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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.
Two front-page, back-to-back stories maligning Tesla and Space-X, by the same submitter.
Who's paying for this?
Deliver on your promises or be prepared to reap the whirlwind that follows.
These days, people have little patience for waiting.
Who's paying for this?
I am. It's cheaper than bribing Donald Trump to raise tariffs to crush my competition.
Tesla is the most shorted stock in history.
This gives many, many people an incentive to trash-talk the company, so that the stock tanks and they can make money.
"Oh, but wait: if you look at the numbers this way, it shows that Tesla will crash and burn any day now."
or,
"Musk is a serial liar, literally nothing that comes out of his mouth is true. The company is run by incompetent nincompoops and Musk is one bad day swsy from a psychotic break"
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.
What you are seeing is a bunch of last-ditch efforts to try and crash the stock so people can make some money from it.
Fortunately, many Tesla investors have realized that news reports about Tesla don't matter (I read one report that said exactly that, but can't find it ATM). They're going to wait out the summer storm and see a stronger, better company in the Fall.
Stock prices have dipped *slightly* over the last month, but have largely recovered.
Investors are keen to wait out the storm. Check back in 6 months time.
Tesla is $10 BILLION in debt. Teslas credit rating is a B3 which is SIX levels below investment grade. That means it is paying huge amount of interest. It has a very good chance of going bankrupt.
Tesla has around $10 billion in debt, and if the stock price drops down to around $200-230, another $900 million or so in debt comes due. At the moment they probably have less than $1 billion in cash reserves with roughly 50% being in the form of refundable cash deposits for the Model 3. These refunds have just evaporated around 10% of that reserve.
There's a reason Tesla is the most shorted stock on Wall St, and it's not because the shorts are haters. It's because by market capitalization, Tesla is larger than GM, despite making 1/35th of the cars that GM does, and only ever producing a running a single profitable quarter in its life (after liquidating ZEV credits). Tesla right now is buoyed by irrationality and hype.
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
I'm on record as being anti-Tesla corp, there really isn't precedent for pre-ordering mass market cars (just rare ones e.g. BMW M2 or early Ferraris) and at the end of the day Tesla got to earn interest / avoid borrowing 400-million dollars for a couple years.
Honestly it should be higher, I imagine most of the people pre-ordering were given the false impression they'd have their cars or an order date last years. You can't plan your life around promises from a car manufacturer, I suspect there will be a lot of people cancelling when they get the opportunity to order as they'll be locked into leases or finance deals.
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.
Happens when you have a good product...
[($)]
Maybe the autopilot couldn't see them.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
People put down a deposit in case they wanted one knowing it would be a long wait. They are simply in the mood for a new car now. The novelty just isn't there.
That aside I think the production issues are mainly with producing batteries.
And what information do you have to back your assertion? According to the standard EV industry report Tesla models are 3 of the top 4 electric cars sold so far this year.
They're realigning demand and supply to give a ... umm ... more synergistic value chain proposition.
(Rei is on holiday)
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
The BAIC EC outsells the Teslas by a large margin and the Nissan Leaf continues to be the best selling EV in the world.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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
Is either story untrue? Both seem easy to fact-check.
Something doesn't need to be true or false in order to achieve a goal of crediting or discrediting something or someone. One can always find positive and negative things about everyone and almost anything. The positive or negative bias comes with which stories run with which spin.
You can see this in articles we discussed on the weekend: "Smartphone shipments are down for the first time in 2017" was quickly spun in the comments to "Apple smartphones defiant against an android slump in 2017" Both are true, both are based on the same data, and both drive different agendas from the person making the comments.
Claiming you have operating cash flow margin on some products doesn't make you a profitable company, particularly when you don't include the cost of money in that margin. They may become profitable one day, but they aren't right now.
After the tax rebates it's a $45,000 car, which isn't far from the initial promise of a $35,000 car.
What the fuck? How the fuck can you afford a $45k car with arithmetic skills that bad?
False.
Each car has positive margins. Tesla also has other business that isn't cars - they operate several gigawatts of PV solar, and build grid-scale energy storage systems for grid operators.
You are conflating product margin on just cars (which is positive, per required paperwork filed with the SEC) with overall EBITDA (currently negative due to capital spend on growth - assembly lines to build cars aren't free, and neither is the real estate required to build out EV charging stations). Are you saying that executives lied on their required SEC disclosures? Have any evidence of that? Where's the US Attorney's office announcing a probe into this perjury you've stumbled onto?
Stop lying. This isn't the first time you've tried to spread this horseshit, and you've been corrected on it before. So you are either willingly being stupid, or pushing an agenda.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
You don't think Musk has a Slashdot account??
His sheer levels of productivity suggest otherwise.