Ah,,, the spin comes back. Detractors, to deny taxpayer money is keeping Tesla sales where they are is laughable vs ICE vehicles that have to stand on their own. I feel like I am first first grade teacher sometimes explaining this simple cut and dry statement.
Tesla Q1 sales flatlining, as I have predicted
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I think Tesla would still sell without the tax credit. You'd lose a few that couldn't quite justify the stretch the base model, but I think most use that tax credit to stretch up to the next more expensive version. The end of last year was a bit of a fluke the way the credit went away and then people tried to get their orders to stretch to the first of the year to get the credit. I didn't risk losing out on the car and took delivery in November.
Well said and this is my only undeniable point that always gets skewed by distractors (just discussing) taxpayer credits are the only thing that are producing Tesla sales numbers in respect to where they are in the USA.
I keep hearing from certain people in this group that make it sound otherwise. Tesla would be buried this year is not for their price slashing and $7,500 taxpayer funds being given to them.
Things would be different if taxpayers were giving $7,500 to anyone who wants a car, ICE or EV.
Forgetting history again?
I'm guessing you said that Tesla would stop growing the first time the tax credit cap was hit years ago?
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Maybe someone has said it already, but Teslas are everywhere in California and a few other states. Go to 45 other states and you won't see any where near as many as a percentage on the road.
The percentage varies even by region in California. In California's Central Coast Teslas are invading like a swarm of locusts because of remote work, and along with that different political attitudes. People think wine growing regions have a certain mystique. Wrong. Wine growing regions are farming, and those who farm have different beliefs than those from the big cities.
Scott
The percentage varies even by region in California. In California's Central Coast Teslas are invading like a swarm of locusts because of remote work, and along with that different political attitudes. People think wine growing regions have a certain mystique. Wrong. Wine growing regions are farming, and those who farm have different beliefs than those from the big cities.
Scott
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Money is money, you're not wrong. I don't know if someone would buy something other than a Tesla if they wanted one, but that's a question that'll have a different answer depending on who you ask. I think the interesting thing about Tesla is that they lowered prices and still make a healthy profit on EVs, unlike any other EV on the market. Really all that says is if they did fail, they have longer to fail before it would shut their doors.
I really won't sit here and defend Tesla into the ground though. I don't love everything about them. I like the car, I like the driving experience, but like any car, there's things I don't care for. The one that surprised me was that the fit and finish is pretty good. This last update was the vision only simulated parking sensors or Tesla Vision as they call it. What a hokey, useless gimmick. I don't care to need parking sensors, but if you want them it is laughable how bad it is on the Tesla compared to the ultrasonic sensors on my 5 year old VW. It literally uses the camera to estimate the difference and remember where that object, like a curb when it disappears from the camera below the hood where it can no longer see it. I see this being a massive problem for objects that can move. Oh and the dumb thing? I can shut off the sound, but not the display that plasters "STOP" across the top of the parking display.
As others have mentioned the average new car price is now approaching $50k. That puts Tesla's within reach of the same customers who would spend $50k on an ICE vehicle. And I assume those customers with a $50k budget are mostly middle class Americans with families and not older and more affluent people who are empty nesters with paid off mortgages. And that demographic is hard hit when gas prices skyrocket and are telling themselves an EV seems like a good idea.
The statement that "everybody who wanted a Tesla already bought one" is ludicrous and if true would be apparent byTesla reducing production, shuttering factories and laying off employees. Quite the opposite is happening.
And for those who keep thinking that someday very soon Tesla will have major competition, and I don't mean that there will just be a dozen other EV's to choose from, but competitive EV's with regards to performance where it counts, you must be assuming that Tesla is standing still in the R&D department. They are still 4-5 years ahead of the competition. And the competition lacks the resources to really pump money into the EV category at a rate that they could possible close the gap with Tesla.
What does that mean ? At some point the competition will figuratively throw in the towel. And buy batteries from Tesla or pay a licensing fee to the companies that are making those batteries. And pay a licensing fee for the software that is involved in the EV's functioning. And pay a licensing fee for the FSD feature that many customers will demand. And so on.
I have predicted before that Tesla will have $$$$$$ flowing in from other sources besides just selling cars. That is Elon's long term plan.
The statement that "everybody who wanted a Tesla already bought one" is ludicrous and if true would be apparent byTesla reducing production, shuttering factories and laying off employees. Quite the opposite is happening.
And for those who keep thinking that someday very soon Tesla will have major competition, and I don't mean that there will just be a dozen other EV's to choose from, but competitive EV's with regards to performance where it counts, you must be assuming that Tesla is standing still in the R&D department. They are still 4-5 years ahead of the competition. And the competition lacks the resources to really pump money into the EV category at a rate that they could possible close the gap with Tesla.
What does that mean ? At some point the competition will figuratively throw in the towel. And buy batteries from Tesla or pay a licensing fee to the companies that are making those batteries. And pay a licensing fee for the software that is involved in the EV's functioning. And pay a licensing fee for the FSD feature that many customers will demand. And so on.
I have predicted before that Tesla will have $$$$$$ flowing in from other sources besides just selling cars. That is Elon's long term plan.
The supply demand curve in its pure form is the driver of prices as you posted. It is also the driver of new products and alternative products; innovation. In markets, prices will rise until consumption is affected to an unacceptable rate.
The world runs on oil; it has no serious competition. There is collusion. It is sold on the world market, so there is no "our oil". Until there is a viable alternative, they have us by the short hairs.
Rising oil prices will push more customers towards alternatives; disrupters will build those alternatives. That's the beauty of the market and its innovators.
I always enjoy your balanced posts.
Yeah, as an investor I might care about profit margins as a buyer I want the company to be with as little profits as possible. I want the lowest market up vehicle as possible, just as why Amazon is such a success with buyers. Only thing about Amazon is they were first to the game (mostly) Tesla is only first in EV powered vehicles but all the other top ten manufacturers were way before them.
One thing about your post though, we do not know if Tesla is making a healthy profit. Those results come out on April 19th. We do know, they have only had a profit in the USA for one or two years at most, starting around 2021/ Most profits came from overseas.
Even IF they show a good profit but not healthy in April 19th that wont last forever because their cars are $7,500 lower for most buyers due to tax credits, so if they want to keep selling to those buyers they would have to shell out another $7,500 per car to them after the taxpayers stop contributing.
I think you know me by now. I am not in anyway against EVs Im not happy about tax dollars paying for them. I'll say it over and over again, I think ( I dont even know what model it is) from Kia or Hyundai small SUV looks awesome as well as some small SUVs due to come out from GM. I wouldn't mind one for my wife when the time comes but I dont think it's practical since our move to the NC coast just two weeks ago after living in SC for the last 15 years.
Now that I am down on the coast that puts me about 255 miles from my son in upstate SC. It would be inconvenient for me personally to have only one ICE vehicle. AS I will continue to drive up there to see him and his family, most of the time it will be day trips only. This is why I do not think current EV technology will ever overtake the ICE and why I thought, no matter how practical a solution would be developed for h2 could change the game, if not, ICE will never go away, at least not in my lifetime and that of anyone posting in here.
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This statement is speculative since right now buyers are being given $7,500 per Tesla that they buy. You seem to be discounting that fact in this post.
More speculation is you think for some reason everyone wants an EV? Just look around at all the big and small SUVs and pick up trucks.
Tesla isnt close to ahead of the competition in regards to the style of their cars, every new EV that hits the market looks fresh vs stale. They really need to step up their designs but again, to this day, the VW Beetle is still a treasure, so maybe that is the plan.
The numbers they claim are $36k to build a Model 3 or Y and before the price cuts claim they average 29% profit. I'm just going off of those numbers. I only mention the profitability because a company turning a profit is much more likely to be around in the future. Ford on the other hand do say they lose money on every Mach-E sold and that has to do with the car not paying off its tooling yet or the production is too low yet to be economical to build yet. It's true Tesla haven't been profitable for more than a couple years now though, so I don't know how they went from losing money to instantly 29% profit. That doesn't make sense to me.
Really the only thing that keeps me on Tesla other than I like the car is the charging network. I would welcome other options, but without the Supercharger network I legitimately couldn't cover my job driving an electric car. Most non Tesla here is only level 2 30mph charging especially in my longest distance drive which is 300 miles round trip. It would likely take some very careful driving to return to home at 0% and I wouldn't want to chance that.
I really don't understand why every story we see is this always has to do with replacing this or replacing that. I think that's the wrong way to look at it. This isn't the horse to the automobile. Some say it's so revolutionary. It really isn't, it's just evolution of technology. To make it as basic as possible its a different powertrain and fuel source. Every day I go to work I sit on top of the most powerful electric motors in regular production today, some of which were put in service back in the 1960s. Instead of a battery, it's a 4400 horsepower 16 cylinder diesel engine turning a generator to create a 600v power supply to power 6 electric motors known as traction motors.
Different tools for different jobs. As we both see there's different scenarios where we can see where one vehicle would be more beneficial for our uses than another. That's what makes me love all the choices available.
wemay
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I see more and more Teslas plus other EV's around here weekly.
You're right, toss me $7500 to buy an ICE vehicle of my choice and I'm in.
I have several friends that would be in too!! EV no thanks, even if they upped the ante.Here is a couple of reasons that come to mind:
Novelty is wearing off
Market is getting saturated
Novelty is wearing off
Market is getting saturated
If the market is getting saturated, why are Teslas and Bolts sales growing while most other makes and models sales are shrinking?
Some feel Californias move to ban ice forces the situation to be either or, and this becomes the focus of these people regardless of where they live. Under this circumstance many feel they have an obligation to dislike them, and or cheer for companies that make them to fail.
You are correct, the right way to look at it is as a choice.
On subsidy, the US spent something like 6%+ of its GDP subsidizing fossil fuels in 2020 and thats expected to rise to 7% by 2025.
This subsidy absolutely lowers the running cost of ICE. The EV tax credit is a mere rounding error comparatively.
Happy to substitute this number for a more accurate number if anyone has one.
I wasn't discounting the fact that the $7500 tax credit allows a Tesla to sell in that $50K range. I didn't comment on it one way or another because it is simply a fact. For the time being anyway. And for the record, I'm against government subsidies.
I also have never said that everyone wants an EV. Your observation regarding the number of pickup trucks and SUV's and Tesla's styling are accurate measures of why some people pick one vehicle over another. Tesla definitely needs to restyle their main three models. Maybe drop the Model X and introduce a mid sized SUV to compete with the popular Mazdas, Toyotas, Subarus and others in that size and configuration category. The Cybertruck is about as attractive as the women on The View but I wouldn't expect any changes for several years after it finally is in full production and I suspect its odd appearance is part of its attraction to the 1.2 million people who have pre-orders in for one.
Regarding Tesla's profitability and projected demand: They are getting ready to ramp up production at Giga Shanghai and the new Austin and Berlin factories will also be ramping up quickly. Their goal is 4 million vehicles per year to include the Cybertruck and semi truck. It will cost a lot of money to do that. And they must have the money and see the demand or they wouldn't do it.
It wasn't long ago that it was a big deal that Tesla manufactured a million vehicles in a year. They will hit two million this year. And the prediction for that 4 million figure is for the 2025 calendar year. Oh, and the rumored economy version is predicted to be available by the end of 2024 too.
What will Ford, GM, VW, Kia and Hyundai be doing in 2025 ? Still playing catch up I expect. But at least offering some competition which will keep Tesla on their toes. Well, at least VW, Kia and Hyundai might. Ford and GM ? And will Toyota still be sitting on their thumbs ?
Good post/reply. I shortened it just to reply to this one part.
"Predictions" mean nothing more than speculation. Sometimes right, sometimes wrong, it depends on the forecaster that you want to believe. I guess that is why the stock is priced FIFTY times earnings though many people took a bath when it was selling at ONE HUNDRED times earnings. All I am saying is speculation is just that, remember when Tesla was going to come out with a truck a few years back? That wasnt speculation and it's still not here.
Im a non believer. Tesla filled a void in the marketplace. No different than a clothing line, or Electronic product in an industry already well established. They have nothing special to offer other than the fact of having a different "engine"
Every legacy car company in the world is now starting production of that same exact product with an expertise in knowing what turns a buyer on regarding look and utility with a VASTLY larger showroom, service and distribution network than Tesla.
I personally think a bit extreme that Tesla will get buried to the status of something like the VW Beetle and I see nothing wrong with that but Tesla has proven it is not easy for them to innovate and change vehicle styles fast enough (at least at this point) to compete with the majority of the big companies and the styling tastes of the public. Add to that they only offer EV models and the legacy companies produce both ICE and EV. Consumers like choices.
BTW I do like Elon Musk and the industries he starts but as with Pay Pal and I wonder at times with Tesla is his intelligence and visions able to execute to the fullest extent possible? I may not even be typing this way if now or even years ago he provided more models that the public desires = Trucks and SUVs.
Time will tell.
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I think your numbers are high. Tesla might deliver 2M, but that would require ramping at Berlin and Austin, which is happening. Shanghai and Fremont are pretty much at capacity; they are not ramping in any significant numbers. Fremont is changing over to the Highland.
Current run rates: Shanghai 1M, Fremont 500K, Berlin 250K, Austin 200K.
If any hiccups occur, 2M is a real stretch. My SWAG is 1.8M deliveries. Who the heck knows?
People have to buy them. Who knows if and how that happens with current economic uncertainty. Now as oil prices rise, a number of customers will run to EVs... Certainly Tesla is in the lead, but BYD is huge. Everyone else are bit players, but they are players. China troubles are a problem for every car company as 1 in 3 cars are sold there.
It is funny to me how some people say, "Yeah but they will (or won't)." And "this will happen" and other opinions when commenting on current results. And then call others comments speculative. They are both speculative.
If you really wanna speculate, speculate when Monterrey begins production and when the everyman's Model Y is offered. Supposedly Monterrey and Shanghai are slated to build this car. Analysts are speculating 4M cars per year at capacity. Monterrey will build them at a furious rate with cost-to-mfg unheard of today. The Latin market is currently untouched...
