Unsold Cybertrucks Are Piling Up at a Decaying US Shopping Mall
vice.com
vice.com
Me and I'm sure others would love one at like the $5,000 price range.
In the case of the unsold Tesla inventory, marking to market would make the whole company worth less. Tesla stockholders expect the company to tell them a good story, and writing down the entire fleet of Incel Caminos would be a bad story.
To your point on "investors not being ignorant", have you followed the last 5 years of tesla stock valuation, and the constant signal that "this company P/E is disconnected from reality?" Meaning, despite no sales growth, consumer goodwill, etc. investors continued to dump money in? We see the reverse effect now, a slow massive draw down on stock value.
Anyway.
In the real world, a board(and also in particular the finance director) is more like to completely write off the unsold fleet, as it would allow both tax insulation and a more clean financial statement for auditing, investors. Mazda recently did this with the entire MX-30 program to signal to investors "this was actually intended from the beginning and allowed us EV research."
This happens in every single industry every day. Where Tesla to just mark the trucks down, that instantly signals to investors (note: not experts.) that there is a cash problem at the firm. There is nothing worse to signal as a public company.
Your claim about writing off the unsold inventory is just silly, and displays a stunning ignorance of the basics of corporate income tax law and accounting. The vehicles will eventually be sold, perhaps at a deeply discounted price. They won't be just tossed in a landfill or something.
Marking down assets has zero impact on cash or cash flow so your comment about that makes no sense at all. The main shareholders are sophisticated institutional investors who aren't fooled by simplistic financial engineering tricks.
But you're saying that they will sell the vehicles which is logical but shouldn't they start working the price down by now?
There is no scenario in which it makes sense to destroy the unsold vehicles, right?
If you say they can't lower the price because it signals to investors there's a problem doesn't it signal the same problem having a massive amount of vehicles unsold and then destroyed? How is one signal better than the other? So they're signaling they've got so much money they just don't care? That also seems like a bad signal to send. Far better to say publicly, hey we made a mistake this vehicle is not selling now we're going to sell what we made for less and stop making it.
None of this theorizing about signaling to investors makes any sense as long as we know that the vehicles aren't selling.
While the current demand being priced in by some investors may be correct, wouldn't a lowering of the sale price still have to be reflected in TSLAs public disclosures and couldn't that still have an impact, both for investors and creditors?
Mind you, I tried my hand at shorting TSLA a long while (nearly a decade) back and learned, as many who undertook this, that rationality/EMH would likely never apply to their valuation. Made that (and then some) back thanks to Twitter though, so all is well, but not exactly coming at the idea of applying sensible concepts to TSLA neutrally.
It completely misses the mark on truck ownership. It's almost as if they had some private jet owning billionaire who has never worked a day of manual labor design the thing, but probably once waved an inactive chainsaw around while doing weird vocalizing sounds.
The "frunk" storage is a joke, the bed design means no easy access toolbox (an actual useful one for people who have a truck for utility). I absolutely would not take that thing off-road, unless the idea of off-road means relativity flat dry dirt area close to the main road and charging stations.
The 2021 Texas snowmageddon had many areas without power for up to a week. I saw multiple vehicles that had slide off roads and been abandoned in ditches. Yet my gas powered 4x4 worked like a champ that helped friends get groceries and go to their essential functioning jobs. The cybertruck is great if you want to let people know you have money and "truck" owner, which no one cares about except them.
And as an extended family member likes to remind me with the photos of her rubicon rescuing trucks trying to keep up with her jeep club, trucks and jeeps are for getting work done, not cruising the highway. Tesla should look at what jeep and the truck companies are doing with electric -- they understand why people buy them -- and work from there.