"O, Death Won't you spare me over 'til another year." - traditional America n folk song
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Tesla finished the year with a record quarter with 104,891 cars produced an d 112,000 cars delivered. We will have to wait 30 days or so to find out i f they managed to squeeze profit from these deliveries.
Of course profit is important, but not the primary goal of Tesla at this po int. They are still expanding production in China which may end up being t he dominant market for EVs and starting production of the new model Y in th e US. By continuing to grow at this time they are laying the underpinnings for significant profit down the road.
The fact that the increased production of the model 3 continues to all be s old while globally the car market is decreasing says to me that there is st ill growing demand for this model and EVs in general. I'm looking forward to the introduction of competing products, but from what has been released about their features and performance none will be very competitive with the model 3 on either performance or price.
I would hope that by 2025 the other auto makers will have closed the gap an d have vehicles with batteries to compare to the Tesla and cars that offer the same sorts of features and capabilities.
Seems the reports of Tesla's death are greatly exaggerated.
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Rick C.
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Luxury car sales are up across the board while lower-cost vehicle sales are stagnant; I think automakers in general would prefer to divest entirely from the low end the margins are too thin and it's a thankless job.
On the high end they would like to sell many types of luxury sedans, SUVs, and trucks they view EVs as just one more kind of luxury car you can sell to a niche market.
That is to say how the major mfgrs would like to view the "automotive future" is moving hundreds of thousands of $50,000-$90,000 ICE pickups and SUVs and hundreds of thousands of $50,000-$90,000 electric luxury SUVs/sports cars a year, with prices and sales figures always increasing, if luxury pickups are more popular one year you make more of those and if luxury electrics are more popular the next you make more of those.
d and 112,000 cars delivered. We will have to wait 30 days or so to find o ut if they managed to squeeze profit from these deliveries.
s point. They are still expanding production in China which may end up bei ng the dominant market for EVs and starting production of the new model Y i n the US. By continuing to grow at this time they are laying the underpinn ings for significant profit down the road.
be sold while globally the car market is decreasing says to me that there i s still growing demand for this model and EVs in general. I'm looking forw ard to the introduction of competing products, but from what has been relea sed about their features and performance none will be very competitive with the model 3 on either performance or price.
p and have vehicles with batteries to compare to the Tesla and cars that of fer the same sorts of features and capabilities.
ob.
Lol, hardly. They make good money selling a handful of luxury autos. But they literally can't afford to abandon the rest of the auto market where th ey sell ten times as many cars in the rest of the markets. Only the very l ow end are nearly bereft of profit.
Just as in electronics, the low end may not produce much profit, but it pay s to keep the doors open and the research ongoing to design the next genera tion of high end products where more profit is made.
So the slump in the low end is significant. But it's not all about which s ector is losing sales. More important may be the geographical distribution . China seems to be leading the pack in slower sales. I'm wondering if th is is in any part due to the Osborne effect from the anticipation of newer EVs with more capability and lower costs being "around the corner".
--
Rick C.
+ Get 1,000 miles of free Supercharging
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They may not be able to just yet, but they would prefer to.
I think Elon Musk found a nice loophole, you don't build any low-end products you just have potential low-end customers give you their money by way of taxpayer-funded subsidies and then you don't do anything for them. Then you lobby to keep tax rates on the wealthy low so they have more money to purchase the high-end products.
Ideally as a corporation you could have the poor foot all the bill to "keep the doors open" and for research but cater to a more desirable market segment.
This technique doesn't annoy other auto manufacturers or other consumer industries so much as they are jealous of it.
ced and 112,000 cars delivered. We will have to wait 30 days or so to find out if they managed to squeeze profit from these deliveries.
his point. They are still expanding production in China which may end up b eing the dominant market for EVs and starting production of the new model Y in the US. By continuing to grow at this time they are laying the underpi nnings for significant profit down the road.
l be sold while globally the car market is decreasing says to me that there is still growing demand for this model and EVs in general. I'm looking fo rward to the introduction of competing products, but from what has been rel eased about their features and performance none will be very competitive wi th the model 3 on either performance or price.
gap and have vehicles with batteries to compare to the Tesla and cars that offer the same sorts of features and capabilities.
s
s job.
But they literally can't afford to abandon the rest of the auto market wher e they sell ten times as many cars in the rest of the markets. Only the ve ry low end are nearly bereft of profit.
Yes, Mr. Ford said that some 40 years ago, but they still sell, small, low profit margin, high volume cars... as best they can.
pays to keep the doors open and the research ongoing to design the next ge neration of high end products where more profit is made.
I am confident the people who are buying Teslas pay plenty in taxes. lol You are really reaching here. I think you are also confusing Trump with Mu sk.
You are a funny guy. Why bother with discussing facts when you can make up your own reality?
ch sector is losing sales. More important may be the geographical distribu tion. China seems to be leading the pack in slower sales. I'm wondering i f this is in any part due to the Osborne effect from the anticipation of ne wer EVs with more capability and lower costs being "around the corner".
I'm a bit worried about China. It will be important for Tesla to sell 3,00
0 cars a week in Asia with some 80% of them going to China. With China aut o sales slowing it may result in problems of unsold production. Heck, they are only running the line 10 hours out of the day. On the other hand, I r ead they are making the batteries in the factory now... which will be worse in a slow down.
They don't talk much about the production of Superchargers. They talk abou t doubling the numbers each year which doesn't happen, typical Musk. They are pumping out 350 kW units now. So both cars in a pair can charge at pre tty much the full rate the whole time rather than being capped by the charg er or your neighbor. This saves some 10 minutes off a full charge even if you are alone on a pair, a lot more if you are sharing.
For a while last year they had a shortage of charging pedestals (the part t hat looks like a gas pump... sort of). Installations were complete other t han pedestals for months. Never heard why this happened. Some have sugges ted they planned to switch to the newer 350 kW unit production but that was delayed. However the installations were for 250 kW units, so clearly ther e was no real connection.
--
Rick C.
-- Get 1,000 miles of free Supercharging
-- Tesla referral code - https://ts.la/richard11209
Not in the US they don't. 87 percent of Ford's sales as of third quarter
2019 are trucks and SUVs with an average sale price of 38k.
"Ford Focus sales decreased 100 percent to 0 units The model has been discontinued"
"Ford C-Max sales decreased 100 percent to 0 units The model has been discontinued"
"Ford Fiesta sales increased 31.88 percent to 14,717 units" (the model is about to be discontinued)
"Ford Fusion sales decreased 1.13 percent to 37,557 units" (the model is about to be discontinued)
"Ford Explorer sales decreased 47.95 percent to 31,546 units Ford completed the sell-down of 2019 Explorer models Inventory of the all-new 2020 Explorer continues to build, with strong consumer demand for ST and Platinum models. The two high-series models represented _46_ _percent_ of Ford?s initial retail mix."
ced and 112,000 cars delivered. We will have to wait 30 days or so to find out if they managed to squeeze profit from these deliveries.
his point. They are still expanding production in China which may end up b eing the dominant market for EVs and starting production of the new model Y in the US. By continuing to grow at this time they are laying the underpi nnings for significant profit down the road.
l be sold while globally the car market is decreasing says to me that there is still growing demand for this model and EVs in general. I'm looking fo rward to the introduction of competing products, but from what has been rel eased about their features and performance none will be very competitive wi th the model 3 on either performance or price.
gap and have vehicles with batteries to compare to the Tesla and cars that offer the same sorts of features and capabilities.
job.
t they literally can't afford to abandon the rest of the auto market where they sell ten times as many cars in the rest of the markets. Only the very low end are nearly bereft of profit.
there are also agreements that require each car manufacturers to meet an av erage fuel economy across their entire fleet sold, so if they want to sell gas-guzzling luxury cars, they have to offset them with small fuel efficien t cars
But they literally can't afford to abandon the rest of the auto market wh ere they sell ten times as many cars in the rest of the markets. Only the very low end are nearly bereft of profit.
low profit margin, high volume cars... as best they can.
Which is part of their plan to electrify america... wait, that's someone el se. lol
They didn't drop the cars because they didn't want to sell them, they have no choice since they aren't the same behemoth as GM and can't keep making a ll the same cars will bringing ten new ones to the market. Oh, wait, GM ca n't do that either. They stopped making a number of cars too.
Maybe it's a trend to convert to EV production. I guess Honda will continu e selling the Civic for a while then.
--
Rick C.
-+ Get 1,000 miles of free Supercharging
-+ Tesla referral code - https://ts.la/richard11209
My impression at this point of the other major US manufacturers besides Tesla after many years of owning some of their "niche" products and thinking about them is...it's not productive to over-think their long-term plans about anything. They do whatever is most profitable at the moment and if that should change suddenly they figure they'll come up with something. Build the cars all in Mexico or China, pay their workers way less, close plants, whatever.
Ford is coming out with an EV, it's going to be called a "Mustang", base price at 50k. They picked the name "Mustang" for it even though it's an SUV because they thought "It's electric so it's important to give it a name that can't be gay so Americans might like it."
At the moment they think there's plenty of money out there for ICE pickup trucks and SUVs and luxury-priced electric cars to co-exist in large number for decades making a nice profit for them along the way. If the prices go so high that most people can't afford them cash (already true) then string them out on credit. If people default en-masse get the government to bail you out.
Building some nationwide EV charging infrastructure isn't the same as making money so don't do that.
The contingency plan if electric vehicle popularity at some point start to really threaten their other product lines is to have them declared enemies of the state, or call up the current president-for-life and have them hit Tesla's headquarters with a nuclear strike. Or something like that they haven't thought about it too much.
They lobbied successfully to change that game in the US:
"in 2011, the standards became ?footprint based,? meaning vehicles are regulated based on the product of their length and width. Vehicles with larger footprints are subject to more moderate efficiency targets."
n average fuel economy across their entire fleet sold, so if they want to s ell gas-guzzling luxury cars, they have to offset them with small fuel effi cient cars
vehicles are
Great article. The diagrams they provide tell the story very clearly.
--
Rick C.
+- Get 1,000 miles of free Supercharging
+- Tesla referral code - https://ts.la/richard11209
The regulations were designed to "adapt to consumer demand." What do consumers demand? Mostly what the auto industry has available for sale and tells them they should buy 'tis what marketing is for after all.
an average fuel economy across their entire fleet sold, so if they want to sell gas-guzzling luxury cars, they have to offset them with small fuel ef ficient cars
ing vehicles are
h
Other way around I think. Marketing can only "shape" demand so much. In t he real world economics and utility have more to do with demand than does m arketing. That's why the Japanese grew so well in the 70s and 80s, good mi leage and high quality. The "marketing" had to adapt rather than the "mark et". Remember the old car commercial, Volvo perhaps, in an auditorium wher e the speaker starts chanting, "quality quality quality" and the audience o f suits start chanting with him... The commercial goes on to indicate they do something more for quality. I tried to find a link, but it seems to be pre-Internet.
Then there was the gas price hike where people told Detriot to stuff their SUVs and mini-vans and they bought econoboxes.
Yeah, there are times when people decide to go for comfort and luxury while listening to marketing. Then there are times when people listen to their wallet and lifestyles and adjust the course of auto design.
--
Rick C.
++ Get 1,000 miles of free Supercharging
++ Tesla referral code - https://ts.la/richard11209
Yeah it does sound like an old car commercial. I haven't seen a car commercial that wasn't emotion-based in a long time. Here's a commercial for some plug-in Volvo with 12 cupholders 90% of Americans can't afford that's going to protect your kids and save the Earth or whatever.
Different time, it was a time when it was far easier for middle-class and lower-middle class people to afford buying a new car off the lot, or even two.
Real wages and purchasing power have been stagnant for decades while new car prices have only gone up, outstripping inflation and real wage growth by hundreds of percent. Two types of people buy new cars in America at this point, the pretty well-to-do who can afford pretty much whatever and don't have to worry much about gas prices, and people who want to f*ck themselves into debt-ownage and maybe screw up their retirement fund and maybe go bankrupt/get the car repoed. They don't much care about gas prices, either, at least not at the time.
Everyone else buys used or leases. The auto industry doesn't give a shit what used buyers want in cars that are sold second-hand after they've made their money, and traditional wisdom holds that leasing a car is the dumbest financial move you can make of all.
I have almost no friends in the 30-45 y/o demographic who buy their cars outright or enter into long-term financing agreements it's nearly unheard of. They tend to be rather financially savvy and understand they can't afford it not even on $60,000/year "working class" salaries.
America in the 21st century is a form of post-scarcity economy, you can work very hard and have a lot of not much.
There are also times when the American consumer has simply shrugged and said bye-bye to reality. Ford sold 214,000 F-series trucks in just the third quarter of 2019 at an average sale price of around 40k, the median per-capita household income of Americans is currently about 31k/year, and the average auto loan financing amount is 35k. g'bye, reality!
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