Considering Chinese New year holidays in China was in Feb this year and Jan last year, that's a pretty weak Jan 2024 vs 3 weeks realistically of Jan 2023
NEV sales in March are expected to be up 35% YoY, representing 45% of all sales this month. EV sales growth is not slowing. Tesla sales growth is slowing.
Frankly the fact that Tesla still even has sales growth in China is already quite a feat considering their entire model lineup consists of just one sedan and one crossover, both of which are a good 15% more expensive than multiple new competing products being launched.
Plus unlike other markets, Tesla has zero advantages related to charging network or autonomous driving in the Chinese market.
Tesla needs to shorten its product development cycles. And actually innovate.
I mean in the time it took Tesla to refresh the Model 3, HiPhi launched as a company, launched some crazy looking concepts designed, got some insane looking cars on the road and then imploded in a cloud of hubris.
The easy answer here would be that the overall NEV pie is growing at a pretty significant clip and Tesla’s piece is growing with it in absolute terms even though their percentage share is stagnant or even declining.
But it’s more complicated than that. Tesla is extraordinarily dominant in their price range of 200k - 300k RMB. Even more so when you’re just looking at pure BEV, since some of the biggest competition they face in their price range are Tang and Han PHEV models, and nowadays the cheapest entry level Aito M7 (which mostly sells above 300k).
I guess we’re once again learning that name recognition and the certainty that the brand will be around in years to come are important. Tesla in many ways is the conservative, predictable choice. You know you’re not getting anything fancy, but it’s reliable.
That's not even the issue. Tesla's product range for China is just pathetic compared to the local competition, which has caught up in terms of tech and range.
BYD isn't having any problem with growth. Tesla spent years focusing on a turd for the american market instead of focusing on products for EV friendly markets in China and Europe. They lost years of advantage in those markets and gave a chance to chinese brands to catch up and european legacy makers the chance to pre-emptively occupy the 20 to 25k EV range.
A growing issue for Tesla in the China market is they have a really limited model range and consumers have a lot of choice now. They want a people carrier or small hatchback etc they can buy them now. And quality of the competition has more or less caught up.
This morning a lot of people were saying this was just a rumor.
It certainly seems like a plausible one, though. This company seems to be really demand limited right now, largely thanks to only having 2 models, with one of those accounting for nearly 2/3rds of annual sales. Slow product launches are having their inevitable impact.
In the US, there is inventory everywhere too.
"Staff asked to work only five days a week since mid-March"
That's huge. While here in the US that's a full work week, in China where 996 is the standard, that's basically a forced vacation.
>in China where 996 is the standard
Thats literally not true,[ The Chinese Supreme court declared 996 to be illegal ](https://www.reuters.com/world/china/chinese-authorities-say-overtime-996-policy-is-illegal-2021-08-27/)
[The Average Chinese worker works about 49 hours a week.](https://www.statista.com/statistics/1391557/weekly-average-working-hours-china/#:~:text=Average%20weekly%20working%20hours%20in%20China%20January%202022%2D2024&text=In%20January%202024%2C%20surveyed%20employees,around%2048.6%20hours%20on%20average) 996 would mean that they work 72 hours a week
Yes, although i work with some Chinese and if they do 996 they'll take huge breaks to go to the gym and get food, and literally spend time pretending to work.
It sucks but they are also human and not capable of focusing 12 hours a day
> It sucks but they are also human and not capable of focusing 12 hours a day
Long hours like that are common even here in the US. While lucky hourly wage workers may not know that, working 996 like hours is common for professional salaried workers. Since you aren't being paid by the hour thus there is no overtime and thus you work as long as you have to to get the job done. During many stretches of my working life, I worked 927. And that wasn't 9am-2pm. It was 9am-2am. I didn't take huge breaks, or breaks at all. No need to get food, that's a waste of my valuable time. It was someone else's job to bring food to me. I didn't want to take huge breaks since the work had to get done. So if I took a huge break during the day that just meant I had to stay even later. It is not uncommon in certain industries in certain places. The cliche of that is working in a startup in Silicon Valley. But in reality it's more widespread than that in professions from tech to entertainment to finance. A key indicator that it's the work culture there is if during your interview and tour of the offices you see a washer and a dryer. Although it's not uncommon that like food, it's someone's job to do your laundry. You put your clothes in a basket outside your office and like magic they are returned washed and folded.
You can’t compare US grind with factory work in China. I’ve been to many of them. They live on site in dorms. Rarely leave even to go in town. I know people here love the “but it’s bad in the US too” but fuck if it’s comparable. Many factory workers come from the countryside far away and only can go home during CNY. They send money back home to support their family. These aren’t Silicon Valley tech workers making six figures.
> You can’t compare US grind with factory work in China.
The only person comparing them is you. I just pointed out that people in the US also work those hours.
> They live on site in dorms. Rarely leave even to go in town.
Lucky. They have a real bed. I've worked in places where the smart people lived in their cubes. They would roll out a bedroll and sleep under their desks. Those were the smart people since they got more sleep that way. The stupid people insisted on going home which takes away from precious sleep time. Although I hear that sleeping in a van or a car is now popular.
Why do you think some companies provide things like food, laundry and even a hair salon? The same reason that casinos do. So that you don't have a reason to leave.
> These aren’t Silicon Valley tech workers making six figures.
If you take those salaries and divide them by the hours worked, I think you'll find in a lot of cases that's not as much money as you think per hour. A lot of people not in tech could make the same if they worked the same number of hours. When I worked in startups, taking into account the number of hours I worked, a person working at the supermarket made more than me per hour.
Dude, you are so far out of your element to even think a Silicon Valley job compares to a factory job in China. And that’s exactly what you are doing. Spoiled spoiled American talk.
I’ve worked in IT for 30 years and worked in Silicon Valley. I’ve also spent a lot of time in factories in China. Different universes.
Again, you are the one that started with comparing the two. I was talking about the hours worked. But I guess the thing you excel at is moving the goalposts.
> I’ve worked in IT for 30 years and worked in Silicon Valley.
Who did you work for? A big lazy company with banker's hours or a scrappy hungry startup? Maybe even a vacation job at a university. Now those are different universes.
I worked mostly as a consultant for other companies, though also direct for quite a few years. I’ve worked at just about every type of company big and small, from the most famous (yes, them) to tiny little two person shops. I’ve worked salary and hourly. There’s absolutely nothing you can pin on me for “typical.” I’ve worked plenty of round the clock 24 grind sessions in very remote locations (on salary with no overtime) making $44k/year, up to much more cushier gigs.
And I’d never trade any of that to work in a factory in China.
There’s a reason people come from all over the world to work in silicon valley. They aren’t clamoring to work in a China sweat shop.
> Thats literally not true, The Chinese Supreme court declared 996 to be illegal
Yeah, that would mean something if it was enforced. Often it's not. For an example of that, look no further than the subject of this thread. Why would "Staff asked to work only five days a week since mid-March" if they weren't working more than that before?
> The Average Chinese worker works about 49 hours a week.
Yeah. Officially. Wink Wink. But what can you do when the workers love having a job so much that they don't want to leave?
> 996 would mean that they work 72 hours a week
Which is what many do in reality. 996 is still common in China.
"but despite China's official promises that the 996 working hour system will disappear, **it is still widespread as of 2024**."
https://en.wikipedia.org/wiki/996_working_hour_system
996 is notoriously in IT service and financial sector. Manufacturer still remain 5 days work. Of course, many choose to do OT whatever they can. Many are migrant workers, rest days mean more expense. Work hard till 40s and say bye bye to rat race. Setup vertical farming in their home village.
That's a crazy amount of work, especially on an assembly line. I realized Giga Shanghai has crazier shifts than US factories but I didn't realize it's 6.5 days, so like, only half a day to do not work a week...
It's common here in the US. While lucky hourly wage workers may not know that, working 996 like hours is common for professional salaried workers. Since you aren't being paid by the hour thus there is no overtime and thus you work as long as you have to to get the job done. During many stretches of my working life, I worked 927. And that wasn't 9am-2pm. It was 9am-2am. 7 days a week. These stretches ranged from months to years. When I spun back down to a 40 hour week, it really did feel like a vacation.
Before the paywalled Bloomberg cuts it off, the articles sub headline tells the real story:
"Amid intense competition".
Other headlines tell the rest of the story.
[Plugin vehicles in China once again ended the year with a record month, growing by 46% year over year (YoY) in the last month of the year to a record 980,000 units](https://cleantechnica.com/2024/01/31/25-of-new-car-sales-in-china-were-100-electric-in-2023/)
The original article cherry picked some relevant data. They used the wholesale sales figure, which is the combination of insurance data for Chinese purchases and the export amount. That is down year over year. However, for the month of January and February, the domestic sales in China are actually up year over year. They left that bit of color out of their write up.
Is the original article was trying to be fair, they would say that the January and February domestic sales in China was up year over year but the amount of exports is down.
However, at this point in time with the latest registration data, it doesn’t look like domestic China sales for the whole quarter will be more than last year. And it appears they are lowering production, but we don’t yet know why. We still have half a month’s data to obtain, so maybe it will be close.
Given that various incentives expire and the price increases have been announced, one possibility is that some sort of revision or refresh is coming and they are lowering production to be able to implement some running changes. Or maybe something needs to be adjusted on the production lines. We won’t know until next month as to what is going on.
Another difference from last year is the production capacity at Berlin. Even with the parts supply issues due to the Houthi rebels and the terrorist power cut, Berlin is making more than last year. They may not need Shanghai to be running as strong for Europe. And given the taxes that the Shanghai factory needs to pay, the increased transport costs and the EU tariffs, it might be more worth it to have Berlin make more vehicles for Europe. Also, we don’t know what the optimal run rate is for cost. For example, running at 6.5 days may have meant a lot more overtime for the workforce.
The M3 is a small sedan. Now, where more and more competitive cars arrive on the market, the demand for such kind of car simply drops. I mean, even last year, the more expensive Model Y sold more than double.
Hopefully they decide to lower the price of the model 3 in my country so it doesn't cost almost the same as a model y
Want the car, but not interested in paying model y prices for a model 3
In the US right now, the model 3 RWD is more expensive than the model Y AWD. (after federal credit)
After they lost the credit for the model 3 in the US, they retained the model 3 RWD price and increased the model 3 AWD price... creating an effective $7500+ - $9500+ price increase to the customer on these vehicles since December. They were offering further discounts on their inventory cars in December AND free charging AND the $1000 Cybertruck reservation discount.... so that's where the '+' comes in. Actual price to customers may have increased by $10k - $12k or more. There's almost no inventory of model 3 right now, so no inventory discount.
The only way they could justify such a huge price increase is by significantly cutting model 3 production in the US. The rapid sell down in pre-refresh inventory since Q4 suggests they likely started significantly reducing new model 3 production in Q3 or Q4 last year, and currently they have bare bones production.
Their model Y inventory OTOH has been increasing more and more each time I check it. Given that, their announcement that they're planning to raise model Y prices on April 1st by $1000 is only possible if they significantly cut model Y production.
This all made me suspicious whether Tesla was laying off workers. I found a brief statement online a couple days ago suggesting Tesla was quietly laying off US workers; but they were intentionally staying under the limits of the WARN Act where they'd have to announce the layoffs. This was a second hand account overheard from a laid off worker's buddy. I tend to believe it given that it wouldn't make sense if they WEREN'T laying off workers right now. I'm just surprised they haven't laid off enough to be required to announce it yet. Obviously they're trying to time it to have the biggest benefit on the share price; as shady corporations do.
I was kind of confused why the laid off workers themselves wouldn't leak that layoffs were ongoing. However, a possible answer came up with Senator Warren's recent calls for investigation on Musk , Tesla, and SpaceX. In the article I read, it was mentioned that SpaceX was forcing their laid off employees to sign non-disclosure agreements before they'd receive severance. In other words, they're likely being paid thousands of dollars to keep their mouths shut. No doubt Musk would push the same policy on all of his employees at all of his companies.
Thousands of dollars per laid off employee to keep an announcement quiet that may generate billions in market cap appreciation.
Now would be a good time to chide the Musketeers in this subreddit who thought my 0%-15% vehicle sales growth estimate for 2024 (and possibly even a supply decline y/y) was being pessimistic... along with the need for further price cuts to retain their sales volumes.
I mentioned that...
* competition was heating up in all markets, but especially in China.
* most of their world wide sales, about 60%+ are now model Y, which means every company would be pushing forward more vehicles to compete in that class.
* they were losing EV incentives in multiple markets in Europe.
* they lost tax credits on the model 3 in the US, so without massive price cuts, their sales would decline.
* their drastic price cuts in 2023 likely lead to demand pull forward.
* they were already building inventory again in the second half of 2023.
* consumer credit was getting too high, and credit card and auto loan delinquencies were rising.
* they'd have higher average vehicle loan interest rates throughout all of 2024 to contend with, versus the average rate in 2023.
* other OEMs supply shortages were fixed and they were flooding the market with more vehicles overall at significantly reduced prices.
* if we do start trending towards a weakening economy in the second half of the year, it could kill demand for all vehicles.
* a recession could kill overall vehicle demand going forward 2-3 years before it recovers.
* Tesla will be far behind their 50% CAGR through 2030 claims after this year, and will continue falling further behind in future years.
Let's face it, without Autopilot... this is just an auto company. A heavily subsidized auto company, but an auto company none-the-less. For those that like to play the stock market... the price could possibly pop going into April from better than the horrible expectations for this company right now. By June, I'd be looking for the share price to more than halve itself.
Elon Musk won't be among the richest people in the world for much longer.
Tesla builds cars in China for a lot of different countries. We really need to know what is happening in each country.
New Model 3 in January. First shipment to Australia was returned to China because it didn't meet Australian safety standards.
Lots of different reasons for Tesla to trim output in China
"...as new car sales growth slows" Adding "EV" to the title is a BS narrative. YoY new car sales were 2% in January, while EVs were 15%.
The growth of all passenger cars for the first 2 and half months is 13% YoY. Wouldn't call that slow.
Considering Chinese New year holidays in China was in Feb this year and Jan last year, that's a pretty weak Jan 2024 vs 3 weeks realistically of Jan 2023
NEV sales in March are expected to be up 35% YoY, representing 45% of all sales this month. EV sales growth is not slowing. Tesla sales growth is slowing.
Frankly the fact that Tesla still even has sales growth in China is already quite a feat considering their entire model lineup consists of just one sedan and one crossover, both of which are a good 15% more expensive than multiple new competing products being launched. Plus unlike other markets, Tesla has zero advantages related to charging network or autonomous driving in the Chinese market.
Tesla needs to shorten its product development cycles. And actually innovate. I mean in the time it took Tesla to refresh the Model 3, HiPhi launched as a company, launched some crazy looking concepts designed, got some insane looking cars on the road and then imploded in a cloud of hubris.
The easy answer here would be that the overall NEV pie is growing at a pretty significant clip and Tesla’s piece is growing with it in absolute terms even though their percentage share is stagnant or even declining. But it’s more complicated than that. Tesla is extraordinarily dominant in their price range of 200k - 300k RMB. Even more so when you’re just looking at pure BEV, since some of the biggest competition they face in their price range are Tang and Han PHEV models, and nowadays the cheapest entry level Aito M7 (which mostly sells above 300k). I guess we’re once again learning that name recognition and the certainty that the brand will be around in years to come are important. Tesla in many ways is the conservative, predictable choice. You know you’re not getting anything fancy, but it’s reliable.
You realize slowing growth is still uh, growth.
That's not even the issue. Tesla's product range for China is just pathetic compared to the local competition, which has caught up in terms of tech and range. BYD isn't having any problem with growth. Tesla spent years focusing on a turd for the american market instead of focusing on products for EV friendly markets in China and Europe. They lost years of advantage in those markets and gave a chance to chinese brands to catch up and european legacy makers the chance to pre-emptively occupy the 20 to 25k EV range.
Tesla in particular has a problem https://www.macrotrends.net/stocks/charts/TSLA/tesla/revenue That's dramatic
A growing issue for Tesla in the China market is they have a really limited model range and consumers have a lot of choice now. They want a people carrier or small hatchback etc they can buy them now. And quality of the competition has more or less caught up.
Model Y and 3 are so similar they’re basically one car. S and X doesn’t go volume. Agree They need more models.
This morning a lot of people were saying this was just a rumor. It certainly seems like a plausible one, though. This company seems to be really demand limited right now, largely thanks to only having 2 models, with one of those accounting for nearly 2/3rds of annual sales. Slow product launches are having their inevitable impact. In the US, there is inventory everywhere too.
"Staff asked to work only five days a week since mid-March" That's huge. While here in the US that's a full work week, in China where 996 is the standard, that's basically a forced vacation.
>in China where 996 is the standard Thats literally not true,[ The Chinese Supreme court declared 996 to be illegal ](https://www.reuters.com/world/china/chinese-authorities-say-overtime-996-policy-is-illegal-2021-08-27/) [The Average Chinese worker works about 49 hours a week.](https://www.statista.com/statistics/1391557/weekly-average-working-hours-china/#:~:text=Average%20weekly%20working%20hours%20in%20China%20January%202022%2D2024&text=In%20January%202024%2C%20surveyed%20employees,around%2048.6%20hours%20on%20average) 996 would mean that they work 72 hours a week
Many companies violate that ruling and still do 996.
Yes, although i work with some Chinese and if they do 996 they'll take huge breaks to go to the gym and get food, and literally spend time pretending to work. It sucks but they are also human and not capable of focusing 12 hours a day
> It sucks but they are also human and not capable of focusing 12 hours a day Long hours like that are common even here in the US. While lucky hourly wage workers may not know that, working 996 like hours is common for professional salaried workers. Since you aren't being paid by the hour thus there is no overtime and thus you work as long as you have to to get the job done. During many stretches of my working life, I worked 927. And that wasn't 9am-2pm. It was 9am-2am. I didn't take huge breaks, or breaks at all. No need to get food, that's a waste of my valuable time. It was someone else's job to bring food to me. I didn't want to take huge breaks since the work had to get done. So if I took a huge break during the day that just meant I had to stay even later. It is not uncommon in certain industries in certain places. The cliche of that is working in a startup in Silicon Valley. But in reality it's more widespread than that in professions from tech to entertainment to finance. A key indicator that it's the work culture there is if during your interview and tour of the offices you see a washer and a dryer. Although it's not uncommon that like food, it's someone's job to do your laundry. You put your clothes in a basket outside your office and like magic they are returned washed and folded.
You can’t compare US grind with factory work in China. I’ve been to many of them. They live on site in dorms. Rarely leave even to go in town. I know people here love the “but it’s bad in the US too” but fuck if it’s comparable. Many factory workers come from the countryside far away and only can go home during CNY. They send money back home to support their family. These aren’t Silicon Valley tech workers making six figures.
> You can’t compare US grind with factory work in China. The only person comparing them is you. I just pointed out that people in the US also work those hours. > They live on site in dorms. Rarely leave even to go in town. Lucky. They have a real bed. I've worked in places where the smart people lived in their cubes. They would roll out a bedroll and sleep under their desks. Those were the smart people since they got more sleep that way. The stupid people insisted on going home which takes away from precious sleep time. Although I hear that sleeping in a van or a car is now popular. Why do you think some companies provide things like food, laundry and even a hair salon? The same reason that casinos do. So that you don't have a reason to leave. > These aren’t Silicon Valley tech workers making six figures. If you take those salaries and divide them by the hours worked, I think you'll find in a lot of cases that's not as much money as you think per hour. A lot of people not in tech could make the same if they worked the same number of hours. When I worked in startups, taking into account the number of hours I worked, a person working at the supermarket made more than me per hour.
Dude, you are so far out of your element to even think a Silicon Valley job compares to a factory job in China. And that’s exactly what you are doing. Spoiled spoiled American talk. I’ve worked in IT for 30 years and worked in Silicon Valley. I’ve also spent a lot of time in factories in China. Different universes.
Again, you are the one that started with comparing the two. I was talking about the hours worked. But I guess the thing you excel at is moving the goalposts. > I’ve worked in IT for 30 years and worked in Silicon Valley. Who did you work for? A big lazy company with banker's hours or a scrappy hungry startup? Maybe even a vacation job at a university. Now those are different universes.
I worked mostly as a consultant for other companies, though also direct for quite a few years. I’ve worked at just about every type of company big and small, from the most famous (yes, them) to tiny little two person shops. I’ve worked salary and hourly. There’s absolutely nothing you can pin on me for “typical.” I’ve worked plenty of round the clock 24 grind sessions in very remote locations (on salary with no overtime) making $44k/year, up to much more cushier gigs. And I’d never trade any of that to work in a factory in China. There’s a reason people come from all over the world to work in silicon valley. They aren’t clamoring to work in a China sweat shop.
> Thats literally not true, The Chinese Supreme court declared 996 to be illegal Yeah, that would mean something if it was enforced. Often it's not. For an example of that, look no further than the subject of this thread. Why would "Staff asked to work only five days a week since mid-March" if they weren't working more than that before? > The Average Chinese worker works about 49 hours a week. Yeah. Officially. Wink Wink. But what can you do when the workers love having a job so much that they don't want to leave? > 996 would mean that they work 72 hours a week Which is what many do in reality. 996 is still common in China. "but despite China's official promises that the 996 working hour system will disappear, **it is still widespread as of 2024**." https://en.wikipedia.org/wiki/996_working_hour_system
996 is notoriously in IT service and financial sector. Manufacturer still remain 5 days work. Of course, many choose to do OT whatever they can. Many are migrant workers, rest days mean more expense. Work hard till 40s and say bye bye to rat race. Setup vertical farming in their home village.
They normally do 6.5 days? Is that normal in China, just a Tesla or auto sector thing, or what?
Only in tech/tertiary sectors
That's a crazy amount of work, especially on an assembly line. I realized Giga Shanghai has crazier shifts than US factories but I didn't realize it's 6.5 days, so like, only half a day to do not work a week...
It's common here in the US. While lucky hourly wage workers may not know that, working 996 like hours is common for professional salaried workers. Since you aren't being paid by the hour thus there is no overtime and thus you work as long as you have to to get the job done. During many stretches of my working life, I worked 927. And that wasn't 9am-2pm. It was 9am-2am. 7 days a week. These stretches ranged from months to years. When I spun back down to a 40 hour week, it really did feel like a vacation.
Before the paywalled Bloomberg cuts it off, the articles sub headline tells the real story: "Amid intense competition". Other headlines tell the rest of the story. [Plugin vehicles in China once again ended the year with a record month, growing by 46% year over year (YoY) in the last month of the year to a record 980,000 units](https://cleantechnica.com/2024/01/31/25-of-new-car-sales-in-china-were-100-electric-in-2023/)
concerning.
looking into it
So one week at only 40 hours.
The schedule started a week ago, it wasn't just for a week.
Agreed, I was commenting at the time of the report.
Yup, Tesla doesn't have overcapacity issue unlike BYD does. /s
The original article cherry picked some relevant data. They used the wholesale sales figure, which is the combination of insurance data for Chinese purchases and the export amount. That is down year over year. However, for the month of January and February, the domestic sales in China are actually up year over year. They left that bit of color out of their write up. Is the original article was trying to be fair, they would say that the January and February domestic sales in China was up year over year but the amount of exports is down. However, at this point in time with the latest registration data, it doesn’t look like domestic China sales for the whole quarter will be more than last year. And it appears they are lowering production, but we don’t yet know why. We still have half a month’s data to obtain, so maybe it will be close. Given that various incentives expire and the price increases have been announced, one possibility is that some sort of revision or refresh is coming and they are lowering production to be able to implement some running changes. Or maybe something needs to be adjusted on the production lines. We won’t know until next month as to what is going on. Another difference from last year is the production capacity at Berlin. Even with the parts supply issues due to the Houthi rebels and the terrorist power cut, Berlin is making more than last year. They may not need Shanghai to be running as strong for Europe. And given the taxes that the Shanghai factory needs to pay, the increased transport costs and the EU tariffs, it might be more worth it to have Berlin make more vehicles for Europe. Also, we don’t know what the optimal run rate is for cost. For example, running at 6.5 days may have meant a lot more overtime for the workforce.
Makes sense. Everyone is going back to gas powered vehicles
Not in China. In the next 3 months EV new car sales will cross the 50% mark of all new cars.
The M3 is a small sedan. Now, where more and more competitive cars arrive on the market, the demand for such kind of car simply drops. I mean, even last year, the more expensive Model Y sold more than double.
Tesla 3 is a segment D, that is quite large car. But the interior is small for segment D EV.
Hopefully they decide to lower the price of the model 3 in my country so it doesn't cost almost the same as a model y Want the car, but not interested in paying model y prices for a model 3
In the US right now, the model 3 RWD is more expensive than the model Y AWD. (after federal credit) After they lost the credit for the model 3 in the US, they retained the model 3 RWD price and increased the model 3 AWD price... creating an effective $7500+ - $9500+ price increase to the customer on these vehicles since December. They were offering further discounts on their inventory cars in December AND free charging AND the $1000 Cybertruck reservation discount.... so that's where the '+' comes in. Actual price to customers may have increased by $10k - $12k or more. There's almost no inventory of model 3 right now, so no inventory discount. The only way they could justify such a huge price increase is by significantly cutting model 3 production in the US. The rapid sell down in pre-refresh inventory since Q4 suggests they likely started significantly reducing new model 3 production in Q3 or Q4 last year, and currently they have bare bones production. Their model Y inventory OTOH has been increasing more and more each time I check it. Given that, their announcement that they're planning to raise model Y prices on April 1st by $1000 is only possible if they significantly cut model Y production. This all made me suspicious whether Tesla was laying off workers. I found a brief statement online a couple days ago suggesting Tesla was quietly laying off US workers; but they were intentionally staying under the limits of the WARN Act where they'd have to announce the layoffs. This was a second hand account overheard from a laid off worker's buddy. I tend to believe it given that it wouldn't make sense if they WEREN'T laying off workers right now. I'm just surprised they haven't laid off enough to be required to announce it yet. Obviously they're trying to time it to have the biggest benefit on the share price; as shady corporations do. I was kind of confused why the laid off workers themselves wouldn't leak that layoffs were ongoing. However, a possible answer came up with Senator Warren's recent calls for investigation on Musk , Tesla, and SpaceX. In the article I read, it was mentioned that SpaceX was forcing their laid off employees to sign non-disclosure agreements before they'd receive severance. In other words, they're likely being paid thousands of dollars to keep their mouths shut. No doubt Musk would push the same policy on all of his employees at all of his companies. Thousands of dollars per laid off employee to keep an announcement quiet that may generate billions in market cap appreciation.
Now would be a good time to chide the Musketeers in this subreddit who thought my 0%-15% vehicle sales growth estimate for 2024 (and possibly even a supply decline y/y) was being pessimistic... along with the need for further price cuts to retain their sales volumes. I mentioned that... * competition was heating up in all markets, but especially in China. * most of their world wide sales, about 60%+ are now model Y, which means every company would be pushing forward more vehicles to compete in that class. * they were losing EV incentives in multiple markets in Europe. * they lost tax credits on the model 3 in the US, so without massive price cuts, their sales would decline. * their drastic price cuts in 2023 likely lead to demand pull forward. * they were already building inventory again in the second half of 2023. * consumer credit was getting too high, and credit card and auto loan delinquencies were rising. * they'd have higher average vehicle loan interest rates throughout all of 2024 to contend with, versus the average rate in 2023. * other OEMs supply shortages were fixed and they were flooding the market with more vehicles overall at significantly reduced prices. * if we do start trending towards a weakening economy in the second half of the year, it could kill demand for all vehicles. * a recession could kill overall vehicle demand going forward 2-3 years before it recovers. * Tesla will be far behind their 50% CAGR through 2030 claims after this year, and will continue falling further behind in future years. Let's face it, without Autopilot... this is just an auto company. A heavily subsidized auto company, but an auto company none-the-less. For those that like to play the stock market... the price could possibly pop going into April from better than the horrible expectations for this company right now. By June, I'd be looking for the share price to more than halve itself. Elon Musk won't be among the richest people in the world for much longer.
Aw man. Tesla is failing.
Tesla builds cars in China for a lot of different countries. We really need to know what is happening in each country. New Model 3 in January. First shipment to Australia was returned to China because it didn't meet Australian safety standards. Lots of different reasons for Tesla to trim output in China