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It's getting increasingly clearer that Tesla won't be able to maintain both high margins and huge growth figures (despite the market believing they will be able
by qwytw 4y ago
It's getting increasingly clearer that Tesla won't be able to maintain both high margins and huge growth figures (despite the market believing they will be able to pull it off ,for some reason, because nothing else would have justified their extremely high valuation). So probably.
- cduzz 4y agoTesla seems to be making bets in huge volumes of cars sold. Possibly with their manufacturing decisions (a couple of really big plants making only a couple of varieties of models, with the models not changing much from year to year) they'll be driving unit costs way down such that they can reduce their sales price and keep their margins. If it's a bad bet they're sitting on a lot of stranded manufacturing assets. If it's a good bet they'll look pretty smart. Their unit prices have historically had pretty dynamic pricing both up and down, though in the past 18-24 months it's mostly been up.
- qwytw 4y agoI think they'll do fine. It's just that their peak valuation was unreasonably high. Basically many expected it to become the Apple of the automotive world (i.e. both huge volumes and much higher margins than anyone else) and that's probably unfeasible longterm due to a variety of reasons if their competitors eventually catch up. Obviously Tesla will still be valued at premium even compared to the legacy car makers who transitioned successfully to EV (and that makes sense from a financial perspective e.g. high debt levels and various other obligations). But it really made no sense for Tesla to have a higher market worth than all the other car manufacturers combined..