Do you look at the inventory? Because in The Netherlands these discounts are applied to the ‘inventory’ cars. However, with the updated model I assume that the demand is very high right now so I don’t expect any discounts this quarter.
“Not doing well” is extremely relative for a company with almost a Trillion valuation. They had 60+% of the EV market for a long time and it was priced into their share price that they’d continue to have a quasi monopoly if the industry as well as be “more than a cat company”.
They still increased sales, revenue, and margins are still better than much of the industry. That said, they only have 4 models, only two of which really sell in large numbers, all in need of a refresh now and revolutionary vs evolutionary update within a few years in most industry analyst opinions. Cybertruck looks like a money sink with no end in sight and $25K EV doesn’t currently exist and seems like another case of over promising.
I still see almost as many new Teslas as all other EV brands combined where I live, but 5 years ago I only saw Teslas, and I’m seeing more and more of the “failed startup” cars like Lucids and Rivians, and traditional auto companies are popping up on the roads all over the place. Even some forgotten cars like Bolt EV were selling like crazy this past 6 months where I live. See a lot of electric BMWs.
By most metrics they had a good year but they failed at biggest metric: maintaining market share as the market exploded in size. They’re cutting margins to try to maintain it but it just isn’t working because there are other things besides just the amount of vehicle you get per cost that are driving people’s choices. Brand loyalty, luxury experience, quality control, form factor, performance and range all matter too.
I’m sure Wallstreet doesn’t expect Tesla to capture 60% of the US EV market at the point where EVs are making up 50% of the US new car market and then beyond as EVs take even more of the market. In 2022, the US car and light truck market was nearly 14 million so that would take 8.4 million Teslas to capture 60%. At $5,000 in profit per car, that would be $42 billion in profit per year just out of the US market. Tesla’s market cap would be way higher if that was a reasonable expectation.
So losing market share from 60% is priced into the stock and expected by basically everyone. You are right though that the question is: how fast does the market share erode (as the market grows quickly) and where does it start to settle in (e.g., does Tesla settle in at 25% of the US new car market; that would be huge because it would be 3.5 million a year of sales just in the US (a massive increase over the about 600,000 Tesla will sell in the US in 2023 and not remotely a number of cars that Tesla can manufacture for the US anytime soon)).
Periodically other manufacturers have had 20-25% of US market share for overall vehicle sales so it’s tough to justify their valuation based on that. A frequent justification of that valuation was that the company could maintain market share. 50+% was always unrealistic but if they can’t capture more than 25% what would make them more valuable than another make making good margins? Toyota for instance.
Tesla has been disconnected from fundamentals forever but “growth” companies start to suffer in the market when the revenue growth and future market share start to decline. Falling margins doesn’t help their case.
Tesla is heavily discounting cars in europe at the end of each quarter for the last 4 quarters now. There were regular price reductions in Q4/2022 and Q1/2023 in Q2 and Q3 Tesla mostly reduced prices on inventory cars and offered other benefits (free supercharging, trade in etc.)
Do you look at the inventory? Because in The Netherlands these discounts are applied to the ‘inventory’ cars. However, with the updated model I assume that the demand is very high right now so I don’t expect any discounts this quarter.
There does not seam to be any inventory, delivery time is 2-6 weeks.
I always read about Tesla not doing well, etc yet they seam to sell every car they have in Europe.
Maybe it’s just a NA thing?
“Not doing well” is extremely relative for a company with almost a Trillion valuation. They had 60+% of the EV market for a long time and it was priced into their share price that they’d continue to have a quasi monopoly if the industry as well as be “more than a cat company”.
They still increased sales, revenue, and margins are still better than much of the industry. That said, they only have 4 models, only two of which really sell in large numbers, all in need of a refresh now and revolutionary vs evolutionary update within a few years in most industry analyst opinions. Cybertruck looks like a money sink with no end in sight and $25K EV doesn’t currently exist and seems like another case of over promising.
I still see almost as many new Teslas as all other EV brands combined where I live, but 5 years ago I only saw Teslas, and I’m seeing more and more of the “failed startup” cars like Lucids and Rivians, and traditional auto companies are popping up on the roads all over the place. Even some forgotten cars like Bolt EV were selling like crazy this past 6 months where I live. See a lot of electric BMWs.
By most metrics they had a good year but they failed at biggest metric: maintaining market share as the market exploded in size. They’re cutting margins to try to maintain it but it just isn’t working because there are other things besides just the amount of vehicle you get per cost that are driving people’s choices. Brand loyalty, luxury experience, quality control, form factor, performance and range all matter too.
I’m sure Wallstreet doesn’t expect Tesla to capture 60% of the US EV market at the point where EVs are making up 50% of the US new car market and then beyond as EVs take even more of the market. In 2022, the US car and light truck market was nearly 14 million so that would take 8.4 million Teslas to capture 60%. At $5,000 in profit per car, that would be $42 billion in profit per year just out of the US market. Tesla’s market cap would be way higher if that was a reasonable expectation.
So losing market share from 60% is priced into the stock and expected by basically everyone. You are right though that the question is: how fast does the market share erode (as the market grows quickly) and where does it start to settle in (e.g., does Tesla settle in at 25% of the US new car market; that would be huge because it would be 3.5 million a year of sales just in the US (a massive increase over the about 600,000 Tesla will sell in the US in 2023 and not remotely a number of cars that Tesla can manufacture for the US anytime soon)).
Periodically other manufacturers have had 20-25% of US market share for overall vehicle sales so it’s tough to justify their valuation based on that. A frequent justification of that valuation was that the company could maintain market share. 50+% was always unrealistic but if they can’t capture more than 25% what would make them more valuable than another make making good margins? Toyota for instance.
Tesla has been disconnected from fundamentals forever but “growth” companies start to suffer in the market when the revenue growth and future market share start to decline. Falling margins doesn’t help their case.
Tesla is heavily discounting cars in europe at the end of each quarter for the last 4 quarters now. There were regular price reductions in Q4/2022 and Q1/2023 in Q2 and Q3 Tesla mostly reduced prices on inventory cars and offered other benefits (free supercharging, trade in etc.)
There are literally hundreds sitting at a mall parking lot near my local Tesla showroom (NE US).
Seams to be a US thing