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Tesla, in SEC filing, says U.S. auto sales fell by $2B
- cowmix 7y agoThey prioritize different markets on a Q by Q basis.
- new_realist 7y agoMargins are highest in the US market. Model mix may differ, but they’re shipping their lowest end models to Europe and China; those would be more profitable to sell in the US.
- toomuchtodo 7y agoYou ship where the tax incentives are still available to buyers.
- zaroth 7y agoIndeed this is what happens when you are production constrained and can sell higher ASP models internationally. Current estimated delivery time for a Model 3 in the US is “5 - 9 weeks”. Basically they reserve about 1/3rd of their production for US sales which is all the units in the last month of the quarter, in order to minimize the number of units in transit at the end of the quarter, because they do not recognize a sale until the car is delivered.
- new_realist 7y agoMargins are highest in the US market (especially considering ZEV credits). Model mix may differ, but they’re shipping their lowest end models to Europe and China; those would be more profitable to sell in the US.
- reitzensteinm 7y agoI don't think that's true. You can see real time stats for the Netherlands, Norway and Spain on this site: https://eu-evs.com/ https://eu-evs.com/ The mix look pretty healthy so far (I would ignore October, which hasn't had meaningful units yet).
- Retric 7y agoZEV credits only apply to 11 states, they don’t apply to the sales to the rest of the US. https://www.ucsusa.org/resources/what-zev https://www.ucsusa.org/resources/what-zev Presumably, Tesla is prioritizing those states rather than the entire US market.
- zaroth 7y agoPlease don’t copy/paste answers. Tesla does not publish an ASP breakdown by market AFAIK. But what we do know is Tesla always sells highest margin SKUs first into new markets and then eventually sells down-market over time. In their Q3 report they said “Despite reductions in ASP of Model 3 as global mix stabilizes, our gross margins have strengthened.” In other words, their global deliveries benefit from higher ASP while they were initially delivering only the fully loaded models. We can also look at base price of the SR Model 3 and see a basic case for higher ASP internationally, but it’s a very tricky analysis to try to back out taxes and transportation costs.
- brianwawok 7y agoEarning report driven production? Do other automakers do that? Seems like you risk alienating a big chunk of your local market (wait goes from 1 week to 9 weeks based on the week in the quarter cycle you are in), to see a temp bump in earning reports?
- _ph_ 7y agoTesla is trying to time production so that cars produced in one quarter are mostly sold in that quarter. So in the first month, oversea production gets prioritized. Musk has announced that they try to reduce the resulting effects, but so far they are still very dominant.
- CydeWeys 7y agoIt does reek of extremely short-termist prioritization.
- deleted 7y ago[deleted]
- _ph_ 7y agoTesla isn't hiding the fact, that production for oversea customers is done in the first month of a quarter, so the cars can be delivered in that quarter. Easy to imagine what the reporting would be, if they had large amounts of "unsold" cars in transit at the and of a quarter.
- zaroth 7y ago15,000 units in delivery in Q1 was part of the reason why Q1 was so bad for them. They’ve said they would like to smooth out the delivery timing, and eliminate the dedicated delivery phase but I don’t see how that happens until you have more geographically distributed production (EU GF4 in 2021).
- Aperocky 7y agoMassaging the market on the spot it wants massaged.
- reitzensteinm 7y agoThe US sales decline is a non story. However, "production constrained" is not really accurate, as it implies they could sell more units for the same price if they could make them. Tesla has bumped down the price many times, suggesting they're selling their whole inventory for the highest price they think they can get (which is still a great position to be in if that price is high enough). The demand for the higher trims in the US has hit steady state, and it's less than they can make. If they stuck with the launch prices and their revenue was 10% higher with no corresponding increase to COGS, they'd be laughing all the way to the bank. Every single quarter would be profitable and absurdly cash flow positive. https://insideevs.com/news/343373/teslas-confusing-price-changes-heres-a-chart-of-the-adjustments/ https://insideevs.com/news/343373/teslas-confusing-price-cha...
- TrainedMonkey 7y agoYou are assuming any of the Elon companies are driven only by profit. I would hazard a guess that real M3 goal is to make a car that costs $35k while being profitable. Lowering price serves not only as incentive to sell more cars, but also internal incentive to figure out a cheaper way to make them.
- computerex 7y agoThey are driven mainly by profit, as they are public companies and therefore Elon has a responsibility to maximize shareholder wealth.
- Retric 7y agoMaximizing shareholder wealth and short term profits are very different things. De bears could flood the market with diamonds and make a lot of money in the short term, but it would be a terrible idea in the long term.
- computerex 7y agoYes I know. My point is that for profit, publicly owned companies are ran for profit where their ultimate goal is to maximize shareholder wealth. The parent seemed to imply that it may not be the case for Elon Musk's companies.
- deleted 7y ago[deleted]
- _ph_ 7y agoTesla is producing as many cars as they can. The production line for the Model 3 is running at full capacity for some months now. With Tesla expanding into more markets, the number of cars sold in the US have to go down. But with the new Gigafactory in Shanghai coming on line these days, the production numbers are going to climb rapidly.
- wpietri 7y agoHoly moly. Sales fell by more than a third: "Tesla’s auto sales during the third quarter quarter took a hit, falling by more than $2 billion, or 36% from a year ago, to $3.13 billion."
- _ph_ 7y agoTesla has sold more cars than ever before last quarter. They are just sold in more countries and Tesla is still expanding. Of course they can't sell a car they send to the UK in the US.
- vkou 7y agoThe two billion dollar question: is there unrealized US demand (at the current price points) that they are failing to meet, or did demand drop, and they are losing marketshare?
- _ph_ 7y agoAs others in this discussions posted, delivery times in the US seem to be up, which means that their production is lagging behind demand. As the Shanghai Gigafactory goes online, total production numbers should rise steeply and more cars be available in the US.
- gamblor956 7y agoThe question is: if a car sale in the US makes $X margin, but a car sale in the UK makes $Y margin, and X>Y, why are they selling the car in the UK in the first place? Not only are they making less money on the sale, but they face higher costs even just getting the car to the UK, meaning that the effective margin on the international is even lower.
- rpmisms 7y agoBecause margin is margin, and establishing a market in Europe is crucial to staying ahead of the EV game.
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- denzil_correa 7y ago> U.S. sales, which account for the biggest share of the company's total revenue, fell to $3.13 billion from $5.13 billion a year earlier. Sales in China rose 64% to $669 million and its other segment, which covers the rest of the globe, rose by more than a billion dollars to $1.83 billion, a regulatory filing showed. https://www.usnews.com/news/top-news/articles/2019-10-29/tesla-filing-shows-us-third-quarter-sales-dropped-39 https://www.usnews.com/news/top-news/articles/2019-10-29/tes...
- revonoc 7y agoJeez why the slow down in the US? Maybe public perception? But at the same time I feel like I've been seeing more and more of them around
- chrischen 7y agoThe end of tax credits probably?
- thewizardofaus 7y agoSeeing more and more is small scale sample size and bias.
- weare138 7y agoTesla's are essentially a luxury car. There's a limited market for luxury vehicles with several well established competitors. I think most people interested in buying a Tesla has already bought one and they're running out of potential buyers.
- davidgould 7y agoBecause all the cars sent to China, Europe, the UK, and Australia are not available to be sold in the US. Last year they were only sold in the US so the US got all the cars.
- maerF0x0 7y agomeanwhile UAW strike cost GM $3B in 40 days. If you believe Tesla is on its way to be as big as GM then $2B is small table stakes, not big news. [1]: https://www.usatoday.com/story/money/cars/2019/10/29/gm-general-motors-profit-uaw-strike/2494365001/ https://www.usatoday.com/story/money/cars/2019/10/29/gm-gene...
- dmode 7y agoSeems like a non story. Tesla prioritizing global growth and sacrificing some local demand.
- lgats 7y agoTSLA Quarterly Report https://sec.report/Document/0001564590-19-038256/ https://sec.report/Document/0001564590-19-038256/