
Tesla, in SEC filing, says U.S. auto sales fell by $2B - XnoiVeX
https://www.mercurynews.com/2019/10/29/tesla-in-sec-filing-says-u-s-auto-sales-fell-by-2-billion-but-is-it-a-big-deal/
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zaroth
Indeed this is what happens when you are production constrained and can sell
higher ASP models internationally.

Current estimated delivery time for a Model 3 in the US is “5 - 9 weeks”.
Basically they reserve about 1/3rd of their production for US sales which is
all the units in the last month of the quarter, in order to minimize the
number of units in transit at the end of the quarter, because they do not
recognize a sale until the car is delivered.

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reitzensteinm
The US sales decline is a non story.

However, "production constrained" is not really accurate, as it implies they
could sell more units for the same price if they could make them.

Tesla has bumped down the price many times, suggesting they're selling their
whole inventory for the highest price they think they can get (which is still
a great position to be in if that price is high enough).

The demand for the higher trims in the US has hit steady state, and it's less
than they can make.

If they stuck with the launch prices and their revenue was 10% higher with no
corresponding increase to COGS, they'd be laughing all the way to the bank.
Every single quarter would be profitable and absurdly cash flow positive.

[https://insideevs.com/news/343373/teslas-confusing-price-
cha...](https://insideevs.com/news/343373/teslas-confusing-price-changes-
heres-a-chart-of-the-adjustments/)

~~~
TrainedMonkey
You are assuming any of the Elon companies are driven only by profit. I would
hazard a guess that real M3 goal is to make a car that costs $35k while being
profitable. Lowering price serves not only as incentive to sell more cars, but
also internal incentive to figure out a cheaper way to make them.

~~~
computerex
They _are_ driven mainly by profit, as they are public companies and therefore
Elon has a responsibility to maximize shareholder wealth.

~~~
Retric
Maximizing shareholder wealth and short term profits are very different
things. De bears could flood the market with diamonds and make a lot of money
in the short term, but it would be a terrible idea in the long term.

~~~
computerex
Yes I know. My point is that for profit, publicly owned companies are ran for
profit where their ultimate goal is to maximize shareholder wealth. The parent
seemed to imply that it may not be the case for Elon Musk's companies.

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_ph_
Tesla is producing as many cars as they can. The production line for the Model
3 is running at full capacity for some months now. With Tesla expanding into
more markets, the number of cars sold in the US have to go down. But with the
new Gigafactory in Shanghai coming on line these days, the production numbers
are going to climb rapidly.

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cowmix
They prioritize different markets on a Q by Q basis.

~~~
new_realist
Margins are highest in the US market. Model mix may differ, but they’re
shipping their lowest end models to Europe and China; those would be more
profitable to sell in the US.

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toomuchtodo
You ship where the tax incentives are still available to buyers.

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dmode
Seems like a non story. Tesla prioritizing global growth and sacrificing some
local demand.

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maerF0x0
meanwhile UAW strike cost GM $3B in 40 days. If you believe Tesla is on its
way to be as big as GM then $2B is small table stakes, not big news.

[1]: [https://www.usatoday.com/story/money/cars/2019/10/29/gm-
gene...](https://www.usatoday.com/story/money/cars/2019/10/29/gm-general-
motors-profit-uaw-strike/2494365001/)

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denzil_correa
> U.S. sales, which account for the biggest share of the company's total
> revenue, fell to $3.13 billion from $5.13 billion a year earlier. Sales in
> China rose 64% to $669 million and its other segment, which covers the rest
> of the globe, rose by more than a billion dollars to $1.83 billion, a
> regulatory filing showed.

[https://www.usnews.com/news/top-
news/articles/2019-10-29/tes...](https://www.usnews.com/news/top-
news/articles/2019-10-29/tesla-filing-shows-us-third-quarter-sales-dropped-39)

~~~
revonoc
Jeez why the slow down in the US? Maybe public perception? But at the same
time I feel like I've been seeing more and more of them around

~~~
weare138
Tesla's are essentially a luxury car. There's a limited market for luxury
vehicles with several well established competitors. I think most people
interested in buying a Tesla has already bought one and they're running out of
potential buyers.

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lgats
TSLA Quarterly Report
[https://sec.report/Document/0001564590-19-038256/](https://sec.report/Document/0001564590-19-038256/)

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wpietri
Holy moly. Sales fell by more than a third: "Tesla’s auto sales during the
third quarter quarter took a hit, falling by more than $2 billion, or 36% from
a year ago, to $3.13 billion."

~~~
_ph_
Tesla has sold more cars than ever before last quarter. They are just sold in
more countries and Tesla is still expanding. Of course they can't sell a car
they send to the UK in the US.

~~~
gamblor956
The question is: if a car sale in the US makes $X margin, but a car sale in
the UK makes $Y margin, and X>Y, why are they selling the car in the UK in the
first place?

Not only are they making less money on the sale, but they face higher costs
even just getting the car to the UK, meaning that the effective margin on the
international is even lower.

~~~
_ph_
Why would you think the UK margin is lower than the US one? When Tesla expands
in a new market, they start with the high margin top of the line models, so
the margin should be rather higher. Also they have a large backlog in markets
that have not been sold to, so they try to roughly equalize backlog across
markets.

