Tesla Slashes Prices

[RickMachE]

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.

You'd be wrong.

Tesla cuts prices in the U.S. and Europe to stoke sales after lackluster year-end deliveries

https://www.cnbc.com/2023/01/13/tesla-cuts-prices-in-us-and-europe-to-stoke-sales.html

Yahoo Finance
Tesla price cuts are the 'right medicine at the right time,' analyst says

With inventory reportedly piling up, Tesla analysts and investors predicted price cuts were coming — and they were right.

https://finance.yahoo.com/news/tesl...at-the-right-time-analyst-says-154839009.html


And, while there definitely seem to be demand concerns across various markets, including North America, much of this must be attributable to the large price rises Teslas have seen in the last year. These cuts finally get us heading in the right direction in terms of price, and should spur significant additional demand. But in addition, CEO Musk has been doing his part to turn customers away with his social media antics, causing many people who would otherwise consider Teslas to look at other brands instead.

These price cuts will reverse the price portion of Tesla’s demand concerns, but it remains to be seen whether customers will remain turned off by the brand destruction to which its CEO seems committed.

https://electrek.co/2023/01/12/amid-demand-concerns-tesla-cuts-prices-by-up-to-13k-in-us/

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[Ghost Ryder]

This is also going to kill the use car prices for the MME.
Like it or not, people are going to cross shop when looking at used cars. If a used tesla is significantly less than the MME, than it's going to sale before the MME.

 

[RedStallion]

Just snagged a MYLR. Deal is too good to pass imo

As somebody said, a bargain is a thing you don't need at a price you can't resist. ?

 

[HeyMomTheMeatloaf]

the 7 seat Model Y is eligible up to 80k, the Model Y Performance is eligible for none unless used, and the Model Y Long Range/Austin Build is eligible up to 55k.

Could buy the 7 seat Long Range with the factory rims for more range or 20” inductions, paint upgrade, trailer hitch, performance upgrade OTA update, FSD and still be eligible for tax credit. The Austin Build/5 seat Long Range models cannot be loaded up and still qualify.

The minimum they could do is reset the prices back to 2022 levels. I still can't believe people who buy the same car as I did 3 months back (2022 GT variant) are paying nearly 11-12K over what I paid if I account for the 7500 tax credit and the 2022 prices.

But yeah if I was in the market right now, that 7 seater model Y is really tempting with the full tax credit.

 

[Ghost Ryder]

You'd be wrong.

Tesla cuts prices in the U.S. and Europe to stoke sales after lackluster year-end deliveries

https://www.cnbc.com/2023/01/13/tesla-cuts-prices-in-us-and-europe-to-stoke-sales.html

Yahoo Finance
Tesla price cuts are the 'right medicine at the right time,' analyst says

With inventory reportedly piling up, Tesla analysts and investors predicted price cuts were coming — and they were right.

https://finance.yahoo.com/news/tesl...at-the-right-time-analyst-says-154839009.html


And, while there definitely seem to be demand concerns across various markets, including North America, much of this must be attributable to the large price rises Teslas have seen in the last year. These cuts finally get us heading in the right direction in terms of price, and should spur significant additional demand. But in addition, CEO Musk has been doing his part to turn customers away with his social media antics, causing many people who would otherwise consider Teslas to look at other brands instead.

These price cuts will reverse the price portion of Tesla’s demand concerns, but it remains to be seen whether customers will remain turned off by the brand destruction to which its CEO seems committed.

https://electrek.co/2023/01/12/amid-demand-concerns-tesla-cuts-prices-by-up-to-13k-in-us/

The big build up in inventory at the end of the year occurred after the IRA was announced, so people were cancelling their orders because they would of qualified for the tax credit a few weeks later. hence tesla reduced it by, you guessed it, $7500 and that cleared out their inventory right away.

 

[MellowJohnny]

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.

I was thinking the exact same thing, but I feel like that's not 100% the case. They will also want to keep their plants running at full capacity, and I'm guessing they misjudged the drop in demand. It's like McDonald's a lunch time - keep making them 'cause you know you're going to sell them. If they are building cars based on forecasted demand, and that demand drops, you get excess inventory.

Just a hypothesis tho.

I am by no means a Tesla hater - I love their cars, just choose not to own one.

 

[tdmeng]

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.

Yes, monopolistic practices if anything.

 

[RickMachE]

The big build up in inventory at the end of the year occurred after the IRA was announced, so people were cancelling their orders because they would of qualified for the tax credit a few weeks later. hence tesla reduced it by, you guessed it, $7500 and that cleared out their inventory right away.

Please show a source that says "Tesla cleared out their inventory right away".

In fact, in China, they have a major inventory / lack of demand issue that has nothing to do with the IRA.

Telsa is a public company. On 1/25 they will release their earnings, and it will show, IMO, they had huge excess inventory as of the end of the year.

 

[Ghost Ryder]

I was thinking the exact same thing, but I feel like that's not 100% the case. They will also want to keep their plants running at full capacity, and I'm guessing they misjudged the drop in demand. It's like McDonald's a lunch time - keep making them 'cause you know you're going to sell them. If they are building cars based on forecasted demand, and that demand drops, you get excess inventory.

Just a hypothesis tho.

I am by no means a Tesla hater - I love their cars, just choose not to own one.

If demand is so bad, why is Tesla expanding GigaTexas?

https://insideevs.com/news/630642/tesla-battery-related-expansion-giga-texas/

Tesla is comparable to Amazon. It's very agile. Because it doesn't have to deal with the dealer network, it can increase or decrease prices quickly base on the current situation. They may feel that by lowering the price to the current price point, it could kill off some competitors. (VinFast, Rivian, Fisker) before they even get started. Also it may take some of the hype out newly release EVs, like GM Blazer or Equinox.

Seems like they're going after market share.

 

[Ghost Ryder]

Yes, monopolistic practices if anything.

Can't be a monopoly if there are other companies competing. Now its up to other companies to respond. That's how a free market works.

 

[MellowJohnny]

I guess this also means the death of ADM...

 

[vvelocityy]

got a 22->23 convert, premium SR RWD, in december. for only 2k more i could have gotten MYLR with actual OTA updates and ~100 more miles. some buyers remorse here ? ugly car but unbeatable price and ever improving build quality and industry leading tech.

 

[RickMachE]

It's pretty amazing to me that people claim to know so much yet don't read financials or market analyst's writeups.

 

[Ghost Ryder]

Please show a source that says "Tesla cleared out their inventory right away".

In fact, in China, they have a major inventory / lack of demand issue that has nothing to do with the IRA.

Telsa is a public company. On 1/25 they will release their earnings, and it will show, IMO, they had huge excess inventory as of the end of the year.

Post #29

Those prices are going to clear out their inventory immediately. They did a discount ($7,500) in December and when it stopped, the inventory levels jumped back up.

 

[phil]

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.

Who says Tesla can't dump a hundred thousand cars worth of stale inventory on Hertz, at bargain-basement fleet prices? Everything old is new again:

https://www.bloomberg.com/news/arti...eslas-in-car-rental-market-shake-up#xj4y7vzkg

I agree, when Tesla manages to improve demand for its cars, it will raise prices. That is, IF Tesla can improve demand - the market signals are not good, and bargain-basement pricing may be the new normal for Tesla as the EV market matures.

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