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Elon Musk and Tesla owners are learning a harsh lesson about revaluation
- dsq 4y agoAbout two years ago I bought a used car. At the time I was met with skepticism from people saying that I should wait and prices would fall. Turns out the prices rose dramatically as availability fell. It goes both ways.
- Zigurd 4y agoThe article is the most mixed of mixed bags. The salient bits are mixed with fluff an uninformed speculation: First, while there's a lot of noise about price drops harming the residual value for people who recently bought expensive Teslas, this happens all the time. Everyone who bought a used car recently is screwed out of some residual value because prices have come down sharply. The important part is that suddenly - not "in the long run" - Tesla is a car maker with ordinary margins that are likely to come in under those for Porsche and other luxury brands. That's an abrupt change that doesn't comport with a gradual response to competitors learning how to make EVs efficiently. What's up with that? People who have the money to splash out for a Tesla can absorb price drops and battery replacement costs, or they are kidding themselves about being able to afford a Tesla. Musk has an interesting chain of interlocking bets: Tesla valuation has to be high because he has borrowed some pretty stupendous sums on margin. That money pays for SpaceX, which depends on Starlink for valuation, which, in turn, depends on generation 2 satellites that depend on Starship and an incredible launch cadence to build and maintain a constellation of tens of thousands of 5X heavier satellites. Holy Jenga tower, Batman! That's the real story of how it could all come crashing down.