Tesla cuts U.S. prices again ahead of 1Q earnings release

2194 Views 38 Replies 15 Participants Last post by Archon, 14 d ago

InCogKneeToe

Discussion Starter · 2 mo ago

www.detroitnews.com

Tesla 1Q income, profit margins fall on price cuts

The EV market leader dropped the starting prices for its two top-selling models overnight, the company's fourth price cut in the U.S. this year.

www.detroitnews.com

Detroit – Tesla dropped the starting prices for its two top-selling models overnight, the company's fourth price cut in the U.S. this year.
The company lopped $3,000, or about 6%, off the starting prices for all three versions of the Model Y small SUV, Tesla's top-seller. It also cut $2,000, or about 5%, from the starting price of a version of the Model 3 small sedan.
Tesla could have cut the Model 3 prices to make more cars loaded with options eligible for the U.S. government's $7,500 electric vehicle tax credit. With options, some Model 3s would exceed the government's $55,000 price limit for cars to be eligible for the credit.

But some industry analysts say demand may be slowing for the company's vehicles as more competition enters the market. Others say Tesla is using its high profit margins to take market share from competitors.
Before the opening bell Wednesday, shares of Tesla Inc. slid more than 3%. After major declines last year, the company's stock is bouncing back, up almost 50% so far in 2023.

A message was left Wednesday morning seeking comment from Austin, Texas-based Tesla.
The cuts follow price drops earlier this week overseas, with analysts reporting cuts in Europe, Israel and Singapore.
They come just ahead of Tesla's first-quarter earnings release scheduled for after the closing bell on Wednesday.
The $3,000 price cuts on the Model Y dropped the lowest-priced Dual Motor model to $46,990. The Long Range model went to $49,990 and the Y Performance dropped to $53,990. All versions of the Model Y were already eligible for the U.S. tax credit because the price limit for SUVs is $80,000.

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InCogKneeToe

Discussion Starter · #2 · 2 mo ago

Humm, First to Market, owns the Market. Until someone Smashes the Market.

Will the Mach E, Hummer EV, Silverado EV, Lightning Smash the Market?

My bet is No, Tesla will continue to own a very volatile market. Heads Pushing Manufactures and Consumers in a Direction that few want to go, or didn't know they wanted to go.

Reactions: 2

tripowergto Jan2003

· #3 · 2 mo ago

^^^The attractive $30K EV Equinox is the ticket, out later this year.

Reactions: 3

RamJet502

· #4 · 2 mo ago

Tough for a little company like Tesla to compete with behemoths like GM and Ford.

“We’re not ‘starting a price war’” “We’re just lowering prices to enable affordability at scale.” - Musk a couple days ago

Reactions: 2

BlackGTP

· #5 · 2 mo ago

InCogKneeToe said:
Humm, First to Market, owns the Market. Until someone Smashes the Market.

Will the Mach E, Hummer EV, Silverado EV, Lightning Smash the Market?

My bet is No, Tesla will continue to own a very volatile market. Heads Pushing Manufactures and Consumers in a Direction that few want to go, or didn't know they wanted to go.

tripowergto Jan2003 said:
^^^The attractive $30K EV Equinox is the ticket, out later this year.

It will be very interesting to see where Tesla is in 5 years as affordable BEV's hit the road and Tesla is no longer the only BEV game in town. I think their sales will level off, but Tesla will retain its loyal following as long as they keep that "beta tester" mantra that I suspect a lot of its core market likes. Though Tesla is at risk if the government clamps down hard on the beta testing in the public's hands.

Hummer is not an issue for Tesla, but a $30k Equinox is. But just as equally, GM and Ford are at great risk if consumer's associate ICE with Detroit and leave them in the dust for exciting new BEV brands like Rivian and Tesla. PS - just saw my first Rivian SUV on the road yesterday - nice looking vehicle, even with those headlights I don't care for.

Reactions: 3

RamJet502

· #6 · 2 mo ago

BlackGTP said:
PS - just saw my first Rivian SUV on the road yesterday - nice looking vehicle, even with those headlights I don't care for.

They look much better in real life than in pictures, but they're just too expensive. $100K+ for a midsize truck is crazy.

Reactions: 4

Cobaltss_King

· #7 · 2 mo ago

RamJet502 said:
Tough for a little company like Tesla to compete with behemoths like GM and Ford.

“We’re not ‘starting a price war’” “We’re just lowering prices to enable affordability at scale.” - Musk a couple days ago

No it’s already a known thing how much money Tesla has saved itself because of its manufacturing process. They had already priced there models way higher than the legacies would have.

kool1

· #8 · 2 mo ago

What a joke.... marketing nightmare. Why buy when it's cheaper tomorrow?

Reactions: 2

tripowergto Jan2003

· #9 · 2 mo ago

kool1 said:
What a joke.... marketing nightmare. Why buy when it's cheaper tomorrow?

I will gladly pay you on Tuesday for a cheeseburger today.

Reactions: 2

RamJet502

· #10 · 2 mo ago

Cobaltss_King said:
No it’s already a known thing how much money Tesla has saved itself because of its manufacturing process. They had already priced there models way higher than the legacies would have.

I think most people would consider Tesla more of a premium brand, like a Mercedes, BMW, or Audi. They needed to lower their prices to compete with mainstream brands like GM and Ford.

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BlackGTP

· #11 · 2 mo ago

Tesla just reported massive 2022 net income - $12.5B, they do have room to drop prices if they wish.

Reactions: 3

Cobaltss_King

· #12 · 2 mo ago

RamJet502 said:
I think most people would consider Tesla more of a premium brand, like a Mercedes, BMW, or Audi. They needed to lower their prices to compete with mainstream brands like GM and Ford.

Tesla is certainly just as popular and trendy as those brands but the product isn‘T luxury.

Reactions: 1

InCogKneeToe

Discussion Starter · #13 · 2 mo ago

BlackGTP said:
It will be very interesting to see where Tesla is in 5 years as affordable BEV's hit the road and Tesla is no longer the only BEV game in town. I think their sales will level off, but Tesla will retain its loyal following as long as they keep that "beta tester" mantra that I suspect a lot of its core market likes. Though Tesla is at risk if the government clamps down hard on the beta testing in the public's hands.

Hummer is not an issue for Tesla, but a $30k Equinox is. But just as equally, GM and Ford are at great risk if consumer's associate ICE with Detroit and leave them in the dust for exciting new BEV brands like Rivian and Tesla. PS - just saw my first Rivian SUV on the road yesterday - nice looking vehicle, even with those headlights I don't care for.

That is just it. "The Leaders will Lead" the followers will scramble.

To turn a Century Old Company into something else, isn't going to happen over night, while Tesla has Decades of a Head Start. Do you think Tesla hasn't learnt a few things in that time frame that others have Yet to learn?

There is a difference between "Getting into New Products when there is Customer Demand for the product" and being "Forced into producing a Product, then Forcing the Customer to purchase it"

Remember, we are talking "Chasing 5% Market Share" and that 5% is inflated by Tax Incentives and Cheap Useage. If the Government didn't offer 15-20% credit, that 5% MS would be less than 2% MS

Reactions: 2

RamJet502

· #14 · 2 mo ago

Cobaltss_King said:
Tesla is certainly just as popular and trendy as those brands but the product isn‘T luxury.

I agree with that 100%. Tesla is not a premium brand because of luxury, it's because of technology. Their interiors are actually pretty lackluster, but they did revolutionize cars into this whole EV future. They were the first and it earned them serious credibility.

Reactions: 2

CJH

· #15 · 2 mo ago

BlackGTP said:
Tesla just reported massive 2022 net income - $12.5B, they do have room to drop prices if they wish.

But they also produced more vehicles than they sold, which can't be ignored. Really interested to see where they are in 3-5 years when all the CAFE/Emissions credits are dried up. Cybertruck/Semi may or may not be out by then....... 😁

Reactions: 2

MisterMe

· #16 · 2 mo ago

InCogKneeToe said:
That is just it. "The Leaders will Lead" the followers will scramble.

To turn a Century Old Company into something else, isn't going to happen over night, while Tesla has Decades of a Head Start. Do you think Tesla hasn't learnt a few things in that time frame that others have Yet to learn?

There is a difference between "Getting into New Products when there is Customer Demand for the product" and being "Forced into producing a Product, then Forcing the Customer to purchase it"

Remember, we are talking "Chasing 5% Market Share" and that 5% is inflated by Tax Incentives and Cheap Useage. If the Government didn't offer 15-20% credit, that 5% MS would be less than 2% MS

Yes. Tesla is now profitable--hugely profitable--for a reason. The reason is that Tesla has covered most of its fixed costs. If Tesla is like other companies in its situation--and I believe that it is--then it can lower its retail prices below the costs of that its competitors incur and still remain highly profitable. The only way that any [non-Chinese] competitor is going to beat Tesla is to have a huge bankroll and a patient banker. That, or Elon Musk goes completely off his rocker and drives the company off a cliff.

09W

· #17 · 2 mo ago

BlackGTP said:
in 5 years as affordable BEV's hit the road and Tesla is no longer the only BEV game in town.

There's 47 BEVs on the USDM today, Tesla only has 4 of them (and only 2 of which would be termed 'affordable'). Yes; they still have the volume, but they haven't been the only choice in numerous years. Then again, the vast majority of BEVs aren't 'affordable...

Reactions: 2

09W

· #18 · 2 mo ago

InCogKneeToe said:
Do you think Tesla hasn't learnt a few things in that time frame that others have Yet to learn?

No; I don't believe Tesla has learned anything others don't already know. To the contrary.

Reactions: 3

InCogKneeToe

Discussion Starter · #19 · 2 mo ago

MisterMe said:
Yes. Tesla is now profitable--hugely profitable--for a reason. The reason is that Tesla has covered most of its fixed costs. If Tesla is like other companies in its situation--and I believe that it is--then it can lower its retail prices below the costs of that its competitors incur and still remain highly profitable. The only way that any [non-Chinese] competitor is going to beat Tesla is to have a huge bankroll and a patient banker. That, or Elon Musk goes completely off his rocker and drives the company off a cliff.

09W said:
No; I don't believe Tesla has learned anything others don't already know. To the contrary.

Or have a "Must Have" option or product. We don't know what that is yet. Something like Cadillac's "Identical Parts" or Ford's "Assembly Line production"

I am one of the Biggest Believers that BEV phase will be proven to be Less than the Hype, I call it the "Cassette Era of Music" Handy and portable, but Digital Audio Tape and Digital CD are just around the corner.

Musk, has already stolen most of the BEV Hype, before anyone else has come to play. Call Tesla the TDK Brand Cassettes, he has Bankrolled the Hype and ready to move on, while the others are still depending on Vinyl. Only to discover (eventually) Vinyl works well with proper equipment.

By then, it will be far too late

big swede

· #20 · 2 mo ago

MisterMe said:
Yes. Tesla is now profitable--hugely profitable--for a reason. The reason is that Tesla has covered most of its fixed costs. If Tesla is like other companies in its situation--and I believe that it is--then it can lower its retail prices below the costs of that its competitors incur and still remain highly profitable. The only way that any [non-Chinese] competitor is going to beat Tesla is to have a huge bankroll and a patient banker. That, or Elon Musk goes completely off his rocker and drives the company off a cliff.

A Chinese brand could easily become bigger than Tesla. Their government could easily pitch in for financing and right about now is a great time to capitalize on an economy that is circling the toilet and most Americans in financial straights whether they know it or not yet.

We are at a highest level of loan defaults since 2008 and we are at the tip of the iceberg. 50% of American households pay a large portion of their adult children’s bills. 20% of parents pay their adult children’s house/apartment payments. No one has learned the word no and have never been taught money management.

With the average electric car over $61,000 the car market is ripe for a cheaper alternative. Then again as long as mommy and daddy keep enabling them they may not seek a cheaper alternative since it wouldn’t look good on social media.

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