Tinker71

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Do we know the current cost of the 4680 MY? If we did we could maybe say that.
Exactly 2020/21 was weird. What would the price of the Y be without the pandemic/chip shortages/stimulus spending? We don't know. I say 2022 because that was the plan then, we are of course talking mid 2023 comparisons now, but Tesla was thinking 2022 and its lineup then.

The planned advancement at battery day would have affected the Y as well. The structural pack, castings and battery cost of < $120?? per kWhr. Not all of this has materialized yet. Maybe when it does Tesla can simply say. "Our cost have dropped now we can sell it for less." No apology required to people that paid an extra $15k -18 months earlier. It is a different car.

People need to remember, the price of the CT always reflected all cost savings. Especially the battery savings. It wasn't the deleted paint that made it appear reasonable.
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I don't understand the constant pricing comparison to the Model Y... right now you can pay more for a Ford Explorer than a Ford F150... they are different vehicles in different segments trying to sell to different people.

The CT will most likely be higher than reveal prices, but I doubt the MY pricing will even be relevant to what they decide to price the CT. F150 lightning, Rivian, and Chevy's etruck pricing will play a much bigger role in determining CT pricing.
 

TheLastStarfighter

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They won't sell cars at 50% margins. It looks bad to consumers, but more importantly it looks bad to workers, even if they get shares. Elon would rather not have a union, and a sure way to get one is to have the corporation banking 50% off every sale.
 
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rr6013

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They won't sell cars at 50% margins. It looks bad to consumers, but more importantly it looks bad to workers, even if they get shares. Elon would rather not have a union, and a sure way to get one is to have the corporation banking 50% off every sale.
True…

A wise man in transportation, CCC Trucking, owns its category said getting 20% market is easy, 30% a little harder, 40% is too hard for one company.
The way that you get 80% marketshare is 20% here, 20% there with company2, another 20% company3 then 10%, 5%, 3%… compnay4,5,6…pretty soon it adds up!
 

Ogre

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Tesla could have 10% of the truck market with 50% margins.

Or they could have 60%+ of the truck market with 20% - 30% margins.

The profits might look similar, but the latter case moves the entire industry forward where the former case just hollows out a slightly bigger niche.
 


charliemagpie

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Yes, but

It is not just a mathematical exercise lol Its a failure to think its just a matter of raising prices to increase profits, or lowering to make more sales.


Au contraire. raise prices and customers go elsewhere, lower prices and there may not be enough profits to pay your bills.. even if appealing, the customer count may be too low.

The equilibrium of the economy has already set the prices.

Tesla is an exception in this point of time. Rome eventually fell. The basics of business apply, not just the whim to turn the dial on the price gun.
 

Ogre

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It is not just a mathematical exercise lol Its a failure to think its just a matter of raising prices to increase profits, or lowering to make more sales.
This is more or the point I was trying to make in a nutshell.

Tesla wants **the truck market**. Not “premium trucks”, not “Supertrucks”, not “Luxury trucks”, the whole market. That is where Ford and GM make all of their profits. Supertrucks and luxury trucks are 2% of the market and maybe 10% of the profits. That’s not what Tesla wants. They want 80% of the profits. More to the point, they want the entire industry to move to electric. Moving the top 2-10% doesn’t move the industry.

Lots of people at all echelons of Tesla take their mission quite seriously.
 

charliemagpie

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This is more or the point I was trying to make in a nutshell.

Tesla wants **the truck market**. Not “premium trucks”, not “Supertrucks”, not “Luxury trucks”, the whole market. That is where Ford and GM make all of their profits. Supertrucks and luxury trucks are 2% of the market and maybe 10% of the profits. That’s not what Tesla wants. They want 80% of the profits. More to the point, they want the entire industry to move to electric. Moving the top 2-10% doesn’t move the industry.

Lots of people at all echelons of Tesla take their mission quite seriously.
Exactly
Tesla price increases have been incremental over the last 4 years.
House prices have also risen. etc

We have at times raised the prices to slow down the order rate.. That works.

We have not raised prices to profit take. That doesn't work.
(Only works for managers who wish to exceed KPI quickly, but are using built up goodwill for short sighted gains.)
 
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rr6013

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Tesla could have 10% of the truck market with 50% margins.

Or they could have 60%+ of the truck market with 20% - 30% margins.

The profits might look similar, but the latter case moves the entire industry forward where the former case just hollows out a slightly bigger niche.
The 50% claim argues that Tesla will accrue 50% share of the market with 50% profit at the end of the day. It implies it would be a fiduciary irresponsible act and inconceivable reason for Tesla to up and back away from economic opportunity by simply following a Pareto principle developed in 1896.

SpaceX conquered orbital flight dynamics to enable a launch cadence unmatched. Its first principles and organizing mission to provide multi-planetary future for humanity is the most successful, most affordable and best solution to getting there by putting an end to 1970’s rocket technology.

Tesla conquered BEV mass production with a launch cadence unmatched. Its first principles and organizing mission to halt the rise in CO2 greenhouse gas is the most successful, most affordable and best solution to stop transportation global emissions by killing 1880’s technology.

Historical precedent for the economics of technology favoring a duopoly emerging, is in-play(ala FORD::CHRY, MSFT::AAPL). Government policy favors rapid EV manufacture in the U.S. and abroad by offering tax offsets, supply chain credits, renewable fuel credits and development grants.

Analysis of Tesla cashflow, grant, credit and offsets in addition to holdings in JV, license and other non-transparent incomes add a %. Tesla collecting a % here, 10% there and a $40,000 pony-up in its Heavy Trucking segment on every semi begin to add-up. At the end of the day, Tesla are posting real profits!

Hidden percentages accrue to profit not margin. Tesla leading technology, production and models get the U.S. and other countries closer to halting GHG with every ICE vehicle it obsoletes.

1800’s thinking(Pareto), 1800’s inventions(ICE) and 50 y.o. engineers can’t stop Tesla massive growth, not even tried and worn out pricing! Because Tesla is making more profit than what you see on a Maloney sticker at the end of the day.
 

Qball

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Certainly plausible! Not good for my wallet but good for stock price.
 


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rr6013

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By the time Tesla finishes disrupting Transportation sector, Energy sector, Automation sector, Robotics sector and people with the benefit of hindsight who own Tesla(s) will look back fondly what a difference it made. Those who were early adopters and own Teslas, will admit it was a gamble that paid handsomely.

People who bought TSLA ditto… Even TSLA investors underwater, will emerge on a compounding ROI gravy train as sector after sector Tesla revolutionizes.

But like the wise old man says, ”you gotta play to win”.
 

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It will be interesting to see how TSLA walks back the price on the Y. Wait times are falling and Austin is just 1/5th of the way through it's ramp.

I can see production problems in Berlin this winter with the Russian driven energy crisis so maybe Austin will supply some of that demand, but otherwise Tesla will oversupply the $60k plus market.

I predict a $49,900 AWD 300 mile Y and CT2 equivalent for $59,900 by this time next year. The RWD Y with 270 range will go for $42,900 or something to support the price premium for the AWD.

Yikes - that would be a 20% price hike, and a 23% price reduction, but I still think that $10k spread between the Y and CT is necessary.

The CT looks might work in Tesla favor. There are many would be Tesla owners that just would not have a CT in their driveway even if $/mile/capability it is by far the best value.
Wait TIMES are falling due to increased production. Wait NUMBER hasn't decreased.
Having 10 customers wait 10 months for a car when the company produces 1 car a month is not nearly as good as having 100 customers wait 5 months. While the wait time may be going down, the number of customers pre-ordering a Tesla has not necessarily declined.
Tesla will never oversupply any market by any considerable numbers as they don't have dealerships willing to sit on inventory. Tesla would more likely throttle model builds to concentrate on models with active demand.
 

Crissa

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Tesla would more likely throttle model builds to concentrate on models with active demand.
This is why they have mixed lines. But they also have alot of levers for changing demand with performance packages, future promises (like Supercharging), and price.

Having solid margins gives them these tools.

-Crissa
 

papajamaliciousness

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Youtube clip just out projecting pricing elasticity means demand for the EV pickup could make Tesla 50% profit margin.

I don't really see the upside in this for Cybertruck buyers. I see the upside in this for Tesla shareholders or Tesla as a company.

This makes me hope that some legitimate competition emerges and we will live in a world in ten years or five years where Tesla has to sweat a little to make a living. If they can just crank out vehicles that no one else can make and charge double the manufacturing cost to willing consumers then that's not really ideal for buyers.
 

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Don’t think Tesla will charge that much. However the cost can be so low it will be over 30% margin with ease so plausible but not probable.

Tesla is already printing money so what’s the point of making so much money and have no way to spend it? They are spending as fast as possible responsibly, even a buy back might not help with 4-5 BILLION in cash every quarter an that’s just next 2-4 quarters. Think about it, even at the current rate Tesla could have over 40 billion in cash that they will not have a way to spend it besides a buy back in only 12 month! BUT that drives price of the stock up and Elon wants his employees to be able to afford the stocks so the buy back will be limited and then split again. It is more likely in 12 months they will start paying dividend because they have no way to spend the cash. Their profit is skyrocking while their operation expenses are basically flat!
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