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Tesla Faces Accelerating Rate of Model 3 Refunds (recode.net)
According to new U.S. data from analytics company Second Measure, Tesla is facing an accelerated rate of Model 3 refunds. As of the end of April, some 23 percent of all Model 3 deposits in the U.S. had been refunded. "Model 3 deposits are fully refundable up until the customer configures a car by selecting features and paying an additional fee of $2,500," notes Second Measure. "After configuration, vehicles are typically delivered in just a few weeks." Recode reports: These cancellations aren't necessarily bad for Tesla, since its production rate is nowhere near as high as it needs to be to fulfill the more than 450,000 reservations it still has. Last quarter, it delivered just 8,180 Model 3s. Presumably, potential Tesla customers could make a deposit again when production is more regular. The potential longer-term harm would be in alienating them so that they choose a different brand of car altogether. About 60 percent of Model 3 reservations so far in the U.S. were made back in April 2016, when Tesla first began taking deposits. About 18 percent of the total refunds on the Model 3 happened this past April, the largest share out of any month, according to Second Measure. That's when Musk explained that Model 3s would be delayed six to nine months. A Tesla spokesperson said that Second Measure's data does not align with its internal data, but would not be more specific as to how far off it is. But the analytics company's numbers did match up to Tesla's numbers last August, "when CEO Elon Musk disclosed that there were 455,000 net reservations out of 518,000 gross reservations, suggesting 63,000 cancelations and a 12 percent cancellation rate," reports TechCrunch.
For those interested in option prices as an indicator:
Tesla December 140 puts are $4.55 as of this post For comparison, Apple December 100 puts are $0.14.
A put option allows the owner of it to sell shares of stock at the contract price at a specific date in the future. In this case, buying the right to sell someone TSLA for $140 / share in December 2018 will cost $4.55 / share. That means a buyer today thinks TSLA will decline to less than $135.45 per share ($140-$4.55) at which point the position becomes profitable.
Apple would have to decline to a bit less than $100 / per share to have a similar decline, but the $100 December put contract is close enough. In case of Apple, put sellers are offering the contract at 14 cents per share. In other words, sellers of Tesla puts are pricing them 32x the price of Apple puts, meaning put sellers are demanding a high price since they think the odds of Tesla declining by at least 50% are reasonably high, especially compared to Apple. Maybe it isn't fair to compare to Apple, but GM December 22 puts are selling for 24 cents, and that is less of a decline on a percentage basis.
Another way of looking at Tesla compared to GM and Ford in charts helps explain why the puts are so expensive. The charts are from last year, but the story hasn't changed much.
Imagine how much harder physics would be if electrons had feelings! -Feynman, maybe
GM : 58 Billion Ford : 154 Billion https://www.statista.com/stati...
Democrats have been slowing down the confirmation process, so that Trump has many fewer people in place than other presidents at this point in their term.
Nope, actually, it's Trump's lack of nominees.
Good little lemming on blaming Democrats. Like for the embassy. You know, for the country that disinvited him.
Admittedly, it's within the rules and an aspect of Democratic resistance that is actually succeeding.
Kinda your own practice really.
Not exactly a success though.
That kind of ruling is what causes Civil Wars.
It's hurts the country but it does slow down Trump's agenda, and that's what matters most.
Actually, Trump's agenda of trying to put crazy shits in office is what's going to hurt the country.
Fortunately for him, his base is more concerned that heattacks the people who don't stand for the national anthem.
It's ok, he doesn't actually have any need to govern. He can just demand apologies.
What profits??? Tesla has NO PROFITS.
Wow, this isn't the first time you have said this right here on Slashdot. I remember you saying it, and I remember the flurry of posts trying to educate you as to why you were mistaken on this point. I guess you just didn't learn anything. Or maybe you prefer alternate facts?
Tesla is believed to make over $20K per Model S and Model X. https://www.fool.com/investing/general/2016/03/27/how-tesla-motors-could-be-profitable-if-it-wanted.aspx
Tesla is expected to make about a 25% profit margin on each Model 3 once they hit the production rate of 5000 cars per month. https://cleantechnica.com/2018/05/14/tesla-model-3-gross-margins/
It's dishonest to take all the money they make on car sales, then divide it by all the expenses they have (R&D, building out the Supercharger network, etc.) and claim that they are losing money on each car sold. No, they are making money on each car sold, and then spending it all, plus more money they borrowed, on all their growth plans. https://cleantechnica.com/2018/05/13/why-tesla-is-a-very-profitable-company-tesla-bankwuptcy-explained-part-2/
Note that GM is believed to lose about $9K per Chevy Bolt sold; the car only pencils out because of EV credits. Tesla is on track to make more money per Model 3 than GM loses. If GM wants to get serious about EVs, then GM needs to invest heavily in battery technology the way Tesla did. https://cleantechnica.com/2018/04/02/tesla-model-3-competitive-advantage-costs-10000-less-to-make-than-chevy-bolt/
Not only is Tesla now very cost-efficient on battery cells due to having their own factory, they have developed their own next-generation battery pack technology. According to this teardown the Tesla Model 3 battery pack contains advanced technology unlike anything that came before. If you like geeky discussions of technology, you will enjoy reading this link: http://evtv.me/2018/05/tesla-model-3-gone-battshit/
Elon Musk has said that 2018 is going to be the year where Tesla starts making money. He has a simple plan: cut any excessive expenses (such as contractors that hire subcontractors that hire subcontractors; Musk compared this to a "Russian Doll") and get Model 3 production above 5000 per month. You will only have to wait a few months to see if he was correct in this prediction. https://techcrunch.com/2018/04/13/elon-musk-says-tesla-will-be-profitable-in-q3-and-q4/
lf(1): it's like ls(1) but sorts filenames by extension, tersely
Tesla will either crash and burn, or be completely out of the woods, in 3 months. Call it 6 months just for some wiggle room: by the end of the year, Tesla will be either gone or a rock solid investment.
There is an excellent graph of Tesla's free cash flow that supports this.
You don't think Musk has a Slashdot account??
His sheer levels of productivity suggest otherwise.