[ad_1]
Early Thursday night, Tesla (TSLA) made significant changes to the Model 3 lineup, the 4th move in as many months. These include the introduction of the highly anticipated rental option for the 3 models, the elimination of LR RWD and SR RWD models and the inclusion of the autopilot as a & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; standard equipment with the corresponding price changes for SR + and AWD models. Not included in the announcement, but available on the Tesla Configurator, the SR + can now be ordered in the EU.
I believe these movements indicate that Tesla has touched the demand and is trying to maintain the volume in every way possible.
leasing
Tesla has now introduced domestic leasing on Model 3. It is unclear what demand will result, as savings to customers are moderate at best. Using the pricing tool on Tesla.com and using the same $ 3,000 deposit between the loan and the lease, we realize savings of less than $ 100 per month with 10 000 miles a year.
Note that these rental prices still benefit from the FIT credit of $ 3,750. When this credit is reduced by $ 1,875 on July 1st, rental costs will increase by $ 58 / month and increase by $ 58 / month by the end of the year. In less than 9 months, the SR + lease will be greater than $ 600 / month. Remember that in 2016, you could have rented a Tesla Model S 60 at a lower price!
I think this will result in low demand for all models, solely on the basis of consumer preferences for leasing, with additional demand for SR + in the second quarter. This increase in demand will likely be short-lived when the FIT credit is reduced by an additional $ 1,875 on July 1.
The 3 SR + model is now available for order in Europe
The most important piece of information, which was missing from the official announcement, was the introduction of the Model 3 SR + into the EU markets, as can be seen on Tesla Norway at kr. 367,700 (approximately $ 43,000) and Tesla Germany at $ 44,500 ($ 50,230).
The only conclusion I can draw from this is that the EU's demand for high-end 3 models is practically exhausted after just two months and around 20,000 deliveries.
Elimination of the standard range of model 3
Tesla eliminates the long-awaited Model 3 standard range of $ 35,000 less than 6 weeks after its introduction, using the following rationale
Given the popularity of Standard Plus over Standard, we made the decision to simplify our production operations to further optimize costs, minimize complexity and streamline operations. As a result, Model 3 Standard will now be a software version of the Standard Plus and we will remove it from the online order menu, which simply means that to obtain it, customers will have to call us or visit us. one of our sites. the several hundred Tesla stores. Model 3 Standard deliveries will begin this weekend.
Although Tesla claims that the 3 SR model can still be ordered from a Tesla store (the same stores that the company recently sought to eliminate before going back on this decision), it will only be for a limited time, similar to how they managed models. It is unclear how many additional 3 SR model orders will be accepted by Tesla, if any.
This move makes sense for Tesla. By requiring customers to enter the SR + and requiring the autopilot, they increased the price of the cheapest model 3 by $ 4,500, without increasing the cost of the goods, because the autopilot is software and any margin . Elon Musk said at the end of November that the cost of Model 3 merchandise was close to $ 38,000. I see no reason to think that it is lower now that production and delivery volumes have decreased, which increases the fixed part of production costs per unit. I believe that Tesla sets the lowest price of Model 3 around the point of balance to maintain volume.
I believe that Model 3, worth $ 35,000, was little more than a cascade of public relations and that Tesla eliminates it because it's a good thing. 39, was acting on a negative margin, and not because of his claim of a lackluster demand.
Stealth price reduction on high-end 3 models
With the inclusion of autopilot on all models 3, Tesla has raised the price of the 3 AWD model from $ 1,000 to $ 49,500 while maintaining the Model 3 performance price at $ 59,500.
On the Troy Model 3 Tracking Worksheet, the reported autopilot attachment rate was 77% for the last quarter. But if we go back to the third quarter of 2018, when Tesla only sold LR RWD, AWD and Performance models, the attachment rate was 81.2% even if the autopilot costs $ 5,000. At the reduced price of the $ 3,000 autopilot, the attachment rate is probably about 90% for both models, which represents a slight price reduction of $ 2,000 for the 3 AWD model and $ 3,000 for the model 3.
Elimination (again) of the Tesla Model 3 Long Range
The model RWD model 3 LR (long range) was removed from the range for the second time. This now joins the 3 SR and 3 RWD (Medium Range) RWD models that were introduced in October at $ 45,000, and rose rapidly to $ 46,000, down to $ 44,000 in January, $ 42,900 in February, $ 40,000 in early March, then quietly eliminated March 14th.
Conclusion
Tesla behaves like an organization in crisis. These measures appear to be reactionary and ill-conceived measures to maintain sales volume in the face of falling demand, loss of margin and long-term commercial viability. At a time when they desperately need to move the sales of the first EV users and enthusiasts to a larger consumer market, constant price changes and reworking of the lineup will only serve to confuse customers.
Arndt Ellinghorst, an analyst at Evercore ISI, described price changes and store closures in March as "amateur hours" and "pure price confusion for the consumer". It does not seem like Tesla learned his lesson.
Disclosure: I am / we are TSLA short. I have written this article myself and it expresses my own opinions. I do not receive compensation for this (other than Seeking Alpha). I do not have any business relationship with a company whose actions are mentioned in this article.
[ad_2]
Source link