What Does This Mean? Tesla Cuts Model 3 Prices For Second Straight Month

Augering in....

As Astro the Jetson's dog would say, "roh-roh."

1000s of cars from January production on the way to China and Europe.

Also 42900-5000 (Premium uplift) = 37900 for imaginary Medium Range Standard version.
So ALMOST there for SR pricing of 35000.

The economic "invisible-hand" of the marketplace is at work and might be in the form of a fist!

Clearly the price at which buyers cared about Tesla products was list price minus government subsidies.

Tesla is screwed. We will all find out how good or bad it is when Tesla's annual report and independent audit by PWC is released in February. Can't wait.

mre30

Just out of curiosity but are you shorting the stock? Also, do you work in the industry as you have very specific financial knowledge or are you just an extreme gear head whom doubles as an accountant?

I'm not shorting TSLA and have never owned the stock. I am a CPA and business owner who really loves cars.

One of my many career stops was in the "Special Loan Group" of a major global money center bank for several years and I have extensive restructuring experience.

Let me just say that the "Loan's" I worked with were "Special" by virtue of the decision by the borrower not to pay them back. Because of my background, it always upsets me when a borrower decides that they do not need to honor their contractual obligations.

I'll leave it at this..."history almost always repeats itself".

You must have been working for the Trump organization though its many "difficult times"

There is a market out there for Tesla debt so they'll roll over the note. It's just that the interest rate will be a lot higher than what they currently pay, using precious cash they need to do all that Musk has promised.

If it walks like a duck, looks like a duck and quacks like a duck its a duck. It is what it is...a discount to move batteries.

Elon needs to move cars to have cash flow.
Slower sales will put him in precarious position quickly.

Cost savings go directly to the buyers. What other car company would do that to its customers when it can sell all the cars it makes ?

I'm not sure what you are smoking but it must be high grade. "Cash savings go directly to the buyers" is the equivalent of a dividend to shareholders and Tesla is not in a cash flow position to offer either at this stage in its growth/failure cycle.

EV
Quit huffing airplane glue. Tesla is desperate for sales/revenue and the ONLY reason they are dropping prices is to shore up more sales to refill the funnel for another capital raise? and by doing such they are decimating the resale values of the poor schlepps that already bought full retail.

@PURGROUND: "Cash savings go directly to the buyers" is the equivalent of a dividend to shareholders.

Just take a look at Ford whose dividend yield is nearly 7% yet its stock price is hovering around 5-year low. Ford is selling out its future (no foreseeable growth) to pay dividends and its stock price is being punished.

OTOH, Tesla is doing it right by its customers - long term customer satisfaction over short term gain.

To EvisNow…Ford has a 7% yield because its stock price is in the toilet because of weak sales, questionable strategy and serious cash flow problems. Ford is on suicide watch. it needs cash but is afraid to lower the dividend because if it does the stock price will drop like a lead balloon. Its in real trouble. If Tesla keeps dropping prices and sales don't respond it too will join Ford because of cash flow problems. With respect to "long term customer satisfaction over short term pain" I refer you to the noted economist John Maynard Keynes who said "in the long run we are all dead."

The Ford family relies on the dividend for their income, and they hold the most voting stock. Cut that dividend and management will be looking for new jobs.

Tesla is having troubles selling the Model 3.That's the reality,not Musk's typical fiction. So tesla has fled to Europe trying to sell the Model 3,whiletheir Model S an Model X got clobbered by the first two direct competitors to show up. The Jaguar I Pace outsold the Model X and Model S by a large margin in Holand and Norway and the Porsche absolutely demolished the Model S by selling out the first year's production , which will certainly be greater than that of the Model S that year. In the U.S. Tesla is facing a very difficult task in selling the Model 3 because of the disappearing tax credits, which assisted Tesla enormously (kept the company alive) when they were on the receiving end but with their competitors now in that spot, they hold all the cards. It gets even worse for the upcoming Model Y (2020) since it wil not only face an inherent $7500 price disadvantage but will come to market after a half dozen very good competitors have already established themselves. Selling the Model 3 or Model Y will be mission impossible in the U.S. and not easy anywhee else.

You cut prices when sales tank.

How would you feel if after buying a Tesla they cut prices on the model you just bought and also by doing so cut your resale value on your car as well. Cutting prices is a sign of desperation at Tesla...pure and simple. Assigning any fanciful customer feel good attribute is ludicrous and naive.

Tesla should be applauded for moving the price toward the original target of 35k.

Yes after financially raping the people who put down deposits and then who were trampled under foot and never got their cars.

All of that cash the company held as deposits on the Model 3... it all earned massive amounts of interest, right?

It's a win-win for Tesla. Regardless of whether the deposits were used for purchases ... or not.

It's a clear sign from above of End Times.

Here is where Tesla would benefit from having a dealer network - they could keep the list prices fixed and then just tinker with the transaction prices via 'cash on the hood'. That would also smooth regional differences in demand.

The way they do it, publicly lowering the prices is the only option.

#Enron2.0