Tesla slashes vehicle and self-driving-ish software prices as shares plummet
- Reference: 1713811513
- News link: https://www.theregister.co.uk/2024/04/22/tesla_cuts_prices/
- Source link:
Prices began falling on Friday, when Elon Musk's electric car operation [1]slashed $2,000 off the price of Models Y, X, and S while leaving the sticker prices unchanged on the Model 3 and Cybertruck. By Saturday price tags on the Model 3 had [2]shrunk in China and Germany. Other cuts were reported around Europe, the Middle East, and Africa, a Tesla spokesperson [3]told Reuters.
Tesla also cut its so-called Full Self-Driving subscription by a third in the US over the weekend, slashing the annual price from $12,000 to $8,000.
[4]
Speaking on his social media platform X over the weekend, Tesla supremo Elon Musk [5]said price adjustments are an essential part of doing business in the auto industry.
[6]
[7]
"Tesla prices must change frequently in order to match production with demand," Musk said.
But that hasn't been enough to reassure investors, who caused Tesla shares to plunge below $140 on Monday morning – just a day before Tesla plans to hold its Q1 2024 earnings call. Great timing made even worse by the week Tesla has just had.
[8]
It started last week Monday with news Tesla was [9]laying off 10 percent of its employees in the face of decreased deliveries. That was followed not long after by the company [10]asking shareholders to reinstate Musk's $56 billion pay package that was recently voided by a Delaware court – again, bad timing given the state of Tesla lately.
Then, on Friday, all 3,878 Cybertrucks on the road were recalled because their accelerator pedals kept getting wedged against the vehicle's interior, causing [11]unintended acceleration . The fix? A [12]single rivet to keep the piece in place.
Along with cutting prices over the weekend, Elon Musk also [13]postponed a scheduled trip to India in which he was predicted to announce Tesla's expansion into the country. Musk said "very heavy Tesla obligations" caused him to postpone the trip.
[14]Tesla Cybertruck turns into world's most expensive brick after car wash
[15]Tesla's Cybertruck may not be so stainless after all
[16]Tesla power steering probe upgraded after thousands more incidents reported
[17]Despite two previous court victories, Tesla settles third Autopilot liability case
All these factors, combined with a fresh round of price cuts, have put Tesla in a delicate position, though not a unique one.
Tesla's shrinking shares are being [18]echoed by Chinese EV maker Li Auto, which has also seen its share prices collapse of late. Like Tesla, Li has slashed its vehicle prices and seen sales fall short of analyst expectations. EV sales have generally been on a [19]decline of late, putting some of the world's biggest manufacturers – like Tesla and Li – in a relatively tight spot.
[20]
Whether Tesla's troubles are only linked to a changing EV market isn't necessarily the case, though. Tesla recently announced plans to [21]kill its low-priced Model 2 vehicle – a seemingly ideal move when consumers want [22]lower priced electric cars. Instead, Tesla seems to have dumped all its eggs in the self-driving basket, with Musk proclaiming Tesla would unveil a new robotaxi in August.
Analysts weren't impressed. Deutsche Bank's Emmanuel Rosner downgraded Tesla from buy to hold while also lowering its price target from $189 to $123. The reason for the downgrade, Rosner said, was the Model 2 and robotaxi news.
Come tomorrow, and Tesla's earnings call, we might just see how low those shares can go. ®
PS: Mercedes [23]now reckons it's the first automaker to sell actual self-driving cars in America that don’t require drivers to keep an eye on the road.
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[1] https://www.nbcnews.com/business/business-news/tesla-cuts-us-prices-3-electric-vehicle-models-difficult-week-rcna148693
[2] https://www.npr.org/2024/04/21/1246256484/tesla-car-price-cuts-elon-musk-cybertruck
[3] https://www.reuters.com/business/autos-transportation/tesla-cuts-prices-across-its-line-up-china-2024-04-21/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zibd@iI47O4KquZoqiL5qwAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://twitter.com/elonmusk/status/1782067256194633756
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zibd@iI47O4KquZoqiL5qwAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zibd@iI47O4KquZoqiL5qwAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zibd@iI47O4KquZoqiL5qwAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/04/15/tesla_lays_off_10_percent/
[10] https://www.theregister.com/2024/04/17/tesla_reinstate_musk_pay/
[11] https://www.theregister.com/2024/04/19/tesla_recalls_all_3878_cybertrucks/
[12] https://www.theregister.com/2024/04/22/tesla_accelerator_fix/
[13] https://www.reuters.com/world/india/teslas-elon-musk-postpones-india-trip-sources-say-2024-04-20/
[14] https://www.theregister.com/2024/04/20/cybertruck_car_wash_mode/
[15] https://www.theregister.com/2024/02/13/tesla_cybertruck_rust/
[16] https://www.theregister.com/2024/02/02/tesla_power_steering_probe_upgraded/
[17] https://www.theregister.com/2024/04/09/tesla_settles_autopilot_case/
[18] https://www.cnbc.com/2024/04/22/tesla-shares-slide-li-auto-sinks-as-ev-makers-slash-prices.html
[19] https://www.nytimes.com/2024/04/15/business/ev-car-sales-tesla.html#:~:text=Nearly%20269%2C000%20electric%20vehicles%20were,the%20final%20quarter%20of%202023.
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zibd@iI47O4KquZoqiL5qwAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[21] https://www.reuters.com/business/autos-transportation/tesla-scraps-low-cost-car-plans-amid-fierce-chinese-ev-competition-2024-04-05/
[22] https://www.usatoday.com/story/money/cars/2024/04/03/electric-car-ev-sales-slump-consumer-gap/73181707007/#:~:text=%E2%97%BE%20Lower%20prices%3A%20Among%20those,are%20only%20four%20below%20%2440%2C000.
[23] https://fortune.com/2024/04/18/mercedes-self-driving-autonomous-cars-california-nevada-level-3-drive-pilot/
[24] https://whitepapers.theregister.com/
Re: "an essential part of doing business in the auto industry"
Bells are an optional extra.
Re: "an essential part of doing business in the auto industry"
They're a backup for the horn.
Nothing says, "Pay me $56bn" like soft demand and massively embarrassing recalls!
I still can't believe people are willing to pay $8,000 pa for access to 'full self drive' which neither full or self driving. Its a level 2 driver aid that still requires you to be in control of the car at all times.
So calling their tech 'Autopilot' and 'full self drive' are misleading at best and dangerous at worst. As no matter how many warnings you tell some people they are just going to assume 'full self drive' means exactly that and expect their car to be able to drive itself under all circumstances.
Considering level 5 fully autonomous driving has been promised as coming since 2019 and has yet to materialize (the new date is August now with Elons robo taxi apparently) Tesla keep kicking the can down the road yet still charging its customers a subscription for what amounts to a fancy cruise control and auto parking feature.
Personally i don't see even with the advances in AI we have had recently, that current on the market Tesla's are ever going to achieve level 5 autonomous driving via a software update like what Tesla has been promising.
I've bought actual cars outright for less than a year's subscription and been able to drive them unaided.
A few years ago
Musk said the price of FSD would "only go up" in the future as it would sometime enable yearly revenue of $100K from having your car act as an autonomous taxi instead of sitting in your garage!
It did go up from up $12K to $15K since then, but dropping the price doesn't make it seem like it is going to be generating a yearly income of $100K for Tesla owners anytime soon. I look forward to all the interesting confabulations Musk will come up with for the analyst call when they announce earnings, or lack of. I'm sure El Reg will run all the most outrageous ones in a story so I won't have to go looking for them.
Alternative headline
Tesla shares crash.
Plummeting is for Boeing.
Re: Alternative headline
Tesla's can plummet... off a cliff. About a half hour or so south of where I live there's a bunch of mountains with winding roads. Every weekend people with their sports cars are out their driving up and down them, and every weekend the cops are hauling up what's left of some poor bastard and their car after they didn't make the turn sending them over a couple hundred foot sheer drop.
Imagine how annoyed current owners must be as their residual values drop. Especially leasing companies - how can they set a price if the manufacturer pulls tricks like this?
There’s reports that Porsche has made too many Taycans and can’t shift them. Rumours are that you can pick up a new one for a massive discount, so the residual value for existing owners has dropped to, well, nil. Battery worries seem to be the issue, no one wants a second hand one. If this is a pattern across the whole industry, then there’s going to be a lot of people who have lost a lot of money…
I know several people who have bought Nissan Leafs second hand. Seems to be on a basis of the car being cheap enough that, if you get 2 years motoring, it’s worth it (or at least not ruinous). The seller didn’t pay that much for it in the first place, so it’s a doable deal from their point of view too.
This might be where the elec car market can work, at the bottom end. That perhaps fits the billing, a small cheap car with a small cheap range for a modest price with low economic risk to any of the owners used for the small cheap journeys that make up the majority of the journeys driven. That people might have something else for the rarer long distance family trips is less important.
For me for example, if I bought a second hand car for £7k that cost next to nothing to charge and it lasted 2 years before the battery was completely zonked, I’m well ahead of the game and could afford to scrap it when it’s useless. But I’d not be wanting to spend £40k on a car that’s also going to be worth nothing in 2 years’ time. It doesn’t matter if that’s got 200 miles range because I don’t need that on a daily basis, and it’s not enough for when I do do long distances.
Though if we all followed this bangernomics model of electric car ownership, we’d be doubling the number of vehicles in ownership.
The other weird aspect is that I can see that the replacement price for a short range battery in a small car could be a lot lower than a high priced leading edge high capacity car.
I'm glad that I get an EV as a company car. The value loss thus isn't my problem, nor is the far higher price paid for electricity when on the move - I objected to the damn thing, but taxation forces this.
Thank God it's at least something with a decent dealership, and not made by Tesla.
That said, I was once trained to first define a problem and THEN look for a solution. Immediately going electric feels suspiciously like there's another agenda in play behind the scenes.
Scrap it after two years?
Buying a second hand EV for £7k and scrapping it after two years may well work for you, but until just one of the EV manufacturers comes up with a clearly defined answer as to how to replace the end-of-life batteries in any of their EV's which doesn't involve the me as the customer being multi thousands of £'s out of pocket in the process then an EV as a mode of transport will never be an option for me.
This is the fucking huge elephant in the room for EV's but no one seems to want to acknowledge that it's even there.
Also ...
Resale value.
Re: Also ...
In the case of higher end EVs also known as a black hole :(.
deja vu
I saw a video recently(which appears to be related to this article https://www.bbc.com/news/articles/cg3q95ednqwo ) regarding this previous tesla engineer reporting floor mat getting stuck on cars about a decade ago
https://finance.yahoo.com/news/former-tesla-engineer-says-company-175946111.html
"One engineer said he had wanted to fix a problem with the Model S's driver's seat floor mat since 2012. As designed, the floor mat could interfere with the brake, the engineer claimed."
"an essential part of doing business in the auto industry"
Sure. Because automakers everywhere routinely slash the prices of their options by a third.
Yeah. Pull the other one, it's got bells on it.