Tesla Slashes Prices

[MellowJohnny]

Ford congratulating Tesla on its price cuts. Heartwarming to see such friendly rivalry between competitors!

I was going to say the exact same thing - this I about moving excess inventory. Sure, Tesla has a bit more room in the margin of their cars to play with, but they have an inventory problem. In the old days Ford would dump their cars to Hertz (for a while basically every car I ever rented from Hertz was brand new), since Tesla can only move to consumers, they are having a sale.

I'm also going to go out on a limb and say this will be over when inventories rebalance.

Fun to watch tho

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[Blue highway]

At this point Ford needs to do whatever they can to

• Make the Mach E an SUV again
• Get more Mach E and Lightning prices just under the thresholds for the tax credits

THIS ^^ I expect a combination of lobbying, de-contenting and discounts... more things could be subscriptions etc.

The more I think about it, having different government subsidies based on EV vehicle "type" makes little sense. The intent is to get more people to drive EV's for all the benefits that offers society.

I can get behind a price cap that phases out, but a yes/no based the label on a vehicle type is really dumb government policy.

 

[roamtheworld]

I was going to say the exact same thing - this I about moving excess inventory. Sure, Tesla has a bit more room in the margin of their cars to play with, but they have an inventory problem. In the old days Ford would dump their cars to Hertz (for a while basically every car I ever rented from Hertz was brand new), since Tesla can only move to consumers, they are having a sale.

I'm also going to go out on a limb and say this will be over when inventories rebalance.

Fun to watch tho

Tesla has already done that remember this? https://www.nbcnews.com/business/autos/after-4-billion-deal-tesla-hertz-says-it-will-rent-n1282576
later expanded to 150K cars. Tesla, Hertz and Uber and the Uber drivers are all making $$

 

[ShaggySS]

At this point Ford needs to do whatever they can to

• Make the Mach E an SUV again
• Get more Mach E and Lightning prices just under the thresholds for the tax credits

They can\should do this but the dealerships will screw it up with markups. Telsa doesn't have to deal with that crap

EDIT: Thanks for correcting me Rick....see the next post.

 

[RickMachE]

They can\should do this but the dealerships will screw it up with markups. Telsa doesn't have to deal with that crap

Markups have nothing to do with tax credits.

 

[MellowJohnny]

Whenever people talk about Elon Musk and his behavior; they need to remember Ford and VW both produced equipment for Nazi-Germany during World War 2.
<snip>

VW was founded by the Nazi party in 1937 - you make it sound like they had a choice. VW and the Nazi Party were one and the same. In fact the Nazi's had a scheme for German citizens to buy a Beatle using a sort of downpayment plan. You'd go the bank each month, pay some money, and the bank would add a stamp to your purchase card. The idea was when the card was full, you'd get you car. Except nobody did, the Nazis simply stole money from their own people to pay for their war.

 

[roamtheworld]

Markups have nothing to do with tax credits.

Tax credits are the gravy once the rules are set and Tesla adjusted prices to match so they qualify now.
Ford still needs to get in the game either by lobby to get MME in the SUV category or drop prices. With so little profit made on MME, my guess is IRA changes are the best hope.

 

[MellowJohnny]

Tesla has already done that remember this? https://www.nbcnews.com/business/autos/after-4-billion-deal-tesla-hertz-says-it-will-rent-n1282576
later expanded to 150K cars. Tesla, Hertz and Uber and the Uber drivers are all making $$

But it's different when Ford *owned* Hertz. Tesla doesn't own Hertz or Uber.

 

[Ghost Ryder]

I was going to say the exact same thing - this I about moving excess inventory. Sure, Tesla has a bit more room in the margin of their cars to play with, but they have an inventory problem. In the old days Ford would dump their cars to Hertz (for a while basically every car I ever rented from Hertz was brand new), since Tesla can only move to consumers, they are having a sale.

I'm also going to go out on a limb and say this will be over when inventories rebalance.

Fun to watch tho

I don't think it really has to do with inventory. Tesla is vertically integrated. Their cars are essentially build to order. if they wanted to reduce inventory, they would just decrease production. Logically, if the demand is not there, then clearing out the current inventory at fire sale prices, but keeping production the same, would just lead to the same situation when the sale is over.

I think Tesla is doing what Amazon has done, and that is using their massive scale (as related to EV productions) and trying to squeeze other manufactures. From what I've have seen, profit margins from EVs, other than Tesla is slim to none. Often time they are negative. Rivian is said to loose ten of thousands per vehicle sold. I think the MME is break even for Ford.

 

[roamtheworld]

But it's different when Ford *owned* Hertz. Tesla doesn't own Hertz or Uber.

Sure back in 2005. Hertz went into bankruptcy and came out with an EV rental strategy and teamed up with Uber.

EVERY car company dumped huge numbers of base models to all the rental car companies in the past to pad production numbers but never made a large profit on those sales.
Tesla is selling at its current pricing.

 

[Ghost Ryder]

But it's different when Ford *owned* Hertz. Tesla doesn't own Hertz or Uber.

Didn't Hertz order 100k Tesla last year?

 

[RedStallion]

Damn Ford gonna have to cut prices. If they can.

Ford will have to cut prices. Not only because of Tesla cuts, but also because of IRS limits, high interest rates, recession pressures, glut of used cars pushing all prices down.
One way manufacturers can spare some cash is by offering whatever possible as a subscription.

 

[snowdoggie]

Funny that my dealer called me yesterday that my 'car' arrived... I am not sure if I want to take delivery now.

 

[roamtheworld]

I still think it's funny how everyone in the media act surprised when Musk said this a few weeks ago
“‘Do you want to grow unit volume, in which case, you have to adjust prices downward, or do you want to grow at a lower rate or go steady? That’s sort of the choice there. My inclination would be to still grow. My bias would be to say like, ‘Okay, let’s grow fast as we can without putting the company at risk,’ which would mean that in that scenario, profits would be low to negative during a recession. Provided the cash position is okay, I think that’s still the right move long term,”

 

[MellowJohnny]

Didn't Hertz order 100k Tesla last year?

They did (100k at first?) but that was not so Tesla could dump inventory, it was more about Hertz (who had just emerged from bankruptcy) wanting to grab headlines and look cool and hip. And if the planet is moving to BEVs, they need to stay relevant.

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