Tesla order invite now says: “We expect to deliver only the foundation series through late 2024”

[cbrtrckrsrvd112219]

Squeeze, squeeze to the last drop.

There is no longer any illusion this will be a limited series and a potential rare collectible truck.

We've been hooked suckers!

I am really curious what did Elon meant when he talked about going non-FS in Q3? What does non-FS mean?

All cars have a "base" model that starts at some "reasonable" level, but you can never get it. it's like Porsche Cayenne 60K Base Model or Mercedes SUV with textile interior... but you cannot find or order one in US!

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[cbrtrckrsrvd112219]

Even Elon can't prove you wrong because nobody can predict what the car market will be doing in the future. It will be priced to sell, that's all we know.

The $35K base Model 3 was available from the last month or two of 2018 into 2019. It was on-menu for a month or so, most of the time it was available, it was off-menu, meaning you had to contact your Delivery Center to order it. Even the people who ordered it for $35K got the premium interior and all-glass roof (which was supposed to be extra).

Now, years later, you can get a much better Model 3, quieter smoother, nicer driving, more features, with more range for only a few thousand more. Inflation adjusted it's probably $35K, or less.

Elon can..
the q-s was wrong, it was about FS ending, it should've been about when we will see $80k AWD CT

 

[HaulingAss]

I was hoping somebody can prove me wrong @HaulingAss based on the fact that noone even tries to prove me wrong unfortunately means that non-FS does not mean announced $79,999 CT. which means that all skippers (like me) are suckers who missed opportunity to drive CT today or very soon on the very baseless assumption that once FS is done there will be option to get CT without FS $20k markup.
I see Tesla to continue to keep 100k price point far as long as it can even after "dropping FS"

I was under the impression that people who declined the FS invite to configure could still change their mind before Foundation Series ended. I could be wrong, but it wouldn't hurt to check for those who find themselves in that situation.

Also, there is no reasonable doubt that when Tesla ends the Foundation Series the price will drop. It's true we don't have certainty on how much it will drop, but it will drop a significant amount. We know this because the entire reason to stop the Foundation Series is so Tesla can continue to ramp production towards their announced production targets and still have a viable market for all of them.

 

[Outdoors]

It's true we don't have certainty on how much it will drop, but it will drop a significant amount.

Please continue to walk the tightrope, but shoot us a number of the thoughts for the base price AWD, and then to get it up to same equipment level as FS. Yes somethings like badging might not be there, but interested to know your thoughts.

 

[HaulingAss]

Please continue to walk the tightrope, but shoot us a number of the thoughts for the base price AWD, and then to get it up to same equipment level as FS. Yes somethings like badging might not be there, but interested to know your thoughts.

I suspect they will keep ramping production towards the end of the year and then take a look at their progress in reducing production costs and make the most logical decision as to how to proceed from there. One thing I'm confident of is they will keep ramping to higher numbers. What we don't have any visibility on is what their actual production costs are, we can only make wild ass guesses. And that includes guessing whether the $7500 tax incentive for trucks under $80K remains intact with a potential change in administrations on the federal level.

Most likely scenario is the tax credit stays intact and Tesla wants production to be ready to hit the ground running when they start running low on buyers willing to pay for Foundation Series. If I'm right about this, we will see a sudden jump in weekly production numbers around that time so they can sell them for $79,990. I think they will use the tax credit as a lifeline to get them through the rocky transition period of Foundation Series ending. Because the end of FS comes with a bunch of buyers who have been waiting to get their hands on one without having to pay for FSD. And FSD is what is likely keeping their margins positive (in addition to the rest of the Foundation premium). With the FSD take rate going from effectively 100% to perhaps as low as 10%, they will also have some enticing high margin goodies to offer new buyers. Because some people who have opted out of the Foundation premium did it because they didn't want to pay the premium, not because they didn't have the money. Of course, such goodies would put it over the tax credit limit if they were attached hardware, therefore would only appeal primarily to people who aren't eligible for the tax credit. So it would be nice if they come up with software goodies that are compelling enough for people to pay $2-$4K for while still retaining the tax credit.

The future is so hard to see because Tesla has many different ways they can handle this, depending upon costs. We don't know their current cost to produce (or their expected cost to produce at higher volumes). The question is, which strategy gets them to high production the quickest without becoming a financial drag (or while improving margins since we don't know where they stand yet).

In other words, they will prioritize volumes over profits but will take all the profits they can get while ramping to high volumes ASAP. The only thing that has been (and could continue to) slowing the planned speed of ramp is risk mitigation. Tesla will ramp as fast as is financially prudent. Without knowing for sure whether they have negative or positive margins, and the size of any negative or positive margins, it's really difficult to accurately predict how Tesla will handle the non-Foundation transition, from a pricing perspective and otherwise.

The scenario I laid out above assumes they currently have siingle-digit positive margins but expect to be somewhere close to breakeven when they switch to non-Foundation production. Hence the sudden jump in production volume. Iin this scenario, delaying the jump in production volumes mitigates risk because it extends Foundation sales.

To derive the price to get to the same level of equipment and software in the above scenario, just take the $80K tax credit limit and add the cost of FSD, the $2500 voucher, maybe $1000 for ten years of premium connectivity ignore the little stuff. So, perhaps a savings of around $8-9K over Foundation Edition. And no laser engraving (or perhaps it will say something else since they already have the laser engraving machine and it doesn't slow down the production). None of this is very precise because I don't want to waste too much time going down a rabbit hole, without even knowing what Tesla currently knows about production costs.

The price will be whatever it will be, and we will find out soon enough. I understand why people would want to know sooner but we don't have enough info. So, the most likely scenario is the most sensible, most straightforward one above. Getting the price down to the tax credit limit.

 

[Crissa]

Well, it's July 1st and Foundation Series is still in the configurator.

I doubt they'd leave the price up - they know how many of us are waiting.

-Crissa

 

[GuyV]

It's still way above inflation. We've hashed this over many times.

This is what we get from people saying they were so willing to overpay.


First off, there are under a million holders, according to Elon. Which makes sense: We know of people who reserved up to fifty trucks each. So even if there are two million reservations, there's going to be less that in holders. And even Elon's count will overcount people who reserved under multiple emails either by accident or intention.

On top of that, the emails are exactly the same, and not everyone even got them - and it's not that hard to send out a million emails.

-Crissa

Inflation is not uniform, it varies widely across all goods and services. Cybertruck prices are up 25-50% from 2019 estimates depending on model, but the S&P 500 is up over 75% since then, so it is not at all out of line with the economy.

 

[Crissa]

Inflation is not uniform, it varies widely across all goods and services. Cybertruck prices are up 25-50% from 2019 estimates depending on model, but the S&P 500 is up over 75% since then, so it is not at all out of line with the economy.

S&P isn't some set percentage of the economy, though. And car prices, although up, aren't up that much.

Which was my point.

-Crissa

 

[GuyV]

I don't see the fallacy you see.

Yes, Tesla's mission is to accelerate the transition to sustainable energy. Doing that most effectively has got to focus on reducing the volume of fossil fuels needed, it's not just a game with the numbers of vehicles, but the amount of fuel they consume has to be taken into account. So being able to grow pickup trucks powered by electricity is an important part of that strategy.

The fallacy with the way you are thinking about the higher pricing of the Foundation Series as being focused on venture capitalists and shareholders is that it assumes the higher pricing of FS will limit Cybertruck to being a niche vehicle, only for affluent people. But Tesla is only using the higher pricing during the initial ramping of production, to make it economically feasible to get to lower prices and higher volumes sooner. Unlike the Silverado EV, the higher pricing of Foundation Series doesn't limit the vehicle to niche status, it accelerates the investment in higher production which is absolutely necessary to lower production costs so they can sell them in larger numbers at the lowest possible prices, which in turn increases their addressable market.

What you claim, that they are selling out for higher profits (vs. larger addressable market), would only be true if milking the higher prices of Foundation Series caused them to hold off on expanding production. I see it as making higher production and lower prices possible by not losing huge money upfront. Charging what people are willing to pay doesn't slow down the production ramp, it speeds it up. The high price of the Silverado EV (for what you get) will never allow them to ramp to high volume production, it's a niche vehicle for as far as they eye can see. Which will allow GM to continue selling large numbers of gas-guzzling pickups, which is why Tesla needs to ramp Cybertruck production and lower prices as quickly as possible.

Leaving money on the table does nothing to facilitate that. Getting as much per vehicle as the market will bear, does facilitate that. What GM is doing with the Silverado, limiting production volumes, is ensuring they can keep the prices high and sales low. Watch, they will not make even as many as they claimed. It will remain a very niche vehicle, even if the range spec impresses the uninformed. Cybertruck production volumes will grow steadily to impressive numbers (which implies a steady lowering of the price to constantly expand their addressable market).

I expect Cybertruck production volumes to be in line with guidance (or higher) while Silverado EV volumes will not even meet GM's lower guidance.

Now, you tell me, who is selling out to shareholders, and who is following a mission of accelerating the transition to sustainable energy?

Well, you can call it a sellout to the shareholders who bought into the mission.

 

[Cyber1qhorsey]

My theory - buy my first Tesla in 2024. Learn to love it, hopefully! Get CT invite, early 2025. Then decide! This Owners club incredibly helpful!!

 

[GuyV]

S&P isn't some set percentage of the economy, though. And car prices, although up, aren't up that much.

Which was my point.

-Crissa

The S&P 500 represents about 80% of total market capitalization. It corelates with Real GDP but is more volatile and predictive of where it is moving. Some car, especially truck, prices are up just about as much, or commanded higher prices from the start. The FS is more equivalent to the lower volume, high price, high margin segments, and when it is finished Cybertruck will be matching mainstream prices.

 

[GuyV]

Who doesn't love Gumby? Lol

The Blockheads.

 

[GuyV]

It’s day one of Q3.

We will soon find out if non-FS Cybertruck’s start production as Elon stated.

Will early “wave 1“ Foundation Series invites convert to non-FS invites?

At least they've started Tactical Grey interiors. It's a step.

 

[Spacenoddle]

I have also spent a good amount of time in every model of Tesla. I think they have been 4 for 5 in putting out something I'd want to own. The X missed the mark, it's the only Tesla I don't want in my garage.

Yeah, boring car indeed.

 

[Crissa]

GDP ≠ Inflation. While the two measures usually move together, inflation is an independent number regarding costs while GDP regards transactions. They ca, and have, totally moved in opposite corners.

The portion of the economy that the S&P represents fluctuates depending upon how much of the economy is captured by the top 500 public companies - if a larger portion is represented by private or just more companies and startups, the S&P will be less of the economy. If companies gobble each other up, more will be represented by the S&P.

And inflation itself isn't really a measure of true cost - but cost, in that moment. It includes friction that raises price and profit taking which also raises prices and shortages which also raises prices; not just demand, which itself can also, raise prices as people bid against each other for goods and services.

Having inflation is good, because it raises the cost of capital hoarding things and money away from the markets - hoarding, cornering, and saving all reduce GDP while increasing inflation.

Gotta remember these things are balances.

-Crissa

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