As US dollar is becoming stronger, will Tesla see a drop on foreign earnings as the exchange rate becomes less and less favorable?
I really appreciate Tesla is trying to sell their cars abroad with the same price as their US prices, when currency exchange rate was determined at the time of price disclosure, would the sale price become too low for Tesla when the local currency/US dollar exchange rate drops?
Even if the price of the car is set using the exchange rate at the time of sale for each transaction, Tesla would still have a foreign currency to US dollar conversion loss risk 5-10 months down the road due to the long time to fill the orders.
Tesla has only a few dedicated suppliers, such as battery from Panasonic. Will Tesla suffers from a higher supply chain and cost risk by Yen's valuation fluctuation? This may not be a case as the supply contract may be set at US dollars. However, as US dollars becomes stronger, if the supply cost was set in US dollars, Tesla won't enjoy a supply cost reduction due to cheaper Yen. Another way to put this - Tesla's supply cost is more likely to be fixed cost instead of variable cost. At the same time, if there is a natural disaster in Japan or anywhere where Panasonic is manufacturing its batteries, Tesla would have a supply chain risk. This supply chain risk can be addressed by the unannounced Giga battery factory.
How do you think Tesla can mitigate the currency exchange risks if there are any?