Prices — up
According to the report, for Model 3 the gross profit in the third quarter increased by 20%. High margins were achieved mainly by the increase in the average price sold Model 3 with approximately $50,000 to nearly $60 000. This has made the production of the more expensive versions of electric — all-wheel drive version (AWD) and very powerful (Performance). These models are more difficult to manufacture, since they do not have one electric motor on the rear axle, one on each axis. The same Performance to 100 km/h accelerates in 5.7 seconds, not (as the rear-wheel Model 3), and 3.6 seconds.
In other words, the substantial profit of the company to a large extent was the result of sales of more expensive, though more impressive product. But such growth cannot be sustained — at least in the American market. It is simply not sold many cars at that price. Tesla can sell them the same as in the third quarter, but to increase sales won’t work.
In addition, Tesla has raised the price of the most difficult types of painting their cars (free of them, mainly black color) from $1000 to $2500. In fact, the consumer is not just arm-twisting: either give up exotic types of paint, or pay for them obscenely.
In fairness it should be noted that the gross profit above 20% went to Model 3 not only through arm-twisting to the buyer. The cost of man hours for one car of this type fell by 30% compared with the second quarter. They became even slightly lower than the twice more expensive Model S and Model X, which are much longer in production.
Manufacturing in China
Elon Musk does not hide that intends to continue to do everything that Tesla made a profit. At the conference with investors, he announced that accelerates the deployment of production in China, where it plans to build its third Girafarig — plant for production of lithium ion batteries. Contrary to previous plans, it will not begin in 2021, and 2019. To do it in time will be difficult. Land for Girafarig was received in Shanghai in October 2018. Although the construction has already started, to build a large automobile plant in less than a year — not an easy task.
Interestingly, the removal of part of production to China at Tesla is not the most standard American company scenario. This is usually done in order to bring released product in the US, where it is less profitable to produce because of the high labor cost. But the Mask, as usual, everything is upside down. In the quarterly report States that all production Giavarini 3 will go to the local market. The logic is. In China, sold more electric cars than the United States (however, in dollar terms less), and is the second largest market for Tesla. However, due to untied Donald trump trade war, China raised tariffs on American cars, and their value as a result of increased one-half. Therefore, the meaning of the construction in China of the plant is, and considerable.
The market is down the cliff
According to the report, American Automobile Association, in the spring of 2018, 20% of American consumers planned in the near future to buy an electric car. In 2017, the year they were 15%. The figure is expected to grow rapidly and further: 96% of car buyers Tesla recommend them to their friends — it’s a lot more than any other brand in the entire history of such surveys. Now the company sells more than 80 000 cars, which means that the number of free advertising agents she grows more than 300 000 people per year.
The trend is, admittedly, disturbing. The electric car in the near future I wish to purchase 30 million Americans, and their manufacture in the United States does not exceed 400 000 per year. The result is a high pent-up demand. Millions of consumers do not buy instead of my Honda Accord 2008 is the same, but 2018, and waiting, preferring a few years to ride its not new, but serviceable “Japanese” and not to pay for a new one.
In the above table, you can see that car sales in the U.S. have jump from a high cliff. In the midst of economic growth (above 4% of GDP per year) the United States has demonstrated unprecedented in such a situation, the slump in car sales. The problem is getting worse: for the 2017-2018 year, the number of “electroporation” motorists in the United States increased by 7.5 million people. Quickly to meet the demand, increasing the pace, is simply unrealistic. Therefore, the decline in sales of cars with internal combustion engine will go faster than time to turn around the production of electric vehicles. This means the overall deceleration in consumer demand in the country. In the coming years, this scenario could be repeated in the European Union and China.
Tesla — the end of agony
For many years the traditional automakers (except Nissan) have done the minimum possible in terms of production of electric vehicles. The behavior of the automakers seemed irrational: it was obvious that those who are early will start mass production of such machines, first learn to receive them with profit. Nothing but irrational it was not. All waiting for the fall of the company Elon Mask, or at least the moment when she admits to inability to mass produce electric cars. The same analysts predicted, and wall street. Why General Motors and other things was to deploy large-scale production of electric cars? Why risk a lot of money if you can just wait for the death of the main competitor?
A new quarterly report of the company Ilona Mask shows the “agony” of Tesla, marching mostly in the minds of its competitors comes to an end. Profit on new models higher profits of producers of traditional cars in the same price segment. Classic car manufacturers have to go to mass electrolink or die.