
Tesla’s ‘Anemic’ High-Margin Model Sales Extends Profit Struggle - tomcam
https://www.bloomberg.com/news/articles/2019-07-23/tesla-s-anemic-high-margin-model-sales-extends-profit-struggle
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rgbrenner
Wasn't this the struggle Musk signed up for? He said he wanted to reduce the
cost of electric vehicles.. and he's doing it. Who was surprised that people
would purchase a cheaper version is available?

I'm sure there are also lots of people buying one because it's finally in
their budget... complaining they won't buy a more expensive version is like
asking Corolla owners why they won't buy a Lexus instead.

I'm not a musk fanboy.. but I don't think Musk is surprised here. Maybe the
author of this article is surprised because he wasn't paying attention. And
yeah, they have some quotes from investors.. but if they were surprised by
this, then maybe they shouldn't be investing in things they don't care to
analyze or think about more than 5 minutes.

~~~
gamblor956
Tesla does not yet produce cars cheaper than their rivals.

Tesla _say_ they do but reach this metric only by leaving out financial items
that all other automakers include in unit costing. If those same items were
excluded with respect to the Chevy Bolt/Volt or BMW i3, or Jaguar iPace, then
those cars are also fantastically profitable as well--even more so than any
Tesla model.

~~~
rgbrenner
That's true.. but I'm just comparing tesla with other tesla models. If you
were in the market for a leaf, you were probably never considering a model
x/s.

But you make a good point.. there are now more luxury electric cars.. and
those people are the same people that would buy a model x/s. Perhaps that's
also part of why sales for those are lower.

~~~
threeseed
Model X/S sales are dropping for two reasons.

Firstly they haven't been refreshed in forever and secondly they are being
cannibalised by the Model 3. The problem for Tesla (and investors) is that
their ARPU is now dropping at a time when they need margins.

~~~
pmorici
Model S&X were both updated in spring 2019.

~~~
m463
I think pre-purchase folks "see" two model S cars, and one model X.

(yes, get more familiar with them and the model S breaks down further in
regard to AP and motors and battery sizes, but buyers aren't readily familiar
with the distinctions until they do quite a bit of research)

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ckastner
The news around Tesla just days before any earnings release are just
fascinating to observe.

On one side, there's an narcissistic CEO who has achieved incredible things,
but who also generates a Reality Distortion Field rivaling that of Steve Jobs
while as the same time apparently being mortally obsessed with attention and
following.

On the other side, there are a bunch of skeptics who get triggered by such a
persona.

Case in point: the fact that Tesla seems to be relatively quiet at the moment
might actually be a _good_ thing. The fantastical claims made during "Autonomy
Day" two days before the previous earnings release were seen by many as a
crude attempt to distract from the poor quarterly results with hand-waving.

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MikeOfAu
I've been following Tesla news fairly closely for maybe 18 months. This kind
of misinformation-based article happens regularly. The combined forces of big
oil and big auto have considerable sway over certain kinds of news
organisation. Remember that Tesla spends $0 on advertising with them.

And then you have the billions invested by those who are short the stock.

That's a powerful coalition of forces going all in on discrediting Tesla any
way they can.

In fairness, there's too much fanboy stuff in the opposite direction too.

But overall, from my reading, Tesla appears to have some serious structural
advantages over all other comers in the expanding EV market.

~~~
clouddrover
> _The combined forces of big oil and big auto have considerable sway over
> certain kinds of news organisation._

Okay, prove it. Show your evidence that Bloomberg has been swayed by Big Auto.

~~~
optimiz3
More like - how does Bloomberg know anything at all about Tesla's margins
given that this would come out tomorrow?

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MikeOfAu
The journalist who wrote this graduated two months ago.

Since then he has churned out a few negative articles about Telsa, while also
being breathless with excitement and uncritical about how VW and Ford
announced some future collaboration on Electric vehicles.

~~~
clouddrover
So you have no actual proofs, just innuendo. I find that unconvincing.

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ec109685
This is a weird article saying the batteries were long in the tooth. The Model
S and Model X both had their electronics upgraded:
[https://www.teslarati.com/tesla-model-s-x-370-mi-long-
range-...](https://www.teslarati.com/tesla-model-s-x-370-mi-long-range-
adaptive-suspension/)

~~~
AtlasBarfed
I thought the range upgrade was the Model 3 motor, not the Model 3 battery
tech.

Tesla is sitting on two upgrades for the Model S battery wise: 2170 cells, and
improved chemistry.

The Model S would have a 600+ mile pack with those two techs combined, which
is probably where the Roadster 620 mile range came from.

Not sure if this includes the improvements from the maxwell technologies
acquisition, or the Model 3 motor efficiency gain.

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jaimex2
Tesla earnings Q2 report must be coming up... and yep, they're tomorrow.

Throw as much feces on the company quick! Keep that share price down!

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new_realist
Earnings release is tomorrow.

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S_A_P
Wonder what tech company will end up purchasing Tesla.

~~~
hi5eyes
with the amount of debt tesla has? doubt any company would touch it

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erikpukinskis
The manipulation on this stock is insane. Was at $350, down to $180, now back
up to $260. In the span of 6 months when basically nothing material happened.
They’re just executing on a known plan.

I trust these financial media companies 0%. It seems patently obvious they’re
manipulating stocks. Why poison my mind? Seeking Alpha, CNBC, Bloomberg all
seem to be the stock manipulation wings of god knows what funds.

~~~
threeseed
I just love Tesla supporters.

They act as though Tesla is the only company in the world that has stock
fluctuations, short sellers, bad press etc. It's never that the company was
bleeding money in a quarter, saw a significant decline in ARPU, had to borrow
money again, purchased SolarCity at a massive loss and has an erratic CEO who
promises the world and fails to deliver. No it's a conspiracy involving dozens
of large companies.

~~~
ajross
> They act as though Tesla is the only company in the world that has stock
> fluctuations,

No, but the only one with a cap this big. Sure, there are tiny companies with
crazy stuff happening. You have another example of another company with a two-
digit billion dollar market valuation that sees anything remotely like this
kind of volatility?

~~~
graeme
Some of these are pretty volatile:
[https://www.marketwatch.com/amp/story/guid/5A570E78-23CD-11E...](https://www.marketwatch.com/amp/story/guid/5A570E78-23CD-11E9-A7F9-8598764E9A6B)

Tesla is also unusual in having an extremely large P/E compared to the typical
S and P 500 company. That means it's being valued on future expectations, not
present realities. Expectations of the future can swing much more wildly than
those for present based businesses.

