7 ms·

This wasn't reported much, but Tesla also expanded their ABL (Asset Based Lending) credit agreement by $500M in March 2019: https://ir.tesla.com/node/19561/html

This wasn't reported much, but Tesla also expanded their ABL (Asset Based Lending) credit agreement by $500M in March 2019: https://ir.tesla.com/node/19561/html https://ir.tesla.com/node/19561/html Without that, they would have $500M less cash on hand. They shipped half of their cars in the final 10 days of Q1. Finances must have been pretty tight at the start of March. That was around the time they announced they are closing all stores, firing sales personnel, and in general tightening the belt significantly. They also had the Model Y reveal in the middle of March, presumably to raise capital via deposits. Cutting prices multiple times towards the end of March must have helped to move a lot of metal, at the expense of gross margin. Speaking of the Model Y, I also found it suspicious that on the conference call Elon Musk wouldn't divulge the number of deposits. When the Model 3 deposits were skyrocketing he talked about the reservation count frequently. I can only suspect that the number of Model Y deposits isn't so impressive.

dogsgobork 7y ago
The pool of people that put down $1000 thinking they were going to buy a $35k car, has to be much larger than the people willing to plunk down $2500 for a $48k car (the cheapest pre-order currently available). The multi year wait for the $35k version to be available (and quickly abandoned) can't help.
- TaylorAlexander 7y ago
  I was surprised by your claim so I checked... the Tesla website currently allows me to configure a Model 3 that is $39,500 before discounts for estimated delivery in two weeks. Not $35k but far less than $48k too.
  - cheeyoonlee 7y ago
    The $35k configuration is still available but by phone/in person order, not online
  - deleted 7y ago
    [deleted]
  - reitzensteinm 7y ago
    Parent is referring to the Model Y, and the cheapest version available for preorder is indeed $48k: https://www.tesla.com/modely/design https://www.tesla.com/modely/design
  - natch 7y ago
    Like animal fries at In-n-Out, the $35k is not shown on the website. You have to call and ask for it specifically. Or if you prefer you can order the $39.5k one and call up service and get them to change the settings, and then they'll send you a refund of $4,500. Does this all sound strange? Sure, but I guess they have their reasons for doing it, which seem to be mainly to keep the menu simple and steer people toward the best value, because the $39.5k car is a better value than the $35k car.
    - dannyw 7y ago
      Everything extra that you get with $39.5k is software unlocks (autopilot, navigation, heated seats software). So the extra $4.5k is pure margin.
      - humbleMouse 7y ago
        So to clarify, you dont get heated seats unless you pay 4.5k for a software upgrade?
        jsight 7y ago
        That was the initial claim. It sounds like they might not actually be turning those off, though.
        humbleMouse 7y ago
        Seems pretty ridiculous to claim software is needed for heated seats. Usually a hardware setup with a simple switch.
        natch 7y ago
        The heated seats can be controlled by an iPhone app and various other means. Pretty sure this involves software. I mean sure software is not needed but then you would be in a different car.
- sliken 7y ago
  With the model 3 the deposit made a huge difference in delivery time. The production ramp was painfully slow (production hell) becuase it was a completely different car than the model S and X that Tesla was producing. Because of the slow ramp the incentive for a deposit was quite large. There was also pretty minimal competition for the model 3, mostly the chevy bolt which most don't really consider in the same class. The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial experience building the model 3, and the Y shared about 75% of the parts. Additionally the model Y is a very conservative design. Same motors, same batteries, same nav, same display, same steering wheel, same seats, same autonomous hardware, same sensors, etc. The announced differences I've heard of are low tech tings like the chassis and suspension. Nothing crazy like the model X gull wing doors to throw a schedule off. Combine that with significant increase in competition from Audi, Volvo, Porsche, Rivian, and others expected in 2020 there's a much less exclusive market for people interested in a small crossover/SUV in 2020. I'd be quite surprised if Tesla doesn't sell every model Y they can make for a good long time, but the world is a really different place than it was when they opened up the model 3 preorders. With that said I did put a deposit down on the Y, it's still my guess at the best small SUV for 2020. If things change I can get a refund.
  - Waterluvian 7y ago
    Your last sentence is what interests me the most. How many people will be out $1000 or $2500 if Tesla goes under? I'm assuming deposits are about as low a priority as you can get for recovering money in a bankruptcy?
    - sliken 7y ago
      I suspect it would be a total loss. But rationally it seems like a really unlikely thing to happen. Tesla just made a $920 million payment in March, they have a 20% gross margin, and have $2.2B cash on hand. Sure they may have to slow their growth, or take out another loan, but Tesla is hardly at the brink of bankruptcy. There are some serious competitors targeting the model S and X coming, although none I've heard come anywhere close to 370 mile range. Most impressively even those with similar size battery (like the 95kwh audi etron) only manage 56% of the range of the model S (100 kwh). It's also substantially slower in acceleration (Telsa is 4.0 second vs Audi e-tron 5.5 seconds). But the model 3/Y competition in the $40k to $60k range is looking significantly more sparse, especially with similar range. This is where Tesla becomes significantly harder to match because if even if you can match the size of the battery, matching the efficiency is tougher. Running a substantially larger battery to make up for lower efficiency is particularly problematic at this price point.
takeda 7y ago
I wouldn't be surprised, I actually did not even know they revealed model Y.
m3kw9 7y ago
Probably because 90% of the ppl can’t tell the difference between model X and Y.
- usaphp 7y ago
  Hmm, it’s quite a big difference. Model Y actually looks almost identical to model 3. Headlights, body shape etc, just slightly taller. Model X has a different body type and head/tail lights.
_Microft 7y ago
The mid-march reveal of Model Y was announced in May 2018. (There was a later comment from Musk saying that he just picked a date when posting this but eventuelly Model Y was revealed on March 15th 2019, so it looks like the timeframe for the reveal actually was somewhat clear back then.) https://twitter.com/elonmusk/status/999502403207544832 https://twitter.com/elonmusk/status/999502403207544832
Phase_White 7y ago
Isn't it obvious? The Model 3 was a completely different market segment from the Model S, so they could hype the Model 3 to the moon without impacting Model S orders (atleast for a time). With the Model Y, they can't brag how much better it is than the Model 3 because it will cause prospective Model 3 buyers to wait for the Model Y, rather than buying a Model 3 and Tesla needs Model 3 cash flow to fund the Y program.

dogsgobork 7y ago

The pool of people that put down $1000 thinking they were going to buy a $35k car, has to be much larger than the people willing to plunk down $2500 for a $48k car (the cheapest pre-order currently available). The multi year wait for the $35k version to be available (and quickly abandoned) can't help.

TaylorAlexander 7y ago
I was surprised by your claim so I checked... the Tesla website currently allows me to configure a Model 3 that is $39,500 before discounts for estimated delivery in two weeks. Not $35k but far less than $48k too.
- cheeyoonlee 7y ago
  The $35k configuration is still available but by phone/in person order, not online
- deleted 7y ago
  [deleted]
- reitzensteinm 7y ago
  Parent is referring to the Model Y, and the cheapest version available for preorder is indeed $48k: https://www.tesla.com/modely/design https://www.tesla.com/modely/design
- natch 7y ago
  Like animal fries at In-n-Out, the $35k is not shown on the website. You have to call and ask for it specifically. Or if you prefer you can order the $39.5k one and call up service and get them to change the settings, and then they'll send you a refund of $4,500. Does this all sound strange? Sure, but I guess they have their reasons for doing it, which seem to be mainly to keep the menu simple and steer people toward the best value, because the $39.5k car is a better value than the $35k car.
  - dannyw 7y ago
    Everything extra that you get with $39.5k is software unlocks (autopilot, navigation, heated seats software). So the extra $4.5k is pure margin.
    - humbleMouse 7y ago
      So to clarify, you dont get heated seats unless you pay 4.5k for a software upgrade?
      - jsight 7y ago
        That was the initial claim. It sounds like they might not actually be turning those off, though.
        humbleMouse 7y ago
        Seems pretty ridiculous to claim software is needed for heated seats. Usually a hardware setup with a simple switch.
        natch 7y ago
        The heated seats can be controlled by an iPhone app and various other means. Pretty sure this involves software. I mean sure software is not needed but then you would be in a different car.
sliken 7y ago
With the model 3 the deposit made a huge difference in delivery time. The production ramp was painfully slow (production hell) becuase it was a completely different car than the model S and X that Tesla was producing. Because of the slow ramp the incentive for a deposit was quite large. There was also pretty minimal competition for the model 3, mostly the chevy bolt which most don't really consider in the same class. The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial experience building the model 3, and the Y shared about 75% of the parts. Additionally the model Y is a very conservative design. Same motors, same batteries, same nav, same display, same steering wheel, same seats, same autonomous hardware, same sensors, etc. The announced differences I've heard of are low tech tings like the chassis and suspension. Nothing crazy like the model X gull wing doors to throw a schedule off. Combine that with significant increase in competition from Audi, Volvo, Porsche, Rivian, and others expected in 2020 there's a much less exclusive market for people interested in a small crossover/SUV in 2020. I'd be quite surprised if Tesla doesn't sell every model Y they can make for a good long time, but the world is a really different place than it was when they opened up the model 3 preorders. With that said I did put a deposit down on the Y, it's still my guess at the best small SUV for 2020. If things change I can get a refund.
- Waterluvian 7y ago
  Your last sentence is what interests me the most. How many people will be out $1000 or $2500 if Tesla goes under? I'm assuming deposits are about as low a priority as you can get for recovering money in a bankruptcy?
  - sliken 7y ago
    I suspect it would be a total loss. But rationally it seems like a really unlikely thing to happen. Tesla just made a $920 million payment in March, they have a 20% gross margin, and have $2.2B cash on hand. Sure they may have to slow their growth, or take out another loan, but Tesla is hardly at the brink of bankruptcy. There are some serious competitors targeting the model S and X coming, although none I've heard come anywhere close to 370 mile range. Most impressively even those with similar size battery (like the 95kwh audi etron) only manage 56% of the range of the model S (100 kwh). It's also substantially slower in acceleration (Telsa is 4.0 second vs Audi e-tron 5.5 seconds). But the model 3/Y competition in the $40k to $60k range is looking significantly more sparse, especially with similar range. This is where Tesla becomes significantly harder to match because if even if you can match the size of the battery, matching the efficiency is tougher. Running a substantially larger battery to make up for lower efficiency is particularly problematic at this price point.

takeda 7y ago

I wouldn't be surprised, I actually did not even know they revealed model Y.

m3kw9 7y ago

Probably because 90% of the ppl can’t tell the difference between model X and Y.

usaphp 7y ago
Hmm, it’s quite a big difference. Model Y actually looks almost identical to model 3. Headlights, body shape etc, just slightly taller. Model X has a different body type and head/tail lights.

_Microft 7y ago

The mid-march reveal of Model Y was announced in May 2018. (There was a later comment from Musk saying that he just picked a date when posting this but eventuelly Model Y was revealed on March 15th 2019, so it looks like the timeframe for the reveal actually was somewhat clear back then.) https://twitter.com/elonmusk/status/999502403207544832 https://twitter.com/elonmusk/status/999502403207544832

Phase_White 7y ago

Isn't it obvious? The Model 3 was a completely different market segment from the Model S, so they could hype the Model 3 to the moon without impacting Model S orders (atleast for a time). With the Model Y, they can't brag how much better it is than the Model 3 because it will cause prospective Model 3 buyers to wait for the Model Y, rather than buying a Model 3 and Tesla needs Model 3 cash flow to fund the Y program.