Honoring Original Estimated Pricing

[charliemagpie]

For sure legacy is perpetuating the CT pricing myth.

Legacy needs to remain relevant to consumers... for the stock market, fundamentally strong.

I skimmed the news this morning, Ford is losing 40% per car on its EV business.?

Its losing that much at 70K? ... How does that look competing against a 50K product? ****

Of course, volume will be the excuse, but not long before shot hits the fan. A disaster is coming.

*** - addendum... I just realized there is a good chance Tesla will release the Dual maybe much sooner than I thought. Offering a 50K product which directly competes with their 70K product will remove customer confusion.

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[Crissa]

I skimmed the news this morning, Ford is losing 40% per car on its EV business.?

There's several ways you can look at this, and when you're building factories, they're not making money, and traditional accounting shows that as a loss.

*** - addendum... I just realized there is a good chance Tesla will release the Dual maybe much sooner than I thought. Offering a 50K product which directly competes with their 70K product will remove customer confusion.

Yes. Public perception is important.

Just like those long wait times encourage some people to order vehicles they don't intend to take delivery of, and discourage others from buying, reducing total deliveries.

-Crissa

 

[HaulingAss]

There's several ways you can look at this, and when you're building factories, they're not making money, and traditional accounting shows that as a loss.

The Ford losses were detailed on accounting statements that cost out the factories and equipment over their useful lifespans. In other words, there is no way to interpret this as anything but Ford losing massive amounts of money for every EV they make.

For the last 2 plus years I've been claiming Ford loses money on every EV they sell but Ford had released no EV specific accounting to point people to when I was questioned on the factualness of my claims. Now Ford has admitted it.

The difference between Ford and Tesla is huge and simply quadrupling production is not going to solve the issue of how inefficient Ford really is when it comes to making and delivering cars. Worse, as Ford reduces their losses, Tesla will be lowering prices and increasing profits. This is wy I say Ford and GM are doomed.

 

[cvalue13]

There's several ways you can look at this, and when you're building factories, they're not making money, and traditional accounting shows that as a loss.

The Ford losses were detailed on accounting statements that cost out the factories and equipment over their useful lifespans. In other words, there is no way to interpret this as anything but Ford losing massive amounts of money for every EV they make.

those were pro-forma loses, on a pre-tax basis; which means Ford’s basically pre-paying taxes on future EV revenue

(and those pro-Forma loses included what amounted to 75% of Ford’s global R&D budget)

To take over-simplified pot-shots of complex corporate spending is a weird hill to die on.

Case-in-point: in 1H of 2021, Tesla also lost money on a pro Forma bases of car sales, posting loses on vehicles but a (record!) net profit not by selling cars, but by selling $518 million in regulatory credits, and $101 million in trading Bitcoin.

I don’t/wouldn’t point and laugh, because balance sheet management of massive and growing manufacturing companies is a complex and often unintuitive bit of accounting.

Of course Ford’s losing money selling EV’s.

 

[CyberGus]

I skimmed the news this morning, Ford is losing 40% per car on its EV business.?

So far, Tesla has spent about $1 billion per Cybertruck

 

[Crissa]

The Ford losses were detailed on accounting statements that cost out the factories and equipment over their useful lifespans. In other words, there is no way to interpret this as anything but Ford losing massive amounts of money for every EV they make.

For the last 2 plus years I've been claiming Ford loses money on every EV they sell but Ford had released no EV specific accounting to point people to when I was questioned on the factualness of my claims. Now Ford has admitted it.

The difference between Ford and Tesla is huge and simply quadrupling production is not going to solve the issue of how inefficient Ford really is when it comes to making and delivering cars. Worse, as Ford reduces their losses, Tesla will be lowering prices and increasing profits. This is wy I say Ford and GM are doomed.

...which agrees with my statement. They're currently not making money, because they're building factories. Duh, that's how all new products are.

It's kind of bullshit accounting that puts all the debts and assumes none of the equipment you've bought will increase the output.

This is why you should look at operating and capital expenses separately as well as within projections.

-Crissa

 

[HaulingAss]

...which agrees with my statement. They're currently not making money, because they're building factories. Duh, that's how all new products are.

It's kind of bullshit accounting that puts all the debts and assumes none of the equipment you've bought will increase the output.

This is why you should look at operating and capital expenses separately as well as within projections.

-Crissa

You are misunderstanding the way capital expenses are accounted for.

Ford spends a lot of money building a factory and filling it with production equipment, but they don't have to account for those costs upfront because they expense them over their useful life and how many vehicles those expenditures are good for.

For example, they might determine that a stamping die for a body panel costs $100,000 but is good for 500,000 panels, thus they only need to account for $0.20 per panel made as a capital expense. Some expenses, like buildings, I believe, are costed based on useful number of years. They don't have to expense all of it upfront.

Tax accounting is different animal, but we are talking about profit/loss statements here.

 

[SpaceYooper]

Define doomed. Most would say that means they are going out of business. At least that's how I interpret doomed. I don't think they are going out of business so I would not say they are doomed.

If by doomed you do mean they are going out of business, do you care to take a wild guess at a date when we'll no longer see Ford and GM producing vehicles?

 

[HaulingAss]

Everyone knows this or at least should know this if they are posting here. It must be a psychological reaction to want the price so high. Some folks predict the CT4 will be like buying a baby Lambo. Having seen so much back and forth on price, im convinced those who predict absurdly high numbers have a need deep down for CT to be more exclusive than it was designed to be

There are a lot of people out there hoping and praying that Cybertruck is very exclusive and sells in small numbers like a botique speciality product because their financial security depends upon it. It doesn't matter if their current income stream is based on oil and gas, legacy auto manufacturing, 1st, 2nd and 3rd tier auto parts suppliers, gas station chains, auto repair shops, insurance companies, electrical grid generation companies, traditional auto dealership chains, etc., if their income and/or the value of their assets is threatened by the faster adoption of EV's in general, and of the Cybertruck in particular, they want to believe that Cybertruck will sell for an astronomical price and be very much a niche product.

Of course hope is not a viable strategy and will not get these people where they want to go. Those who know how quickly this disruption will happen, will prepare for it and be fine, many will make millions of dollars, but those who deny the disruption, who try to fool themselves into believing the Cybertruck will not be popular, it will be too expensive, that the EV transition will take many decades, will experience the full fury of disruption head-on. They will not win.

 

[Mini2nut]

The Dual Motor MSRP will probably be priced $65-$70k.

$70k would be a stretch since that would be nearly a 40% price increase from the $49,900 MSRP announced in November, 2019.

 

[WheezyLex]

Yes, they don't have an obligation to meet the price exactly. But they have a legal obligation to substantially perform. That means coming somewhere near the price they suggested.

-Crissa

Agreed! I do remember them saying that if you added in the FSD option, which I definitely did, they would honor the price at the time that you added it. I hope that's still true - it was $7K when I placed my order.

Edit: and after I respond, I see others already said the same! My mistake.

 

[WHIZZARD OF OZ]

The Dual Motor MSRP will probably be priced $65-$70k.

$70k would be a stretch since that would be nearly a 40% price increase from the $49,900 MSRP announced in November, 2019.

I have the 'Duel' about a dime under $60K, so with your lower point, let's hope it sells somewhere in the middle.

 

[charliemagpie]

ALL of Tesla's expenses were allocated to the production of its first cars... its average losses were at maximum levels.

Ford on the other hand, covers a lot of expenses like a parent.

 

[HaulingAss]

Define doomed. Most would say that means they are going out of business. At least that's how I interpret doomed. I don't think they are going out of business so I would not say they are doomed.

If by doomed you do mean they are going out of business, do you care to take a wild guess at a date when we'll no longer see Ford and GM producing vehicles?

When I say Ford and GM are doomed, I mean they will no longer be dominant automakers. Maybe they go bankrupt and reorganize under new ownership, as their brand name is their most valuable asset. Maybe someone buys them out for pennies on the dollar (of their current valuation).

As far as a date, I can't predict the future, but I would be shocked if they are able to survive another 6-8 years as anything but a shadow of their former selves. I have little interest in trying to forcast the details, what matters is whether they are still solvent and cranking out millions of vehicles per year. I find that highly unlikely.

 

[Deleted member 3316]

Just a curious it’s factor. If we paid a deposit in 2019 to reserve a vehicle at a certain price. We have been exceptionally patient for the past 4 years. I would think that they should be obligated to come within 10% of the original promoted price. Anyone purchasing one that did not pay the deposit would pay whatever they choose to sell it for. It’s an awesome way to finance the facilities needed by collecting 250,000 deposits of $150 a mere 37,500,000 interest free loan for 4 years time. Collectively we have been an invaluable asset and therefore should be locked into the 2019 pricing?

If you are concerned about pricing, let me just direct your attention over here….

https://thedriven.io/2023/03/23/cyb...racting-scalpers-what-will-tesla-do-about-it/

Or here…..

https://www.cybertruckownersclub.com/forum/threads/cybercatch22-demand-vs-delay.8179/#post-141764

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