[ramki.grandhi]

Tesla cuts prices on electric vehicles for U.S. market

https://www.reuters.com/business/aut...et-2023-01-13/

https://twitter.com/SawyerMerritt/st...342838784?s=20

[Mustang_Boss]

There are too many things going on and i see the following reasons:

One: It might be irrelevant, but still the subsidies from the government to use EV's explained in the video. The numbers are staggering.

https://www.youtube.com/watch?v=hvg_...eringExplained

Second reason: Teslas were always expensive. Expensive than BMW's, but were much cheaper to make.

Third reason: Fading demand or saturation for demand for Tesla products.

The fourth reason is Competition catching up fast with better products and competition offers better service.

The fifth - Oil prices have come down and are steady and discourages buyers from expensive EV's.

The Sixth: Tesla now has more capacity than their demand. With new plant in china and other regions, Capacity utilization is falling.

The seventh: Inflation is cooling down, but still high and at the same time, the car sales have peaked in 2021 and are on a downward trend. So, pricing the products correctly is the key to sustain sales.

In summary, this was long coming and there is enough room to cut prices by another 30%.

[ramki.grandhi]

Originally Posted by Mustang_Boss

Expensive than BMW's, but were much cheaper to make.

Thanks for sharing these, do you have any article or video that says Tesla's are much cheaper to make?

[SKC-auto]

Good to see these price cuts, good for the EV revolution, the prices look reasonable now, will create immense pressure on traditional automakers. For the year 2022 T MY sold more than Camry in US, I believe they will sell more than RAV4 this year.

This year will end up great for EV market in China, Europe and US.

[Mustang_Boss]

Originally Posted by ramki.grandhi

Thanks for sharing these, do you have any article or video that says Tesla's are much cheaper to make?

There are dozens of articles everywhere. Even Ex Germany PM, Angella Merkel was worried of electric cars impacting huge number of jobs and has spoken about it.

There are only 3 major parts in an EV. In case of Tesla, Battery pack is made by panasonic and some cells by Samsung. The motors were a proprietary design and the displays and sensors. Other than that, there aren't any major expensive parts suppliers to Tesla. No dealer network. Even if you go through Musk's initial profitability proposals of Tesla, the numbers were ~30% & more. My quote was just a summation of all i heard.

[carthick1000]

Also in Europe, from today. Here in the Netherlands the cheapest Model 3 (Standard Range) is now ~7000EUR cheaper than it was yesterday. That brings it into the subsidie price bracket (<45000EUR) and hence you get additional 2950EUR from government. In total 10000EUR cheaper for entry level model 3.

Model Y Long range is about 12000EUR cheaper. Now BMW, Hyundai, Kia and other European EV makers are going to scramble their heads.

[GTO]

Guys, frankly, this was a done thing. The two major things working in favour of Tesla are 1st mover advantage & the charging network (primarily in USA). Once the legacy automakers catch up on EV technology (and they are!!), it's clear that Tesla will face stiff price pressure. It's no longer the only game in town. I drove the EQS for 300 km and can tell you Mercedes has bridged the gap to Tesla in terms of powertrain tech & feel.

As an aside, Elon Musk's Twitter shenanigans have also damaged the Tesla brand temporarily. Thousands of loyalists are deserting the brand.

The Model S is like a decade old. That's a century in the auto world. A next-gen car is nowhere in sight.

[StarrySky]

Originally Posted by carthick1000

Also in Europe, from today. Here in the Netherlands the cheapest Model 3 (Standard Range) is now ~7000EUR cheaper than it was yesterday. That brings it into the subsidie price bracket (<45000EUR) and hence you get additional 2950EUR from government. In total 10000EUR cheaper for entry level model 3.

Model Y Long range is about 12000EUR cheaper. Now BMW, Hyundai, Kia and other European EV makers are going to scramble their heads.

The Finland price list is also updated along the same lines. The Model Y LR is about €12000 cheaper! That makes it almost €10000 cheaper than a top-end versions of Kia EV6 GT-line AWD, or ID.4 GTX and the like. It would be interesting to see the response from the legacy automakers.

[vtires2018]

I don't know why it is a surprise -Tesla has been facing intense competition in China from BYD, Wuling, NIO, Zeekr(Geely), VW etc

BYD has been making monthly sales records for last 10 months ! Tesla's were also selling in good numbers, but competition was catching up really fast !

Along with current economic scenario, and Tesla models are older compared with newer tech in all the above brands.

China is Tesla biggest market, and if demand stagnates there, they have to reduce prices, in China and Europe and US.

https://www.nytimes.com/2023/01/05/b...-vehicles.html

[inwester]

When I bought my Model Y in Oct 2020 it was around $55-56k with options. Then they slowly increased the price and made it almost $70k within just 1 year. This price cut was always bound to happen. $70k is premium mid-size territory in the US, you get fairly loaded X5, GLE, XC90 etc. Model Y and 3 cannot hold a candle to the traditional luxury manufacturers in terms of anything, except technology and charging. But as GTO said it's a much level playing field now. Plus the Koreans are beating Tesla and Europeans at their own game.

It was only a matter of time Tesla brought down their prices. I used to be bullish on Tesla and even used to invest heavily in Cathie Woods fund and cost me a lot as well, because TSLA was a major portion of her portfolio once. Even today it's 10%.

S and X are dinosaurs in terms of car model age (11 and 8 years respectively). Last week they reverted back on the steering for Model S. Initially it was claimed you won't go back to a round steering wheel once you tasted the Yoke.

I don't know if I can use profanity on this forum, but this guy is full of $hit.

I will give him the credit that he is desicive, bold and unconventional, not the second coming of Jesus as some fanboys claim.

[Mustang_Boss]

Originally Posted by inwester

I don't know if I can use profanity on this forum, but this guy is full of $hit.

I see him as $$$$$$ hit. & he is right to a great extent. You see him as bad, but he is a money making hit machine. Every new area where he ventured in was clear. Either it was heavily funded by the government or, there was no competition.

You have mixed up investments + Cathie WOOD and other overly optimistic & non realistic believers and have evaluated him. Tesla was overbought by investors because of many such people. But that is not his fault.

Tesla != Musk, but market sees as Tesla = Musk. This is not correct. Just evaluate Tesla as a car brand.

The way he moved is what made him. He took advantage of the $$$ funding provided by the government during 2012 crisis. He pitched tesla with long engineering lifecycles and periodic software updates. This was the initial plan and they are abiding by it, and in process reducing the recurring investments.

Now, Tesla is independent, sustainable and profit making. That's very good and they are out of the WOOD'S. The new Tesla's game is to maintain factory production capacity. So, prices will come down again soon.

[treyazaghtoth]

On a related note, check out these podcast clips from Joe Rogan;

Here

and

Here

i would love to hear, the thoughts of the forum on this

[volkman10]

Tesla hikes Model S and Model X prices after stock dive.

The move comes as a reversal of Elon Musk's words earlier this week.

As of April 21st, 2023, the Model S and Model X both cost between about $2,200 and $2,700 more than they did earlier this week, depending on the trim, with the flagship sedan starting from $85,000 and the crossover from $95,000. However, Tesla added three years of free Supercharging too.

Link

[volkman10]

Tesla's price cuts take their toll, as its operating margin shrinks,

Tesla is at the bottom of the operating margin variation between 2022 and 2023. The brand dedicated a big part of the year to cut prices to keep its volume sales growth and its factories in USA, Germany, and China. In fact, these price cuts allowed Tesla to register a new sales record of more than 1.8 million cars delivered, at the expense of fewer profits.

The company’s operating profits fell from 12.72 billion euro in 2022 to 8.05 billion euro in 2023. In contrast, its revenue increased by 15%, while the units delivered soared by 38%. In other words, Tesla sold more cars at a lower price, and got more operation costs coming from its expansion plans. Its operating margin dropped by 7.6 points to 9.2%.

Link:

[ninjatalli]

Originally Posted by volkman10

Tesla's price cuts take their toll, as its operating margin shrinks,

Operating margin doesn’t give the full picture. Net profit / income is a better metric to compare. Yes, when looked from a per car sale, the net margin doesn’t improve, but overall, I guess it’s a win for Tesla still. It’ll be interesting to see what happens in 2024.


Source: Stastica