Tesla Drops USA Prices up to 20%

[alarmguy]

Point in time is a blip on the radar. How you perform long term is what counts. The competition is tiny in comparison.

Agreed; lower demand is a reason to cut prices. So is squeeze the competition. And the competition already loses money on their EV business.
To your point, right now, the Model Y and Model 3 outsell most other cars of any kind, not just EVs. And growing.

I think we need a little perspective on that statement. I can agree with how long you perform is important in these vehicles and all have been performing a lot longer than Tesla.

The 25 Bestselling Cars, Trucks, and SUVs of 2022

Supply issues continue to plague the industry, but these are the models that managed to reach the most buyers in 2022.

www.caranddriver.com

 

[leadcounsel]

If any car maker besides Tesla posted a 44% YOY growth number wouldn't that be considered a blockbuster quarter ?

It is a blockbuster quarter, no doubt. And yet, the stock has imploded causing a loss of about 400 billion or so and 2/3rds value. When that happens, it's bad news, not good news. Because of expectations set for a relatively small tech company that fails to continue it's growth. I think the prior year was 75% growth or something. So the TREND is down, not up.

It needs reiterating that Tesla's raw numbers for the last few years were a lot smaller than the other big automakers.

For smaller companies growth can be significantly faster. By analogy, if I run a chocolate chip cookie company and for the last 30 years I've sold 10,000 cookies annually, and I jump to 10,100, that's a 1% increase. If you start your premium expensive peanut butter cookie company and sell 50 cookies in year 1, but 300 cookies in year 2, and 1000 cookies in year 3, your growth is astronomical. But I still sell a lot more cookies, in a very crowded cookie market with elastic demand and finite customers.

Taking it 1 step further, let's say there's also a sugar cookie company, and molasses cookie company all rivaling my production and sales of about 10,000 per year. And the capacity for all consumers to buy cookies is say 40,000 in the best of years. You can see how there isn't much room for more cookie companies. IOW there's not an infinite demand for cookies, and especially not for really expensive luxury peanut butter cookies. There's finite demand and growth at the top end. You might peel away the elites who were eating other cookies, but there's a finite number.

It's easier to go from selling 50 to 300 to 1000, than it is go to from 10,000 to 10,100, in lay terms. For all industries, growth at the top is the most difficult. It's similar in the stock market, where small cap companies often have higher growth numbers than the blue chip large cap companies. None of this is ground breaking information, but needs to be reiterated.

That finite number might represent former MB or BMW buyers moving to Tesla. Those companies had relatively small market shares, in a crowded luxury market competing for finite wealthy customers.

 

[JeffKeryk]

It is a blockbuster quarter, no doubt. And yet, the stock has imploded causing a loss of about 400 billion or so and 2/3rds value. When that happens, it's bad news, not good news. Because of expectations set for a relatively small tech company that fails to continue it's growth. I think the prior year was 75% growth or something. So the TREND is down, not up.

It needs reiterating that Tesla's raw numbers for the last few years were a lot smaller than the other big automakers.

For smaller companies growth can be significantly faster. By analogy, if I run a chocolate chip cookie company and for the last 30 years I've sold 10,000 cookies annually, and I jump to 10,100, that's a 1% increase. If you start your premium expensive peanut butter cookie company and sell 50 cookies in year 1, but 300 cookies in year 2, and 1000 cookies in year 3, your growth is astronomical. But I still sell a lot more cookies, in a very crowded cookie market with elastic demand and finite customers.

Taking it 1 step further, let's say there's also a sugar cookie company, and molasses cookie company all rivaling my production and sales of about 10,000 per year. And the capacity for all consumers to buy cookies is say 40,000 in the best of years. You can see how there isn't much room for more cookie companies. IOW there's not an infinite demand for cookies, and especially not for really expensive luxury peanut butter cookies. There's finite demand and growth at the top end. You might peel away the elites who were eating other cookies, but there's a finite number.

It's easier to go from selling 50 to 300 to 1000, than it is go to from 10,000 to 10,100, in lay terms. For all industries, growth at the top is the most difficult. It's similar in the stock market, where small cap companies often have higher growth numbers than the blue chip large cap companies. None of this is ground breaking information, but needs to be reiterated.

That finite number might represent former MB or BMW buyers moving to Tesla. Those companies had relatively small market shares, in a crowded luxury market competing for finite wealthy customers.

It is especially hard for the legacy companies to grow when new company is taking substantial market share from you.

 

[JeffKeryk]

I think we need a little perspective on that statement. I can agree with how long you perform is important in these vehicles and all have been performing a lot longer than Tesla.

The 25 Bestselling Cars, Trucks, and SUVs of 2022

Supply issues continue to plague the industry, but these are the models that managed to reach the most buyers in 2022.

www.caranddriver.com

Good point. How many luxury cars are in that list?
How many cars in that list cost $50K or more? How many when you take the pickups out?

Which of those cars make the most profit?
In real dollars, which vehicles in that list blow away the others in profit, regardless of sales units?
Which of those vehicles is expected to be the #1 seller in the world in 2023?

By the way, did you know TSLA is up over 13% YTD?

 

[leadcounsel]

It is especially hard for the legacy companies to grow when new company is taking substantial market share from you.

2% is now "substantial market share"?

 

[JeffKeryk]

2% is now "substantial market share"?

Perhaps check your numbers.
Which company is growing?

 

[leadcounsel]

Good point. How many luxury cars are in that list?
How many cars in that list cost $50K or more? How many when you take the pickups out?

Which of those cars make the most profit?
In real dollars, which vehicles in that list blow away the others in profit, regardless of sales units?
Which of those vehicles is expected to be the #1 seller in the world in 2023?

By the way, did you know TSLA is up over 13% YTD?

But, the US is by far the largest market for Tesla, and of that market California is the largest market. I stipulate that California is an extremely unique market, in the US and the world. I won't bother listing the obvious reasons why other than wealth concentration, virtue signaling, Tesla presence, and progressive support in key areas like emissions and infrastructure. California is Tesla's best possible scenario global market offering significant competitive and comparative advantages, including political support and EV friendly laws and ICE hostile laws/taxes. All in, Tesla has about a whopping 2% of the auto market. From November 2022:

Latest Money Transfer and Remittance News

moneytransfers.com

I've read various articles trying to pin down Tesla's growth and have seen numbers for 2020 to 2021 showing anywhere from 75% to 105%, including this article. Assuming these are accurate, then a 45% grown in 2022 is, in fact, radically moving in the wrong direction. It points to saturation, competition, and lowered consumer interest. This is not a good trend for Tesla.

Tesla sales swell 105% year over year, considerably more than any other company

According to TrueCar's most recent analysis, Tesla sales are estimated to have increase 105% year over year!

www.teslarati.com

And it's running out of steam already. As we discussed it missed earnings and sales numbers and the stock has sunk like the unsinkable Titanic. There's more also Nov. 2022:

Tesla's California EV market share slips as rivals step up

Tesla's dominant market share of the electric vehicle market in California slipped again this year, according to Reuters' calculations based on government data from January to September, as rivals up their game. Tesla controlled 73% of the battery electric market in California from January to...

news.yahoo.com

"Tesla's dominant market share of the electric vehicle market in California slipped again this year, according to Reuters' calculations based on government data from January to September, as rivals up their game. Tesla controlled 73% of the battery electric market in California from January to September, the lowest level since 2018, according to new vehicle registration data from the California Energy Commission. Tesla had a 75% share in 2021 and 79% in 2020. Tesla's sales in California - home to its first factory - accounted for 15% of the automaker's global deliveries last year, according to Reuters' calculation. California is the biggest U.S. state for zero emission vehicles, which also includes hydrogen fuel cell, and plug-in hybrid-electric vehicles, and accounts for 18% of new car sales in California this year. "We are reaching a saturation point for Tesla market share in California," said Ed Kim, president of AutoPacific. He expected rivals to continue to take away market share, while also expecting Tesla sales would still grow.

The real test for Tesla is significant presence in middle class America, northern cold states, and other markets that are not perfectly aligned for Tesla and EVs. In the BEST POSSIBLE market for Tesla, in just the last few years, sales have already not met expectations or otherwise slowed considerably.

 

[leadcounsel]

Perhaps check your numbers.
Which company is growing?

LOL. Sorry, 3.3% with 1/5th of that being in California. The US is the largest Tesla market in the world.

Tesla's Market Share Improved Slightly In Q3 2022

During the third quarter of this year, Tesla once again expanded its market share, reaching new record levels, although the growth rate slowed down.

insideevs.com

Forbes is predicting the bubble burst for Tesla in 2023. A plunge in market share.

Why Tesla’s Market Share Is Set To Plunge In 2023

A recent report shows that competitors are gaining on Tesla, but there is another reason Tesla risks losing significant market share in 2023.

www.forbes.com

Side note, I misspelled Tesla and it's not even in the spell checker. I found that funny. Ford, General Motors, Honda, Hyundai Kia, and Chrysler are. Hyundai. LOL. But not Tesla.

 

[wag123]

IMO their vehicles are/were WAY overpriced, and their stock value was WILDLY inflated (and considering the stock split, still is). Both are finally coming into the realm of reality but still needs some adjustment. It is the natural order of things in business.

 

[JeffKeryk]

But, the US is by far the largest market for Tesla, and of that market California is the largest market. I stipulate that California is an extremely unique market, in the US and the world. I won't bother listing the obvious reasons why other than wealth concentration, virtue signaling, Tesla presence, and progressive support in key areas like emissions and infrastructure. California is Tesla's best possible scenario global market offering significant competitive and comparative advantages, including political support and EV friendly laws and ICE hostile laws/taxes. All in, Tesla has about a whopping 2% of the auto market. From November 2022:

Latest Money Transfer and Remittance News

moneytransfers.com

I've read various articles trying to pin down Tesla's growth and have seen numbers for 2020 to 2021 showing anywhere from 75% to 105%, including this article. Assuming these are accurate, then a 45% grown in 2022 is, in fact, radically moving in the wrong direction. It points to saturation, competition, and lowered consumer interest. This is not a good trend for Tesla.

Tesla sales swell 105% year over year, considerably more than any other company

According to TrueCar's most recent analysis, Tesla sales are estimated to have increase 105% year over year!

www.teslarati.com

And it's running out of steam already. As we discussed it missed earnings and sales numbers and the stock has sunk like the unsinkable Titanic. There's more also Nov. 2022:

Tesla's California EV market share slips as rivals step up

Tesla's dominant market share of the electric vehicle market in California slipped again this year, according to Reuters' calculations based on government data from January to September, as rivals up their game. Tesla controlled 73% of the battery electric market in California from January to...

news.yahoo.com

"Tesla's dominant market share of the electric vehicle market in California slipped again this year, according to Reuters' calculations based on government data from January to September, as rivals up their game. Tesla controlled 73% of the battery electric market in California from January to September, the lowest level since 2018, according to new vehicle registration data from the California Energy Commission. Tesla had a 75% share in 2021 and 79% in 2020. Tesla's sales in California - home to its first factory - accounted for 15% of the automaker's global deliveries last year, according to Reuters' calculation. California is the biggest U.S. state for zero emission vehicles, which also includes hydrogen fuel cell, and plug-in hybrid-electric vehicles, and accounts for 18% of new car sales in California this year. "We are reaching a saturation point for Tesla market share in California," said Ed Kim, president of AutoPacific. He expected rivals to continue to take away market share, while also expecting Tesla sales would still grow.

The real test for Tesla is significant presence in middle class America, northern cold states, and other markets that are not perfectly aligned for Tesla and EVs. In the BEST POSSIBLE market for Tesla, in just the last few years, sales have already not met expectations or otherwise slowed considerably.

44% YOY growth is bad? When just about everyone else is experiencing negative growth?
What does it tell you about a company that the market expects to grow 50% every year?

CA is the biggest market for just about every car company. We are the #4 economy in the world, by ourselves.

 

[leadcounsel]

44% YOY growth is bad? When just about everyone else is experiencing negative growth?
What does it tell you about a company that the market expects to grow 50% every year?

CA is the biggest market for just about every car company. We are the #4 economy in the world, by ourselves.

It is when you're a young company, previously doing 100% growth, and predicted to do 50% but missed, and your spokesperson alienates a large % of your base.

TSLA 3/28/2022: $321
TSLA 12/19/2022: $123, where it has remained for 4 weeks.
Loss of 63% in about 7.5 months. Representing something like $300,000,000

But you win. Forbes is wrong. Investors are wrong. Telsa is going to CRUSH every auto maker who can never compete with making magical EVs with unicorn hair, fairy dust, pixie wings, leprechaun rainbows. Nobody at Ford, or GM, or Toyota understands how to engineer a battery, they cannot learn or reverse engineer the technology, they don't know how to make plants to build cars or hire anyone who can do it. They all may as well stop producing their collective 10-15 million vehicles annually and throw in the towel to Tesla and its 1 million annual sales.

 

[SC Maintenance]

I wonder how many Tesla owners will line up to buy a new Tesla in a few years, given Tesla just devalued their trade by 20%.

Tesla could either be the future of the automotive world, or the next Polaroid or Blackberry.

 

[JeffKeryk]

I wonder how many Tesla owners will line up to buy a new Tesla in a few years, given Tesla just devalued their trade by 20%.

Tesla could either be the future of the automotive world, or the next Polaroid or Blackberry.

I will. Probably later this year.

 

[JeffKeryk]

It is when you're a young company, previously doing 100% growth, and predicted to do 50% but missed, and your spokesperson alienates a large % of your base.

TSLA 3/28/2022: $321
TSLA 12/19/2022: $123, where it has remained for 4 weeks.
Loss of 63% in about 7.5 months. Representing something like $300,000,000

But you win. Forbes is wrong. Investors are wrong. Telsa is going to CRUSH every auto maker who can never compete with making magical EVs with unicorn hair, fairy dust, pixie wings, leprechaun rainbows. Nobody at Ford, or GM, or Toyota understands how to engineer a battery, they cannot learn or reverse engineer the technology, they don't know how to make plants to build cars or hire anyone who can do it. They all may as well stop producing their collective 10-15 million vehicles annually and throw in the towel to Tesla and its 1 million annual sales.

From a valuation standpoint, you are right. Tesla, even with its historic stock price drop, is still worth more than the next 4 or 5 companies combined. What is wrong with those companies?
I am still kicking my self for buying the car instead of stock in late 2018. 6x profit right now. Sheesh.

What a roller coaster! Let's see how the price is later this year. Fair enough?

 

[DwightFrye]

Nobody at Ford, or GM, or Toyota understands how to engineer a battery, they cannot learn or reverse engineer the technology, they don't know how to make plants to build cars or hire anyone who can do it. They all may as well stop producing their collective 10-15 million vehicles annually and throw in the towel to Tesla and its 1 million annual sales.

Well then what are they waiting for ? Do they think the country is going the way of Wyoming and will ban EV's and they can go back to selling mediocre ICE vehicles ?

Some of you guys are assuming that since Tesla hasn't really had much in the way of model refreshes for the last few years that their engineers are just sitting around checking their Facebook status and watching Pornhub all day and Elon only spends money on frivolous personal projects like Twitter.

I see the point that some are making regarding FACTS and the numbers regarding TSLA stock valuation. I am not ignoring them. Only pointing out that just as TSLA made meteoric gains in value for reasons that didn't seem to make sense and then lost a huge percentage of that value for reasons that DID seem to make sense, they can just as easily start to come back and again have the "experts" scratching their heads.

Anyone who thinks that Tesla is just going to sit back and rely on their current technology and lineup and let other automakers make substantial inroads into their market share, well go ahead and buy some Ford and GM stock now while it's cheap. You might be wealthy in a couple of years. Or you may still own a stock that barely has kept up with inflation.

 

[zzyzzx]

I wonder how many Tesla owners will line up to buy a new Tesla in a few years, given Tesla just devalued their trade by 20%.

Wouldn't that really only apply to anyone who bought in the last 2 years bloated prices?

 

[alarmguy]

Anyone who thinks that Tesla is just going to sit back and rely on their current technology and lineup and let other automakers make substantial inroads into their market share, well go ahead and buy some Ford and GM stock now while it's cheap. You might be wealthy in a couple of years. Or you may still own a stock that barely has kept up with inflation.

I think you have that backwards. The legacy companies still control market share and latest data shows Tesla losing market share. But I will say too early to know that. I have nothing against the company except all the misinformation promoted by some people. ( I dont like mis-information)
My own speculation is Tesla is rapidly losing market share, watch out by 2025 as my opinion and that of people that know a lot more than me, Tesla better start producing something unique other than 4 door looking sedans. They need a blockbuster product of which right now they have nothing to compete moving forward.
(ps they have to increase their market share by 400% to come close to GM or Toyota, 350% to Ford ect)

 

[KrisZ]

I didn’t read the whole thread, but prices going down and I see a lot of people saying it’s bad? WTH?
In what universe prices going down is seen as bad? Are most on here big time investors in Tesla or something?

 

[Torrid]

I wonder how many Tesla owners will line up to buy a new Tesla in a few years, given Tesla just devalued their trade by 20%.

Tesla could either be the future of the automotive world, or the next Polaroid or Blackberry.

I probably will. Eventually a second Tesla or at least another electric car will end up in the driveway.

 

[UncleDave]

It is a fact Tesla is losing marketshare.

Anyone who thinks that Tesla is just going to sit back and rely on their current technology and lineup and let other automakers make substantial inroads into their market share, well go ahead and buy some Ford and GM stock now while it's cheap. You might be wealthy in a couple of years. Or you may still own a stock that barely has kept up with inflation.

On keeping up with and or beating inflation....