How will manufacturers deal with falling EV prices?
Discussion
It's probably not unique to EVs but seeing as discounting is mainly provided via BIK benefits they have had virtually no price pressure. Tesla is clearly happy to cut prices no matter the consequences and everyone else seems to not be all that motivated. We have Chinese EVs coming in that are cheaper. I see some Renault guy has said that they will not drop prices, they prefer to sell less if needed. Supply is predicted to exceed demand this year, which is presumably already affecting Tesla. Tesla may also be aggressively protecting market position and may have the margins to hurt competition.
It seems to me that the low supply party is coming to an end so what will happen now? Are we in for the great price re-alignment? Maybe more compelling finance offers? More discounting done at fleet level and RRP stays the same? Or everyone will just truck on as they were and hope that stuff will sell?
It seems to me that the low supply party is coming to an end so what will happen now? Are we in for the great price re-alignment? Maybe more compelling finance offers? More discounting done at fleet level and RRP stays the same? Or everyone will just truck on as they were and hope that stuff will sell?
Yup, you got it hole in one.
Musk presenting as a "tech" company when all he's doing is building cars.
Huge tax incentives.
Must-have lifestyle accessory for the greenies.
But at the end of the day they're just cars and as the traditional players bring their heavy guns to bear Tesla, particularly with its blobby and dated styling, is going to be on the back foot. I'm expecting Musk to try to find a way of selling more of his Tesla shares without collapsing the whole house of cards. He sold $3.6Bn of shares last December.
Musk presenting as a "tech" company when all he's doing is building cars.
Huge tax incentives.
Must-have lifestyle accessory for the greenies.
But at the end of the day they're just cars and as the traditional players bring their heavy guns to bear Tesla, particularly with its blobby and dated styling, is going to be on the back foot. I'm expecting Musk to try to find a way of selling more of his Tesla shares without collapsing the whole house of cards. He sold $3.6Bn of shares last December.
DMZ said:
I see some Renault guy has said that they will not drop prices, they prefer to sell less if needed.
This, from a list price perspective at least.DMZ said:
I Maybe more compelling finance offers?
This is historically the way. Price is the same, but through some 0% finance at it, and/or manufacturer-supported dealer discount offers.Tesla reported 19% gross margin - down from 29% a year ago. And the reduced prices again a few hours before the earnings call.
Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
coetzeeh said:
Tesla reported 19% gross margin - down from 29% a year ago. And the reduced prices again a few hours before the earnings call.
Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
I suspect that there's an increasing proportion of his target market who have gone completely cold to Elon's products, with how he's acting and behaved recently.Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
Given the cars can have software updates pushed out to them OTA, and if the man at the top happens to be a nutjob with a fondness for a "Just do it, lol, what's the problem?" style approach, I can see why the appeal might falter.
Especially alongside the court of public opinion generally viewing Teslas as very clever tech, with a very mediocre cabin perched atop it.
coetzeeh said:
Tesla reported 19% gross margin - down from 29% a year ago. And the reduced prices again a few hours before the earnings call.
Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
I think the target is around 20% so dropping further runs the risk of upsetting investors. I think he is pushing his luck with investors with the complete cr@p he talks.Toyota also reporting 19% for example.
Tesla need to keep their factories busy - Texas and Germany are not close to full capacity and globally Tesla build more cars than what they are selling.
Unless musk has way to further reduce manufacturing costs, which he may well do, he is going to struggle to exploit his main advantage over the competition I.e ability to mass produce ev’s
ashenfie said:
I think the target is around 20% so dropping further runs the risk of upsetting investors. I think he is pushing his luck with investors with the complete cr@p he talks.
Unless musk has way to further reduce manufacturing costs, which he may well do, he is going to struggle to exploit his main advantage over the competition I.e ability to mass produce ev’s
Tesla can not only build a lot of EVs, but also seems quite good at flogging high price vehicles in quantity.Unless musk has way to further reduce manufacturing costs, which he may well do, he is going to struggle to exploit his main advantage over the competition I.e ability to mass produce ev’s
Isn't Tesla supposed to be launching a cheaper model soon?
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