Believe that the reduction in S and X sales is mostly due to the great value proposition in the Model 3.
End result is still that Tesla sold 110% more vehicles in Q1 2019 than in Q1 2018.
Customers have more choices now.
Imagine that Model 3 sales will also take a dip when the Model Y is in volume production...yet still, Tesla will be selling more cars.
That 110% will fall HARD Q2 on Q2 and all the fans who love repeating the number know it. Not an argument that's going to hold up well. A growth spike without profit and then...? A new larger scale car was added, that's to be expected.
I can't find a link now, but when Model 3 was introduced, weren't we told that Model S and X would remain technology leaders, getting the new stuff first?
Note that S/X demand growth is not slowing, demand plummeted in real numbers, halving from one quarter to the next. Model 3 had been selling for over a year. There's more going on. V3 supercharging capability was implemented in the 2017 Model 3, but still not in the 2019 S and X. That's flipping the finger at all that is sane product management, and getting the bill for it. Model S in 2012 had up to 81kWh, now 7 years later 102kWh and some incremental upgrades that all cars get. Frunk got smaller, new face. 2012 starting price was $57,400, now it's $85,000.
The sudden drop in S/X has little to do with Model 3 being desirable (totally different price range) but all to do with S and X receiving hardly any notable upgrade since 2016 to warrant "3 years of technology leadership" while service levels declined due to...guess who, Model 3.
Model 3 has all but killed S+X then, and now Model Y is coming up and it's almost universally better. What's the path this company is on? Why even bother still offering S+X? What's the wait with Y, a few panels and chairs? Reduce Model 3 output and start making Y on one or two of the three lines in Fremont.
Tesla may have self-inflicted the same problem the legacy car makers are seeing. Introducing a BEV that appeals to the masses will never be in sufficient supply once the buying public gets a taste for it and all other cars in the catalog will cease to matter. But, Tesla could and SHOULD have kept S and X on top. They have the tech in house for it.
Stick in two Model 3 rear motors and perhaps another one on the front axle. Roadster style. More range.
Put in the market leading 2170 cells, it saves $3-5K per unit and bring more top model range, better load endurance.
How hard would it be REALLY to put a tow hitch on Model S while anti-selling Model 3? Consumers car for this, but doe Tesla care for what consumers want and expect? The whole "production capacity limited" argument just ended in a very ugly way.
Killing off S and X like that wouldn't be such a suicidal act if they could actually make Model 3 (it should be technically in good numbers. Yet quarterly they're still below the rate of the last week of June 2018. Elon said they were on the steep bit of the S curve now, but I see a ceiling. In those circumstances, should you leave your flagships looking very "2012" or at best "2016"? The market doesn't care there is no competition for a 2016 Model S. They're not going to pay $85K for it if the $35K car is going to get a vastly higher mph charge rate in the future, whip the fancy S at long distance travel.
I contend this is not some temporary misfortune Tesla ran into due to making a new car. It's utter mismanagement. How can they mess up with such an innovative drive and cars that people used to love? The car that should be built at 10K weekly rate by now is still not at half despite an extra production line. Could they seriously not foresee that by Q2 2018?
Keep in mind, if they could make more Model 3's, Model S and X might sell even worse for all we know.
My main question remains. "What changed"?
I saw nothing over the past half year that Tesla themselves could not expect to foresee. Did the era where they would get rave reviews and overwhelming demand for whatever they did suddenly end? Did they run out of cult-like following that doesn't look at recent model upgrades and devaluation prospects? Is the ramp up to 10K Model 3 per week still imminent? Cell demand still overwhelmingly high despite years of cumulative delay from Model 3?
As a long time fan of the brand, I'm at a loss when trying to defend them on my local investment forum. Q on Q Model 3 production basically flat despite smaller batteries and the steep part of the S curve.
Overdoing Model 3 export ramp and getting stuck with end of quarter inventory due to late sailings, cash flow plummet and delayed margins, in my opinion is the least of it all.
Over the past year I rarely saw a moment where Tesla seemed to be knowing what they were doing. This brand is still here because of the fans, not due to over the top awesome innovation and design choices. It's all despite those choices. Model 3's skateboard is amazing, but what have they done to leverage it?
