Yeah and might I suggest their discounting might not be long term sustainable and say thus is war chest burning to keep the sales and delivery numbers up, since that seems to be what company leadership cares about. Maintaining markets have and delivery numbers.
Don’t be surprised once the economic situation improves, the Tesla prices will come right back up to match the increased demand and customer ability to pay.
Yes, if demand increases, Tesla will increase prices. They’ve made it very clear that they adjust their prices to manage their sell through of their cars. They have less parking lot space to maintain an inventory than the legacy OEMs and their dealership network. So Tesla has to be more nimble than the OEMs on this issue.
However, based on breakdowns of the car costs and their own financial disclosures, Tesla has excellent margins on their vehicles (and that is before they get to the 100% margin part of their business where they sell you a software update to get stuff like FSD). So with the current cost of lithium (which is back to historically normal pricing) there seems to be little problem for Tesla to keep this level of pricing and still cash flow enough to support the car part, expensive R&D like cyber truck, and silly Elon stuff like buying Twitter. Cash on the balance sheet increased from $23 billion to $26 billion last quarter. I would guess that current pricing is sustainable from a cash flow perspective and Tesla certainly says in its public reports to shareholders that it is sustainable.
Yeah and might I suggest their discounting might not be long term sustainable and say thus is war chest burning to keep the sales and delivery numbers up, since that seems to be what company leadership cares about. Maintaining markets have and delivery numbers.
Don’t be surprised once the economic situation improves, the Tesla prices will come right back up to match the increased demand and customer ability to pay.
Yes, if demand increases, Tesla will increase prices. They’ve made it very clear that they adjust their prices to manage their sell through of their cars. They have less parking lot space to maintain an inventory than the legacy OEMs and their dealership network. So Tesla has to be more nimble than the OEMs on this issue.
However, based on breakdowns of the car costs and their own financial disclosures, Tesla has excellent margins on their vehicles (and that is before they get to the 100% margin part of their business where they sell you a software update to get stuff like FSD). So with the current cost of lithium (which is back to historically normal pricing) there seems to be little problem for Tesla to keep this level of pricing and still cash flow enough to support the car part, expensive R&D like cyber truck, and silly Elon stuff like buying Twitter. Cash on the balance sheet increased from $23 billion to $26 billion last quarter. I would guess that current pricing is sustainable from a cash flow perspective and Tesla certainly says in its public reports to shareholders that it is sustainable.