$TSLA Daily Investor Discussion - January 02, 2019

A $2,000 price cut does not inspire much confidence in demand, though. Tesla obviously thinks the loss of the tax credit is a big issue, hence the $2,000 price cut.

You've got this almost exactly backwards. A $2,000 price cut plus a decrease of $3,750 in tax credits means that most people are going to be paying $1,750 more now. If Tesla really was worried about demand in the US they would've decreased the price by at least 3,750. If there really was a lack of confidence in demand then maybe they would've dropped the price by more than that?

You're essentially arguing against the idea of huge demand at any price, which is just a ridiculous strawman. There's no serious investor that really think's demand for Teslas are completely inelastic.

Europe/China aren't going to be big demand drivers they're supposed to be.

This doesn't really make much sense either. Selling to an entire new market isn't a "demand driver", it's tapping in to unmet demand. They're not trying to increase demand in Europe by starting to sell in Europe. The demand is already there, completely unmet, For the next quarter or two they're just going to be trying to clear their backlog in these markets.

I'm also surprised to see the $2K price cut on the Model 3,

I'm a bit surprised too, but given how influx everything is, there's no way we can justify this just as a problem with demand. Prices are a result of the intersection of demand and supply, and supply is the result of capacity and costs (both fixed and variable). This is a 3-4% price adjustment on the average Model 3 they're selling now, that could easily be explained by changes in capacity, and/or fixed or variable costs, which can easily change that much quarter to quarter.

/r/teslainvestorsclub Thread Parent