Cybercatch22: Demand vs Delay

[Deleted member 3316]

OK, whatever you say.

If you aren’t will to engage honestly there’s nothing I can say.

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[HAL GALLUS]

It looks like you are the only one who thinks it's a realistic possibility that Tesla will let those with more money jump the reservation line by auctioning off a certain percentage of early production to those willing to pay the most. At least I didn't see anyone who thinks this is a realistic possibility raising their hands.

Tesla doesn't support the idea that those with the most money should be served first either, that's why they have a reservation system and, more importantly, it's why they have a clause in the purchase/sale agreement that requires all buyers to agree they are buying the vehicle for their own use, not to resell for a profit. It's also why Tesla has, on multiple occasions, refused to sell certain customers additional vehicles when it was determined they were in violation of that clause. Customers who beak the agreement are blacklisted from further purchases.

It's unreasonable to think Tesla could stop even small-scale, one-time scalping, but they certainly don't want to feed that beast by providing a steady stream of vehicles to people with a track record of doing exactly that.

I like having intelligent discussions, but with all your insulting and demeaning language, I don't consider this an intelligent discussion. I visited New Zealand and found the locals to be charming and polite. I'm hoping an Aussie can assure me that Austrailia is just as friendly and that your behavior and language is not what I can expect should I chose to visit Australia this winter. Your abrasiveness seems out of place on a normally polite and friendly enthusiast's forum.

Come on kids, play nice.

 

[cvalue13]

Since he won’t do it…

Using simplified numbers:

• Tesla presently has 100 existing reservations it must honor at MSRP, to generate an expected cumulative $200 of net profit (2$ net margin per CyberTruck).
  
  
• A (made up) 10% are true scalpers, equaling 10 vehicles for which “parasitic profiteers” need to find 10 buyers willing to pay over MSRP.
  
  
• To have an auction that thwarts the 10 would-be scalpers, Tesla needs to now:
  • produce 110 total vehicles, to generate an additional [$?] (determined by auction results) over the expected cumulative $220 of net profit from selling 110 vehicles;
  • auction those extra 10 vehicles as early as possible in production cycle - ideally the first 10 sold (as scalpers could be amongst the first 10 reservation holders, and the earlier in line the more margin Tesla can “lose”)
  • push the entirety of original reservation holders (taking delivery after the 10 auction vehicles) another 10 vehicles later in delivery cycle, 90 of whom are legit buyers
  • as a result, Tesla experiences from the auction:
    • increased cumulative net profit [$X] (over the cumulative expected $220 of net profit)
    • decreased cumulative good will of [Y] good will units (attributable to the 90 customers taking delivery 10 vehicles later than promised)
    • a net corporate benefit of [$X] minus [Y] good will units

BUT SURPRISE!

Demand is so “unprecedented” that there are greater than 10 individuals willing to pay above MSRP, and as a result:

• In addition to the 10 Tesla-auctioned vehicles, the 10 would-be scalpers also sell their vehicles for a profit
• now the net corporate benefit to Tesla is of [$X] minus [2Y] good will units (because legit reservation holders both got pushed back, and for no reduction in scalping)
• To attempt to thwart those scalpers, Tesla would have to had produced 120 vehicles, 20 of which are for auction. A net result of which is Tesla experiences a net corporate benefit of the auction of [$2X] minus [2Y] good will units - now auctioning more cars seems “better” for Tesla than risking underestimating the “unprecedented” demand and managing to both lose good will and fail to stop scalping

NOW WE’VE GOT THEM!

So Tesla puts pen to paper and finally determines that demand for the CT is so “unprecedented” that there are actually 100 total individuals willing to pay above MSRP!

Now at least Tesla knows it has to produce 200 vehicles to thwart the would-be scalpers. It now starts deliveries with auctioning 100 vehicles, finally thwarting all 10 scalpers with reservations.

But the 90 legit reservation holders have now been pushed to deliveries 101-200. Of them 50% are fed up with Tesla’s anuctions and delivery delays, and moved on, abandoning their legit reservations.

Tesla realizes this before it’s produced too many vehicles, and slows production. Rather than selling 200 total vehicles, it sells 150. Of those, 100 were at auction for above MSRP to people who originally weren’t “in line.” The remaining 50 who did purchase, have a bad taste in their mouths.

Net corporate benefit to Tesla: it’s now an out-of-reach luxury car manufacturer with no actual MSRP, just a bizarro auction lever that managed to convert unprecedented demand into some extra margin at the expense of a fatal degree of lost good will.

LUCKY FOR US, THOUGH!

Luckily, Tesla has no crystal ball with which to either (1) presumptively determine how many scalpers are in the current queue needing displacement by auction, nor (2) determine just how many people would be willing to pay over MSRP. Both types of fortune telling would be needed for Tesla to decide to lose an unknown degree of good will from legit customers by prioritizing the auction of a sufficient number of vehicles to satiate the people willing to pay over MSRP.

Seems they might instead just manage their MSRP and production volume, and deal with scalpers best as possible as they’re identified, while honoring the reservation priority.

 

[Deleted member 3316]

Come on kids, play nice.

Trying to, but I respond poorly to disingenuous shitposting. It’s a personal failing.

What flaw can you see the strategy as a whole?

Current list of challenges;

• Misplaced misunderstanding of fairness. ie queue jumping
• Difficulty in managing PR around implementation.
• Extra logistics in managing various auctions.
• Locking down the mechanism for resale restriction.

 

[cvalue13]

Trying to, but I respond poorly to disingenuous shitposting. It’s a personal failing.

What flaw can you see the strategy as a whole?

Current list of challenges;

• Misplaced misunderstanding of fairness. ie queue jumping
• Difficulty in managing PR around implementation.
• Extra logistics in managing various auctions.
• Locking down the mechanism for resale restriction.

 

[HAL GALLUS]

Since he won’t do it…

Using simplified numbers:

• Tesla presently has 100 existing reservations it must honor at MSRP, to generate an expected cumulative $200 of net profit (2$ net margin per CyberTruck).
  
  
• A (made up) 10% are true scalpers, equaling 10 vehicles for which “parasitic profiteers” need to find 10 buyers willing to pay over MSRP.
  
  
• To have an auction that thwarts the 10 would-be scalpers, Tesla needs to now:
  • produce 110 total vehicles, to generate an additional [$?] (determined by auction results) over the expected cumulative $220 of net profit from selling 110 vehicles;
  • auction those extra 10 vehicles as early as possible in production cycle - ideally the first 10 sold (as scalpers could be amongst the first 10 reservation holders, and the earlier in line the more margin Tesla can “lose”)
  • push the entirety of original reservation holders (taking delivery after the 10 auction vehicles) another 10 vehicles later in delivery cycle, 90 of whom are legit buyers
  • as a result, Tesla experiences from the auction:
    • increased cumulative net profit [$X] (over the cumulative expected $220 of net profit)
    • decreased cumulative good will of [Y] good will units (attributable to the 90 customers taking delivery 10 vehicles later than promised)
    • a net corporate benefit of [$X] minus [Y] good will units

BUT SURPRISE!

Demand is so “unprecedented” that there are greater than 10 individuals willing to pay above MSRP, and as a result:

• In addition to the 10 Tesla-auctioned vehicles, the 10 would-be scalpers also sell their vehicles for a profit
• now the net corporate benefit to Tesla is of [$X] minus [2Y] good will units (because legit reservation holders both got pushed back, and for no reduction in scalping)
• To attempt to thwart those scalpers, Tesla would have to had produced 120 vehicles, 20 of which are for auction. A net result of which is Tesla experiences a net corporate benefit of the auction of [$2X] minus [2Y] good will units - now auctioning more cars seems “better” for Tesla than risking underestimating the “unprecedented” demand and managing to both lose good will and fail to stop scalping

NOW WE’VE GOT THEM!

So Tesla puts pen to paper and finally determines that demand for the CT is so “unprecedented” that there are actually 100 total individuals willing to pay above MSRP!

Now at least Tesla knows it has to produce 200 vehicles to thwart the would-be scalpers. It now starts deliveries with auctioning 100 vehicles, finally thwarting all 10 scalpers with reservations.

But the 90 legit reservation holders have now been pushed to deliveries 101-200. Of them 50% are fed up with Tesla’s anuctions and delivery delays, and moved on, abandoning their legit reservations.

Tesla realizes this before it’s produced too many vehicles, and slows production. Rather than selling 200 total vehicles, it sells 150. Of those, 100 were at auction for above MSRP to people who originally weren’t “in line.” The remaining 50 who did purchase, have a bad taste in their mouths.

Net corporate benefit to Tesla: it’s now an out-of-reach luxury car manufacturer with no actual MSRP, just a bizarro auction lever that managed to convert unprecedented demand into some extra margin at the expense of a fatal degree of lost good will.

LUCKY FOR US, THOUGH!

Luckily, Tesla has no crystal ball with which to either (1) presumptively determine how many scalpers are in the current queue needing displacement by auction, nor (2) determine just how many people would be willing to pay over MSRP. Both types of fortune telling would be needed for Tesla to decide to lose an unknown degree of good will from legit customers by prioritizing the auction of a sufficient number of vehicles to satiate the people willing to pay over MSRP.

Seems they might instead just manage their MSRP and production volume, and deal with scalpers best as possible as they’re identified, while honoring the reservation priority.

Yes, I strongly agree!

 

[Deleted member 3316]

Yes, I strongly agree!

That’s interesting.
What has changed? It appeared in your previous post, you thought a different market strategy would be better.

 

[HAL GALLUS]

That’s interesting.
What has changed? It appeared in your previous post, you thought a different market strategy would be better.

No, I am not a trained wordsmith. Perhaps I put it wrong. Ether way you misinterpreted
what I was trying to say.

 

[Deleted member 3316]

No, I am not a trained wordsmith. Perhaps I put it wrong. Ether way you misinterpreted
what I was trying to say.

I’d like to understand. can you say it in a different way?

 

[Deleted member 3316]

I have every intention of driving my CT until I keel over, but I like your idea.

You possibly would like this more complete market strategy that would make little difference to you personally besides possibly paying a lower price.

 

[HAL GALLUS]

That’s interesting.
What has changed? It appeared in your previous post, you thought a different market strategy would be better.

Short and simple. Tesla has been through this before with reservations. I'm sure
they will find an equitable way of doing it. I find no need to worry.

 

[Deleted member 3316]

Short and simple. Tesla has been through this before with reservations. I'm sure
they will find an equitable way of doing it. I find no need to worry.

This situation is unprecedented, they haven’t been through this before. The way they have previously dealt with it is to up the prices… if price is of little consequence to you then clearly there’s no need to worry. It’s only money right?

 

[earthman]

My reservation is now selling for 2.5 million plus a 5 digit reservation number.

Where can I go to look at the current market for reservations?

 

[earthman]

This situation is unprecedented, they haven’t been through this before. The way they have previously dealt with it is to up the prices… if price is of little consequence to you then clearly there’s no need to worry. It’s only money right?

So tru lol

 

[Deleted member 3316]

There it is. Lol

How about you contribute to the conversation here instead of Shitposting there?

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