All the other EV companies are going nil crazy due to Tesla’s pull. Look at NIO and WKHS
Enlighten us. What details?
Tesla is innovation and is the leader in industry. Even today, no one has beaten Tesla record on many ways. It became famous for its performance and that stays longer period with patent protection!
Tesla is on record saying they won’t enforce their patents.
Take some time to read through the TMC investors forum. A wealth of discussions of technical advancements, financial models, etc…
Onen newer item is Tesla (who already has the “best” batteries) is going to unveil a speculated cheaper to make, more energy dense battery already in pilot production.
Lol. Sort of like funding secured to go private at $420 a share? Just like Musk said Tesla was self-funded now and didn’t need to raise more capital, then it raised capital 30 days later. Remember when Musk said Tesla would be profitable from current quarter to all future quarters?
Any tech that lowers cost will result in dropping the price. They’ve already proven that. Which means gross margin isn’t going to improve. It’ll always be the same as Toyota. Meanwhile, they need to spend tens of billions on factories to build cars to need the batteries. I’d actually be excited if Tesla decided to sell their batteries to all other car companies. That could be a high margin, fast growing business that’d require far less capital.
I guess some people buy the words and never pay attention to the actions.
Except that pricing is demand based rather than cost based. Thought you would know that . Any improvements in efficiency go straight to gross margin.
Toyota has one upcoming vehicle that can potentially compete with them, the Rav4 Prime. Unfortunately they have basically no batteries available and will only be able to ship ~5k to the US in the first year so good luck getting one.
Only 42 miles on electric.
When has Tesla increased price? They literally have a history of reducing price over time. That’s why their gross margin hasn’t improved.
They have decreased price to increase volume. Once again, demand based pricing…I don’t get what’s so surprising. Starting with a high margin niche and reducing price to drive volume as your COGS improve is a textbook market entry strategy.
You originally said any improvements in efficiency go to gross margin. As you pointed out in your second post, efficiency gains have been used to lower price to increase sales. Gross margin isn’t increasing.
Does anyone think Tesla will end up with a gross margin at least 5% higher than Toyota?
It’s common sense that any company will optimize their position on the price/demand curve to accomplish their strategic objectives. The efficiency improvements still go to gross margin initially, i.e. up until the price gets tweaked.
Yes.
Tesla turns Q1 profit on cost reductions, rising car margins, credits – TechCrunch.
“ Its automotive gross margins grew to 25.5% in the first quarter, up from 20.2% in the same period last year. Tesla includes regulatory credits in its automotive revenues, which figure into its gross margins. Regulatory credits in the first quarter were $354 million, a 64% increase from the first quarter of 2019. “
They aren’t actually improving gross margin of the cars. They are selling more regulatory credits.
I’d forgotten about Tesla’s impending inclusion into the S&P500. This is what is seemingly driving up the price over the last 2 months.
Quote: “The reason for all the excitement is index inclusion means many mutual funds, exchange-traded funds, and, of course, index funds that track or benchmark themselves to the S&P have to go and buy Tesla stock. A bolus of buy orders is bullish. The technical reason, after all, any stock goes up is more buy orders than sell orders.”
Index funds are rarely caught completely off guard. Meaning, today’s rally could be tomorrow’s index inclusion.
Index funds don’t commit 100% fund into index stocks, they have a small sum for discretionary trading such as preparing for inclusion and exclusion from the index. They can long TSLA calls to prepare for TSLA inclusion, and long ABC puts to prepare for ABC exclusion.
Lol looks like you got through 0 pages on the site I linked to
They raised costs of the Tesla Model 3 last year…that lasted for about a year I believe until this price cut.
Making long term valuations based on what happens during COVID quarters is probably not a good idea. If you think Tesla cutting prices but being profitable now is bad, competitors are faring much worse…
Tesla may drive down price as manufacturing efficiency improves or they may not, but in your comparison to Toyota you are entirely missing the software piece.
As driving assistance / self-driving software improves, Tesla realizes a larger % of revenue of previous software sales and of course is selling this software at a higher price than before. As you might guess selling of a $10,000 software product that is very high margin fundamentally affects the gross margin level of the vehicle.
Of course “how” profitable will they be is up to speculation. But the market is more and more bullish each time they report better than expected results. And with literally not real competition around for 5 or so years, don’t expect to get a “deal” on the stock price once consistent profits are achieved (well unless there’s a big recession!).
The “actions” that some people (you mean billion dollar investors right?) pay attention to is the clear lead on EV drivetrain and software that Tesla has.
$1000 is history. $1400 so soon?
omg my shares
See after market $1421 !
Surprised no one mentioned this yet. Selling for $69.420. Whatever you say about Elon the guy has a wicked sense of humor.