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> Now the economy is cooling and inventories are rising, so the price is dropping. US car sales are not dropping across the board, it is specific to Tesla. Ne

> Now the economy is cooling and inventories are rising, so the price is dropping. US car sales are not dropping across the board, it is specific to Tesla. New car sales volume in $ has been consistent since September 2021. https://ycharts.com/indicators/us_total_vehicle_sales https://ycharts.com/indicators/us_total_vehicle_sales > the same Model Y configuration that I purchased in early 2021 is still $1000 more than the price I paid That is lower than inflation for the car industry in general, which is somewhere around 7%. So Tesla prices are dropping relative to the car industry in general. This is interesting and reinforcing that something is going on.

ajross 4y ago
Not sure that's responsive? Tesla production has been growing 40-50% per year, so flat sales would absolutely be expected to produce huge inventory shortfalls. In fact Tesla sales aren't flat, but the factories did for sure get ahead of sales. Again, you're reading tea leaves here. There's nothing weird about this at all. It's a high demand product in a volatile sales environment and it's modulating prices (in both directions) to try to keep demand and supply even. This happens everywhere, it's not special just because the CEO is a hate magnet.
- bhouston 4y ago
  It is pretty clear what is happening: Tesla captured 72% of EV sales in 2021. But only 65% of EV sales in 2022, and it dropped to just 58% in Q2 of 2022. So Tesla's market share is dropping pretty rapidly in comparison to its EV competitors. https://www.barrons.com/articles/tesla-lost-market-share-in-q4-51673810443 https://www.barrons.com/articles/tesla-lost-market-share-in-... "Tesla grew 40% in 2022 — selling 1.3 million cars — falling short of the EV industry growth and below its 50% growth target." https://www.forbes.com/sites/petercohan/2023/01/15/how-elon-musk-is-trimming-tesla-margins-and-ceding-market-share-to-ford/?sh=5224285b3528 https://www.forbes.com/sites/petercohan/2023/01/15/how-elon-... Right now it is in the stage where the competitors take big shares out of the market at Tesla's expensive now that there are serious competitors to Tesla both in North America and in China. Not sure when we get to a new equilibrium here.
- holy_eggplants 4y ago
  There is nothing weird about a car in the luxury space dropping its prices 20% overnight? Are there other examples of cars (in the same price range, volume levels) doing this? Is it that common? Are you implying all price fluctuations are uninteresting because they are all a matter of matching supply with demand?
  - ajross 4y ago
    Luxury car prices jump around like crazy. Go call five dealers and get quotes on the same BMW. Turn on your TV in the holiday season and try to dodge all the "Lexus Holiday Sales Event" ads. Yeah, this absolutely happens all the time. It just doesn't reinforce your priors when someone gets a deal on a Porsche.
    - holy_eggplants 4y ago
      I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those? I'm not even assuming to know the answer (might not be enough info; although i know many car manufacturers do sell direct to consumer, although it's not as common). I differentiate this between the dealership model since there is an additional middleman (and they have different cost structures; how they hold/buy inventory on lot, etc etc). So, the more direct comparison would be the price that dealerships pay overnight drop 20%. Either way, I don't think you will be convinced that this price drop is interesting since it's all just matching supply and demand. edit: grammar -- distracted so i think i wrote sentences in the wrong tense.
      - ajross 4y ago
        > I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those? Every week? That's a ridiculous question, and you know it. Luxury car brands never sell for MSRP. Everything is always "discounted", and by a different amount for every sale. You genuinely think those price changes are not due to market factors? The only reason you're even able to assert this point is that Tesla, almost alone among major manufacturers, sells directly to customers for a fixed sticker price.

ajross 4y ago

Not sure that's responsive? Tesla production has been growing 40-50% per year, so flat sales would absolutely be expected to produce huge inventory shortfalls. In fact Tesla sales aren't flat, but the factories did for sure get ahead of sales. Again, you're reading tea leaves here. There's nothing weird about this at all. It's a high demand product in a volatile sales environment and it's modulating prices (in both directions) to try to keep demand and supply even. This happens everywhere, it's not special just because the CEO is a hate magnet.

bhouston 4y ago
It is pretty clear what is happening: Tesla captured 72% of EV sales in 2021. But only 65% of EV sales in 2022, and it dropped to just 58% in Q2 of 2022. So Tesla's market share is dropping pretty rapidly in comparison to its EV competitors. https://www.barrons.com/articles/tesla-lost-market-share-in-q4-51673810443 https://www.barrons.com/articles/tesla-lost-market-share-in-... "Tesla grew 40% in 2022 — selling 1.3 million cars — falling short of the EV industry growth and below its 50% growth target." https://www.forbes.com/sites/petercohan/2023/01/15/how-elon-musk-is-trimming-tesla-margins-and-ceding-market-share-to-ford/?sh=5224285b3528 https://www.forbes.com/sites/petercohan/2023/01/15/how-elon-... Right now it is in the stage where the competitors take big shares out of the market at Tesla's expensive now that there are serious competitors to Tesla both in North America and in China. Not sure when we get to a new equilibrium here.
holy_eggplants 4y ago
There is nothing weird about a car in the luxury space dropping its prices 20% overnight? Are there other examples of cars (in the same price range, volume levels) doing this? Is it that common? Are you implying all price fluctuations are uninteresting because they are all a matter of matching supply with demand?
- ajross 4y ago
  Luxury car prices jump around like crazy. Go call five dealers and get quotes on the same BMW. Turn on your TV in the holiday season and try to dodge all the "Lexus Holiday Sales Event" ads. Yeah, this absolutely happens all the time. It just doesn't reinforce your priors when someone gets a deal on a Porsche.
  - holy_eggplants 4y ago
    I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those? I'm not even assuming to know the answer (might not be enough info; although i know many car manufacturers do sell direct to consumer, although it's not as common). I differentiate this between the dealership model since there is an additional middleman (and they have different cost structures; how they hold/buy inventory on lot, etc etc). So, the more direct comparison would be the price that dealerships pay overnight drop 20%. Either way, I don't think you will be convinced that this price drop is interesting since it's all just matching supply and demand. edit: grammar -- distracted so i think i wrote sentences in the wrong tense.
    - ajross 4y ago
      > I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those? Every week? That's a ridiculous question, and you know it. Luxury car brands never sell for MSRP. Everything is always "discounted", and by a different amount for every sale. You genuinely think those price changes are not due to market factors? The only reason you're even able to assert this point is that Tesla, almost alone among major manufacturers, sells directly to customers for a fixed sticker price.