Tesla Drops USA Prices up to 20%

Something is worth what someone is willing to pay for it, yet all of a sudden Elon is annoyng folks by reacting to market conditions?
If you bought a car and 4 months later it is priced $13,000 less you wouldnt be mad? ( I would call anyone a liar who says otherwise)

"Marianne Simmons, a self-professed “Tesla fan girl,” bought her second electric vehicle from the company in September: a white, high-performance Model Y ringing in at more than $77,000. Then the company slashed prices on Thursday and she realized she could have bought the same car today at $13,000 less."
 
Any other carmaker and a 40% YoY gain in sales would be considered a tremendous year. However I believe since Tesla has gravitated towards the narrative of being a Tech company that happens to produce cars focused on growth, it was a huge miss from their expected 50% YoY target.

Their impressive margins, cash reserves, valuation, and back log are great, and probably allow them to navigate out of closing up shop as many have predicted. However, I would not take those traits as the end all, as the competition is slowly but steadily getting fierce in select global markets, and in the US, where they supposedly dominated the EV pack they went ahead and had to slash prices (as last by their demand equation and 40% YoY gain in sales). If Tesla continues on this Growth before anything narrative, its going to be interesting to say the least.

Lastly, these price cuts are going to effect other players, but I dont expect their problems to be any different then before the price cut. Kia/Hyundai are still going to scramble how to get stateside production and qualify for the IRA credit. Toyota is still confused how to produce an EV before 2030 thats competitive when it launches while being reliable. etc etc

On a side note, the holidays sales were an interesting excursion. I believe on latest number those discounts/benefits accounted for less then 4% of Total US sales. I dont understand the purpose, especially when they had alot of backorders.
 
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Any other carmaker and a 40% YoY gain in sales would be considered a tremendous year. However I believe since Tesla has gravitated towards the narrative of being a Tech company that happens to produce cars focused on growth, it was a huge miss from their expected 50% YoY target.

Their impressive margins, cash reserves, valuation, and back log are great, and probably allow them to navigate out of closing up shop as many have predicted. However, I would not take those traits as the end all, as the competition is slowly but steadily getting fierce in select global markets, and in the US, where they supposedly dominated the EV pack they went ahead and had to slash prices (as last by their demand equation and 40% YoY gain in sales). If Tesla continues on this Growth before anything narrative, its going to interesting to say the least.

Lastly, these price cuts are going to effect other players, but I dont expect their problems to be any different then before the price cut. Kia/Hyundai are still going to scramble how to get stateside production and qualify for the IRA credit. Toyota is still confused how to produce an EV before 2030 thats competitive when it launches while being reliable.

On a side note, the holidays sales were an interesting excursion. I believe on latest number those discounts/benefits accounted for less then 4% of Total US sales. I dont understand the purpose, especially when they had alot of backorders.
The price drop is to squeeze the competition and take market share even faster. Tesla has been ramping production and continues to do so. They need full factory utilization; all mfg companies do. Margins will drop, but revenues will increase. Tesla's margins are a formidible weapon as they allow pricing flexibility in the market. Their cost to manufacture prowess is the envy of the industry.
 
The price drop is to squeeze the competition and take market share even faster. Tesla has been ramping production and continues to do so. They need full factory utilization; all mfg companies do. Margins will drop, but revenues will increase. Tesla's margins are a formidible weapon as they allow pricing flexibility in the market. Their cost to manufacture prowess is the envy of the industry.
It's fact Tesla is losing market share, so I think it might be more correct to say they are looking to hold onto as much as they can.
Price drop according to financial markets was because they have an oversupply of cars and over built production capacity.
Everything else other than that is only speculation until proven to be true and that will take another 1 to 2 years if they hold onto anything or end up with a stock market price multiple no different than all the other manufacturers.

I swear sometimes I think you are Elon Musk with a disguised name ... (just saying! *LOL*) and I am having fun... kidding.
 
If I bought a car and the price dropped, I wouldn't be mad. This occurs with all makes/model over years with dealer discounts, rebates, and normal supply and demand and popularity. I think that Tesla should've drop the price slowly, and maybe even quietly, like a grand a week for a few months until each model reached its new price point. So, if Tesla makes ~$10k per car, and drops the price by ~$10k per car, does this mean their profit simply disappeared overnight? Or, do they have magic fairies doing the accounting?

Tesla buying another automaker would've been a helluva an internet forum discussion.
 
It's fact Tesla is losing market share, so I think it might be more correct to say they are looking to hold onto as much as they can.
Price drop according to financial markets was because they have an oversupply of cars and over built production capacity.
Everything else other than that is only speculation until proven to be true and that will take another 1 to 2 years if they hold onto anything or end up with a stock market price multiple no different than all the other manufacturers.

I swear sometimes I think you are Elon Musk with a disguised name ... (just saying! *LOL*) and I am having fun... kidding.
Every EV sold that is not a Tesla reduces Tesla's market share in the EV market.
Every Tesla sold is a reduction in every other car company's market share in the car market.

Tesla had a 44% YOY increase in 2022, in an overall declining market. And that increase was called a miss. What do you call the other car company's results?
 
The price drop is to squeeze the competition and take market share even faster. Tesla has been ramping production and continues to do so. They need full factory utilization; all mfg companies do. Margins will drop, but revenues will increase. Tesla's margins are a formidible weapon as they allow pricing flexibility in the market. Their cost to manufacture prowess is the envy of the industry.
Top-5-Automakers-By-Electric-Vehicle-Market-Share-US-1.png


If this market picture is grounds for them to pull a "lever", what happens when each of those automakers gains low double digits?
Theres more room to sink for M3/Y prices I assume.
 
Tesla has much more flexibility in pricing than any other EV manufacturer.

Tesla out paces even Toyota in profit per vehicle and it's not even close.
Here are some statistics for the 3rd quarter of 2022:

Toyota:
* 2,625 thousand sales
* $3,342 billion overall net profit
* $1,273 profit per vehicle

Tesla:
* 344 thousand sales
* $3,292 billion overall net profit
* $9,754 profit per vehicle
That’s good info. We now need to see what the margin was per car, such as what was the average price on a Toyota vs the average price on a Tesla. Tesla enjoys the gee whiz techies handing them their money vs the thrifty old ladies buying Corollas, averaged into the numbers. Not to mention middle eastern types buying stripped down Tacomas.
 
Every EV sold that is not a Tesla reduces Tesla's market share in the EV market.
Every Tesla sold is a reduction in every other car company's market share in the car market.

Tesla had a 44% YOY increase in 2022, in an overall declining market. And that increase was called a miss. What do you call the other car company's results?
Depends if the other car companies have embraced the Tech company that produces car narrative that Tesla has and wall street has believed it as well.

For now, any increase in demand for a regular car company is deemed a good year.
 
That’s good info. We now need to see what the margin was per car, such as what was the average price on a Toyota vs the average price on a Tesla. Tesla enjoys the gee whiz techies handing them their money vs the thrifty old ladies buying Corollas, averaged into the numbers. Not to mention middle eastern types buying stripped down Tacomas.

It's also a result of very clever development and specialization - and of course only offering a few models. It's harder with more offerings so they have it easy in this regard.

Munro offers excellent insight to parts counts and builds.

When you remove hundreds of steps with 2 giant castings, and 3/4 of the wiring and plumbing it's cheaper to make.
 
Top-5-Automakers-By-Electric-Vehicle-Market-Share-US-1.png


If this market picture is grounds for them to pull a "lever", what happens when each of those automakers gains low double digits?
Theres more room to sink for M3/Y prices I assume.
Tesla's margins are the envy of the entire car industry. In the EV market, most companies lose money. It is thought GM used to lose $9k on every Bolt sold.
Now with lowered prices, the pressure on legacy companies only increases. And not just on their EV business.
You probably know the Model Y was the #6 selling car of any kind, in the world. With a large price drop, watch out competition.
Ditto the Model 3.

Let's see what 2023 Q1 results tell us. The market expects greater than 40% growth rate in 2023. That is market penetration.
 
See the drop that started in Q1 2022? That will only continue downward as the other manufacturers gear up.
Of course as other entries come into the EV market, Tesla's share of the EV market drops as they are the dominant player.
But that's a myopic view. Tesla's overall market share continues to grow.
 
Every EV sold that is not a Tesla reduces Tesla's market share in the EV market.
Every Tesla sold is a reduction in every other car company's market share in the car market.

Tesla had a 44% YOY increase in 2022, in an overall declining market. And that increase was called a miss. What do you call the other car company's results?
It is hard breaking down Tesla numbers as they do not report USA sales figures.
Numbers are spun, more so when you didnt make many the year before. I mean GM can claim in the USA alone 2022 4th quarter its sales increase 44%
What did Tesla USA sales increase? We dont know because they dont tell. I mean, arent they supposed to be the "new" way of doing business? Not exactly transparent right ? Or am I missing something here?

Tesla's world wide sales numbers for 2022? 1,113,000
GM sold world wide 6,290,000 over 550% more than Tesla

Tesla Estimate of 536,000 in the USA in 2022 (Tesla strangely will not report USA sales)
GM sold 2,270,000 in the USA roughly 425% more than Tesla

It will be interesting once GM is turning out EVs like McDonalds turns out hamburgers. I personally feel the market is going to be saturated with an over supply in 3 years if that long.

It's easy to start with a low number of sales and increase them when you are a new company.
 
It's easy to start with a low number of sales and increase them when you are a new company.
Of course. That's the point I have been making all along.
Tesla has the lion's share of the EV market, not to mention they are #1 in the luxury market. Any new entry sales into the EV market lowers the leader's percentage, but they are still the leader by a long shot.

People seem to think that until Tesla overtakes Toyota or whoever, they are a flash in the pan. Tell that to Lexus, BMW, MBZ and a whole bunch of others.
 
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