Cybercatch22: Demand vs Delay

[Deleted member 3316]

Reservations? I'm not buying that ugly truck, I'm here for delightful intellectual discourse

Yes, it’s not considered a purchase when you sell your spot in line.

Intellectual discourse? Then why all the Shitposting? I guess preoccupation with vanity and self esteem might cloud intellect to think disingenuous and obstructive frivolity is a valid expression of intelligence.

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[JBee]

Personally for me, although I'd like my CT today like everyone else, morally a time sequential purchase order is not a valid reason, there are much better moral arguments than that, neither is inhibiting scalping, given Teslas mission goal is transition to energy sustainability. If they already have MORE money than they can spend on things, then every vehicle sold off the factory floor is a win in their book.

The mind to change would be EMs, and his mind isn't interested in just making more money for the sake of making money, and not letting somebody else do so on their backs. I mean every person who drives a vehicle expects to get a net positive return on their vehicle purchase, right?

But in saying that robotaxi will kill the scalping market anyway too, as private ownership will become a niche market as soon as transportation becomes so ubiquitously affordable.

The anti-scalping auction lever, would at best stop say 100,000 CTs at say 40-50% average, but what is a billion or two between friends, if your goal is to make the planet a better place?

Better than us Aussies paying $30b a year to the US and UK for subs, to provide protection of our trade routes to our main trading partner China, by using the same subs to protect us from China....

 

[Deleted member 3316]

The anti auction auction lever, would at best stop say 100,000 CTs at say 40-50% average, but what is a billion or two between friends, if your goal is to make the planet a better place?

If implemented it would only be needed for the first few years until production meets demand.

My priority is to get my truck at the lowest price possible whilst allowing late comers and parasitic profiteers to pay as much as they see fit……to Tesla.

Your earlier point about robotaxi does blow up the whole automotive market and possibly the global economy would need a reset.

 

[Deleted member 3316]

The mind to change would be EMs, and his mind isn't interested in just making more money for the sake of making money, and not letting somebody else do so on their backs. I mean every person who drives a vehicle expects to get a net positive return on their vehicle purchase, right?

I’m not sure if your agreeing or disagreeing with the premise here.
No, Elmo doesn’t seem interested in profit for profit’s sake.
Vertical integration is an indicator for your second point,
What is the intent of this last sentence?…

 

[JBee]

I’m not sure if your agreeing or disagreeing with the premise here.
No, Elmo doesn’t seem interested in profit for profit’s sake.
Vertical integration is an indicator for your second point,
What is the intent of this last sentence?…

The point of the last sentence is that we all buy stuff to get ahead and increase value in our lives.

I buy a shovel and rake to cultivate my garden to produce vegetables for me to eat and sell. Or I buy a car to operate as a Uber, or to get me to my jobs site or work, or holiday. Because I can't afford to "leverage" a chauffeured limousine.

So just because I can't afford a limousine, should I stop others from affording one? Or, as it is with robotaxi, can we make technology such that everyone can afford one?

So in the case of CT scalping, as you have also pointed out, it is only transitional until production better meets supply, and some might benefit from a sale or two. But ultimately the value add of owning and using a CT will exceed the scalping value, for everyone that owns one too. But the scalper won't have that benefit without a CT either, because he cashed in, up front, on that added value benefit it provides.

Simply, if I was a scalper, which I'm not (I have plenty of my own hair, still!) then I would have long ago realised that using my reservations myself, or even a fleet of them, is more profitable than a couple of scalped CT sales.

Now atm the question for Tesla becomes; at what profit margin does Tesla think they need to be to further the mission, and at what margin are they still leaving to much money on the table, from the value add to buyers? As EM pointed out, most don't undstand how fine the line is to CT affordability, so keeping it low is in their own best interests.

Now I question why adding another extra layer to play the scalpers with an auction is beneficial, in that for the customers who are ultimately paying the bill on this, there is no difference between the money paid at auction to jump the cue to Tesla, or to the scalpers. The only difference is who is getting the extra funds, which in the grand scheme of things is the cost of doing business in a fiat currency economy, especially one where the gov is fleecing to the tune of trillions by printing cash to fight fabricated proxy fears. Each dollar printed halves the value of another dollar already in existance, further each dollar printed is "borrowed" into existence and needs to be paid back. It is in fact a debt on society not a payment, based on our future tax obligations.

Now if you were trying to promote a more equitable currency, or economy, or enhanced productivity for all, with an appropriate "resource allocation" currency substitute, then we'd have a much better chance to make positive change in the right direction. Money, and it's transactions, are simply corruptible because they have no intrinsic control of morality by themselves. It's their nature to transact both good and bad, and that works just as well for both types of actors , and in particular at any level, to the beggar/pocket thief or the scalper/charity, the corporation or world trade regulation and currency wars by governments, there's nothing to stop it, simply because of our endocrinated belief that it is worth "something" and having "more" if it is better.

Once again if currency itself forms the sole motivation for doing something, to gain more of it, or to appease lenders that will only finance projects that do that too, through fractional lending, then the only outcome can be complete disassociation from the things that really matter and what we should allocate resources to. Simply currency should not be making decisions for us, or as a method to dominate the less well off at any level, rather we should be making decisions on how currency should be used or not, based on if at all it is beneficial to society at all.

So the most expedient pathway would be to create an intentional systemic foundation of technological "economic excess" upon which values are no longer a consequence of demand, or in particular of those in control of supply.

Ponder for a moment this; what are the benefits of owning a EV charged predominantly at home from solar, and the forecasting certainty and stability it provides, then compare that to geopolitical tensions like Ukrainian oil and gas reserves, and the now likely and inevitable demise of a fossil dominated currency and economy. A massive change is afoot, so getting as many of these things out there in peoples hands, and forcing every other manufacturer to do so along the way, is worth a couple of bucks in the short term. Just don't upset your customer base to get there, and make sure you don't expose yourself to predators who have the means to see to your demise.

 

[Deleted member 3316]

Now I question why adding another extra layer to play the scalpers with an auction is beneficial, in that for the customers who are ultimately paying the bill on this, there is no difference between the money paid at auction to jump the cue to Tesla, or to the scalpers. The only difference is who is getting the extra funds, which in the grand scheme of things is the cost of doing business in a fiat currency economy

Ok. This is the juicy part.
Who would the customer prefer to pay?
Some random guy off the internet at a price that is an opaque market value?
How do you know if you’re paying a fair price? A transparent auction clarifies that.

The difference is you know the value of the service being provided, what value is a scalper providing the transaction besides access?

I know I’d rather not pay some one that is exacerbating supply constraints and skimming off the top. But if I didn’t have another choice… In the 1st few years of production will be thousands of people that will want this vehicle, have the capacity and willingness to pay well over MRSP, but cannot buy direct from Tesla.

The naive and idealistic response is join the queue.

Just like scabs crossing a picket line, there must be a compelling reason for them not to participate in this arbitrage.

 

[slomo]

There is no reason for Tesla to be particularly concerned about scalpers. The high auction prices adds to the prestige of the vehicle.

Once production ramps and scalpers fear a potential loss on the transaction the behavior ceases.

Tesla rational choice is to price high enough to only allow early scalpers to achieve large margins.

In the past Tesla has prioritize early sales to existing customers. Choosing to sell first to customers who they know are currently driving a Tesla perhaps knocks out half or more of the earliest reservation scalpers. Tesla has never followed a strict queue order AFAIK, and likely has plans to carefully select their first ten thousand or so sales.

Tesla knocking out some scalper reservations is nice for those who make it past the screening and resell.

 

[Deleted member 3316]

There is no reason for Tesla to be particularly concerned about scalpers. The high auction prices adds to the prestige of the vehicle.

Once production ramps and scalpers fear a potential loss on the transaction the behavior ceases.

Tesla rational choice is to price high enough to only allow early scalpers to achieve large margins.

In the past Tesla has prioritize early sales to existing customers. Choosing to sell first to customers who they know are currently driving a Tesla perhaps knocks out half or more of the earliest reservation scalpers. Tesla has never followed a strict queue order AFAIK, and likely has plans to carefully select their first ten thousand or so sales.

Tesla knocking out some scalper reservations is nice for those who make it past the screening and resell.

 

[JBee]

Ok. This is the juicy part.
Who would the customer prefer to pay?
Some random guy off the internet at a price that is an opaque market value?
How do you know if you’re paying a fair price? A transparent auction clarifies that.

The difference is you know the value of the service being provided, what value is a scalper providing the transaction besides access?

I know I’d rather not pay some one that is exacerbating supply constraints and skimming off the top. But if I didn’t have another choice… In the 1st few years of production will be thousands of people that will want this vehicle, have the capacity and willingness to pay well over MRSP, but cannot buy direct from Tesla.

The naive and idealistic response is join the queue.

Just like scabs crossing a picket line, there must be a compelling reason for them not to participate in this arbitrage.

So I think you missed the "juice" of my argument; someone who is selling their CT to scalp a few extra dollars, is actually making a loss in comparison to keeping it over its lifetime.

In the end if you can both afford the extra cost and you so desperately need to jump the queue and can't make do without it for any longer, and the Tesla warranty is preserved, then I don't think many will have a problem from who they buy it. I would rather wait, but I'm also not that far down the line because I had enough sense to keep up with developments.

Overall, without any useful metric to define the extent of the scalping problem, and given the large range I presented in my previous post, I really don't think scalping presents enough of a problem to warrant concern, or devise a method of control. Let alone Tesla implementing one that doesn't negatively impact their image for doing so.

 

[Deleted member 3316]

Overall, without any useful metric to define the extent of the scalping problem, and given the large range I presented in my previous post, I really don't think scalping presents enough of a problem to warrant concern, or devise a method of control. Let alone Tesla implementing one that doesn't negatively impact their image for doing so.

Scalping isn’t the issue I’m looking to resolve, it’s affordability


The extent of scalping is defined by the retail price. Scalping isn’t currently an issue because it’s set at market clearance, in line with supply.

Getting caught up on the current rate of arbitrage is pointless because Tesla’s current mitigation strategy is to raise prices.

What is driving the the affordability problem for Tesla?

It certainly isn’t the profitability problem the other manufacturers are facing.

The point of this market strategy is to enable an affordable price without leaving money on the table from impatient high wealth individuals.

It functionally mirrors the current system except Tesla inserts itself as the scalper/flipper.

 

[JBee]

It functionally mirrors the current system except Tesla inserts itself as the scalper/flipper.

Which is exactly my point on how it will be counter productive for Tesla's image to enable it. It will have negative net benefit to the cause, and probably negative impact on achieve their goals faster.

They still don't need more money, they actually need more engineers and workers for manufacturering so their factories aren't standing around empty being money fire pits. (As EM puts it there is no factory for making engineers, they are sort after and rare commodity)

At some point there is more money than resources, and they are already running into that issue despite doing all their own automation to reduce man hours. Why do you think Tesla is vertically integrating all the way up to ground extraction of resources? They are resource constrained, which is another reason they can momentarily reduce their EV prices, because increasing profit, like anyone else would for monetary gain, doesn't achieve their mission goals faster, and is an opportunity to gain more traction in a lower price market. Same goes for the $25k model.

Simply the more pressure they exert on the existing vehicle industry the faster "it", as a whole has to convert to a sustainable and more cost effective solution. For Tesla to achieve its goal, it doesn't need to do it all itself, or even pay for it all themselves, not at all, it just has to have enough impact to change the industry by being so compelling and competitive the whole industry has to adapt.

This is strategic change, that simply money can't buy.

 

[cvalue13]

It functionally mirrors the current system except Tesla inserts itself as the scalper/flipper.

and for it to work, Tesla only needs to scalp every vehicle until demand settles at MSRP!

At least you’ve finally come out and said it. For Tesla to get more money, all they have to do is not sell to existing reservation holders until demand settles at MSRP

 

[Deleted member 3316]

Which is exactly my point on how it will be counter productive for Tesla's image to enable it. It will have negative net benefit to the cause, and probably negative impact on achieve their goals faster.

Can you expand on this?
Properly articulated where is the damage to brand? What is the net negative impact?

Affordability tends to promote a positive brand affinity.

 

[JBee]

Can you expand on this?
Properly articulated where is the damage to brand? What is the net negative impact?

Affordability tends to promote a positive brand affinity.

Sure, first provide evidence that there is a problem with enough magnitude to justify a control method. Unless there is a physical problem, chasing a fictional problem is otherwise very hard to quantify. I honestly don't think Tesla will even regard the amount of clientele with enough funds to maximise profits, because it simply doesn't fit with their motivations, rather they will take note of the dominate market affordability and set prices accordingly, and intentionally low to further the cause.

It's a bit like claiming we don't have enough spice to navigate the dunes of Mars, so we will never establish a Mars base there, so that can Tesla can sell vegan ice cream. Is it possible, sure, but is it the biggest problem?

Lol it's a bit like the EM interview I'm listening to on Twitter atm...the real question is "what is real".
Accordingly, we need to act.

 

[Deleted member 3316]

Here in lies the problem, I’m failing to articulate

Unless there is a physical problem, chasing a fictional problem is otherwise very hard to quantify

You keep presenting scalping as the problem.
Affordability to the masses is the problem.
Scalping is the consequence of setting the price low enough for the vehicles to be universally affordable.

I honestly don't think Tesla will even regard the amount of clientele with enough funds to maximise profits

The maximisation of profit is purely from the impatient

because it simply doesn't fit with their motivations, rather they will take note of the dominate market affordability and set prices accordingly, and intentionally low to further the cause

If priced at $20 when the market clearing price is $40 demand is artificially inflated by people speculating on the product between those two points. The threat of a blacklist is not incentive enough to forgo 10%-20% profit on a transaction.

The reservation list creates an artificial demand exponent on top of the supply constraints, exacerbating the drive to maintain higher prices.

The purpose of this strategy is to equitably improve affordability not maximise profitability. The effect on absolute margins is not the priority. (Which maybe net neutral)
The priority is getting these vehicles in the hands of high mileage drivers. (usually less affluent)

I’ll ask again;

Properly articulated where is the damage to brand?
What is the net negative impact?

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