Tesla price cut

[Old Chimer]

Just read that as of November last year, Tesla made the most profit per car. 8 x more than Toyota.

And, as they continue to innovate with new production techniques, their profit margin will no doubt increase.

They also benefit from very low warranty costs, whereas Ford spend billions every year on warranty and recalls.

I'm confused. If they are doing so well, why has their share price dropped from close to $400 to little over $120 in the last 9 months

[Skyway]

Pity the December UK buyers with 10,664 and Model Y and 5,704 Model 3 registrations paying the original higher prices! Not to mention the hit on the secondhand values of all Teslas now.

https://insideevs.com/news/629901/uk-pl ... cember2022

Meanwhile I've just been offered a price just £6k less than I paid new for my 31 month old GTS. Not selling it though.

Used Model 3 Tesla's have dropped 24% in a single year and that was before the price cut!

[andreas]

I'm confused. If they are doing so well, why has their share price dropped from close to $400 to little over $120 in the last 9 months

Basically, it's because the market analysts don't understand the outstanding potential of Tesla, and perhaps believe the lies being spread about by the likes of GM and Ford. Many analysts are American and (whilst Tesla is an American company) they favour the legacy auto makers such as GM and Ford. Similarly, Biden has excluded Tesla from his EV press events, pandering instead to the union influence ever present at GM and Ford.

Tesla is just about the most profitable auto maker in the world, with a gross margin around 25%. None of the big legacy companies can come close to that figure. Indeed, VW apparently makes a loss on every EV it produces. I think we'll see the Tesla share price rebound when the analysts wake up!

[Skyway]

I'm confused. If they are doing so well, why has their share price dropped from close to $400 to little over $120 in the last 9 months

Basically, it's because the market analysts don't understand the outstanding potential of Tesla, and perhaps believe the lies being spread about by the likes of GM and Ford. Many analysts are American and (whilst Tesla is an American company) they favour the legacy auto makers such as GM and Ford. Similarly, Biden has excluded Tesla from his EV press events, pandering instead to the union influence ever present at GM and Ford.

Tesla is just about the most profitable auto maker in the world, with a gross margin around 25%. None of the big legacy companies can come close to that figure. Indeed, VW apparently makes a loss on every EV it produces. I think we'll see the Tesla share price rebound when the analysts wake up!

You mean providing Elon doesn't purchase another Twitter

[Old Chimer]

I'm confused. If they are doing so well, why has their share price dropped from close to $400 to little over $120 in the last 9 months

Basically, it's because the market analysts don't understand the outstanding potential of Tesla, and perhaps believe the lies being spread about by the likes of GM and Ford. Many analysts are American and (whilst Tesla is an American company) they favour the legacy auto makers such as GM and Ford. Similarly, Biden has excluded Tesla from his EV press events, pandering instead to the union influence ever present at GM and Ford.

Tesla is just about the most profitable auto maker in the world, with a gross margin around 25%. None of the big legacy companies can come close to that figure. Indeed, VW apparently makes a loss on every EV it produces. I think we'll see the Tesla share price rebound when the analysts wake up!

I have to admit I'm surprised at the scale they've managed to reach. I honestly thought they would be a flash in the pan once the major players woke up, and I still wouldn't be surprised to see them wither away over the next decade. It's easy to innovate and be agile when you're a small disruptor, but far more difficult to sustain that advantage when growing as rapidly as they have. Interestingly, they are I suspect now at more risk from emerging EV players than the legacy manufacturers.

[andreas]

You mean providing Elon doesn't purchase another Twitter

You've obviously fallen into the common trap of believing that Elon Musk's presence is vital to everything Tesla does. It isn't. He has an amazing team of people, with levels of autonomy which are unheard of in legacy auto makers. Most Tesla employees are shareholders, and a large number of them are millionaires already. They can get on with the job of increasing production, improving the products and growing the margin without Elon's help. His genius is in hiring the very best people, and then giving them power to do whatever they like.

[andreas]

I have to admit I'm surprised at the scale they've managed to reach. I honestly thought they would be a flash in the pan once the major players woke up, and I still wouldn't be surprised to see them wither away over the next decade. It's easy to innovate and be agile when you're a small disruptor, but far more difficult to sustain that advantage when growing as rapidly as they have. Interestingly, they are I suspect now at more risk from emerging EV players than the legacy manufacturers.

The majority of the emerging EV makers are Chinese. The main one as a Tesla competitor is BYD. Unfortunately, BYD can't match Tesla's efficiency so their margins are slim or non-existent. Tesla's recent price reductions in China will be very disruptive to BYD.

[ghostwalker]

Lol I was waiting for this thread to appear!

I noticed it a few days ago and I was just thinking that even if they offer full self-drive by way of redress, it's not going to make up for the turbulence it'll cause in the resale market.

I don't think I've ever heard of a manufacturer doing this, but I suppose Tesla was always a candidate for the unusual. You just knew that they'd start getting into trouble once legacy automakers had caught them up. They've not only done that but some competitors are doing even better in terms of charging speed/range etc!

[SAC1]

Pity the December UK buyers with 10,664 and Model Y and 5,704 Model 3 registrations paying the original higher prices! Not to mention the hit on the secondhand values of all Teslas now.

If Tesla had increased prices, do you think December buyers would have been required to pay more?

Prices of used Model 3 and Model Y cars were artificially high due to high demand, but as Tesla ramps up production this would normalise.

Paying £7k more for a Model Y a month ago then I'd be looking for a refund of that amount or returning it for a full refund.

Price increases are a fact of life and the norm. With a price increase you can probably pull out of the purchase before delivery. Especially with most cars still on long lead times and demand exceeding supply.

[andreas]

I don't think I've ever heard of a manufacturer doing this, but I suppose Tesla was always a candidate for the unusual. You just knew that they'd start getting into trouble once legacy automakers had caught them up. They've not only done that but some competitors are doing even better in terms of charging speed/range etc!

Ah, so legacy automakers have caught them up, have they? Strangely, that's not reflected in the sales figures in the US, their home market. Tesla's sales increased last year by 77.5%. In contrast, VW sales dropped 24%, Mercedes sales dropped 23%, Honda's sales dropped 33%, Nissan's sales dropped 24%, and Jaguar Land Rover's sales dropped a staggering 55%.