Featured A $25,000 Tesla Around The Corner?

At this rate he'll have one out for $400 by 2030. Looking like it pays to wait.

 

And by 2032 you'll be able to get one used for half that price...

 

10 year waiting list

 

3 years is a big corner. that being said, are any other manufacturers even talking about the possibility?

 

They still can't get close to $35,000 sticker price on a Model 3. Don't hold your breath.

 

Why make a Camry L if everyone is buying the XLE?

 

Tesla's, at least in the mind of Elon Musk, is in serious financial straights. I have been right where Elon and Tesla are now. Great idea, fantastic product, but not enough capital to keep it going. With large debt payments due in 2019, this is a critical time for Tesla. Musk's thought to take the firm private are all part of the picture of desperation that is facing the company. Negative cash flows in the billions of dollars, coupled with multiple billions of dollars of debt coming due might well spell receivership for the firm. Which might not be a bad thing as long as the firm can be saved.

I am not invested in Tesla, but if I were I would be looking for an exit point, if not going short.

 

1st quarter 2019.

Next question, please.

 

Prove it: tsla-10q_20180630.htm

This is the Q2 2018 financial report:

• $27,910,000 - Assets
  • $2,236,474 - Cash and cash equivalents
• $9,141,362 - Current liabilities

Off hand, a solid position before counting the held back inventory claimed to formerly be held in 8,000 and 2,000 vehicle storage lots. By holding the inventory, Tesla deferred the Federal tax credit trigger to Q3 2018. Those storage lots are empty which means Tesla gets the revenue. Now Tesla can ship every car to buyers straight from the factory. So how much profit are we talking about?

Munro teardown analysis came up with 30% profit on the $50,000 long-range Tesla. That would be $15,000 per car minimum. Extras increase the profit margin:

• $150,000,000 - 10,000 held back Model 3 x $15,000 profit per
• $360,000,000 - six weeks Model 3 since Q2
  • $60,000,000 / week - 4,000 Model 3 per week x $15,000 profit per
• ~$510,000,000 - Model 3 profits

During the same interval, Tesla continued to sell Model S and Model X.

There is a common misconception that Capital and Operational moneys come from the same pot. In reality, the Capital costs are typically a one-time charge. It is the Operational money, profit-and-loss, that ultimately predicts the company fate. Real Prius people have known that ever since the "hybrid premium" was converted to gasoline equivalent.

Bob Wilson

 

I imagine it has something to do with creating a market for their battery factories. The battery for a cheaper car can't be much different than the one for the more expensive car- it's still going to have a car's worth of mass and bulk and the same sort of range and charge time requirements after all.

Selling it for 25k makes it available to a dramatically wider market. Maybe wide enough that someone will loan Tesla enough money to help them survive long enough to meet those customers.

 

So in the month of July Tesla produces/delivers close to as many Prius Prime as have been sold all year and production numbers are still rapidly rising and waiting lists for buyers extending out years and do we believe what they're actually succeeding at or do we believe the relentless smear campaign of oil industry, auto industry and Wall Street? Any business who's scaling up production this fast never has a debt payments problem, they have a problem with investors wanting maximize profiting off them, as well as competitors finally realizing this young upstart has the potential to destroy them in the long run. What part do you not understand when a new luxury car maker outsells all other luxury car sales combined? A guy I did gardening work for last week had several friends over and each of them had bought 3 Tesla Model 3 each. This level of success has never happened, but leave it to wealthy criminals on wall street to convince people who are more interested in hype than facts that Tesla's demise is imminent. No wonder Musk wants to go private and deprive all the billionaire con-artists of his companies profits.

 

Munro estimates a 30% profit on the $50,000 long range Tesla:

• $15,000 - profit at 30% * $50,000 long range, Model 3
• $35,000 - actual cost of long range, Model 3

Reports are the standard Model 3 will have 2/3 the battery capacity of the long range. The reduced battery pack cost becomes the profit margin on the $35,000 standard Model 3.

Bob Wilson

 

Not clear because, I didn't quote in my comment, but I was referring to the lack $35k Model 3 perceeding comment. Tesla will offer it next year, but they could hold off as long as they are selling enough of the higher priced versions, and any corporation would be happy to so if such was the case for their products.

Tesla currently has the Semi, Model Y, a pick up, and the next Roadster in the pipeline. They are still a small company when looking at the car industry. So a cheaper car will be farther out in terms of time.

 

Every single Tesla deadline has been missed. I am not a Tesla hater but I'm just saying... it will not be 1st Q.

 

Ah yes, I understand you better now. You're right, they can hold it off longer. I think it's a natural bubble, and they should ride it until it naturally exhausts itself, then roll out the lower priced model.

 

Figures.
We're probably more than a year away from seeing a real-world $35,000 T3 and they're already talking about breaking $25,000.

 

So where is the waiting line for a test drive?

Bob Wilson

 

Deadlines are easy to miss when you build major auto manufacturing facilities from scratch with an entirely new drivetrain in less than a decade. I'd like to think that despite all the missed deadlines sustaining 5k Model 3 a week on top of other vehicles still in production changes the game so much that deadlines missed are not much more than a minor inconvenience, especially if this allows them to pay their bills and not get fleeced by crooked Wall Street investors anymore.

 

I want it a reality. Just so guys like Toyota and Honda would step up, just so Tesla would step up with product quality and service.

Unfortunately, Toyota (Honda seems to want to show prototypes at least in hopes to be ready) does not think Tesla is in their league to worry. Tesla already worried the likes of Audi, BMW, Jags, and MB... at least it is a big start. And a $25k car will be right at Toyota's wallet to care.