Hacker News Reader

Comment by Animats | Hacker News Reader

Tesla had to do this. They've filled the order backlog of customers who were willing to pay more than $35K. They still have many on the list who are only willing to pay the original $35K. So it's sell at $35K, cut production, or park the unsold cars in a lot. Happens all the time in automotive.

Big question is, does Tesla make a profit at that price?

$8K more for 50% more battery. Or $24K for an entire large battery. Big markup there.

View on HN

Both of your $NK more numbers include a whole lot more than just battery changes. (Including a whole additional engine and better performance in the +$23k model.)

I don't think they currently had to do this, they have just started delivery in Europe and China and there is significant demand for the higher priced models so that they could continue to do this.

I see it more as them wanting to show again that they could build up a huge order backlog as that something that pretty much no other car company can do. That would help them with the market and potential future loans.

Demand has collapsed in the US for model 3 and looks incredibly weak in Europe and China at this point. There is no reason for this across the board price cut other than weak demand.

Where are you getting this from?

It’s general consensus but here’s an article for example that suggests less than 20,000 Europe orders and hundreds in China. Of course we won’t know for sure until Q1 earnings but it’s a safe bet

https://seekingalpha.com/article/4239396-tesla-weak-model-3-...

And as a follow up, insideevs just posted February’s numbers: 5750 model 3. That’s down from 6500 in January and over 25,000 in December and 18,000 in November.

https://insideevs.com/tesla-model-3-s-x-sales-february-2019/

> Demand has collapsed in the US for model 3 and looks incredibly weak in Europe and China

[citation needed]

Driving up 101 daily, I see truck after truck loaded with European-specced Model 3s heading towards the port of San Francisco.

Yeah, it’s not a route that used to have a lot of car carriers on it, now there are a lot of them.

Even with weak demand they’ll still deliver a lot of cars. The question is if it’s enough.

Lol. Best selling electric car in world last year with heaps of momentum that just got cheaper. Doesn't appear to be collapsing to me.

Well insideevs just posted the February sales numbers which are absolutely terrible. 5750 model 3s sold, down from around 6500 in January and 25,000 in December. That’s a collapse and that’s why they’re slashing prices now, even though there’s no evidence they can get the margins low enough to make a profit on this car.

https://insideevs.com/tesla-model-3-s-x-sales-february-2019/

I think so. Model3 used to have 300k backlog and now you can get one in 2 weeks?!

As a person on the list since 2016 with a tentative delivery date of late 2019 I respectfully think you are pulling this statement out of your arse.

Well we won’t know until they post Q1 results but they said yesterday they’re expecting a loss now, downgrading from initial plans to post a tiny profit. General consensus is that the halving of the federal tax credit drove down Q1 demand significantly.

Reply on news.ycombinator.com