Towards the end of May, there is no stock that I care more about than Tesla (TSLA). The stock price is more than 50% below its all-time high, but this was not a 2 to 1 stock split as the company seems to be even worse off than I originally thought. With less than six remaining weeks in the quarter, there seems to be another large-scale attempt to move vehicles, regardless of cost.
( Source: Yahoo Finance)
Tesla's forecast ranges from 90,000 to 100,000 Deliveries in the second quarter, at just under 91,000 vehicles, reached a quarterly record higher than the fourth quarter of 2018. According to InsideEvs and TMC Europe April in the US and Europe, with about 5,000 vehicles in total, below the value of October. Part of this gap is being closed by China, but these sites have only made about 23.4% of deliveries from these regions in the first month of the fourth quarter. In the months of November and December, many sales were made, especially in the US, making the comparisons for May and June very difficult.
In 2019, there were already several headwinds, considering that the US tax credit for electric vehicles was lowered and the Netherlands benefited less. Tesla is also facing somewhat stronger competition – for example, model S / X registrations in Norway are 141 by May 21, compared to 324 for the Jaguar i-Pace and 283 for the Audi e-Tron. For the current quarter, S / X registrations in Norway have dropped more than 76%, and in the Netherlands it is much worse. Even if the sale of Model 3 closes the gap next month, you're still talking about a vehicle that is offered for half price or even less and with lower profit margins.
It was the end of April when Tesla announced changes. Up to model S / X and less than a month later, the company has already lowered prices for these vehicles. I have previously discussed how this affects the company's already large inventory. What bothers me the most is the following statement from the company listed in the above linked article Electrek on Tuesday's price cuts:
A Tesla spokesman has sent us the following statement about the price change :
Like other automakers, we regularly adjust prices and available options. These price changes mean a reduction in prices for models X and S of about 2% to 3%. Last week, we raised prices for US Models 3 by 1%. At reasonable levels, these small changes are not current.
Now, this statement shows that Tesla is first and foremost a car company and not a tech company, as some of its supporters claim. But the last part that this is not up to date, I noticed. This is because CEO Elon Musk, as you'll see in the pictures below, has tweeted several times over a price change of $ 1,000 for self-drive costs. That would be a small price change and was announced directly by the CEO to more than 26 million Twitter followers. You can not say that price changes are nothing new when the leader of your company tweets about it several times.
( Source: Elon Musk Twitter page )
t the only big news from Tesla on Tuesday. According to Electrek the company also returned an unlimited free charge to those who purchase S / X inventory units. Not only are these vehicles lagging far behind thanks to the new versions, but this is another benefit that can amount to hundreds or even thousands of dollars over the lifetime of the vehicle.
Both steps are expected to have potentially significant margin effects for Tesla in the second quarter and beyond. The price cuts obviously lower revenues and gross margins, and they continue to be impacted by the stronger dollar I mentioned in my previous article. This also means that the inventory should be revalued with a lower amount, which means that both new and used inventory units are depreciated more than expected. As you can see below, the Tesla estimates for the year are already at their lowest, and I could easily see that they continue to fall.
( Source: Yahoo Finance Analysts Estimate Page)
When Tesla Lowers Prices and Offers With big benefits, this probably means that demand is not where it needs to be. Management has already expanded the pressure cooker by making risky forecasts and repeating guidelines for the capital increase conference. If the company experiences delivery bottlenecks, there are likely to be many unfortunate investors, especially if stocks and bonds remain well below the prices at which they were last sold. There are already numerous lawsuits pertaining to the SolarCity Deal, the financing of secured tweets and Model 3 projections. The last thing Tesla needs now is more legal issues It's even harder for Tesla to be sustainably profitable in the future. Here, the name should have been based several times on earlier statements by the management. The decline in the stock shows that investors are starting to abandon the Tesla story, and another failure in the second quarter could lead to even more investors tackling the exits.
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