Tesla unlikely to Survive (Vol. 3)

[TheDeuce]

RichardM5 said:

NDA said:

It will be interesting to see what impact the monthly subscription of £200 for FSD will have.

It's an interesting business model. They have around 5m cars on the road at the moment.

A sonic would say none at all, as it does not work. And I say that as a FSD owner for the last 4 1/2 years.

I bet a lot of the existing drivers buy a single month's subscription to have a go. I doubt many will keep it at that price though. Although it's perhaps priced for company car buyers who in effect will pay less than £100 a month for it.

[Mikebentley]

I think they are ok cars but they all look the same. They just seem devoid of any adornment. The first time I sat in one it felt like being in a new build show home with no furniture in it. I am though looking at 2 yr old Mod 3 at £20 to 25k and think they are good value.

[skwdenyer]

TheDeuce said:

skwdenyer said:

soupdragon1 said:

NDA said:

soupdragon1 said:

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

BYD are down 43% - I think many in the automotive sector are struggling.

Yes, EV's are a hard sell right now. Toyota looking strong, seeing great growth in the US, with hybrids being an easier sell.

But I think Musk's apparent endorsement of the hard right is also causing major problems at home. Teslas were a natural fit for centrist and liberal folk; Musk (right now) is not.

Whereas Musk might previously have been seen as an eccentric trying to save humanity, he now seems to be an eccentric trying to smight the woke and prove how free enterprise (ah-hem) is the path to salvation. Since many of his customers would consider woke as a badge of honour, that seems like a poor strategy for a business founded on word of mouth and reputation (and not, famously, conventional advertising or PR).

This is making the news, too: https://uk.finance.yahoo.com/news/elon-musk-blamed...

I'm always very sceptical of this sort of thing.. Sure, its easy enough to find people that have a Tesla or have short listed one who will state that Musk puts them off it to an extent. But ultimately, the majority of punters will buy the car which suits their needs and budget best - even if they don't like the politics of who makes it. Note; people buy Chinese and Korean cars too!

I think by far the biggest problem Tesla now face is:

a) Significant new competition for comparable EV's at lower prices

b) Their own affordable EV offering is in theory not that far away from launching, some people will be waiting for that. The model Y buyer is similarly likely waiting for the updated model Y.


And also the 'Tesla effect' has probably started to wane in general now. When they were the worlds only significant EV car manufacturer, they were seen as an incredibly exciting company - EV meant 'Tesla' for many. Now, an awful lot of people that bought a Tesla in the last decade now have a plenty of choice elsewhere.

Tesla were never going to be able to maintain their significant early market share. Nor are they capable of being a new, cool and exclusive 'club' for their drivers forevermore. Now, they're pretty much just another car company, facing a lot of competition.

Musk being a tit sometimes probably doesn't help! But I think that increased competition and the promise of a new more affordable Tesla 'coming soon' are far more significant factors, commercially speaking.

I’m not attributing a quarter’s sales to Musk’s profile. I’m wondering whether it will have a progressive effect, eroding the aura of specialness around the brand. I don’t have an answer; but it would be interesting to see some (properly carried out) research on this topic.

[TheDeuce]

skwdenyer said:

I’m not attributing a quarter’s sales to Musk’s profile. I’m wondering whether it will have a progressive effect, eroding the aura of specialness around the brand. I don’t have an answer; but it would be interesting to see some (properly carried out) research on this topic.

Perhaps, I suppose he has had a positive influence in the past so plainly he could have some measure of negative influence now.

But I think to a greater extent, the aura just has faded quite bit. Not because they've done anything wrong as such, it was always going to be impossible to maintain quite the same level of 'special' once electric cars were being sold mainstream from others all over the world.

I expect they'll be just fine, they will survive! But realistically, now the brand glamour effect has started to fade, they need to put out cheaper cars that can directly compare on value terms with their competitors. They're already moving in that direction by reducing the prices of the 3 and Y and soon to start selling the 2 by all accounts.

[skwdenyer]

TheDeuce said:

skwdenyer said:

I’m not attributing a quarter’s sales to Musk’s profile. I’m wondering whether it will have a progressive effect, eroding the aura of specialness around the brand. I don’t have an answer; but it would be interesting to see some (properly carried out) research on this topic.

Perhaps, I suppose he has had a positive influence in the past so plainly he could have some measure of negative influence now.

But I think to a greater extent, the aura just has faded quite bit. Not because they've done anything wrong as such, it was always going to be impossible to maintain quite the same level of 'special' once electric cars were being sold mainstream from others all over the world.

I expect they'll be just fine, they will survive! But realistically, now the brand glamour effect has started to fade, they need to put out cheaper cars that can directly compare on value terms with their competitors. They're already moving in that direction by reducing the prices of the 3 and Y and soon to start selling the 2 by all accounts.

I thought 3 prices had just risen again? May be wrong.

[TheDeuce]

skwdenyer said:

TheDeuce said:

skwdenyer said:

I’m not attributing a quarter’s sales to Musk’s profile. I’m wondering whether it will have a progressive effect, eroding the aura of specialness around the brand. I don’t have an answer; but it would be interesting to see some (properly carried out) research on this topic.

Perhaps, I suppose he has had a positive influence in the past so plainly he could have some measure of negative influence now.

But I think to a greater extent, the aura just has faded quite bit. Not because they've done anything wrong as such, it was always going to be impossible to maintain quite the same level of 'special' once electric cars were being sold mainstream from others all over the world.

I expect they'll be just fine, they will survive! But realistically, now the brand glamour effect has started to fade, they need to put out cheaper cars that can directly compare on value terms with their competitors. They're already moving in that direction by reducing the prices of the 3 and Y and soon to start selling the 2 by all accounts.

I thought 3 prices had just risen again? May be wrong.

Perhaps for the new one, but in response to increasing competition they did reduce prices - they're showing they have headroom to reduce their prices and also willingness to do so if they must.

[EddieSteadyGo]

We can't really look at Tesla price changes and draw strong conclusions about underlying demand. They often pre-announce an increase in order to try and boost orders to "beat the price rise". They also have increased price when they want to instead offer discounted finance or interest-free finance.

However, all EV prices will be coming down, as with battery prices at circa $55/kwh at a cell level, it mean new EVs coming into the market should be at parity with ICE car pricing. And with that point in mind, BYD have just starting taking pre-orders for their new small SUV in China (which is about the size of the Kia e-niro)

The longer range version of this car is priced at $15,000 in China with a 45kwh battery. That means cars with large 70kwh battery packs could be sold at less than $20,000.

https://carnewschina.com/2024/03/29/byd-yuan-up-re...

ETA : Just in case anyone was wondering about my estimate for the pricing on a 70kwh pack, this new car from BYD comes with 32kwh at $13,400 and a 45kwh at $15,000. So BYD are retailing 1kwh of battery capacity for $110. If the cost price at a cell level is circa $55/kwh, that would make sense. It also means increasing the battery capacity by 25kwh to say 70kwh would add less than $5,000 to the price, even assuming those prices don't scale up linearly.

Edited by EddieSteadyGo on Thursday 4th April 09:20

[TheDeuce]

EddieSteadyGo said:

We can't really look at Tesla price changes and draw strong conclusions about underlying demand. They often pre-announce an increase in order to try and boost orders to "beat the price rise". They also have increased price when they want to instead offer discounted finance or interest-free finance.

However, all EV prices will be coming down, as with battery prices at circa $55/kwh at a cell level, it mean new EVs coming into the market should be at parity with ICE car pricing. And with that point in mind, BYD have just starting taking pre-orders for their new small SUV in China (which is about the size of the Kia e-niro)

The longer range version of this car is priced at $15,000 in China with a 45kwh battery. That means cars with large 70kwh battery packs could be sold at less than $20,000.

https://carnewschina.com/2024/03/29/byd-yuan-up-re...

You're quite right. Their pricing strategy will take many things into account and isn't linked exclusively to demand in the here and now. Also in reality the 'price' isn't what you see on the website or what they promote, the true price is what they're flogging stock to leasing companies for - which in the case of the model Y in recent times is obviously far below the RRP.

But price lowering was just one of the points I made that collectively point to Tesla feeling the pressure of incoming competition. That's not debatable, Tesla started out as 'the' electric car company, now they're one of probably 30 brands that can offer an EV, with new brands joining the fray several times a year. The market competition has and continues to intensify, it's a matter of fact.

That was always going to squeeze their sales, and one of their responses is to release a lower priced car in the form of the Model 2. It makes perfect sense, they have to provide a Tesla answer to the £25k competition from China and Korea.

As you point out, less than $20k for a long range Chinese EV is provably possible, it could be quite a bit less I suspect if they needed to push down the price to secure market share - and they can always ramp up production to bring the unit price down further if they did opt to go further down the low-price strategy. In the end, that's a battle the Chinese are odds on to win - there's no way manufacturers outside of China can produce a car for the same low costs. Even the western manufacturers that do build in China can't reach the same costs (and low human rights...) as those that are state owned.

But I still think Tesla are entirely safe, their cars/brand has it's own set of USP's that will appeal to more than enough people to keep them in business providing the price gap between their and others offerings isn't ridiculous - they are making steps to ensure it doesn't get to that point. Their sales will contract as competition grows, but that's normal given the circumstances and not a sign of a problem, as such.

[skwdenyer]

EddieSteadyGo said:

We can't really look at Tesla price changes and draw strong conclusions about underlying demand. They often pre-announce an increase in order to try and boost orders to "beat the price rise". They also have increased price when they want to instead offer discounted finance or interest-free finance.

However, all EV prices will be coming down, as with battery prices at circa $55/kwh at a cell level, it mean new EVs coming into the market should be at parity with ICE car pricing. And with that point in mind, BYD have just starting taking pre-orders for their new small SUV in China (which is about the size of the Kia e-niro)

The longer range version of this car is priced at $15,000 in China with a 45kwh battery. That means cars with large 70kwh battery packs could be sold at less than $20,000.

https://carnewschina.com/2024/03/29/byd-yuan-up-re...

ETA : Just in case anyone was wondering about my estimate for the pricing on a 70kwh pack, this new car from BYD comes with 32kwh at $13,400 and a 45kwh at $15,000. So BYD are retailing 1kwh of battery capacity for $110. If the cost price at a cell level is circa $55/kwh, that would make sense. It also means increasing the battery capacity by 25kwh to say 70kwh would add less than $5,000 to the price, even assuming those prices don't scale up linearly.

Edited by EddieSteadyGo on Thursday 4th April 09:20

IIRC Tesla’s cost base is about $120/kWh. If commodity cells are now less than half that, doesn’t it imply Tesla’s investment in cell tech is likely to be a failure?

[EddieSteadyGo]

skwdenyer said:

IIRC Tesla’s cost base is about $120/kWh. If commodity cells are now less than half that, doesn’t it imply Tesla’s investment in cell tech is likely to be a failure?

TBH I wonder if Tesla are really a leader anymore in cell battery technology. Seems they are licensing more and more from CATL.

However, I think Tesla will be paying market rate for their batteries, considering their buying power and relationship with CATL. That would mean their cost prices will be now far below $120/kwh.

Just one part of the reason for the reduction in battery prices is the cost of lithium carbonate. It's only a component of the cost, but it is fallen by over 80% from the peak in Nov 2022.

https://tradingeconomics.com/commodity/lithium

[TheDeuce]

skwdenyer said:

IIRC Tesla’s cost base is about $120/kWh. If commodity cells are now less than half that, doesn’t it imply Tesla’s investment in cell tech is likely to be a failure?

At the time they started to produce their own, it was a necessity - so can't be termed a failure.

But like everything else that is produced, now the ball is rolling the countries with far cheaper labour rates and more 'relaxed' working conditions rules are going to deliver the same, for less.


Much of Tesla's research is probably still valuable. They will have parents they can and likely do already use to licence certain technologies.

[Gone fishing]

SMMT UK sales figures are out, Tesla are 33% down on last March and the best part of 12% down YTD in a market where BEV sales increased of 4% on last March and 10% YTD. Tesla YTD sold around 12k of the 84k BEVs (14% share of the BEV market) v last year where they'd sold 13k of the 76k BEVs (17%)

This in a month when a new model started being delivered.

Reality is starting to set in, and the doubling of capacity/sales some predicted until every other car maker was extinct, which was clearly a daft notion, is now now being seen for what it is. That said, getting 2% of the UK market is still respectable, its more than double porsche, nearly the same as Mini, and more than Jaguar.

[TheDeuce]

Gone fishing said:

SMMT UK sales figures are out, Tesla are 33% down on last March and the best part of 12% down YTD in a market where BEV sales increased of 4% on last March and 10% YTD. Tesla YTD sold around 12k of the 84k BEVs (14% share of the BEV market) v last year where they'd sold 13k of the 76k BEVs (17%)

This in a month when a new model started being delivered.

Reality is starting to set in, and the doubling of capacity/sales some predicted until every other car maker was extinct, which was clearly a daft notion, is now now being seen for what it is. That said, getting 2% of the UK market is still respectable, its more than double porsche, nearly the same as Mini, and more than Jaguar.

Exactly, they're actually doing fine. They're just not leading the market, barely challenged anymore.

Only a 4% increase in BEV sales isn't enough to sustain what Tesla were selling previously, given the sheer number of competitors they now have.

And they were ALWAYS going to suffer that competition catching up and in some aspects, easily out-doing them. There was never anything magical or difficult to replicate about a Tesla car. All kudos the them for being the first major player and kick starting an EV revolution of course - but that initial and fairly earned advantage was never going to last.

[LivLL]

Gone fishing said:

SMMT UK sales figures are out, Tesla are 33% down on last March and the best part of 12% down YTD in a market where BEV sales increased of 4% on last March and 10% YTD. Tesla YTD sold around 12k of the 84k BEVs (14% share of the BEV market) v last year where they'd sold 13k of the 76k BEVs (17%)

This in a month when a new model started being delivered.

Reality is starting to set in, and the doubling of capacity/sales some predicted until every other car maker was extinct, which was clearly a daft notion, is now now being seen for what it is. That said, getting 2% of the UK market is still respectable, its more than double porsche, nearly the same as Mini, and more than Jaguar.

New model? They did a facelift on the Model 3 but I'm not aware of any new models.

Edited by LivLL on Thursday 4th April 14:24

[EddieSteadyGo]

Gone fishing said:

SMMT UK sales figures are out, Tesla are 33% down on last March and the best part of 12% down YTD in a market where BEV sales increased of 4% on last March and 10% YTD. Tesla YTD sold around 12k of the 84k BEVs (14% share of the BEV market) v last year where they'd sold 13k of the 76k BEVs (17%)

This in a month when a new model started being delivered.

Reality is starting to set in, and the doubling of capacity/sales some predicted until every other car maker was extinct, which was clearly a daft notion, is now now being seen for what it is. That said, getting 2% of the UK market is still respectable, its more than double porsche, nearly the same as Mini, and more than Jaguar.

Whilst the UK market for BEVs is increasing, I suspect many of those sales will have been discounted deals, effectively forced by the ZEV mandate. I think Tesla will have made a solid profit on the cars it sold in the UK. I suspect that won't be the case for many of the BEVs its competitors sold in March.

[Gone fishing]

LivLL said:

Gone fishing said:

SMMT UK sales figures are out, Tesla are 33% down on last March and the best part of 12% down YTD in a market where BEV sales increased of 4% on last March and 10% YTD. Tesla YTD sold around 12k of the 84k BEVs (14% share of the BEV market) v last year where they'd sold 13k of the 76k BEVs (17%)

This in a month when a new model started being delivered.

Reality is starting to set in, and the doubling of capacity/sales some predicted until every other car maker was extinct, which was clearly a daft notion, is now now being seen for what it is. That said, getting 2% of the UK market is still respectable, its more than double porsche, nearly the same as Mini, and more than Jaguar.

New model? They did a facelift on the Model 3 but I'm not aware of any new models.

Edited by LivLL on Thursday 4th April 14:24

In the Tesla world, the facelift came with the dechrome, heat pump etc a few years ago. The Model 3 we now have is, to them, a new model in the same way BMW have mid life refreshes and new models, and was expected to reinvigorated sales. Go on the owners forums and many were holding off on M3 purchases waiting for the new model.

If you have a problem with the term "new", we'll have to agree to disagree, if you have a problem with the impact it was having on Model 3 sales in the back end of 2023, then I can only think you've been tracking very different data to me.

[LivLL]

Ok, ta for the explanation. Didn't seem nearly enough changes for a new model designation but if that what Tesla say it is so be it.

I've only seen on so far locally, front looks nice but I'm not keen on the T E S L A lettering across the boot.

I'd love to see them produce a Golf sized hatchback next.

For sales, at least private in the UK, I don't understand how they offer PCP at 9.5% on the Model 3 but only just over 2% on the Y. Makes a huge difference.

[EddieSteadyGo]

LivLL said:

...

For sales, at least private in the UK, I don't understand how they offer PCP at 9.5% on the Model 3 but only just over 2% on the Y. Makes a huge difference.

Good question. For some reason they still aren't making (new) Model 3 at the same rate as the old one. Hence it seems they don't want to sell more Model 3, they would rather sell the ones they do have with a higher margin. The effective financing cost has meant that the Model 3 has been more expensive than the Y in most markets. However, I think that does look to be changing now in the US, so maybe they have finally completed the switch over.

I'm interested in replacing my 2021 Model 3 with a new Model 3, but I look at the current prices and I am certain in 6 months time prices will be better, and I'm not interesting in over-paying for something I don't need.

[TheDeuce]

LivLL said:

Ok, ta for the explanation. Didn't seem nearly enough changes for a new model designation but if that what Tesla say it is so be it.

I've only seen on so far locally, front looks nice but I'm not keen on the T E S L A lettering across the boot.

I'd love to see them produce a Golf sized hatchback next.

For sales, at least private in the UK, I don't understand how they offer PCP at 9.5% on the Model 3 but only just over 2% on the Y. Makes a huge difference.

The MK8 golf is no more of a 'refresh' over the MK7 than the new vs old model 3. And it's correct that people held off buying the old 3 awaiting the new one.

For the same reason you should be able to understand why they're pushing out the current model Y with cheap finance and lease deals - they're soon to replace that with a new model Y too.

And a stack more people will be waiting out for neither of the current cars, but instead the cheaper upcoming model 2.

Overall, quite apart from the obvious pressures Tesla are under from new competitors, their own established and loyal customer base have had plenty of reasons to hold off ordering a new car recently. All waiting for 'whatever' new model that's coming soon.

[LivLL]

I hadn't realised there was an imminent Mk2 Model Y. It hasn't been out long enough yet to need it I wouldn't have thought.

Lots of rumours but no release dates or other info from Tesla that I can see.

There are still a bunch of Mk 1 Model 3's in inventory - LR RWD at £42k for example but the PCP rates are nuts.