David Green
Well-Known Member
Tesla produced in Q2 2019, 5x more Model 3, 72531, than Model S/X combined, 14517. Sure the Model S/X was raiding the upscale, highly profitable sales of traditional ICE makers. Their recent entries look more like protecting their luxury car market than competition to the Model S/X. Good for them!
Elon's mission statement is to move us towards renewable energy future. If he shames the traditional automakers to make EVs, even luxury EVs, good deal. As they learn how efficient and affordable EVs can be to make, they too will follow Tesla's lead with lower market cars. That is also good.
In any technology advance, there is an "S" curve:
So we're entering the steep, upward slope in EV models. GOOD! Choice works.
To run Tesla out of business, the rest of the industry must exceed Tesla's quantities by at least a factor of 2-3 and match performance. By then Elon's ability to innovate will have further reduced his costs and distributed production keeping Tesla competitive.
Bob Wilson
Bob, the weakness in your (and others here) analysis is that you are ignoring the revenue, and sustainability of the results. As for your curve on EV growth, Bob, USA EV sales are hardly up so far in 2019 over 2018 YTD, the growth has slowed dramatically, and I venture to guess Q3 2019 USA EV sales will be lower than Q3 2018, look at July as an example? and in a few days we will see August which I expect to see flat over last year. I do not think we have reached the inflection for the general public, its still us nerds that want EV's, and EV's still come with many sacrifices (like it or not).
Now, back to revenue, Teslas business is expensive to operate compared to other car makers, as they are not efficient at generating revenue per employee, and their factories are not putting out anywhere near the stated (by Elon Musk) capacity. Now that we are well into Q3 we can get some good ideas on model mix sales and see Tesla is selling far more (unprofitable) Model 3 SR plus than AWD, and that is a bad sign for revenue per vehicle which is Tesla's most important metric. Also Model 3 did have a part in killing the highly profitable market for S and X. (I consider down by 40% YTD killed) as the profits are only made when the factory runs over 80% of its designed capacity. You quote Model 3 sales, but are missing the revenue per unit part of the equation, last year people paid over $50K for a RWD, and $75K for a performance Model 3, this year those numbers are way down, and so is the profit. Elon is trying to make up the difference by cutting as many employees as possible, but that also has unintended consequences as we can see on the service side of things.
You bulls constantly talk about gross profit, but who cares? its the bottom line number is the only one that matters and with servicing all of Tesla's debt, it is an expensive company to keep going.
