They're just relaying that erroneous Reuters thing that came out of Detroit... without checking any of the facts
What exactly is erroneous in the article?
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What exactly is erroneous in the article?
MitchJi
Trying to learn kindness, patience & forgiveness
Already guaranteed! I think Tesla has all the pieces in place to speedily self-finance expansion pretty quickly now.
I'll take a shot at this. The market for cars and SUVs with base prices in the $50-$60K (US) price range is much larger than the $80K plus price range. The lower priced S60 and X60 don't get all the way there, but they significantly expand the size of the market. This will help Tesla ramp S and X sales to over 120,000 in 2017 and, as has been mentioned previously, help Tesla to accelerate its build-out of infrastructure and staff (including service centers, superchargers, etc.) in advance of the Model 3 launch in late 2017.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
This is factually incorrect:
The follwoing is biased reporting (i.e. cherry picking of facts to paint a negative picture):
The way this sentence is written implies that they have lowered prices because they have missed sales targets. It is not clear to me that these two things are causally related just because they are related in time.
(Several fronts? What fronts? Did the regulators demand they hand over information or did Tesla contact the regulators themselves to offer this information?)
What analysts and what investors? Are there not also analysts and investors who have spoken positively about the prospect of a merger?
This is one analyst rating, yes. What about others? How does Barclays track record of predicting stock price actually hold up to scrutiny when compared to the price point that TSLA has actually traded at? The role of analysts is not to say what they believe the stock should be worth, but how what value the market will assign to the stock at some future point in time. The best analysts are the ones who predict the price the best.
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This is not a smart move. Any attempt at blocking the free flow of information won't help him with other journalists. This is a critical time, he needs all the positive press he can get. Drumph tried it, didn't go well.
So basically demand with just the 75 and 90 was not enough to use the full potential of the assembly line and without the 60 Tesla would miss its full year guidance? Great, so now they have substituted a sales guidance miss with lower overall margins. In an environment where 'cash is king'.
X60D is a good move. The SUV market is the largest out there (not sure why). People are willing to spend more on SUV's (not sure why either). By lowering the entry cost for the X, people can now truly compare it with the X5's of the world. In addition, it doesn't deter people from the showrooms because the press previously reported it being 150K+.
There's an argument swirling around that gross margins will be hurt. In actuality I think it will be a net zero effect because people WILL buy options because the base of the car is lower which would make up for it.
There's an argument swirling around that gross margins will be hurt. In actuality I think it will be a net zero effect because people WILL buy options because the base of the car is lower which would make up for it.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
It's not like he/his media team won't know what Fortune writes about him or Tesla. It's a symbolic action of course - as in "Fortune is a shitty news outlet who publish lies about me and my company".
SunCatcher
Member
"Fortune; go play with yourselves."
It may also be the case, that they now have improved production and margins on the X to the point when even the 60 makes a profit.
Also, part of the plan to convert some M3 reservations and Model Y holdouts to 2016 sales.
The 60Kw is purely a move to lower the price of the vehicle; it's an attempt to create some quick demand until next quarter.
SW2Fiddler
We Are Cognitive Dissidents
Also too, anyone think maybe they planned for the referral incentive program to expire when the new X60 becomes available to order?
Maximize profit is the objective with the fixed resources already in place. so expand demand as long as
marginal revenue exceeds marginal cost.
Your assertion if taken to the limit would be to sell only 1 car at 10 billion dollars.
maximizing margin is not the same as maximizing profit. Maximizing profit is the objective.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
In principle I agree with this. The only counter argument is that it's likely that Elon has forfeited one of the incentive goals of his incentive package: To achieve a high automotive gross margin for consecutive quarters. Was it 25% or even 30% - I don't remember.
The word Sales is not synonymous with Deliveries, especially in the case of Tesla.
Hey, there's your silver lining. If Musk doesn't qualify for the next stock option award, less dilution!
racer26
Active Member
Not sure why the shorts and the negative nellies seem to think that Tesla doing something that will increase demand should be seen as a negative thing.
Tesla just finished a quarter with their highest run-rate yet, (albeit only for the last part of the quarter) and they've said that by the end of 2016 they intend to be at a run rate of 2400 cars/week.
If they're going to produce an additional 400 cars/week by the end of the year, and additional 200/week by the end of Q3, they have to find an additional 7200 buyers that they didn't have to find if they just maintained 2000 cars/wk.
Of course you need to raise demand in order to do that. There is still a 10-12 week lead time to get your car. That indicates that demand isn't the problem.
As they continue to ramp the production capacity, they need to ramp the demand to fill it. Pretty basic to me.
Ignoring all of that though, I believe that X60 is purely a case of they already make 60kWh software limited 75kWh skateboards for the S60, so why not get a basically free extra product out of it.
In addition, I don't think they sell very many software limited S60's but it gets people in the door to buy a higher margin product. I believe the same will hold true for X60. I believe it is purely a product intended to take advantage of the decoy effect. By providing a third (or fourth) option which is somehow undesirable, you impact the decision people make, and you can drive them to buy higher margin things they wouldn't have otherwise.
Tesla just finished a quarter with their highest run-rate yet, (albeit only for the last part of the quarter) and they've said that by the end of 2016 they intend to be at a run rate of 2400 cars/week.
If they're going to produce an additional 400 cars/week by the end of the year, and additional 200/week by the end of Q3, they have to find an additional 7200 buyers that they didn't have to find if they just maintained 2000 cars/wk.
Of course you need to raise demand in order to do that. There is still a 10-12 week lead time to get your car. That indicates that demand isn't the problem.
As they continue to ramp the production capacity, they need to ramp the demand to fill it. Pretty basic to me.
Ignoring all of that though, I believe that X60 is purely a case of they already make 60kWh software limited 75kWh skateboards for the S60, so why not get a basically free extra product out of it.
In addition, I don't think they sell very many software limited S60's but it gets people in the door to buy a higher margin product. I believe the same will hold true for X60. I believe it is purely a product intended to take advantage of the decoy effect. By providing a third (or fourth) option which is somehow undesirable, you impact the decision people make, and you can drive them to buy higher margin things they wouldn't have otherwise.
It's also Elon's personal account so. Whatevz
Yes, but it doesn't mean that people are going to buy the lower priced vehicle with 0 options.
jhm
Well-Known Member
Check out the price action on SCTY. Started out low like TSLA, but has gained some traction. It is only 0.4% down while TSLA is 1.2% down and more volatile. Let the shorts attack TSLA. It's SCTY (low exchange worth $201 per Tesla share) that long-term buyers want. I think when SCTY reaches parity with TSLA, then TSLA shorts will feel real pressure. So long as SCTY is well below parity with TSLA, the shorts know that the short-term price of TSLA is vulnerable.
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