Forums

Tesla Cuts Car Prices: Why Bears’ Arguments Don’t Make Sense

Tesla Cuts Car Prices: Why Bears’ Arguments Don’t Make Sense

Tesla Cuts Car Prices: Why Bears’ Arguments Don’t Make Sense

WRITTEN BY JITENDRA PARASHAR

Tesla Model 3 price cut
On Tuesday, Tesla (TSLA) cut the prices of its vehicles to standardize its global car line-up, according to Reuters. The company is no longer selling the standard range variants of its Model X and Model S premium cars. With the latest move, it’s also aiming to make its vehicles more affordable for consumers. To bridge the price gap between its standard range and long-range variants of the Models S and X, the company has cut the prices for its long-range options of these car models. Let’s take a closer look.

https://marketrealist.com/2019/07/tesla-cuts-car-prices-why-bears-argume...

jimglas | 17 juli 2019

but but but …… POOR SEVICE!

TeslaTap.com | 17 juli 2019

For one or two constant complainers.

TeslaTap.com | 17 juli 2019

As for pricing - if it goes up people complain and the analysis say Tesla is doomed. Price goes down, people complain and the analysis say Tesla is doomed. We've heard all the silly arguments before.

Other car companies raise and lower prices hourly depending on what dealer you visit, the salesman you deal with, your negotiation skill, rebates, incentives and perhaps the phase of the moon. Never a peep from analysts how those companies are going to fail due to changing prices.

pagrimm1 | 19 juli 2019

I purchased a PS100DL on March 8, 2018 for $141,000 minus 7500. tax credit. Now the car would cost less than $99,000. How many readers would not be livid about that kind of a drop in value in 16 months. A $40,000 drop in profits on the sale of ONE car is Ludicrous. That comes off the bottom line which helps to make the chance of being profitable virtually impossible. One article said those that could afford a small price drop would not be upset and they can say that because they will probably never be in that financial position. Someone needs to run the company in a profitable manner.

SO | 19 juli 2019

@pagrimm1
1. Why do you not point out the much smaller tax credit now?

2. Do any of us like “losing” money? Of course not. We all have “or should have” realized that Tesla drops pricing at times. This is by far from the first time.

3. Would you have preferred the price stayed up so that next time you can pay that full price again?

4. At the time of purchase, did you agree to the price?

5. If Tesla had raised prices, would you kick in more money even after the final sale?

6. Tech often reduces in price over time. How much were the first cell phones? How much were the first 80” TVs?

SO | 19 juli 2019

If Tesla (and Amazon for that matter) only cared about profits since day one, they would be a fraction of their current size and product lines.

Tesla is growing. Growing while demand is there increases market share. If that shrinks, then worry about profit to stay alive. As long as they can get the investment and have the demand, profit should not be a concern for them.

NKYTA | 19 juli 2019

+2 SO

dmm1240 | 20 juli 2019

June 2018 - Musk states at the annual shareholder meeting that Tesla was on track to achieve a battery cell cost of $100 per kWh by the end of the year. At that time, GM was buying battery cells from LG for the Bolt 2 $145 per kWh; Audie said it was buying batteries for $114 per kWh for its upcoming e-tron quattro that still hadn't launched.

As for the cost at the pack level, Musk said he saw Tesla achieving the price point of $100 per kWh for the overall battery pack in less than two years.

It's a little more than one year later. In the meantime, Tesla has bought Maxwell Technologies its very own battery company. (Audi announced in April it was delaying production of the E-tron sportback and slowing production of its E-tron SUV following LG's inability to deliver batteries in sufficient quantities. The reason cited for Audi's delay was that LG had raised battery prices for the E-tron by 10%).

In 2015, Bloomberg/analysts put the cost of batteries @ 57% of the total cost of a midsize car. This year, it's down to 33%. Tesla, because the company makes its own had a cost advantage in 2018 which is probably more pronounced this year because LG and other suppliers are having trouble delivering batteries in sufficient quantities to Audi et al.

What is Tesla's mission? To accelerate the world's transition to sustainable energy.

To do that, Tesla must make vehicles that a wider swathe of buyers can afford.

Tesla's cars have been dropping in price for several years. I paid $98,500 for a MX90D in the fall of 2017. I can buy a Model X right now with 78 miles more range, a full 100 kWh battery pack and all the goodies for $92,500. I knew this would happen when I bought the car.

A Tesla isn't a car, it's a computer with wheels. The cost for new technology falls. I paid $2,000 for a 26" Sony flatscreen TV in 2005. Three years ago, workmen screwed up the HDMI plug and I wound up buying a newer version of that TV made by the same company for $315. It's called Moore's Law which basically says that costs for new technology fall drastically after introduction.

Has it occurred that Tesla is indeed meeting its targets to reduce battery costs and that they are passing those costs on to customers as it happens in order to fulfill the company's mission? That the falling prices are a good thing?

Madatgascar | 20 juli 2019

If it feels unfair to you, think how it feels to other car manufacturers. Tesla’s value proposition just keeps getting better and better. How do you now justify a starting price of $60k on a 2020 Corvette that seats two? That’s what it’s all about. And so far Tesla resale value is holding up pretty well.