Tesla’s price cuts have been so significant in some regions that it devaluated some recently purchased vehicles by over 40% and it pushed some owners to literally organize protests. In China, the price reductions have also been quite significant and indignation over the decision started trending on Weibo (China’s Twitter).
“I received Tesla’s Model X on February 25, and I only drove this car for five days before Tesla announced a price reduction of 174,300 yuan ($25,989.87). I’m probably the most unlucky new buyer … That’s unfair,”
Some of them went as far as protesting in front of Tesla stores and installing signs on the windows, saying “don’t buy now, buy tomorrow at a discount”.
http://www.globaltimes.cn/content/1140712.shtmlhttps://twitter.com/ShanghaiJayin/status/1102395073109676034Not sure if I am sympathetic with a Tesla buyer.
They should have known into what mess they bought into.
Shouldn't be a problem. Elon Musk is working hard on the bankruptcy.
Adam Jonas at Morgan Stanley said in a note Tuesday that investor feedback on Tesla has been “firmly in the ‘something’s wrong’ camp rather than ‘this is a great buying opportunity’ camp.”
“You can put us in the ‘something just doesn’t add up’ camp,” he said. Recent events “are communicating to investors a sense of growing tension in the organization.”
Investors have questioned why Tesla hasn’t raised capital yet, and whether the company’s balance sheet is strong enough to weather cash burn and more debt that is coming due. They are also homing in on the risks attached to online-only sales, Jonas said.
“Without an additional capital raise, we are prepared for Tesla’s gross cash to fall further below ($2 billion),” he said. The new sales model is “uncharted territory” for Tesla, a company that used to highlight its advantages in promoting the brand and engaging with customers without a middleman, he said.
Brian Johnson at Barclays cut his price target on the stock by 9% to $192, representing 30% downside to Tuesday share prices. The Barclays target is among the most bearish of analysts surveyed by FactSet. The sooner-than-expected $35,000 Model 3 announcement, “rather than reflecting dramatic progress on manufacturing and distribution costs, likely reflects the need to replenish cash after the convert repayment, perhaps exacerbated by the weak first two months of U.S. sales,” the Barclays analysts said. Moreover, “gross margins will now be appreciably lower, and thus a significant amount of additional volume is needed to offset price cuts even considering the cost saves,” they said
David Tamberrino at Goldman Sachs also raised concerns that a lower-priced Model 3 implies lower demand for the sedan’s pricier trims. It will “drive a downward mix impact for Model 3 margins,” he said in a note Friday.
Tesla conducted yet another round of disclosures after its original secret conference call, but this time, only with Deutsche Bank.
"An analyst at Deutsche Bank said Tesla had shared information with him about Model 3 profit margins, even though Musk refused to answer a question about margins on the media conference call," the (LA Times) report says. If true, this would be especially egregious breach of Reg FD because one of the questions that Elon Musk ducked on the first secretive conference call was a question about the vehicle's margin. According to a transcript provided by Huettner, when asked about the Model 3's margin by Forbes, Elon Musk said he wasn't "going to answer questions like that".
Moderator: [00:32:42] Thank you. Our next question comes from Chuck Tannert with Forbes.
Chuck Tannert: [00:32:47] Good afternoon. What is that Tesla's profit margin on each and every $35,000 Model 3 sold?
Elon Musk: [00:32:57] Yeah. We're not going to answer questions like that. Next question.
Deutsche Bank is the Administrative Agent and Collateral Agent under $TSLA's crucial Asset-Based Loan (ABL) Agreement. Eight other banks rely on $DB to police the covenants in that agreement.
If the bank was indeed granted this nonpublic information, it would amount to a second jarring violation of Regulation FD and much more than the "mistake" Elon Musk has made it out to be. Further, it’s difficult to believe that the original call was a mistake on its own, when Tesla IR stated in its introduction of the call: "This is all on the record. But, please do not publish the recording or transcripts of this call."
https://www.latimes.com/business/autos/la-fi-hy-tesla-musk-mistake-20190305-story.htmlTesla has been told by the German industry association for fair competition practice to stop listing Model 3 prices after incentive and gas savings in Germany by March 20. The association in question, Wettbewerbszentrale, took an issue with Tesla including gas savings over time into the displayed sticker price.
https://electrek.co/2019/03/07/tesla-stop-listing-model-3-price-after-savings-germany/The automaker has used this somewhat controversial way of displaying prices on its website on and off for years.
After some complaints, Tesla stopped using it for a while but the company brought it back last year.
Already seen, about 5 or 6 posts upward.
Tesla employees also say the company is not yet making 7,000 vehicle batteries a week consistently at the Gigafactory in Nevada.
First, the company is apparently asking employees to work remotely and keep their travel costs to a minimum.
Second, the company is telling hourly employees at its Sparks, Nevada Gigafactory, where Tesla makes batteries and drivetrains, to leave in the middle of their shifts. The company is also telling employees to take paid or unpaid time off, according to the report.
Building cars by remote??
https://www.cnbc.com/2019/03/07/tesla-lays-off-more-workers-and-cuts-costs-ahead-of-model-y-reveal.htmlTesla is losing an important member of its engineering team: Micheal Schwekutsch, VP of Engineering. He is one of the engineers behind several of Tesla’s latest powertrains and announced that he is leaving the automaker this week.
After almost 3.5 years, yesterday I have decided to leave Tesla. I had an incredible time with a team that is by far the most talented that I ever worked with. Tesla’s products are hands down the most efficient and exciting EVs in the world. And I’ve enjoyed working at a company with such a great passion, with such incredible customers and with a mission that is so “electrifying.” All the best, Tesla!”
That’s a big loss for Tesla. Schwekutsch has been a hardcore electric powertrain engineer for the longest time and he clearly helped deliver an incredible powertrain in the Model 3 – indeed one of the most efficient powertrains ever as he noted.
http://electrek.co/2019/03/08/tesla-loses-vp-of-engineering-electric-powertrain/