tesla flurry of recent changes
Lexus Champion
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From: Canada
Since Tesla is run by one man alone, Tesla is Elon Musk and Elon Musk is Tesla. You cannot speak about Tesla without being influenced by the eccentric personality of its CEO.
Lexus Fanatic
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Tell me who you think Tesla competes against. My answer (opinion, of course) is no one...at the moment. So my point is if someone is not buying a Tesla (priced between $45k to $125k) because the tax rebate dropped by $3,750, I'm saying they were never a real Tesla target customer anyway. $3,750 on a 5 year loan is $65/month. Where are they going to go? Buy a Chevy Volt? OK, fine. That's a car without any of the performance possibility of a Tesla and it does not compete with Tesla in any way, shape, or form. Again, that person was never a real Tesla target customer. I'm in sales and when you have a disruptive product with little/no competition, you don't lose early adopters or the beginning portion of mass market adopters over 8% of your selling price (lowest price Model 3 is $45k x 8% = $3,600). Early adopters are innovators - they buy things because of emotions and psychological reasons like social status, they want to be "first", they love technology, they're passionate about your movement (in Tesla's case, environmental), etc. etc. So I genuinely question why Tesla felt the need to lower the price of the car to compensate for the loss in credit. They have no competition. The only reason Musk would do it is to grab market share - to effectively prevent someone stalling on a decision and a formidable competitor having an offering (maybe at exact same price). When you're selling something, it's often best to "get the deal off the street" so the "deal" doesn't push to non-decision or competition.
I'm not sure I understand most of what you're saying in your sentence in bold. You're saying he lowered the price of the car to make it equal to what it was when they had the $7,500 rebate. One sentence later, you're saying sales took a hit when the rebate dropped in half... but that hit wouldn't be based on price since he kept the pricing exactly the same. So, what exactly are you pointing out?
I'm not sure I understand most of what you're saying in your sentence in bold. You're saying he lowered the price of the car to make it equal to what it was when they had the $7,500 rebate. One sentence later, you're saying sales took a hit when the rebate dropped in half... but that hit wouldn't be based on price since he kept the pricing exactly the same. So, what exactly are you pointing out?
Tesla selling 44k in December and 7.6k in February? Model 3 sold 25k in December and 5k in February?
And you think they shouldnt do anything about it? Obviously a lot of it was due to pentup demand drying up but that is a huge drop and this is why they lowered the prices and introduced $35k model in March - selling 5k Model 3's when they expected >20k is really horrible.
But can you separate the actions of the company from the man who is running the company? Since a company has no personality of its own and cannot make decisions by itself, its personality (and decisions made) reflect a melding of the personalities of its leaders.
Since Tesla is run by one man alone, Tesla is Elon Musk and Elon Musk is Tesla. You cannot speak about Tesla without being influenced by the eccentric personality of its CEO.
Since Tesla is run by one man alone, Tesla is Elon Musk and Elon Musk is Tesla. You cannot speak about Tesla without being influenced by the eccentric personality of its CEO.
Last edited by bitkahuna; Mar 30, 2019 at 08:03 AM.
They lowered the price for the reasons why everyone in the world lowers the price - their sales started tanking.
Tesla selling 44k in December and 7.6k in February? Model 3 sold 25k in December and 5k in February?
And you think they shouldnt do anything about it? Obviously a lot of it was due to pentup demand drying up but that is a huge drop and this is why they lowered the prices and introduced $35k model in March - selling 5k Model 3's when they expected >20k is really horrible.
Tesla selling 44k in December and 7.6k in February? Model 3 sold 25k in December and 5k in February?
And you think they shouldnt do anything about it? Obviously a lot of it was due to pentup demand drying up but that is a huge drop and this is why they lowered the prices and introduced $35k model in March - selling 5k Model 3's when they expected >20k is really horrible.
but it’s not all bleak, if you read the ‘true believer’ websites like electrek, teslarati etc., they’re saying the 3 is off to a big start in europe, but as we know, it’s not the first months that matter, it’s whether demand is sustained.
Lead Lap
Joined: Mar 2015
Posts: 4,513
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From: In your head
Tell me who you think Tesla competes against. My answer (opinion, of course) is no one...at the moment. So my point is if someone is not buying a Tesla (priced between $45k to $125k) because the tax rebate dropped by $3,750, I'm saying they were never a real Tesla target customer anyway. $3,750 on a 5 year loan is $65/month. Where are they going to go? Buy a Chevy Volt? OK, fine. That's a car without any of the performance possibility of a Tesla and it does not compete with Tesla in any way, shape, or form. Again, that person was never a real Tesla target customer. I'm in sales and when you have a disruptive product with little/no competition, you don't lose early adopters or the beginning portion of mass market adopters over 8% of your selling price (lowest price Model 3 is $45k x 8% = $3,600). Early adopters are innovators - they buy things because of emotions and psychological reasons like social status, they want to be "first", they love technology, they're passionate about your movement (in Tesla's case, environmental), etc. etc. So I genuinely question why Tesla felt the need to lower the price of the car to compensate for the loss in credit. They have no competition. The only reason Musk would do it is to grab market share - to effectively prevent someone stalling on a decision and a formidable competitor having an offering (maybe at exact same price). When you're selling something, it's often best to "get the deal off the street" so the "deal" doesn't push to non-decision or competition.
I'm not sure I understand most of what you're saying in your sentence in bold. You're saying he lowered the price of the car to make it equal to what it was when they had the $7,500 rebate. One sentence later, you're saying sales took a hit when the rebate dropped in half... but that hit wouldn't be based on price since he kept the pricing exactly the same. So, what exactly are you pointing out?
I'm not sure I understand most of what you're saying in your sentence in bold. You're saying he lowered the price of the car to make it equal to what it was when they had the $7,500 rebate. One sentence later, you're saying sales took a hit when the rebate dropped in half... but that hit wouldn't be based on price since he kept the pricing exactly the same. So, what exactly are you pointing out?
Lexus Fanatic
Joined: Oct 2003
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From: Virginia/D.C. suburbs
https://www.clublexus.com/forums/car...-ask-them.html
’is a big...’? Market? While the 3 is a game changer, I think Tesla’s inability to deliver the 35k model has seriously hurt them. I believe they’re trying to upsell all those early pre-orders to more expensive versions and lots have said uh, no. Problem is, as time passes, more other ev’s are coming or out, like the Kia Niro EV which is getting rave reviews, so while not as fast as a Tesla, Kia has a ‘y’-like model out now, not 2 years from now like Tesla.
Lead Lap
Joined: Mar 2015
Posts: 4,513
Likes: 345
From: In your head
’is a big...’? Market? While the 3 is a game changer, I think Tesla’s inability to deliver the 35k model has seriously hurt them. I believe they’re trying to upsell all those early pre-orders to more expensive versions and lots have said uh, no. Problem is, as time passes, more other ev’s are coming or out, like the Kia Niro EV which is getting rave reviews, so while not as fast as a Tesla, Kia has a ‘y’-like model out now, not 2 years from now like Tesla.
Are they really pushing the needle?
Lead Lap
Joined: May 2010
Posts: 3,902
Likes: 1,512
From: San Diego, CA
Sales down 31% this quarter. First QonQ sales drop in two years. and the largest quarterly drop in Tesla's history.
And yes, analysts are attributing much of the drop to the partial loss of tax credits.
And yes, analysts are attributing much of the drop to the partial loss of tax credits.
Lead Lap
Joined: Mar 2015
Posts: 4,513
Likes: 345
From: In your head
While not all doom and gloom like the analysts have predicted, imho Tesla sales are normalizing. The beta testers aka I need to be the first with the Model 3 are slowly shrinking in size, and now comes those whose money will basically keep the lights on, those who are still interested in purchasing the 35K special just to be part of the EV movement.
Huge Initial demand, and then normalcy after a few months. I assume that their Model Y is the same, and this is just industry standard.
Huge Initial demand, and then normalcy after a few months. I assume that their Model Y is the same, and this is just industry standard.
Huge Initial demand, and then normalcy after a few months. I assume that their Model Y is the same, and this is just industry standard.
Lead Lap
Joined: Mar 2015
Posts: 4,513
Likes: 345
From: In your head
except the 35k model isn't available. but that's ok i guess, because any ev's that are 35k and below today (leaf?) suck.
understand, but there's nothing 'normal' about what's going on here, or what tesla wishes for, i.e., a revolution. and it could turn out that a significant fraction of new car buyers decide "ya know what, i'm not sure about ev's but i don't want to buy another gas burner so i'm making the switch". if that happens in chunks, then tesla could fly much much higher.
understand, but there's nothing 'normal' about what's going on here, or what tesla wishes for, i.e., a revolution. and it could turn out that a significant fraction of new car buyers decide "ya know what, i'm not sure about ev's but i don't want to buy another gas burner so i'm making the switch". if that happens in chunks, then tesla could fly much much higher.
Tesla wants do a lot of things, but they face the same constraints the status quo has had to deal with. The only difference is the public has a talking head to direct their concerns to, while every other company has a brand logo.
https://www.fool.com/investing/2019/...-and-mode.aspx
Nevertheless, there was no firm proof that Tesla was having trouble selling its cars -- until now.
On Wednesday, Tesla reported dreadful production and deliveries totals for the first quarter. It seems increasingly clear that Model 3 demand is not living up to bulls' lofty expectations, while sales of the pricier Model S and Model X are in free fall.
That said, looking at things on a sequential basis casts Tesla's Q1 performance in a different light. In the fourth quarter of 2018, Tesla built 61,394 Model 3s and delivered 63,150.
MODEL 3 DELIVERIES DECLINED SEQUENTIALLY IN THE FIRST QUARTER. IMAGE SOURCE: TESLA.
The sequential decline in deliveries can mostly be attributed to higher in-transit inventory as Tesla abruptly shifted its delivery mix toward Europe and China rather than the U.S. But even adjusting for that headwind, it appears that Model 3 production and sales have peaked. The only hope for a return to meaningful growth is that Tesla's move to open a factory in China will allow it to significantly reduce prices in that key market.
Tesla tried to put a positive spin on things by stating that Model 3 orders in the U.S. significantly outpaced deliveries in the first quarter. However, that's not as impressive as it sounds, since the majority of Model 3 deliveries went to overseas customers during Q1.
InsideEVs estimates that Tesla delivered 22,425 Model 3s in the U.S. last quarter. (Tesla doesn't provide a country-by-country breakdown.) In other words, Tesla's statement could be consistent with receiving only 30,000 Model 3 orders in the U.S. during Q1. That would be a bad sign for the company, given that it plans to build nearly 100,000 Model 3s per quarter at its factory in Fremont, California, by year-end and the U.S. has historically accounted for the majority of Tesla's sales.
Unfortunately, Tesla delivered just 12,100 Model S and Model X vehicles combined last quarter. That was down from 27,550 a quarter earlier and 21,800 in the first quarter of 2018.
DELIVERIES OF THE MODEL S AND MODEL X PLUMMETED LAST QUARTER. IMAGE SOURCE: TESLA.
There are a number of possible causes of this sales plunge. The partial phase-out of federal tax credits in the U.S. may have pulled forward some demand into 2018. Better availability of the Model 3 is another factor that could be weighing on demand for pricier Teslas. Trade tensions may be impacting sales in China. Growing competition in the electric vehicle market certainly can't be overlooked. And the recent Model Y reveal could be causing some potential buyers to consider waiting for that model.
Yet one thing is certain. There aren't any meaningful production constraints to blame for the sales decline -- it's all about demand. The only question is how much Tesla is willing to cut prices (at the cost of lower gross margin) to prop up Model S and Model X sales volume going forward.
However, getting Model S and Model X output back to the prior rate of about 25,000 deliveries per quarter will be very challenging. Furthermore, Tesla's plan to ramp up Model 3 production over the course of 2019 seems extremely unrealistic. Falling wait times suggest that there may not even be enough demand to support the current production rate after Tesla burns through the initial backlog of demand in Europe and China.
To make matters worse, Tesla's operational challenges and price cuts, as well as the steep drop in Model S and Model X demand, will severely impact the company's profitability and cash flow in 2019. Some analysts expect Tesla to burn more than $1 billion of cash this year, which would leave its balance sheet in a perilous state unless it manages to raise more capital.
Tesla bulls can hope that new products like the Model Y, Tesla Semi, and a future Tesla pickup truck will help turn things around. Yet by the time those models arrive in 2020 and beyond, Tesla could be in a much weaker state than it is today -- and facing more competition than ever.
The Tesla Model 3 News Is Bad -- the Model S and Model X News Is Worse
The Tesla Model 3's growth is stalling out, while Model S and Model X demand has fallen off a cliff.
Adam Levine-Weinberg(TMFGemHunter)Apr 7, 2019 at 9:20AMIn the first few months of 2019, there were plenty of warning signs that all was not well at Tesla(NASDAQ:TSLA). The electric vehicle pioneer implemented numerous price changes -- mainly reducing prices -- and began taking orders for the long-awaited $35,000 base version of the Model 3, hinting at a growing desperation to boost sales.Nevertheless, there was no firm proof that Tesla was having trouble selling its cars -- until now.
On Wednesday, Tesla reported dreadful production and deliveries totals for the first quarter. It seems increasingly clear that Model 3 demand is not living up to bulls' lofty expectations, while sales of the pricier Model S and Model X are in free fall.
Model 3 demand fails to impress
Tesla built 62,950 Model 3s last quarter and delivered 50,900. Both figures represented big increases on a year-over-year basis. In the first quarter of 2018, Tesla built fewer than 10,000 Model 3s -- and delivered 8,180 of them -- as it was still early in the process of ramping up production.That said, looking at things on a sequential basis casts Tesla's Q1 performance in a different light. In the fourth quarter of 2018, Tesla built 61,394 Model 3s and delivered 63,150.
MODEL 3 DELIVERIES DECLINED SEQUENTIALLY IN THE FIRST QUARTER. IMAGE SOURCE: TESLA.The sequential decline in deliveries can mostly be attributed to higher in-transit inventory as Tesla abruptly shifted its delivery mix toward Europe and China rather than the U.S. But even adjusting for that headwind, it appears that Model 3 production and sales have peaked. The only hope for a return to meaningful growth is that Tesla's move to open a factory in China will allow it to significantly reduce prices in that key market.
Tesla tried to put a positive spin on things by stating that Model 3 orders in the U.S. significantly outpaced deliveries in the first quarter. However, that's not as impressive as it sounds, since the majority of Model 3 deliveries went to overseas customers during Q1.
InsideEVs estimates that Tesla delivered 22,425 Model 3s in the U.S. last quarter. (Tesla doesn't provide a country-by-country breakdown.) In other words, Tesla's statement could be consistent with receiving only 30,000 Model 3 orders in the U.S. during Q1. That would be a bad sign for the company, given that it plans to build nearly 100,000 Model 3s per quarter at its factory in Fremont, California, by year-end and the U.S. has historically accounted for the majority of Tesla's sales.
A sales wipeout for the Model S and Model X
While the Model 3 gets most of the headlines these days, the Model S and Model X were a big part of Tesla turning profitable in the second half of 2018. Indeed, gross margin for those pricey models rose to around 30% during that period. As a result, the Model S and Model X likely generated about half of Tesla's gross profit in the back half of the year, despite accounting for less than a third of its total deliveries.Unfortunately, Tesla delivered just 12,100 Model S and Model X vehicles combined last quarter. That was down from 27,550 a quarter earlier and 21,800 in the first quarter of 2018.
DELIVERIES OF THE MODEL S AND MODEL X PLUMMETED LAST QUARTER. IMAGE SOURCE: TESLA.There are a number of possible causes of this sales plunge. The partial phase-out of federal tax credits in the U.S. may have pulled forward some demand into 2018. Better availability of the Model 3 is another factor that could be weighing on demand for pricier Teslas. Trade tensions may be impacting sales in China. Growing competition in the electric vehicle market certainly can't be overlooked. And the recent Model Y reveal could be causing some potential buyers to consider waiting for that model.
Yet one thing is certain. There aren't any meaningful production constraints to blame for the sales decline -- it's all about demand. The only question is how much Tesla is willing to cut prices (at the cost of lower gross margin) to prop up Model S and Model X sales volume going forward.
2019 could be a rough year for Tesla
Tesla noted that a substantial number of deliveries shifted from the first quarter to the second quarter, due to challenges encountered while trying to dramatically increase deliveries in Europe and China. That -- along with initial availability of the $35,000 Model 3 and another step-down in the federal tax credit for Tesla purchases on July 1 -- should be enough to drive a sequential increase in Model 3 deliveries this quarter.However, getting Model S and Model X output back to the prior rate of about 25,000 deliveries per quarter will be very challenging. Furthermore, Tesla's plan to ramp up Model 3 production over the course of 2019 seems extremely unrealistic. Falling wait times suggest that there may not even be enough demand to support the current production rate after Tesla burns through the initial backlog of demand in Europe and China.
To make matters worse, Tesla's operational challenges and price cuts, as well as the steep drop in Model S and Model X demand, will severely impact the company's profitability and cash flow in 2019. Some analysts expect Tesla to burn more than $1 billion of cash this year, which would leave its balance sheet in a perilous state unless it manages to raise more capital.
Tesla bulls can hope that new products like the Model Y, Tesla Semi, and a future Tesla pickup truck will help turn things around. Yet by the time those models arrive in 2020 and beyond, Tesla could be in a much weaker state than it is today -- and facing more competition than ever.