Tesla Bulls reacted to the news yesterday that Tesla had received 50K new net orders so far in Q2 2019, but I wonder what the sustainable level of orders are for the current products? Tesla has already pulled a few demand levers in Q2 did these effectively pull ahead sales? We were over 50 days into the Qtr when the email leaked, so does that mean + or - 1000 cars per day is a sustainable order rate for all Tesla vehicles? What demand levers are left to be pulled in Q3, and beyond? IMO 1000 per day will not be a level that can generate NETprofit with the current mix of configurations, and the collapse in the high end S and X business which was highly profitable in 2018. 1. Release upgraded S and X, More Range and faster Acceleration 2. Include A/P in all cars at a discounted price 3. Release standard range plus Model 3 in Europe and China 4. Release for order Right Hand Drive Model 3 in UK, and Australia 5. Price reduction on S and X in all markets 6. USA $1875 Tax Rebate Sunset at end of Q2 I would say these levers did pull ahead some pent up demand, and create some new interest that is not sustainable going forward. How much, and how it affects sales remain to be seen.
Great point, Marshall, not only did Tesla add leasing in Q2, they more aggressively subsidized the rates, to get the payments down to be competitive with other OEM's. 7. Model 3 Leasing These 7 levers and I expect an 8th at the end of Q2 draws near, they will get very aggressive on pricing, and try to blow out the inventory, so we could add a couple more levers 8. Free Unlimited Supercharging (already on inventory and used cars, but I expect to see it expanded to new orders soon) 9. More aggressive pricing structure. All of these bottom line stressing levers should pull forward some sales and attract new buyers, but none of that is sustainable, and the earnings report is going to pay the price for all of these.
