More Tesla price cuts === cheaper Cybertruck (6 oct)

[CyberBC]

Not sure if this has been talked about elsewhere, but, is there some significance to the fact that Tesla has kept the reservation list open. I think many of the others closed theirs when they got beyond what they could produce in a certain period. It seems like there is a vague precedent that companies try to sell at the same price to all pre-orders. Why didn't Tesla close the book at some point? Are they going to ramp that fast to clear 1.5 mill +? Are they going to raise the prices higher which will reduce the backlog? Elon seemed sad that they weren't going to be able to match the release prices based on input cost inflation. Both my gut and heart are telling me that atleast one model is going to be priced very competitive and that nice straight factory line in Austin is going to fly.

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[slomo]

Musk has never and will never close a reservation list. Established automakers think of the list as potentially a promise to existing and potential customer. The new automakers don't care about such things.

It's unlikely that Rivian, Lucid and other will ever close a list. There is prestige and safety in a long list.

An alternate view is that Tesla needs a big list due to forthcoming mass disappointment in the price.

Tesla carefully chose to build production for 200,000 vehicles. Peak F150 production was about 900K

 

[TBONO]

Sigh...It looks like you are missing the point. The whole purpose of the $35K car was to displace hundreds of thousands of gasoline cars - to make a car that was so mass market Tesla could grow auto production at 50% plus per year, compounding each year, to numbers in the millions. That was to drive mass adoption of EV's. Tesla is succeeding brilliantly at doing this through unprecedented disruptions that resulted in relatively few cars actually being sold at $35K.

And that is the same purpose of the Cybertruck. Pricing is never absolute, it's relative to many things, from the state of the economy to the price of labor and raw materials, to interest rates. It looks like you forgot we had a global pandemic with mandatory factory shutdowns and massive inflation in raw materials prices. ICE cars skyrocketed in price to the point that the average new car transaction price in the U.S. has risen to $50K. Well-equipped ICE trucks regularly sell for $70K and more. Prices of raw materials are still getting back to more normal levels after unprecedented supply chain disruptions.

Those who think of prices and money as something that is fixed, or that only moves steadily and predictably in one direction, will always fail to understand what is actually happening with car pricing and will be unable to make sense of many things. In short, they will be wrong a lot.

If you want to understand things better and be able to make better (but not perfect) predictions, you will look at money and pricing in a less absolute manner and a more relative manner. While it's likely that launch pricing, in absolute dollars, will be higher than reveal pricing, the difference in relative dollars will not be significant. The bottom line is the Cybertruck will be emminently affordable by millions of new truck buyers. If it's not, we have bigger problems than whether you can afford a new truck.

So, enough handwringing about the imagined high prices of the Cybertruck. The overall economy is what really matters, and one company is pulling more than their weight when it comes to showing global businesses a new way to supercharge the economy. Economic growth does not come from companies that operate inefficiently and offer poor value, nor does it come from government decrees. Prosperity comes from companies that can deploy natural and human resources efficiently, so they can pay good wages and offer products and services to the people that are screaming values, making their hard-earned dollars stretch further. Companies appear to have forgotten how to do this and consumers are paying a high price for this failure. Tesla is showing the world a better way, but it will take significant time for others to make the necessary changes. Most of them will die the death of the dinosuars that they are, as more efficient deployers of capital and resources take their places. The auto industry had become too wasteful to be sustainable. Tesla is fixing that problem. Watch and see.

Just know that the high prices bandied about by a few outspoken people are a direct result of failing to understand how Tesla is changing the world for the better and that those projected prices are not based on a full understanding of what is really happening in the auto industry and the economy overall.

Uh…thanks for the Tesla Corp. sponsored response translated to:

Promised low price but met objectives and enough demand to allow by selling higher price.

Yep. Agreed.

Likely same for CT. So save your Pennie’s for the higher spec options as it’s all that’ll be available for some time ?

 

[TBONO]

Are you speaking of Tesla's unprecedented lowering of prices of state-of-the art EV's as raw material prices and supply chain disruptions continue to re-adjust to more normal levels?

Tesla's pricing is desgned to do two things:

1) Drive unprecedented demand for EV's over ICE

2) Allow Tesla to continue to grow and expand so they can accomplish number 1 on ever increasing scale.

Those who think Tesla is driven by greed will never understand what is happening right before their eyes. In short, they will be wrong a lot.

Sounds like a fortune cookie.

I’ve been right on Tesla a lot.
This is a pricing thread.
Let me know I’m wrong if Tesla reveals CT pricing close to 2019 estimates and I’ll take a knee.

 

[Deleted member 3316]

Are you speaking of Tesla's unprecedented lowering of prices of state-of-the art EV's as raw material prices and supply chain disruptions continue to re-adjust to more normal levels?

Tesla's pricing is desgned to do two things:

1) Drive unprecedented demand for EV's over ICE

2) Allow Tesla to continue to grow and expand so they can accomplish number 1 on ever increasing scale.

Those who think Tesla is driven by greed will never understand what is happening right before their eyes. In short, they will be wrong a lot.

I think we can all agree Tesla is driven by mission not greed. The people suggesting the price might be high are not advocating for it they are just assuming it’s inevitability.

Why doesn’t Tesla just charge 3%-15% margin like the rest of the automotive industry? Is it greed?

Please explain to us all how the connections between margins, market value, and long term supply constraints coupled with unprecedented demand effect pricing.


Why doesn’t Tesla just charge 15% margin is it greed?

 

[HaulingAss]

I think we can all agree Tesla is driven by mission not greed. The people suggesting the price might be high are not advocating for it they are just assuming it’s inevitability.

Why doesn’t Tesla just charge 15% margin? Is it greed?

Please explain to us all how the connections between margins, market value, and long term supply constraints coupled with unprecedented demand effect pricing.


Why doesn’t Tesla just charge 15% margin is it greed?

Tesla sets the prices to maximize the rate at which they can expand production. If the price is too high, there is no additional demand to fill and production doesn't need to be expanded. That is a strategic error.

If they set the price too low, they don't have enough profits to replicate the factories and production lines on other continents. The key is to be able to increase production to meet demand.

Those of you who are guessing Tesla will set the prices to levels most won't be able to afford, obviously don't understand Tesla's long-term objectives. They have no desire to earn more profit from the backlog of initial demand that has built-up because they want price stability, they don't want to have to lower prices after the truck enters high volume production and all the initial pent-up demand has dissipated.

In fact, Tesla has a long history of selling the first vehicles at a loss and having to optimize and grow production to make significant profits. They do this even though pent-up early demand would allow them to sell the initial units for double the price or more. As much as possible, Tesla sets prices for long-term stability and tends to err slightly on the side of pricing low enough that demand stays higher than supply. That is why, more often than not, a Tesla buyer must order at least a week or two in advance.

I've never seen so many dogs barking up the wrong tree. Actually, I think it's a small number of dogs barking louder than any dog has a right to.

BTW, I have no affiliation with Tesla, but this ain't my first rodeo.

 

[ED_SFO]

I kinda think that Tesla was making too much money at almost 30% gross profit. They have like 21 billion in cash and growing. When they cut prices across the board they are still making probably 15-20% gross profit and they basically cannot invest that money in new products fast enough. So they cut prices to make it more affordable, that in turns gains more sales, which generates more cash. Everyone wins tbh.

I still think the dual motor is prob $60k because of the stainless and all the other goodies.

 

[Deleted member 3316]

That was quite a convoluted way to avoid the question.

? a week or two in advance… there are multiple locations where the wait is over three months still. How long is it going to take for the Cybertruck waitlist resemble something close to two weeks…quite a few years.

You said it in your first paragraph, Tesla currently sets the price at just below market value for the volume they can supply and make adjustments on the fly. This strategy is not going to work the same for Cybertruck.

Then you close with;

Tesla sets prices for long-term stability and tends to err slightly on the side of pricing low enough that demand stays higher than supply

This contradicts your previous arguments.

As an early reservation holder I do hope the Cybertruck is set close to reveal pricing, I just don’t think that it’s likely.

The Cybertruck and semi were revealed early as a smack down to legacy auto. Tesla could easily sell cybertruck lower than reveal prices and still make a handsome profit within the first year of production.

Why don’t they? Is it greed? No, it’s capturing available demand/profit at their production rate.

If they could make 1 or 2million CyberTruck per year they would sell below reveal price because that is the mission.

 

[HaulingAss]

That was quite a convoluted way to avoid the question.

? a week or two in advance… there are multiple locations where the wait is over three months still. How long is it going to take for the Cybertruck waitlist resemble something close to two weeks…quite a few years.

You said it in your first paragraph, Tesla currently sets the price at just below market value for the volume they can supply and make adjustments on the fly. This strategy is not going to work the same for Cybertruck.

Then you close with;

"Tesla sets prices for long-term stability and tends to err slightly on the side of pricing low enough that demand stays higher than supply."

This contradicts your previous arguments.

The only contradiction here is the belief that early Cybertruck prices are going to be out of reach of the mass truck buying market.

Read it agian and engage your brain. You are talking nonsense.

As an early reservation holder I do hope the Cybertruck is set close to reveal pricing, I just don’t think that it’s likely.

Yes, we know what you think. Because you keep saying it over and over. But that's just your opinion. Maybe it's time to stop repeating yourself and wait for the prices to be announced.

The Cybertruck and semi were revealed early as a snack down to legacy auto. Tesla could easily sell cybertruck lower than reveal prices and still make a handsome profit within the first year of production.

Why don’t they? Is it greed? No, it’s capturing available demand/profit at their production rate.

You ask why Tesla doesn't sell Cybertruck for lower than reveal prices while making a handsome profit in the first year. You claim they could do this. Your earlier arguments were that it would cost more to make than the reveal pricing. Which is it?

Again, you are all over the board and not making logical sense. Just give it a break, Tesla will announce the actual pricing soon enough.

 

[firsttruck]

.....

Tesla carefully chose to build production for 200,000 vehicles. Peak F150 production was about 900K

We mention the ICE F-150 a lot as a competitor for Cybertruck but F-150 is not the only full-size ICE pickup truck.

Cybertruck will compete in a market of 2.4 million full-size ICE pickup trucks

Tesla did not build huge Austin Gigafactory to just do 200K Cybertrucks a year.
More like 500K-750K a year

In U.S. full-size pickup trucks by Ford, GMC, Chevy, RAM, Toyota are best selling vehicles.

The best-selling light trucks in the United States in 2021
726,004 Ford F-series (150/250/350/450)
569,388 RAM 1500/2500
519,774 Chevrolet Silverado 1500/2500
252, 520 Toyota Tacoma
248,924 GMC Sierra 1500/2500
81,959 Toyota Tundra
27,406 Nissan Titan
2,425,975 Total
Published by Mathilde Carlier
Jan 18, 2022
https://www.statista.com/

 

[Deleted member 3316]

Your earlier arguments were that it would cost more to make than the reveal pricing.

I haven’t said that… can you quote me?

The only contradiction here is the belief that early Cybertruck prices are going to be out of reach of the mass truck buying market.

This too, quote me…
you are just not … how do I put it in words you’d understand…

Read it agian and engage your brain. You are talking nonsense.

We’ve discussed this elsewhere, don’t engage in this vitriolic disingenuous tone if you don’t want to be subjected to the same.

Look in the mirror whilst reading below

But that's just your opinion. Maybe it's time to stop repeating yourself and wait for the prices to be announced

and then contemplate what the purpose of a forum discussion around pricing is for?

Again, you are all over the board and not making logical sense.

Your failure to comprehend is not my responsibility, if you ask a genuine question to clarify your misunderstanding I will usually answer you. Can you read a question and answer it?

If you don’t want to have an open and challenging conversation…..don’t.

 

[firsttruck]

Uh…thanks for the Tesla Corp. sponsored response translated to:

Promised low price but met objectives and enough demand to allow by selling higher price.

Yep. Agreed.
.....

No, that is wrong. That was not the primary objective.

The primary objective is conversion from ICE to BEV.
In real life conversions are not some smooth curve or line.

Tesla is constantly striving to increase production (goal 20 million vehicles by 2030) but that growth will be have small ups and downs in production vs demand.

At some points during the conversion
1. demand is above production, raise prices some
2. demand is lower than production, lower prices some

But always the goal is to accelerate the conversion. Build as many BEVs as possible.

 

[Deleted member 3316]

No, that is wrong. That was not the primary objective.

The primary objective is conversion from ICE to BEV.
In real life conversions are not some smooth curve or line.

Tesla is constantly striving to increase production (goal 20 million vehicles by 2030) but that growth will be have small ups and downs in production vs demand.

At some points during the conversion
1. demand is above production, raise prices some
2. demand is lower than production, lower prices some

But always the goal is to accelerate the conversion. Build as many BEVs as possible.

How is it wrong? Your comments are supporting the quoted statement.

 

[TBONO]

The primary objective is conversion from ICE to BEV.
In real life conversions are not some smooth curve or line.

Tesla is constantly striving to increase production (goal 20 million vehicles by 2030) but that growth will be have small ups and downs in production vs demand.

At some points during the conversion
1. demand is above production, raise prices some
2. demand is lower than production, lower prices some

But always the goal is to accelerate the conversion. Build as many BEVs as possible.

I agree with this/you. On this part. (I removed “wrong” comment. However it needs to be done profitably to be sustainable.

So back to the pricing discussion of this thread: are the launch prices realistic/ profitable when the only competition is the Lightening, more expensive and documented by Ford as losing big $$?

Everyone’s just guessing and bring what they believe are good arguments to consider.
That said, it’s quite disappointing to see the condescending tones and tantrums being posted by some when it doesn’t align with their views.

 

[firsttruck]

......
Tesla carefully chose to build production for 200,000 vehicles. Peak F150 production was about 900K

If Tesla would a make a compact/mid-size pickup (Wolverine ?) in addition to the Cybertruck the total addressable market is very large.

Both Tesla Monterrey & Tesla Shanghai factories would be good places to export compact/mid-size pickup (Wolverine ?) from.

Pre-pandemic, globally there were over 4.3 million pickup trucks sold in 2018.

Pickup Trucks - Worldwide
Most recent update: Dec 2022
Source: Statista
https://www.statista.com/outlook/mmo/passenger-cars/pickup-trucks/worldwide#unit-sales

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