides some of the most comprehensive and detailed EV sales data of any regional market in the world
California is the most prominent left-leaning state in America
California is the leading EV market in America in terms of both total volume and EV market share, and since the very beginning it has been a leading indicator for EV growth trends elsewhere
California and SF Bay Area politics have been the specific target of much of Elon's political activism since 2020
Overall, Tesla has continued to maintain a dominant position in the California EV market in the last couple of years. Tesla's share of the general light-duty vehicle (LDV) market in California is now 13%. This all-time record for Tesla is an increase from 11.7% last year and it is second only to Toyota's 15.7%. Tesla accomplished this with a four-vehicle menu that leaves major gaps in the market unserved, such as pickup trucks, full-size SUVs, compact sedans and compact hatchbacks. In 2023, Tesla achieved 61% BEV market share by selling 230k out of 376k total BEVs with at least 200 miles of nominal range. Tesla outsold the next-best competitor, Chevrolet, by almost 12x. This is approximately the same ratio of Tesla to the 2nd-place BEV competitor that Tesla has enjoyed across the US as a whole for many years. Although 61% is down significantly from 73% from last year, Tesla still posted significant 8.2% growth statewide in 2022. Tesla's market share declined because everyone else grew faster.
California Energy Commission (2023). California Energy Commission Zero Emission Vehicle and Infrastructure Statistics. Data last updated [24 Jan 2024]. Retrieved [2 Apr 2024] from Zero Emission Vehicle and Infrastructure Statistics.
Tesla's decline in California market share may be disappointing but it is understandable. Both of the US factories, but especially Fremont, are close to maximum output for the S3XY models for the existing production lines. Also, the S3XY models are already so dominant in California that they may be close to their demand limits under current macroeconomic conditions. The Model Y and Model 3 were the #1 and #2 best-selling vehicles of any kind in California, by a wide margin. The Y sold slightly more than the RAV-4, CR-V, Rogue and Tucson combined. There still may be substantial room for this ceiling to grow over time, as awareness increases and the Supercharger network and service center network continue to expand.
Let's zoom out for context:
61% share is still double what it used to be before the Model 3 was introduced
Competitors emerged from the chip shortage in 2023 and thus were much less supply constrained than during the pandemic. The entire automotive industry had a glut of supply, prices dropped across the industry, and dealership inventories grew.
2017 saw a similarly large drop in CA BEV market share when S&X sales peaked and 3 was still in the beginning of Production Hell.
California is the leading state in the USA for selling compliance EVs at a loss, because California is a huge market with stringent regulatory requirements and it is the most lucrative automotive market in the nation. Tesla is selling into a tilted playing field because customers are subsidizing their losses with earnings from ICE and hybrid sales, but this situation won't last forever.
2023 was another weak year of growth for the overall automotive market in California. Overall LDV sales were 10% lower than in the peak years of 2015 through 2018.
California has a overall liberal and leftist population supermajority, but it's a big state with almost 40 million people living it it and it is politically, geographically, culturally, ethnically and economically diverse. The populous coastal counties that comprise the major urban areas are heavily left-leaning, whereas the rural counties are heavily right-leaning, and many other counties are somewhere in between.
In the leftist urban and coastal counties, Tesla did have a decline in their BEV market share from its peak in 2020. In 2023 alone, it declined from 74% to 61%. However, this decline was right in line with the overall trend for California in which Tesla's market share dropped from 73% to 61%. Also, Tesla still showed growth in these left-leaning counties. The only exception was San Mateo county just south of San Francisco and just north of Silicon Valley. San Mateo for some reason had sales collapse by 38% in 2023. I don't have any idea why this happened, but San Mateo is a fairly small market and it was heavily saturated with Teslas until 2022. Despite that lone outlier, overall in the most left-wing counties in California, Tesla actually grew their sales volume by 8.1%, which was almost exactly equal to the Tesla's statewide sales growth of 8.2%.
Even with wide variation in regional demographics, culture and politics, Tesla overall increased sales volume in California pretty evenly throughout the state. Tesla grew the same in woke, socialist metropolises, in liberal suburbs, and in MAGA Trumpland (which does exist in California). Tesla even grew sales by 5% in San Francisco county, which is the bluest county in the state, is the epicenter of the Twitter/X and OpenAI controversy, and has been directly accused by Elon of propagating a radical "woke mind virus" that will destroy civilization as we know it.
Unfortunately, Tesla grew sales in California with the help of large price reductions. However, Tesla also reduced prices by the same amount all across the US and similar amounts in all major EV markets around the world. Also, competitors cut prices on their EVs shortly after Tesla did, and inventory has been piling up at their dealerships. It's important to note that Tesla's online ordering and transparent pricing means that we know they were selling vehicles at the same prices throughout California.
All of this evidence casts major doubt on the belief that Elon's political activism has been the primary cause of growth slowdown and price reductions. It is questionable whether it even is a net factor at all. There has been no observed correlation between the political bias of a local market and Tesla's BEV market share. It appears that the broader tough market conditions have affected the whole EV market in the state and worldwide, with BYD the only other player looking decent in 2023. That being said, a lack of correlation doesn't necessarily mean there was no effect. The urban and coastal areas in California have many differences from the rural areas, so maybe Elon's antics were hurting demand in the metro areas but some other factors were tailwinds in these same areas. Still, the simpler and more likely explanation is that the politics did not have a majorly negative effect. Either way, end result is the same and the data shows no cause for alarm.
Is quarterly data available? Looking at 2H 2023 - Q1 2024 (when available) unit volume on a quarterly basis vs. Toyota would be helpful to understand if there is a Tesla specific decline or not.
.......2024 is a frightening year in many ways. and is even more for those of us who were not paying attention when Tesla so clearly told us what was happening. The implications are inevitably delaying the high growth and high margins we have grown to regard as semi-divine principles. Key: watch Free Cash Flow. if Tesla manages positive cash flow in Q1 we'll know all is doing well. Inevitably Free Cash Flow will be lower because of supporting this business transition, but if it is still positive we know the total logistics planning and management is still functioning as designed.......
Cannot believe after such a horrible Q1 delivery number, TSLA now is higher than Monday and last Friday close.
$176.15 now
Any news that causes this to happen?
If I recall correctly, Tesla is paid in tranches, so I think at least some revenue could be recognized if the MP are delivered and installed (in Q2).
Also, in the P&D report Tesla told us about GWh installed, not revenue. So there is still a chance.
Is quarterly data available? Looking at 2H 2023 - Q1 2024 (when available) unit volume on a quarterly basis vs. Toyota would be helpful to understand if there is a Tesla specific decline or not.
We are going to be hearing about the success of Toyota hybrids for a long time as they are offering it standard shortly on the new Camry and will likely do the same with other models.
Their day will come. The down fall will likely start in Asia outside Japan and China where all the Japanese makes are super strong. Thailand is already at 10% EV adoption. The Chinese EV brands are everywhere. I was kind of shocked on my last visit there how the market went from 0 to 10% EV in 1 1/2 years.
The latest FSD 12 is receiving rave reviews all over youtube. Well, my 2 cents: Yesterday I had to drive from Santa Barbara to Ventura. The highway was showing dark red gridlock and so FSD took me to Ventura through all the very windy, narrow, and mostly unlined back roads. Added to these back roads being poorly lined and poorly marked, there was one traffic circle, bicycle riders, and several construction zones. Because the FSD feels like a human driving, it makes for a more relaxing, predictable drive. So, 1.5 hours and 45 miles later, my Model Y delivered me to the destination address in Ventura with ZERO disengagements and ZERO input from me. I was blown away!
For used cars is exactly what I was thinking - my son just bought a 2019 M3 with 80K miles. Would have been much easier decision if the cost of “piece of mind” up to 150K was known.
Not at all discounting your information, just offering my preference. I prefer TTM FCF per share because FCF can be lumpy between quarters. Through averages, it's easier to spot when the trend inflects, in this case upwards. I also like to be aware of P/FCF ratio as it can be a strong indication that a stock may be over/undervalued.
Yes. Only something like 40% of the revenue is recognized in the near term and the remaining is either accounted for as Deferred Reveue or Unsatisfied Performance Obligations, as the name implies the Megapack project must perform to meet certain benchmarks before the remaining revenue hits.
There is a huge market in the US for EVs. Just look at how sad US adoption is compared to Norway or even the UK. Physics is not different in the US, and frankly electricity is cheaper there, and solar+wind potential is higher.
The US MEDIA does a great job at spinning a negative narrative about EVs, but its fighting a losing battle. I can't say for sure that Kim Cardassian tweeting constantly in front of her cybertruck marks a turning point, but it certainly cannot hurt.
Every Tesla sold in the US creates a new roving billboard and evangelist for EVs. The most iconic new vehicle in a decade is an EV. The media are fighting a losing battle.
The problem is scarcely the mainstream media, which as center left is generally pro EV.
It is entrenched petrochemical interests and their paid handmaidens in politics. That is the sum total of the problem.
Apparently so, Honda just moved over 36K CRVs in the US alone last month and more than half of them were hybrid variants, with rumors of the ICE-only version going away at its MMC in two years. So, I guess yes. Who doesn't want better mpgs?
OK just to learn a bit more for my self I googled the following:
How big is the battery in a CRV hybrid. (I didn't find battery size in Honda's specs page)?
The regular self-charging hybrid model uses a 1.06kWh battery and is virtually identical to the system now used in the Civic and ZR-V. But the CR-V is also available with Honda's first plug-in hybrid powertrain, too.
specs says 40 city/34 highway
Road trip on 1.06kWh means we either drive all on gas or need to take a pee and charge every mile we had fools gold before now we are going to have fools EVs as well
That is an excellent point, especially relevant as Tesla "smooths the wave", by which means, as Tesla grows there will be, in all probability, a tendency towards inventory build up in Q1 with gradual drops until Q4 will typically have a drop in inventory. Further, as TE grows and very large utility and commercial installations grow, as they have been doing for a couple of years already, those revenues will become increasing large in some quarters, smaller in others, depending on contract terms while actual production and delivery will probably stabilize.
Those all mean we will see different P&L and Balance Sheet going forward than we have heretofore been accustomed. If we manage to have Q1 positive cash flow consistently going forward that will be bullish. There is a possibility that sale of TE will grow enough to reduce the 'lumpiness', but that remains to be seen. We should see, from 2025 forward, gross margins being at high levels for auto industry (excluding Ferrari and Porsche), The effect of new manufacturing processes, increased distribution range, and Supercharger revenue will by huge forces for positive results. To be specific, adding Performance models, optional performance enhancements, new colors etc will add measurably to margins. Cybertruck wraps will be certainly added to other models, and Cybertruck itself will be contributing margin improvement still this year, whether reported separately or not. Will 4680 and Lithium production help still this year? Maybe.
All the foregoing is EXCLUDING FSD and Optimus.
I do expect Tesla financial condition to further improve this year whether reported profit appears to reflect that or not. That really means they'll lower shipping and other logistics costs, reduce variable manufacturing costs, while realizing significant growth in 'subscriptions', including Superchargers, connectivity, games, and others not yet invented.
Much of that is found in Other or otherwise not individually disclosed. Even the shipping and manufacturing elements are not individually disclosed.
This is intended to be a laundry list of positive things.
Is quarterly data available? Looking at 2H 2023 - Q1 2024 (when available) unit volume on a quarterly basis vs. Toyota would be helpful to understand if there is a Tesla specific decline or not.
ycharts.com
electrek.co
