> At $50B Market Cap, Tesla should be delivering at least $2B Annual profits.
LOL what?
Show me another company with $50B market cap growing at 50% a year on the top line to deliver $2B in profits.
I'll wait.
LOL what?
Show me another company with $50B market cap growing at 50% a year on the top line to deliver $2B in profits.
I'll wait.
50% profit growth is delusional at this stage
Q42018: 63,100 Model 3s delivered.
That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.
Tesla is dropping the sticker price of their vehicles because they think that demand for their cars is at least somewhat elastic with respect to sticker price, and they're in a better position than you or me to have the data and analysis on this. (Tesla has also announced that this is why they're dropping the price so I'm not sure why you're arguing this point?)
Economies of scale are not related to this drop in price. Economies of scale refers to it being cheaper to product an product at scale due to efficiencies in the use of the largely fixed-cost capital expenditures. Companies don't usually drop prices due to EOS until at least a quarter or two after they've reached that point in the production cost cycle, largely to confirm that they've actually reached EOS operationally, and some company's retain the efficiencies from EOS as profit until/unless they need to for competitive market reasons.
Economies of scale allow them to do this.
Would you normally argue that a yearly price increase of ~3% on a car portends anything in particular about demand? I guess it implies that they expected demand to fall if the increase had been ~6% instead, but that doesn't seem like anything that would preclude 50% worldwide growth.
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iqPFhpeWEIS...
Article: https://www.bloomberg.com/graphics/2018-tesla-tracker/