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magnamentis

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Re: Tesla glory/failure
« Reply #1300 on: February 05, 2019, 09:40:25 PM »
<snip, I warned; N.>
« Last Edit: February 05, 2019, 11:50:11 PM by Neven »
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1301 on: February 05, 2019, 10:07:12 PM »
<snip; N.>

I agree there is a Dark Side.  While I do not ignore it, the Light Side seems much more important and powerful.  Besides, others seem much more capable of emphasizing the negative news than I am.  ;)
« Last Edit: February 05, 2019, 11:50:33 PM by Neven »
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magnamentis

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Re: Tesla glory/failure
« Reply #1302 on: February 05, 2019, 10:23:08 PM »
<snip, use the Like button; N.>
« Last Edit: February 05, 2019, 11:51:36 PM by Neven »
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1303 on: February 06, 2019, 12:47:06 AM »
Inventory versus Demand:  Who’s doing it better, OEMs or Tesla?

The old established manufacturers have several control points — other than production — that Tesla does not have:
- Dealer stock choices
- Advertising
- Discounts from sticker price (average of $3,720 per vehicle in January to incentivize sales)
- Leases

So theoretically, their inventories could be quite lean.  One reason they are not, is because U.S. sales peaked three years ago.  Sales in 2019 are expected to be “cool” as well.  Demand problem there?  Most definitely yes! — see the article below.

But while almost all OEM sales declined in 2018, Tesla sales leaped — I think we can safely say “skyrocketed.”  ;)  And Tesla does no public advertising, offers no leases on the Model 3, and (except for exceptional circumstances) gives no discounts on new cars.  So to suggest that Tesla’s comparatively tiny inventory is somehow a sign of waning demand is ludicrous.  A much more likely reason is pure logistics: the difficulty of suddenly getting many more cars to the many more people who have ordered them.  Tesla has a buyer for every car it makes (other than test, demo, and service loaner vehicles, of course, which have their own destinations).

US Car Dealer Lots Are Flush With Unsold Cars as Sales Are Expected To Drop
Quote
Car dealers are beginning 2019 with a heavier inventory of unsold vehicles on their lots, a situation that some analysts say will put pressure on them to cut factory output as U.S. auto sales are expected to cool this year.

There were 3.95 million vehicles on dealership lots at the end of January, a 4% increase from December and up nearly 3% from the prior-year January,

General Motors Co. has already moved to end production at five North American factories this year in response to falling sedan sales, and aiming to get ahead of an expected U.S. car market downturn. More auto makers could be forced to follow suit as rising interest rates on new-car loans and more affordable options on the used-car lot are expected to put a damper on new-car sales this year.
“We could see more of the pain we saw last year with GM and inventory being taken out on the car side,” said Tyson Jominy, an analyst at J.D. Power.

Ford Motor Co., which late last month reported a 27% drop in operating income for the full-year 2018, has moved to phase out slow-selling sedans and shift more production to higher-margin crossovers, sport-utility vehicles and trucks.

Jonathan Smoke, an economist with Cox Automotive, said last year’s strong results were lifted by sales to fleet buyers that aren’t likely to be repeated again this year.

With sales projected to weaken this year, analysts say auto makers will be under pressure to trim factory production in order to avoid offering steeper discounts—a task made harder with many new crossovers and electric vehicles set to roll out in the coming years, further crowding dealer lots.

Some dealers say auto makers are being overly optimistic for the projected demand.
David Rosenberg, chief executive for New England dealership chain Prime Automotive Group, said he is already getting flooded with too many recently launched crossover and truck models, such as the Toyota RAV4, Ram 3500 and Audi Q8.
“There is an oversupply of new products, but not everyone is going to achieve their sales targets,” Mr. Rosenberg said.

Ryan Gremore, president of the O’Brien Auto Team, a dealership chain in Illinois, Florida and Kentucky, said low interest rates in the past have made it cheaper for dealers to carry higher levels of inventory. But with rates now going up, it will become more expensive to hold on to unsold vehicles and retailers are likely to be pickier about what they stock, he added.
“We’ve carried too much inventory because we’ve been conditioned at artificial rates,” Mr. Gremore added.
Wall Street Journal article:  https://www.wsj.com/articles/car-dealer-lots-are-flush-with-unsold-cars-as-sales-are-expected-to-drop-11549319709
Or:   https://apple.news/AAtAxtb1sReSKX7RPzvg8Mg
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1304 on: February 06, 2019, 02:52:23 PM »
Can a Tesla Bull please explain where they think the new products are going to come from when Tesla is spending less on Capex than the amount the equipment is depreciating? Wouldn't that imply shrinking, not growing?
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oren

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Re: Tesla glory/failure
« Reply #1305 on: February 06, 2019, 03:11:51 PM »
I am not exactly a Tesla bull, but I will just point out there is a lot of auomotive product pipeline that is supposed to be coming out in the next two years: the Semi, the model Y CUV, the Pickup, the Roadster 2. IMHO this is too much anyway and may lead to loss of focus. Even the Model 3 is far from general availability (still missing Standard Range, RHD, non-premium interior, global availability, various features such as tow hitch). And there's the Supercharger network that needs expansion, addition of CCS connectors, Supercharger v3. And improvements in service centers and spare parts. Still a lot to do without adding lots of new products.
Capex is investmemt in plant & equipment, once the factories are running it's obvious it will shrink. New products would entail R&D spending, a different metric.
I expect that when the Y enters production Capex will rise again.

NeilT

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Re: Tesla glory/failure
« Reply #1306 on: February 06, 2019, 03:21:28 PM »
I wasn't aware that companies only bought equipment that lasted 5 years so that they could depreciate it over and over again.  Personally I thought companies bought 10-20 year equipment, depreciated it over 5 years then used the equipment to make money.

Of course with the changing technology and the constant fight for market share, there will be constant churn.

Yet again you mis-read the situation.  Tesla said it was going for cost cutting so it could finally ship the mass market "affordable" Model 3.  The way you do that is with fully depreciated equipment, fixed models that don't change and a ramp up in volume for the same workforce without expending on new capital.

That is how you increase profits in a market that you dominate.  Some time later they will have to innovate, update models, revamp the line and buy more equipment.  But the thing about the car market is that they can produce new variants of the models they already produce using 85% of the existing jigs and assembly tools.  The automotive business has been doing this for at least 3 decades now.  When GM owned Vauxhall, Opel and Saab, Saab 9-5 owners were distinctly disgruntled to learn that their prized cars shared 90% of their parts and pressings with Vauxhall and Opel models.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1307 on: February 06, 2019, 03:24:43 PM »
I wasn't aware that companies only bought equipment that lasted 5 years so that they could depreciate it over and over again.  Personally I thought companies bought 10-20 year equipment, depreciated it over 5 years then used the equipment to make money.

Of course with the changing technology and the constant fight for market share, there will be constant churn.

Yet again you mis-read the situation.  Tesla said it was going for cost cutting so it could finally ship the mass market "affordable" Model 3.  The way you do that is with fully depreciated equipment, fixed models that don't change and a ramp up in volume for the same workforce without expending on new capital.

That is how you increase profits in a market that you dominate.  Some time later they will have to innovate, update models, revamp the line and buy more equipment.  But the thing about the car market is that they can produce new variants of the models they already produce using 85% of the existing jigs and assembly tools.  The automotive business has been doing this for at least 3 decades now.  When GM owned Vauxhall, Opel and Saab, Saab 9-5 owners were distinctly disgruntled to learn that their prized cars shared 90% of their parts and pressings with Vauxhall and Opel models.

So it's just a lie that they are building the model y, pickup, semi, roadster, new factory, new service centers, new charging stations, roof tile?
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1308 on: February 06, 2019, 03:28:59 PM »
For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1309 on: February 06, 2019, 04:39:23 PM »
For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.

Tesla does not operate like other businesses.  ;)
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1310 on: February 06, 2019, 04:40:28 PM »
This is fascinating/amusing.  Tesla and Daimler have collaborated before.  Tesla built electric powertrains for MB and Smart; Daimler invested (profitably) in Tesla stock; Tesla’s President of Automotive is a former Daimler executive.

Now, MB has its own EV platform it’s trying to sell to others.  But Tesla’s is better.  And Tesla needs electric vans for its mobile service fleet.  But MB’s e-Sprinter van doesn’t have the required range.  So, is some new sort of mash-up in the works?

Tesla and Mercedes-Benz have been holding ‘talks’ about collaborating again, says Daimler CEO
https://electrek.co/2019/02/06/tesla-mercedes-benz-holding-talks-collaboration-daimler-ceo/
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1311 on: February 06, 2019, 04:56:38 PM »
For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.

Tesla does not operate like other businesses.  ;)

Oh, so the laws of supply and demand dont apply. Tesla is cutting prices to be nice. Gottcha.

Don't mind the fact that 1/4 of the (inflated/bs) margin has evaporated in the last 6 weeks. At this rate they will be selling 35k version by the end of the quarter. For a loss.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1312 on: February 06, 2019, 05:20:59 PM »

Tesla does not operate like other businesses.  ;)

Oh, so the laws of supply and demand dont apply. Tesla is cutting prices to be nice. Gottcha.
...

Yes, “nice.”  Like:
- opening their patents for anyone to use, for free
- free Supercharging for life, for early customers
- not making Supercharging a profit center
- not making Service a profit center
- upgrading all their cars via OTA updates, for free

Tesla is supply-constrained, NOT demand-constrained.  Every car they make is already sold, and 3/4 of their sales last quarter were from new orders, not reservations.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1313 on: February 06, 2019, 05:34:51 PM »
“No demand.”  LOL.

Quote
EV sales, over the last 8 years.

Don’t bother looking for Model 3, when it shows up you can’t miss it.
https://twitter.com/tesla_truth/status/1092980837216280576
GIF at the link.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1314 on: February 06, 2019, 05:46:14 PM »
2016: Solar Roof Tile (lol)
2017: Full Self Driving (lol)
2019: 12,000 more Supercharging Stations
2019: Dozens of new Service Centers
2019: Semi
2020: Model Y
2020: Roadster, hover-enabled (lol)
???? : Pickup that can fit a F150 in its bed (lol)
???? : Model S update
???? : Model X update

Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?
« Last Edit: February 06, 2019, 06:14:34 PM by GoSouthYoungins »
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1315 on: February 06, 2019, 05:47:39 PM »
“No demand.”  LOL.

Quote
EV sales, over the last 8 years.

Don’t bother looking for Model 3, when it shows up you can’t miss it.


High-school math: the amount of demand is equal to the area under the line.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1316 on: February 06, 2019, 06:06:42 PM »
The facts argue against major price sensitivity for the Model 3:  More customers continue to order the higher-priced All Wheel Drive versions.

Quote
Model 3 VINs (@Model3VINs) 2/6/19, 11:43 AM
2/ Since its introduction in mid-2018, AWD demand has been incredibly high. In the 1st ~month after the configurator opened, around half of new orders were AWD. This was higher than expected, and @Tesla @elonmusk didn't seem to think this trend would continue.
https://twitter.com/model3vins/status/1093188363127947264
Text image of the comments from the call, at the link.
Quote
Model 3 VINs (@Model3VINs) 2/6/19, 11:43 AM
3/ And yet, 6 months later, AWD orders are still coming in above RWD. In fact, cumulative AWD VINs have now passed RWD — despite a 54k head start!
https://twitter.com/model3vins/status/1093188364394614785
Image below.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1317 on: February 06, 2019, 06:11:36 PM »
The facts argue against major price sensitivity for the Model 3:  More customers continue to order the higher-priced All Wheel Drive versions.

It warms my heart to know that the reason I can get such ridiculously good odds betting against TSLA is that the bulls genuinely believe things like "Tesla is cutting prices because demand is so strong". Wonderful, truly wonderful.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1318 on: February 06, 2019, 06:15:29 PM »
...
Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?

No problem.  Revenue will be around $30Billion in 2019, and closer to $45Billion in 2020. 

$TSLA annual revenue (billions).
2018: $21.46
2017: $11.76
2016: $7.00
2015: $4.05
2014: $3.20
2013: $2.01
2012: $0.41
2011: $0.20
2010: $0.12
2009: $0.11
2008: $0.01
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1319 on: February 06, 2019, 06:23:20 PM »
Neil,

Please get back to me about how you know the DOJ's investigation has concluded.

Also, you never answered why it makes sense not to have a CFO or CAO with any experience for a $50b company.

Finally, where is Tesla going to acquire the $20b they for capex in the next 2 years? Or do you have a drastically different estimate about how much is required to complete the stated projects?

Congratulations on all your airline miles and your multiple homes.
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gerontocrat

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Re: Tesla glory/failure
« Reply #1320 on: February 06, 2019, 06:30:16 PM »

High-school math: the amount of demand is equal to the area under the line.
Not in this case.The SALES are equal to the line which registers the cumulative sales. It is very possible that demand has not increased at the same rate the area under the curve has increased.
The real demand for the TESLA vehicles in the next n years is unknown.
e.g.
A few people on the reservation file might be dead.
Others on the reservation list might say no-thank-you when they get a call to buy a TESLA because - they've lost their job, they are getting divorced, they are sick with big medical bills etc etc etc.

Other people might buy a TESLA when
a) they think they will get it straight away and / or
b) their current set of ICE wheels have got too long in the tooth, and / or
c) to keep up with the Jones's,
d) they have change their view of climate change and want to do their bit (?*!??)

I would love to see their confidential market survey stuff.

Meanwhile
- their current CFO has not run away. He is hanging around as a senior advisor to the company.
- the energy storage business will remain a minority business even if they install over 2 GWH (i.e. double 2018) of stationary storage in 2019. Just 250,000 TESLA 3s with the small battery of 50KWH = 12.5 GWH of storage,
- I think they won't roll out solar roof tiles in large quantities until 2020 - that is when all new dwellings in California will have to have solar power installed? That makes the economics of using
solar roof tiles much more attractive.
- looking at the 5 year share price graph says that TESLA was a 200 dollar a share company until 2017 and during 2017 it changes into a 300 dollar a share company by 2018. All the short-term ups and downs are just market hysteria.

So the question is - can it during 2019 get up to the next stage by 2020. It needs 10,000 cars a week as normal production to do that.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1321 on: February 06, 2019, 06:32:10 PM »
...
Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?

No problem.  Revenue will be around $30Billion in 2019, and closer to $45Billion in 2020. 


Revenue means NOTHING. They need to generate free cash flow. Model S and X sales down vs 2018. Two model 3 price cuts in the first 6 weeks of 2019. Gross income in 2018 was $4b. That number will, at best go up to $7b. SG&A $5b. Debt repayment $1b. Even with this extremely generous and crude accounting approximation, $1b for capex. Please should your math to get to $10b...
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1322 on: February 06, 2019, 06:34:26 PM »
Quote
HA!!! MODEL 3 IS DOOOOOOMED!!! TESLA IS DESPARATE! Prices are NEVER EVER EVER reduced on SUCCESSFUL CARS!!!!
https://twitter.com/vuryfurrybur/status/1093168322856681474
Image below.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1323 on: February 06, 2019, 06:35:17 PM »
So the question is - can it during 2019 get up to the next stage by 2020. It needs 10,000 cars a week as normal production to do that.

The answer is "NO". There is nowhere to build those cars. Easy.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1324 on: February 06, 2019, 07:02:11 PM »
Quote
HA!!! MODEL 3 IS DOOOOOOMED!!! TESLA IS DESPARATE! Prices are NEVER EVER EVER reduced on SUCCESSFUL CARS!!!!
https://twitter.com/vuryfurrybur/status/1093168322856681474
Image below.

Without having ever met you, it is abundantly clear you have never run a business. (Helpful Hint: You learn Econ 101 for free by just watching a few youtube videos.)

As price goes up, demand goes down. As price goes down, demand goes up. A business should pick the price where (the demand) X (the margin) is highest. Ford sold 10 times more cars in 1915 vs 1911 (which also must have drastically lowered the cost to produce each vehicle).

If Tesla is, as you claim, supply constrained, then the only reason to lower price is because the demand isn't there. (You are sort of right about them being supply constrained since they can't make more than 5k model 3s per week. But more importantly, there isn't the demand to meet that supply at a 20% margin. This is why they are lowering the price. DUH. If they lowered price to $35k, the demand would be more than the 5k a week they can make, but they would lose money on each car. They will likely settle on a price near $40k by the end of the quarter. Margin less than 10%.

If you actually want me to draw out the supply demand profit maximization charts for Ford in the 1910s vs Tesla in the 2010s, I will.


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Sigmetnow

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Re: Tesla glory/failure
« Reply #1325 on: February 06, 2019, 07:21:33 PM »
Pretend you know more about Tesla financials than they do, and suggest as many ‘alternative facts’ as you like, but the price reductions were made possible by the ending of the referral program, which had grown to the point where it was adding considerable expense to each Model 3. 

Tesla attributes the price change “primarily” to the end of the referral program.
Quote
A Tesla spokesperson sent us the following statement:
“Primarily as a result of ending the referral program, which cost far more than we realized, Tesla is able to lower the price of Model 3 by $1,100.”
https://electrek.co/2019/02/05/tesla-model-3-price-reduction/

It’s great to see referral program money being used instead to reduce the cost of the 3. It's the right move, it was time.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1326 on: February 06, 2019, 07:29:26 PM »
Pretend you know more about Tesla financials than they do, and suggest as many ‘alternative facts’ as you like, but the price reductions were made possible by the ending of the referral program, which had grown to the point where it was adding considerable expense to each Model 3. 

Tesla attributes the price change “primarily” to the end of the referral program.
Quote
A Tesla spokesperson sent us the following statement:
“Primarily as a result of ending the referral program, which cost far more than we realized, Tesla is able to lower the price of Model 3 by $1,100.”
https://electrek.co/2019/02/05/tesla-model-3-price-reduction/

It’s great to see referral program money being used instead to reduce the cost of the 3. It's the right move, it was time.

Show me your math of why a supply constrained company would lower their prices. Good luck.
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1327 on: February 06, 2019, 07:33:52 PM »
https://insideevs.com/drone-flyover-tesla-gigafactory-3-progress/amp/

Tesla is about to turn a field of mud into a 3k vehicle per week factory in the next 330 days. AMAZING!
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Re: Tesla glory/failure
« Reply #1328 on: February 06, 2019, 08:10:30 PM »
Regarding price cuts and US demand, I think the situation is indeed one of not enough demand at previous price points, especially with the tax credit expiring. So does Elon Musk, by the way, as shown in the Q4 conference call transcript.
Tesla's strategy in this regard seems to be cutting production and selling costs, passing on these savings in the form of price reductions, thus reviving US demand. The intrinsic demand for the product is certainly there, but is price sensitive.
I believe these price cuts do not reduce gross margin, but rather maintain it at the same level.
The situation in Europe and elsewhere is different, as there is still a lot of pent-up demand at higher price points. However, once that initial demand tapers off the issue will be quite similar, and I expect the same strategy of price reductions and lower-cost versions will follow.
Quote
Operator

Our next question comes from Emmanuel Rosner with Deutsche Bank.

Emmanuel Rosner

First, I wanted to ask you about the short-range Model 3. What are your latest thoughts in terms of timing of introduction? I think at some point, you had in mind to do it in the - maybe the first half of this year. And just to clarify, when you're sort of talking about the outlook for 2019, the number of deliveries up 50% and then the margin target for Model 3 to get to 25%, does that assume that you're introducing a lower range, the short-range Model 3 at some point during the year?

Elon Musk

Well, you could call it the standard range, but it's maybe short by Tesla's standards, but it's long range by other manufacturers' standards. So - but yes, we expect to introduce the standard range Model 3 sometime - probably the middle of this year is a rough, rough guess. And we're working hard to improve our costs of production, our overhead costs, our fixed costs, just costs in general. I think this past year, while extremely difficult, has driven us to a high level of financial discipline. I think we're way smarter about how we spend money, and we're getting better with each passing week. Yes.

Emmanuel Rosner

And so to be clear, the - you expect to reach at some point this year - or you're targeting at some point this year 25% gross margins on Model 3, and that's despite introducing the lower-end - or just the standard range Model 3. Is that correct?

Elon Musk

Yes.

Emmanuel Rosner

Okay. And, I guess, my follow-up would be on the demand side. So you're talking about 50% increase this year. You said a few times that it could be higher than this. I think you just mentioned in the previous question 350,000 to 500,000, if I understood well. So what is sort of like what drives the cautious outlook that's in your letter? Because it feels like it's the - it's just basically four times the fourth quarter run rate, which would imply sort of 50% for the full year but not really a lot of growth versus what you just accomplished. So, I guess, how do we think about the total demand for 2019, especially if you introduced this - the cheaper version?

Elon Musk

Well, we need to bring the Shanghai factory online. I think that's the biggest driver for getting to 500K plus a year. Our car is just very expensive going into China. We've got import duties. We've got transport costs. We've got higher-cost labor here. And we've never been eligible for any of the EV tax credits. A lot of people sort of dependent on incentives. In fact, we are [indiscernible] EVs, we have the least access to incentives. It's pretty crazy because there's so many companies that - countries that have put price caps on the EV incentive, which affects Tesla. And in China, which is the biggest market for EVs, we've never had any subsidies or tax incentives for vehicles.

So it's - it is eligible for that. But it sounds like that's going to be reducing in China in the coming years. But, really, bottom line is, we need the Shanghai factory to achieve that 10k rate and other cars be affordable.

The demand for - the demand for Model 3 is insanely high. The inhibitor is affordability. It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.

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Re: Tesla glory/failure
« Reply #1329 on: February 06, 2019, 09:54:36 PM »
Model S and X sales down vs 2018. 

Do you have a link to this?
Thanks

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Re: Tesla glory/failure
« Reply #1330 on: February 06, 2019, 09:55:41 PM »
I believe these price cuts do not reduce gross margin, but rather maintain it at the same level.

That is cute, but totally absurd. They are price cuts to the same exact car. How does that not reduce the margin?!?!? <snip, someone's on moderation again; N.>

Regarding price cuts and US demand, I think the situation is indeed one of not enough demand at previous price points, especially with the tax credit expiring

Congrats! You would pass one of Econ 101s most basic concepts.

Tesla's strategy in this regard seems to be cutting production and selling costs, passing on these savings in the form of price reductions, thus reviving US demand. The intrinsic demand for the product is certainly there, but is price sensitive.

I'm sure it is fun to make up concepts in economics, but demand is intrinsically about price. Otherwise demand for everything is infinite.
« Last Edit: February 06, 2019, 09:59:54 PM by Neven »
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1331 on: February 06, 2019, 09:58:10 PM »
Model S and X sales down vs 2018. 

Do you have a link to this?
Thanks

Well its the 8th and 5th year the car has been out their so it should be pretty obvious. Also, competition has finally arrived. And they cut the variants which were 75% of sales. But if basic logic won't do, how about this:

https://www.cnbc.com/2019/01/23/tesla-layoffs-details-reduced-hours-model-x-model-x-production.html
big time oops

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Re: Tesla glory/failure
« Reply #1332 on: February 06, 2019, 10:53:54 PM »
Well its the 8th and 5th year the car has been out their so it should be pretty obvious. Also, competition has finally arrived. And they cut the variants which were 75% of sales. But if basic logic won't do, how about this:
https://www.cnbc.com/2019/01/23/tesla-layoffs-details-reduced-hours-model-x-model-x-production.html
I can't see any figures there. 
A previous link posted for January US sales showed a 9% increase for Model S compared to Jan 2018 and a 35% increase for Model X for the same comparison, so I was wondering if you had  figures to dispute this.

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Re: Tesla glory/failure
« Reply #1333 on: February 07, 2019, 01:06:24 AM »
January sales are seasonally lower than December for all luxury automakers globally.
Tesla’s focus in January was producing ~20,000 cars put on ships headed for Europe and China.

—— BREAKING:
Quote
Kristof Lambrecht (@Kristof_1978) 2/5/19, 1:28 PM
Customer deliveries of model 3 start next week. I got confirmation from two people in Belgium  that will receive their car on the 14th. #tesla #model3 #TheWaitIsAlmostOver
https://twitter.com/kristof_1978/status/1092852604365914113
- UPDATE customer deliveries of model 3 start this evening at 6 in the Netherlands  #tesla #model3
- Customer cars are also now being dropped off by carrier at service center in Belgium #tesla #model3

——
Number Of Identified Tesla Model 3 Orders In Europe Close To 20,000
February 5, 2019
Almost 2/3 of the Model 3 were ordered in Norway, the Netherlands and Germany
Quote
The voluntary dataset of Tesla Model 3 orders placed in Europe currently indicates over 19,300 (as of January 31, 2019), which is roughly 5,500 more than a month earlier.
As not all customers were willing to add their order to the list, and only top of the line versions are available, we can safely bet that more than 20,000 people are waiting for their cars.
The latest data shows also that the number of orders increased in all major markets. Norway’s share – with over 5,100 – decreased from one third to more than one fourth. On the other hand, the Netherlands went up from less than 8% to 20% and becomes the second biggest market (over 3,800) according to the data.
So far, the best selling models in Europe (Nissan LEAF, Renault ZOE) had around 40,000 sales in 2018, so the Tesla Model 3 has a big chance to become #1 this year.
https://teslamotorsclub.com/blog/2019/02/05/tesla-model-3-orders-europe-20000/
Table of data at the link.

(There must be many reasons why someone would choose to report, or not report, their purchase in this database.
But I look at the data and see so many Norway orders, with few reports, and I see, “So many people here have an EV; it’s not a big deal.”
Versus Germany, also many orders, but many more reporters, suggesting feelings of, “Hell yes, I’m buying an EV!” ;D )

———-
Quote
Alex (@alex_avoigt) 2/5/19, 2:00 AM
Germanys car registrations in January (YoY): - 1.4%,
ICE: -8.1%
Diesel: + 2.1%
Hybrid + 66.4%
BEV +68.2%

Audi: +3.7%
Porsche: - 53.8%
BMW: - 7.5%
VW: - 6.5%
Mercedes: - 4.3%
Tesla +117%


P.S. @Tesla M3 arrived tonight in Europe
https://twitter.com/alex_avoigt/status/1092679368869117952

——-
Norway's EV sales are about to skyrocket to new high with Tesla Model 3 arrival
Quote
I expect that those first 5,000 Model 3 vehicles are scheduled to be delivered in the first quarter, which would indicate that Tesla could more than double its deliveries in Norway and easily push BEV sales to over 50% of the market.
https://electrek.co/2019/02/06/norway-ev-sales-skyrocket-tesla-model-3-arrival/

——-
2018 Global EV Sales by OEM (Updated)
Quote
Looking at the 2018 sales by Automotive Group…
Interestingly, half of the Top 10 belongs to Chinese OEMs, and if we add Tesla to the Disruptors team, Legacy OEMs are a minority in the Top 10. Is this a sign of the New World Order in the automotive industry?

Looking at last year standings, and comparing it with 2018, there are noticeable changes, Tesla jumped from #5 to the leadership, Renault-Nissan dropped from #1 to 3rd, Geely dropped two positions, to #6, SAIC was up two spots to #6, while the Volkswagen was down two spots, to #9.

Highlighting the changing times, we have two new Automotive Groups in the Top 10, with Hyundai-Kia jumping to #8, and Chery reaching #10, kicking out General Motors, now #11, and Toyota (down to #15!) out of the Top 10. 

The Toyota case is particularly worrying, not only because it is one of the largest Automotive OEMs, and in this ranking is only #15, but also because in a fast growing market, it was one of the few (the only?) OEMs to lose sales (-10%) regarding 2017...

BEVs Only
Looking only at BEVs, the ranking would be like this:
1. Tesla (245.240);
2. BAIC (165.369);
3. Renault-Nissan (150.374);
4.  BYD (105.420);
5. Chery (64.897).
The disruption is even more visible here, with only Renault-Nissan on the Top 5, and Tesla winning even more easily.
http://ev-sales.blogspot.com/2019/02/2018-global-sales-by-oem.html
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1334 on: February 07, 2019, 01:13:44 AM »
Quote
ValueAnalyst (@ValueAnalyst1)2/6/19, 10:44 AM
$GM doesn't expect to be profitable on electric vehicles until "early next decade," while $TSLA has been profitable for two quarters. §§
https://twitter.com/valueanalyst1/status/1093173629557370881
< That’s based on GM estimating that they can still sell Bolt after $35k Model 3 comes out. So I doubt $GM can be profitable “early next decade”.
ValueAnalyst: Precisely. This is exactly correct. ...
Quote
ValueAnalyst (@ValueAnalyst1) 2/6/19, 11:24 AM
 I think Tesla may reduce [Average Sale Price] across all vehicles by $1k per quarter; no other company can compete with that.
https://twitter.com/valueanalyst1/status/1093183734189305856
§§Edit:  ValueAnalyst is commenting here from what he heard listening to GM’s Q4 2018 Earnings Release and Call.  It sounds like Tesla will probably have more free cash flow than GM this year.

—— Daimler cuts dividend as downturn, R&D costs hit Mercedes
Quote
(Reuters) - Daimler cut its dividend on Wednesday after fourth-quarter operating profit plunged by 22 percent, hit by trade wars, rising costs for developing electric cars and an industry downturn that has dented even the most profitable carmakers.
Daimler said the return on sales at Mercedes-Benz cars fell to 7.3 percent in the fourth quarter from 9.5 percent in the year-earlier period as emissions tests led to supply bottlenecks and prices for luxury vehicles deteriorated.
https://www.reuters.com/article/us-daimler-results-idUSKCN1PV0KP

—-TOYOTA CUTS FORECAST
Quote
LiveSquawk (@LiveSquawk) 2/5/19, 11:31 PM
Toyota Q3 Net 180.9b Yen; Est. 587.8b Yen
Toyota Q3 Oper Income 676.13b Yen, Est. 663.90b Yen
Toyota Cuts Fy Net Forecast To 1.87t Yen From 2.30t
Toyota Still Sees Fy Net Sales 29.5t Yen, Est. 29.90t Yen
https://twitter.com/livesquawk/status/1093004177633087489
« Last Edit: February 07, 2019, 04:29:59 PM by Sigmetnow »
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1335 on: February 07, 2019, 01:16:26 AM »
Florida PSC Says Tesla (TSLA) Can Offer Residential Solar Equipment Leases in Florida
Quote
The Florida Public Service Commission (PSC) today issued a declaratory statement that affirms Tesla, LLC (Nasdaq: TSLA) can offer residential solar equipment leases in Florida. In its declaratory statement, the PSC found today that:

• Tesla’s residential solar equipment lease, through Tesla’s SolarLease, does not constitute a sale of electricity;
• Offering its solar equipment lease to Florida consumers will not cause Tesla to be a public utility under Florida law; and
• The residential solar equipment lease will not subject Tesla or its customer lessees to Commission regulation.

PSC rules have long allowed leasing of renewable energy equipment, as long as the lessor is not effectively selling electricity to the customer. Homeowners can purchase or lease equipment to generate electricity for personal use and also benefit from interconnection and net metering with their local utility.

In its decision today, Commissioners agreed for the third time in the past year that a solar equipment lease is not a retail sale of electricity. In 2018, the PSC issued similar declaratory statements for Sunrun, Inc., and Vivint Solar Developer, Inc. PSC approval is not required for a company to lease solar equipment to Florida residents.

“While today’s declaration is limited to the facts in Tesla’s petition, companies operating under the same facts can rely upon this declaration as well,” said PSC Chairman Art Graham.
https://www.streetinsider.com/dr/news.php?id=15080777
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GoSouthYoungins

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Re: Tesla glory/failure
« Reply #1336 on: February 07, 2019, 02:20:30 AM »
So Sig, no attempt at basic math to support your absurd claims, but LOTS of twitter link based on Tesla propaganda. Got it. I'll buy some more puts.
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NeilT

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Re: Tesla glory/failure
« Reply #1337 on: February 07, 2019, 11:06:22 AM »
So it's just a lie that they are building the model y, pickup, semi, roadster, new factory, new service centers, new charging stations, roof tile?

Not at all.  The Semi production capability is in progress and will, probably, need capital to launch.  However investment is well under way.

The China plant ground is bought but construction is now ongoing.  Partially capital and partially state funded.  Capital expenditure will follow.

Model Y?  You ignored my point about shared lines producing different models with marginally different make up, but radically different product and prices.

Right now?  Tesla has said it is maximising profit to reduce the cost of the Model 3.  Capital expenditure bears that out.

Just time to wait, as ever, to see that Tesla actually does 90% of what it says.  Just as a checkpoint, achieving 90% of your business goals is way over the top.  Most companies are extremely happy with 75%.  That is why you set targets and goals, to keep moving and you set them high.
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NeilT

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Re: Tesla glory/failure
« Reply #1338 on: February 07, 2019, 11:11:36 AM »
Brings new meaning to the phrase "marketing gimmicks" doesn't it?

Yes they have kept the price point but made it a TCO price.  Inventive, yes.  But, honestly, what did you expect?  The state cut their subsidies and someone has to pay the difference.  In a company of the age of Tesla that is going to be the customer.  Nobody else.

It would appear that the only people who expect to get cutting edge tech with a bottom end performance car, for the cost of a cheap Japanese family saloon, made in the US; are the people who should be jumping up and down trying to get the US onto EV's....

Amazing.
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oren

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Re: Tesla glory/failure
« Reply #1339 on: February 07, 2019, 12:37:16 PM »
Quote
Tesla’s website now shows the cheapest Model 3 available, one with a mid-range battery, at $34,850, which the company says is $42,900 minus $3,750 in “potential incentives” and $4,300 in “gas savings” over six years. 

Brings new meaning to the phrase "marketing gimmicks" doesn't it? 
I strongly dislike Tesla's approach of showing "net" prices on its website. Customers are intelligent and can make their own calculations. Price should be displayed as is.

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Re: Tesla glory/failure
« Reply #1340 on: February 07, 2019, 02:13:48 PM »
Brings new meaning to the phrase "marketing gimmicks" doesn't it?

Yes they have kept the price point but made it a TCO price.  Inventive, yes.  But, honestly, what did you expect?  The state cut their subsidies and someone has to pay the difference.  In a company of the age of Tesla that is going to be the customer.  Nobody else.

It would appear that the only people who expect to get cutting edge tech with a bottom end performance car, for the cost of a cheap Japanese family saloon, made in the US; are the people who should be jumping up and down trying to get the US onto EV's....

Amazing.
Tesla was doing this before the subsidy was cut.

Neven

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Re: Tesla glory/failure
« Reply #1341 on: February 07, 2019, 02:34:47 PM »
Does it also show how much savings you make if you buy the car but then never drive it?
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1342 on: February 07, 2019, 04:44:51 PM »

Does it also show how much savings you make if you buy the car but then never drive it?

Apparently, something approaching the monthly cost of the car loan –– once a Tesla network is up and running and you can let other people use your car.  Or, today, if you rent out your car on Turo.

https://www.tesla.com/blog/master-plan-part-deux

https://techcastdaily.com/2019/02/03/interview-tesla-side-hustle-sharing-evs-02-04-19/
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Neven

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Re: Tesla glory/failure
« Reply #1343 on: February 07, 2019, 11:37:26 PM »
Sorry, Sig, I was being sarcastic!

To make up, here's a video of a bunch of bros (one of them running the most popular podcast in the world) who drool over Tesla and Musk:

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oren

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Re: Tesla glory/failure
« Reply #1344 on: February 08, 2019, 02:12:02 AM »
Here's an article from a long/realist perspective discussing the recent price drop.
Tesla's Perplexing Pricing by Numbers Nerd.
Quote
Summary

Tesla reduced the prices of their cars $1,100.

It was the second price drop in the past 45 days.

Timing points to a demand issue.

NeilT

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Re: Tesla glory/failure
« Reply #1345 on: February 08, 2019, 11:33:48 AM »
Totally ignoring the fact that Tesla has a new Chairman and at least one very strong new member of the board, that conclusion is probably correct.

Allowing for those facts, we can't be sure until we either see more price reductions or something is said.

One thing is clear though.  One hell a lot of the reservations were for the $35k version.  Tesla has to move towards that now as it will unlock high demand.

The Auto industry is in crisis right now, VAG/Mercedes/TATA owned JLR.  JLR has just decided to move factories to Eastern EU, which might be deemed a Brexit issue if it were not for the fact that those cars are going to be behind a tax barrier for their strongest customers....  The US and the UK.  China is their largest drop in sales due to global issues in the vehicle market.

Even in EV's there is going to be a knock on from that.  Especially EV's which are sports car class and marketed as such.
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1346 on: February 08, 2019, 09:40:55 PM »
Sorry, Sig, I was being sarcastic!
...

I know! ;D  And I couldn’t help but reply with an example or two anyway. ;)
I’d just listened to the ‘Make Money with My Tesla on Turo’ podcast, and was struck how customer-focussed it was.  It’s not the first time I’ve heard of someone doing that.  Offering cleaner choices to people who can’t afford an EV is surely the Next Big Thing:

Lyft's new 'Green Mode' lets riders request an EV
Quote
Green Mode is the next step in Lyft’s Green Cities initiative. Last year, the company announced all its rides were carbon neutral through carbon offset purchases. All EV charging for Lyft will be covered by 100 percent renewable electricity.
...
Lyft is also introducing EVs to its Express Drive program. Express Drive allows drivers to rent a car for the purpose of driving for Lyft. These drivers will now be able to rent EVs, and for the time being, unlimited charging will be included in the weekly rental rate. The Express Drive EV option will start in Seattle and Atlanta before rolling out to other regions.
https://electrek.co/2019/02/06/lyft-green-mode/
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Sigmetnow

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Re: Tesla glory/failure
« Reply #1347 on: February 08, 2019, 10:17:18 PM »
This will really blow the minds of those claiming No Demand:  Tesla just dropped the price of Enhanced AutoPilot in China to… $0.

Quote
Vincent (@vincent13031925) 2/7/19, 9:54 PM
Breaking:
Now all Tesla Model 3 ( PM3, LR AWD & LR RWD) in China are included Enhanced Autopilot feature with no extra charge, was 46300 RMB.
—-
- Update:  Confirmed with the Tesla sales specialist in China, Standard EAP in all Model 3 possibly only “temporarily”
https://twitter.com/vincent13031925/status/1093704500240510976
Images (in Chinese) at the link.

Why? Potentially because Hardware version 3.0 (which will allow Full Self Driving) — which was to be rolled out in Q1 2019 — which likely means the cars now being sent to China have it.  If Tesla is confident that major features of FSD will be available this year, it makes sense to reposition AutoPilot as a standard feature, to further differentiate Teslas from other cars that are beginning to advertise similar features.  It means a loss of profit in the short term, but FSD will quickly make up for it, since no other car with FSD will be available for individuals to buy, at any price, any time soon.
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Re: Tesla glory/failure
« Reply #1348 on: February 09, 2019, 09:55:40 AM »
Lyft's new 'Green Mode' lets riders request an EV

In the UK this would invalidate your insurance unless you specifically state that you are using the car for ride hailing.  Not even business would do as general business does not cover ride hailing.  On top of that the Lyft terms of service are contradictory.  First of all they state that you must have valid insurance for your vehicle, then they state that they have insurance to cover an accident.  As I stated at the beginning, using your car for Lyft would invalidate most UK insurance unless you already covered yourself for this kind of use. Which would make the Lyft insurance redundant.

It is an interesting idea but, I believe, will fall foul of regulators very rapidly once accidents start to happen.
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oren

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Re: Tesla glory/failure
« Reply #1349 on: February 09, 2019, 10:50:56 AM »
This will really blow the minds of those claiming No Demand:  Tesla just dropped the price of Enhanced AutoPilot in China to… $0.

Quote
Vincent (@vincent13031925) 2/7/19, 9:54 PM
Breaking:
Now all Tesla Model 3 ( PM3, LR AWD & LR RWD) in China are included Enhanced Autopilot feature with no extra charge, was 46300 RMB.
—-
- Update:  Confirmed with the Tesla sales specialist in China, Standard EAP in all Model 3 possibly only “temporarily”
https://twitter.com/vincent13031925/status/1093704500240510976
Images (in Chinese) at the link.

Why? Potentially because Hardware version 3.0 (which will allow Full Self Driving) — which was to be rolled out in Q1 2019 — which likely means the cars now being sent to China have it.  If Tesla is confident that major features of FSD will be available this year, it makes sense to reposition AutoPilot as a standard feature, to further differentiate Teslas from other cars that are beginning to advertise similar features.  It means a loss of profit in the short term, but FSD will quickly make up for it, since no other car with FSD will be available for individuals to buy, at any price, any time soon.
This certainly smacks of not enough demand in China, and a method to increase sales without hurting short-term margin (as AP hardware is shipped in all cars anyway). I think they planned on producing a certain batch for China this quarter, and are trying to make sure all of it is ordered
There could be an alternative explanation, that they are looking to quickly log lots of AP miles in China, to accelerate AP's knowledge of the Chinese road system, but I strongly doubt that except as a maybe a secondary consideration.