And sometimes you give up profit for market share.
1 Like
me just enjoying the sound of a start up on a cold morning. Will worry about the ev future later
1 Like
There is some math here you are ignoring:
What is better?
Sell 2 cars a week with $20k profit each
Sell 10 cars a week with $7k profit each
Their real margin is probably higher but this was the easiest way to show a $13k price cut.
You forgot that the other 8 cars at 20k profit that didn’t sell you owe Floor Plan interest on. Hope that 40k covered it!
2 Likes
Those margins are pre cut, so with the cuts they are looking very similar to other companies, likely losing money on some cars.
Yes the volume matters but so do the margins. Making it up on volume still doesn’t bode well for the companies stock price. My discussion mainly pertains to that.
LOL, they are not losing money on their vehicles. On top of that, their margins are still higher than almost all legacy automakers post price cuts(including ICE sales). Go watch Sandy Munro latest video on Tesla profit margins. They are well in the green.
2 Likes
Volume is just as important as margins because in the end, the profit is just a dollar figure which could be the same for different volume numbers, stock valuation looks at volume moved and like @forbs said, unsold volume will eat into margins.
Additionally, getting more cars to more people who were looking at something else because it’s now more affordable is a good thing.
Is your portfolio 100% TSLA? Diversify!
I own no Tesla, why would I own it while I’m telling you it’s overpriced , it’s weird you guys keep saying this.
Care Bears often wish for lower stock price to buy after they’ve missed an opportunity.
I said TSLA… are you referring to the car or the stock?
And we keep asking this because you keep pointing your arguments (which have been countered by many here) to stock valuation.
1 Like
Both, I have neither. It’s ok to disagree, have a good day
Sure, but you need to acknowledge other responses that refute your points.
And if you don’t have either… why are you posting so much about it? Do you see any positives in these price cuts? You even said that the cars are overpriced… so doesn’t this help?
2 Likes
I guess I’m trying to make up for not understanding Econ in college.
The concept of what Tesla is trying to do seems pretty simple to me (now that I’m much older 
), whether or not it will work long term is not that large a concern because they are looking at short term movement of current inventory and have the “luxury” of available supply. That could change later but also speaks to their D2C model because they can shift pricing/inventory more rapidly than others.
But I guess I’ll go back to making memes.
#sellmoremakemore
3 Likes
I disagree about the responses , just because you say something that is different than me doesn’t mean either of us are right.
I have said yes they will likely sell more volume. I don’t think it will necessarily help them in a world where their margins have massively collapsed.
“massively collapsed”?
Did this type of response get posted when Chevy dropped their Bolt price “massively:”?
As others have pointed out, you continue to make the same arguments while totally ignoring explanations that have been provided to you. If you massively increase production of a product, and demand stays the same (or increases but not as much as the production increase), you have to cut costs to sell through your production. Your response?
2 Likes
Yes that has to happen. I think Tesla expanded with the thought that they had essentially limitless demand and now have so much production capacity that they are basically forced into this box of cutting price to meet demand( something they haven’t really had to do).
The graphic above shows them making 9500 bucks on every car they sell pre cut. They just cut their best selling car 13k in price. Obviously model 3 less and they don’t sell nearly as many X or S. Here is the extremely basic math behind severe margin compression.
It’s not an explanation like you have the right answer, they are perceptions or opinions of how the business will work. This is the cult working, can’t possibly entertain someone not thinking it’s the greatest thing since sliced bread or that Tesla is destined to take over the world.
That’s another car that was way overpriced.
Hugely!