After seeing its sales slide during the first quarter of this year, Tesla needed to come up with an incentive to help boost sales of the sagging Model-X and Model-S. In that effort, Tesla is returning the offer of free SuperCharging on all Model-S and Model-X sold. The plan was last offered in 2018 and then ended after Elon Musk called the plan unsustainable.
Telsa has been making changes to their lineup and pricing almost monthly since the beginning of 2019, so this could be a short term offer or it could stick around longer. Tesla buyers who already purchased their car are out of luck though, the offer only extends to new purchases.
Over the weekend, Tesla CEO Elon Musk commented on Model Y production. Originally thought to be slated for production at Tesla's Gigafactory in Nevada, Tesla appears to have changed course.
Reported by Bloomberg, Musk said "Right now our default plan is to produce the Y at Fremont." during an interview on the "Ride the Lightning" podcast. "I was skeptical about whether this made sense at first, but my team convinced me the fastest way to get volume production is to do the Y at Fremont."
In order to free up space in the factory, Tesla plans to move Model S and Model X to a single line, according to current and former employees. Both models have seen sales tumble over the last 6 months as Model 3 sales increased.
Model Y sits on the same platform as the Model 3 and production is set to start in late 2020.
In the same podcast, Tesla made some claims about the upcoming Tesla truck. He said "It won't look like a normal truck. It's going to be pretty sci-fi" adding "It's going to be a truck that is more capable than other trucks. It will be a better truck than an equivalent F-150 in terms of truck-like functionality. That's the aspiration."
After much speculation, it has come to light that Apple did propose to bid on Tesla back in 2013 for $240 a share, higher than the sub-$200 a share Tesla is trading at today, according to CNBC. Analyst Craig Irwin told CNBC that there was a serious bid from Apple and says that multiple credible sources have told him so.
Tesla is down more than 46% from its high in August 2018 when CEO Musk tweeted that he had funding secured to take Tesla private at $420 a share via a Saudi Soverign Wealth Fund, but that tweet turned out to be false, Tesla reversed course, and got Musk and Tesla in trouble with the SEC and further cost Musk the Chairmanship of the company.
Now that Tesla stock is trading in the sub-$200 range, it becomes a substantially more attractive acquisition target, not only for Apple, but for other companies as well. The question remains what to do with Tesla's CEO Elon Musk. Apple's insistence on Musk's departure was apparently what killed the deal back in 2013.
Reports are that Apple is working on its own car technology, but acquiring Tesla would substantially boost their progress.
...Tesla stock under $200 as company faces cash crunch...
Tesla's stock opened under $200 at $197.75 on Tuesday, a substantial decrease from the $332.80 it was trading for in December 2018. In April, Tesla posted a $722M loss for the first quarter of 2019. Tesla has faced terrible delivery reports over the last two quarters while also trying to get the new Tesla Model Y production online and a Gigafactory in Shanghai operational.
The Los Angeles Times reports that Wedbush Securities Analyst Dan Ives has cut the price target of Tesla from $275 a share to $230 a share citing an escalating trade war between the U.S. and China. Another analyst cuts Telsa's forecast Chinese sales in half and sees the company being forced to take on new partners to make ends meet.
Tesla recently raised $2.7 billion in a stock and bond sale, an amount that Tesla head Elon Musk says will give the company about 10 months of cash.
Tesla is seeking to raise nearly $2.7 billion to add to its sagging balance sheet according to a filling. It would offer 3.5 million shares priced at $243 per share and a $1.6 billion convertible debt. Elon Musk will be buying $25 million in shares and currently owns around a 20 percent stake in the company.
Wall Street seemed to find this capital raise promising as it boosted shares 1.5% before the opening bell. Analysts were calculating that Tesla, which burned $1.5 billion in Q1-2019 alone, would not have enough cash to continue working on its Model Y crossover and the new Tesla Semi-truck, and also getting production rolling in China.
In the backdrop of a sagging US auto market, Tesla has seen demand for its cars soften dramatically in the US over the past two quarters, though demand for EVs in Europe has increased.
...swing from profit to big loss in one quarter...
Tesla posted a $722M loss for the first quarter of 2019, higher than analysts expectations. This was a swing from a 4th quarter 2018 profit of $139.5M. Cash on hand is $1.5B lower than end of 2018, now $2.2B, partially due to a one time payment of $920M in convertible bonds that came due.
Tesla says that is built 63,000 model 3s in the first quarter gearing up for overseas sales, though only 12,100 of those vehicle were delivered. Tesla is maintaining its projections of 360,000 to 400,000 vehicles total for the year.
Tesla recently announced updates to its Model S and Model X vehicles that allow them to travel further on a single charge and also charge up to 50% faster than before. These updates require the purchase of a new vehicle and cannot be simple downloads over the air. They are also offering current owners who purchase a new Model S or Model X Performance model a free upgrade to Ludicrous Mode. Part of the reason for this upgrade is that the Model S, Model X, and Model 3 now share drive components and that simplification could yield big savings for the company.
Tesla is also preparing for the launch of the Tesla Model Y small crossover based on the Model 3 sedan, but deliveries of that vehicle do not start until Fall 2020
We reported earlier in April that Tesla was preparing more efficient versions of their Model S and Model X. Yesterday Tesla announced improvements to the Model S and Model X Long Range models that will increase range to 370 miles and 325 miles respectively, based on EPA testing cycle. The vehicles will still use the same 100 kWh battery pack.
Unfortunately, customers will only get this upgrade when they purchase a new vehicle. The upgrade changes the drive hardware to the latest version of Tesla's motor technology. Now using a permanent magnet synchronous reluctance motor, silicon carbide power electronics, improved lubrication, cooling, bearings, and gear designs achieve a 10% improvement in range. This improvement works both during supplying power to the vehicle and during times of regenerative braking. In addition to adding range, power and torque has increased for all Model S and Model X versions, resulting in even better 0-60 times.
Along with this new more efficient powertrain, the Model S and Model X are now capable of 200kW charging on V3 Superchargers and 145 kW on V2 Supercharger. This enables drivers to charge 50% faster.
Tesla has also upgraded the air suspension system to be fully-adaptive. It will give an ultra-cushioned feel when cruising on the highway for firm up during more aggressive driving behavior. The adaptive suspension can receive over the air updates so that Tesla owners always have the latest technology.
Tesla will also be bringing back their standard range versions of these cars at a lower entry price that includes the latest motor and suspension updates. Any existing Model S or Model X owners who purchase a new Performance model of these cars will get a free upgrade to Ludicrous Mode at no additional charge.
The changes go into production this week and can be ordered today.
...If you want the mystical $35,000 Model 3, you're going to have to jump through some more hoops...
It was only eight weeks ago when Tesla finally announced that the $35,000 Model 3 would be available to order. This news caused the internet to go crazy on this news as it would become the most affordable model in Tesla's lineup. But late this week, the Californian automaker made some changes to the Model 3 ordering process to "simplify vehicle choices and make Autopilot more affordable."
On Thursday, Tesla said in a blog post that the $35,000 Model 3 - known as the Standard Range - would not be available to order online. If you want one, then you need to either find Tesla store that is still open or call the company directly. Why is this happening?
(Author's Note: A quick refresher; the Model 3 Standard Range gives you 220 miles, while the Standard Plus offers 240 miles. -WM)
There is some dispute to the claim of the Standard Plus outselling the Standard. In late March, The Drive reported that a number of customers have gotten text messages from Tesla saying their deliveries have been pushed back without a new delivery date. Several have reported getting calls from Tesla trying to upsell them into the Standard Plus model.
In Tesla's blog post, the off-menu version of the Model 3 will see its range decreased by 10 percent when compared to the Plus model, along with "several features will be disabled via software (including our onboard music streaming service, navigation with live traffic visualization, and heated seats)." Tesla also announced that Standard customers will have the option to upgrade to the Plus at any time, along with the option for Standard Plus owners to convert their model to the Standard and get a small refund "for the difference in cost."
As for pricing, the Standard Plus will now set you back $39,500 - up $2,000 over the previous Standard Plus. This is due to Tesla making Autopilot standard on all of their models. No pricing was given for the secret Model 3 Standard.
“Tesla is now facing a reckoning. Between the cost cuts, waning demand for its vehicles and now making the $35,000 Model 3 much harder to buy, the company is now quietly realizing it has to play by the same rules as every other automaker,” said Jessica Caldwell, executive director of industry analysis at Edmunds.
But wait, there's more!
Tesla also announced that it would be offering a lease for Model 3. It is a 36-month lease with mileage options ranging from 10,000 to 15,000 miles per year. But there is a big caveat to this. Unlike most leases where you can buy the car at the end of the lease, Tesla is not allowing any Model 3 customer to buy their vehicle after the lease. The automaker is planning to use them in their upcoming ride-hailing network.
Source: Tesla, Bloomberg (Subscription Required)
Photo by Vlad Tchompalov on Unsplash
Following a dismal fall in sales in the previous two quarters, Tesla has sacked several dozen employees in stores in Chicago, New York, and Tampa last week according to a report in Bloomberg. These cuts are the latest in a series of cuts to Tesla's retail staff that Tesla had announced earlier in the year. At first, Tesla had announced it would close most of its retail locations and moving to an entirely online retail model. They later changed course and dialed back the reductions with the caveat that some locations would still be closing. Tesla then raised the prices on the more expensive Model 3 trims
Most of the cuts came from staff who hold the position of Inside Sales and their managers. Inside sales teams reach out to potential buyers and stimulate interest with test drives.
According to sources familiar with Tesla software, Tesla is preparing to update the Model S and Model X with new, more efficient motors. Recent software updates have appeared that make reference to the new motors.
The new motors with the codename "Raven", are permanent magnet reluctance motors as found in the Model 3. These motors have the benefit of pre-excitation from the magnets giving them an efficiency advantage. They also work to reduce the overall costs of the vehicle. In the Model 3, the motors can achieve an efficiency rating higher than 97% compared to 93% on the Model S/X. The difference in efficiency is even more marked in stop and go traffic where the Model 3 is much more efficient than the AC induction motors in the Models S and X. These upgrades could work out to a longer range and better performance for the pair.
Tesla sales, though up year over year, have recently crashed down 31% from the previous quarter . While the timing of the release of these upgrades is not known, there are rumors that Tesla is planning a major interior refresh for the pair for 2020, so it could be matched with those updates. Important timing when vehicles like the Porsche Taycan, Audi E-Tron , and Polestar 2 will be hitting the market over the next 18 months.
Tesla unveiled their newest addition to their lineup, the Tesla Model Y, last night at an event in Los Angeles.
The Model Y is a crossover based on the Model 3 platform but is large enough to carry 7 adults. Inside, the high seating and panoramic roof lend a feeling of spaciousness. A front trunk and split folding second-row seats provide a total 66 cubic feet of storage. Like on the Model 3, accessing the Model Y works from a connection to the driver's smartphone. The Tesla Mobile App connects to features like remote door lock, Summon, remote pre-conditioning, location tracking, and more. Tesla has built the Model Y to be the safest mid-size SUV with rigid body structure and large crumple zone.
The Model Y will come in 4 powertrain variants. The Standard Range version will start at $39,000 plus $1,200 delivery charge. It will also be offered in Long Range, Dual-Motor All-Wheel Drive, and Performance. The highest performance Model Y will have a 0-60 of 3.5 second and a top speed of 150 mph. Standard Range battery will offer 230 miles of range while the Long Range version will offer 300 miles on a full charge.
Deliveries of the Performance, Long Range, and Dual-Motor models will begin in Fall of 2020 while the Standard Range will begin deliveries in Spring of 2021.
Will raise prices on certain models and trims 3% to compensate.
On February 28th, Tesla announced that they would be closing most of their retail locations and moving to an online sales model in order to cut costs. In a blog post yesterday, Tesla has reversed course on that position somewhat, and will not only close a portion of their stores.
Some of their locations, around 10%, have already closed and Telsa said they would have closed anyway due to low foot traffic. Another 20% of locations are currently under review and depending on performance will be decided on in the next few months.
All sales will still remain online only, and customers who come into the stores will be shown how to order their vehicle online. The 1000 mile or 7 day return policy (minus the non-refundable delivery charge) will remain in effect for any customer who has doubts about their purchase. The remaining Tesla stores will have cars available for test drive and will keep a small number of vehicles in stock for people who want to take delivery immediately.
To compensate for this change in direction, Tesla will be raising prices by 3% on the more expensive trims of Model 3, and the Model S and Model X. The base Model 3 remains $35,000 plus $1,200 delivery charge. Current prices are valid until March 18th.
Can charge at a rate up to 1000 miles of range in one hour
Tesla announced the evening of March 6th 2019 that Version 3.0 of their supercharging network would roll out across the globe and be in place by the end of calendar year 2019. With the growth of the global market and to support a ever growing base of Tesla 3 owners and the upcoming new products, charging needed to get faster to reduce wait times by their customers. As such. V3 Supercharging was born out of Tesla's experience with the world's largest grid connected batteries enabling Tesla to surpass all OEM auto competitors in recharging their electric auto's.
V3 Supercharging is a utility scale new architecture product that can delivery a peak rate of 250kW per car using a new 1MW power cabinet delivered via liquid cooled charging lines. This allows the Tesla 3 to recover 75 miles of range in 5 min with a charge rate of 1000 miles per hour. This new charging technology cuts the average time spent recharging by 50%. In addition to the new 250kW Superchargers, Tesla is able to push out an update to the existing V2 Superchargers that will allow a 145kW charge rate on the 12,000 plus V2 Superchargers around the world. This will be coming in the next couple of weeks as Tesla works to reduce charge times at existing charge stations. Tesla is expecting to double by the end of the calendar year 2019 the number of Tesla auto's on the road globally and having a faster recharge time on existing Superchargers is critical, but in high volume areas, this will need to be addressed and Tesla says they can do this by adding the 250kW chargers to existing stations.
Tesla V2 charging cable to the left, V3 liquid cable to the right.
This new supercharger no longer splits power with the vehicle next to you but delivers the full amount of charge to your battery. Tesla expects the average time spent by a customer at a Supercharging station to drop to 15 min on average.
Tesla is also pushing out to Tesla 3's a new On-Route battery Warmup software feature that will intelligently heat the battery to the optimal temperature so that at the time of arrival at the supercharging station it can take a full high capacity charge quickly to get you on your way. This becomes very important as Tesla says with the Model Y on the way V3 SuperCharging is the only way Tesla can sustain quickly keeping people moving and not waiting around.
San Francisco bay area will get the first of the all new V3 Supercharger stations. These new V3 chargers will be made available to the Tesla Early Access Program participants. V3 Supercharging stations will get installed in North America during Q2 & Q3 time frames with Asia and Europe installations starting in Q4 of 2019.
Now you might ask what about the Tesla S and X auto's? While they currently will not be able to take advantage of the 250 kW chargers, Tesla does say in their release that in the coming months, Tesla S and X will get software updates to allow them to use the 145kW V2 Superchargers.
One might ask how does this compare to what the VW-backed Electrify America network? Electrify America is currently rolling out 350 kW capable chargers. These chargers will allow a Tesla 3 to get 185 miles of range in 9 minutes once the Tesla 3 has their new Software update.
The Future of ultra fast recharging is coming and should allow a revolutionary change in the way people drive.
Expected to be about 10% more expensive than Model 3
Elon Musk revealed in a series of tweets that the Tesla Model Y compact crossover would be revealed at an event in their LA Design Studio on March 14th. Detailed specs, pricing, and even test rides will be available. Musk says that the Model Y will be about 10% larger than a Tesla Model 3 and expects pricing to be about 10% more. The Model Y will share battery sizes with the Model 3 and because of increased size and weight will get slightly less range. Musk indicated that the Model Y will look a lot like a Model 3 and will not have the falcon wing doors found on the Model X.
Last week Tesla announced that the base model $35,000 (before destination charges) version of its Model 3 sedan was now available and that it would be closing most of its retail locations to focus mainly on online sales.
After a long wait, the standard Model 3 is now available.
Tesla announced that beginning today, the standard version of the Model 3 with a base price of $35,000 is available for order. The base Model 3 has a top speed of 130 mph and a 0-60 time for 5.6 seconds. Additionally, Tesla will be introducing a Model 3 Standard Range Plus with 240 miles of range, top speed of 140mph, 0-60 of 5.3 seconds, and some interior upgrades for $37,000 before incentives. Tesla claims that these upgrades give customers 9% more range for 6% more money.
Existing Model 3 drivers will be receiving firmware updates that will increase the range of the Long Range rear-wheel drive Model 3 to 325 miles and the Model 3 Performance top speed to 162 mph. The firmware update for all Model 3 cars will give an approximate 5% power increase.
In the same announcement, Tesla revealed that they will be closing most of their retail locations with the exception of a few high traffic outlets and moving to an online-only sales model. Customers buying a Model 3 will now be able to try the car for 7 days or 1,000 miles and return it for free. Tesla claims that this will ease customer concerns about being able to test drive the vehicle before purchase. By moving to an online-only system, Telsa claims that it will be able to reduce prices 6% on average.
Tesla is moving to a Same-Day and in some locations Same-Hour service system where Tesla comes to the driver rather than the traditional method of vehicle service. Tesla is also guaranteeing everywhere in every country they sell in.
Last Tuesday, Tesla CEO Elon Musk tweeted that the company would produce "around 500,00" cars in 2019, a large increase over the goal of 400k vehicles the company previously forecast in January. Musk later corrected himself and said that is meant "annualized production rate at the end of 2019 probably around 500k".
The problem with this tweet is that back in October, Tesla and Musk had entered into a settlement with the SEC that Musk's public statements regarding Tesla production, finances, and other such matters would be reviewed by the company's board of directors before they were posted. The settlement stems from a fraud case where Musk tweeted that "funding has been secured" to take Tesla private, a tweet that later turned out not to be true. Tesla's lawyers acknowledged to the SEC on Friday that the posts in question had not been reviewed.
Yesterday, the SEC filed a motion with the Federal District Court in Manhattan that claims Musk had "violated the court’s final judgment by engaging in the very conduct that the preapproval provision of the final judgment was designed to prevent.". Further, the tweet had gone out to 24 million followers.
Musk argues that the substance of his tweets had already been vetted, approved, and publicly disseminated. The defense comes from Telsa's earning report which had a forecast production of between 350,000 to 500,000 cars.
The federal judge has a range of options from imposing a fine, impose restrictions on Musk's use of Twitter, or even set up for a later removal of Musk as CEO.
Tesla stock dropped about 3% in the hour directly after the motion was filed.
Tesla Model 3 "Recommended" Rating Rescinded by Consumer Reports
Tesla Laying Off 7% of Workforce
Tesla Dials Backs Production Hours on Model S and X
Consumer Reports has rescinded the "Recommended" rating after a high number of survey responses came back with reliability complaints. Survey respondents have indicated that the electronics in the car have issues such the screen freezing or acting as though it was being touched rapidly in multiple locations. This issue would cause music to play, volume to increase to maximum, or the navigation map panning and resizing.
Some owners reported issues with trim and paint, with a few, including CR themselves, experiencing a large crack in the rear glass.
When the Model 3 came out in 2017 it received an initial rating of average based on the fact that it shares so much technology with the then average rated Model S. Some early adopters reported issues with braking that dropped the score to below average. Telsa issued an over-the-air update to correct the braking issue and the score returned to average.
The Model S's rating has been inconsistant as Telsa has made hardware changes over the years. CR dropped the "Recommended" rating from the Model S in the fall of 2018 due to issues with the suspension. Tesla made AWD and air suspension standard on the Model S for model year 2017.
The Model X has always had a below average rating and has never earned a "Recommended" largely due to problems with its falcon-wing doors.
Tesla is expected to debut a new crossover this year along with the production version of its Semi-truck.
Third party analysis of data shows the NHTSA flubbed the numbers.
Back in 2017, the NHTSA released a report on the safety of Tesla's Autopilot system after the fatal crash of a Tesla owner in 2016. That report claimed that the use of Autopilot, or more precisely the lane-keeping function called Autosteer, reduced crash rates by 40%.
In that original crash, the owner repeatedly ignored warnings to resume manual control of the vehicle. Critics questioned whether Autopilot was encouraging drivers to pay less attention to the road. The NHTSA report appeared to put those concerns to rest.
Later, when a second driver died in an Autopilot related accident, Tesla CEO Elon Musk pointed to the NHTSA study and the 40% increase in safety claim. Now, 2 years after the original report. According to a report by Arstechnica, a third party has analyzed the data and found the 40% claim to be bogus.
Originally the NHTSA data on Autopilot crashes was not publically available when Quality Control Systems, a research and consulting firm, requested it under a Freedom of Information Act request. The NHTSA claimed the data from Tesla was confidential and would cause the company harm if released. QCS sued the NHTSA and in September of last year, a federal judge granted the FOI request.
What QCS found was that missing data and poor math caused the NHTSA report to be grossly inaccurate. The period in question covered vehicle both before and after Autopilot was installed, however, a significant number of the vehicles in the data set provided by Telsa have large gaps between the last recorded mileage before Autopilot was installed and the first recorded mileage after installation. The result is a gray area where it is unknown if Autopilot was active or not. In spite of this deficiency, the NHTSA used the data anyway.
In the data provided only 5,714 vehicles have no gap between the pre and post Autopilot mileage readings. When QCS ran calculations again, they found that crashes per mile actually increased 59% after Autopilot was installed.
Does that mean that a Tesla using Autopilot makes a crash 59% more likely? The answer to that is no for a number of reasons. First is that the sample size QCS had to work with is a very small percentage of Tesla’s total sales. Secondly, the data is only representative of vehicles with version 1 of Tesla’s Autopilot, a version that Tesla hasn’t sold since 2016.
Tesla stopped quoting the NHTSA report around May of 2018, possibly realizing something was fishy with the data. They have since taken to their own report stating that cars with Autopilot engaged have fewer accidents per mile than cars without it engaged. This has some statistical fishiness to it as well. Autopilot is only meant to be engaged on the highway and due to the higher rate of speed all vehicles have a lower rate of accidents per mile.
We may just have to wait until more data is available to find out if Tesla Autopilot and systems similar to it make crashed that much less likely.
Ultra-capacitor maker acquired through a $218 Million Stock Swap
Maxwell Technologies has announced their definitive merger agreement with Tesla, Inc. This is a $218 million dollar all-stock deal which put a value of $4.75 per share on the Maxwell common stock. To quote the news announcement from Maxwell;
Tesla CEO Elon Musk is on record saying that ultracapacitors could provide a more likely bet for a breakthrough in energy storage than batteries. Maxwell Ultracapacitors can hold up to 300 watt-hours of electricity per kilogram. This represents 20% more storage than Tesla's largest battery cell pack. Maxwell is also on record saying that their Ultracapacitors have the potential to store more than double the energy by mass versus Tesla's current cell design and will allow Tesla to ramp up the density and speed factor of their auto's while greatly reducing the time to recharge.
Looking at where Tesla is today and for the future, this purchase has to be also based on the fact that Maxwell Ultracapacitors use solid-state technology with no flammable electrolytes or rare earth minerals such as cobalt. One also has to think that this could be a hedge as Panasonic is on record as saying they will not have solid state batteries for about 10 years unlike Volkswagen, Mercedes-Benz, Fisker, Dyson and other auto companies who have stated they will have solid state batteries in their electric vehicles between 2022 and 2025.
Maxwell is also the ultracapacitor supplier to Geely, the parent company of Volvo where they will be used in Volvo's plug-in hybrids.
Maxwell has also announced that they will showcase their Ultracapacitor storage system at Key Q1 2019 Grid and Utility Events such as DistribuTECH in New Orleans and Energy Storage Europe in Germany. To quote their press release:
This one could take as a sign of how Tesla will grow their own home and business storage business with Solar. Musk in the most recent earning's call stated he thinks Tesla's energy storage business is to be one of their big growth areas this year.
Tesla isn't done with price cuts it seems. Bloomberg reports that the automaker has dropped the price of all Model 3 models by $1,100 - bringing the base price to $42,900. The reason cited by Tesla was the end of a customer referral program that ended up costing them more than they realize.
The program gave new owners six months of free supercharging if they were referred by a friend. Those who referred a number of people got rewarded with various prizes such as getting the next-generation Tesla Roadster.
This is the second price cut for Model 3 this year. Last month, Tesla instituted a $2,000 price cut on their lineup to soften the blow of the Federal Tax Credit being cut from $7,000 to $3,750.
Before January comes to a close, Tesla has announced some more changes for the Model S and X. Instead of using 100D and P100D to designate models, Tesla will be using the naming system found on the Model 3. This is how it will break down.
100D = Extended Range
P100D = Performance
P100D with Ludicrous Mode = Performance with Ludicrous Mode
There will also be base models known as the Model S and Model X. They'll get the same 100 kW battery as in the extended range models, but range will be locked to 310 Miles (Model S) and 270 miles (Model X). You can pony up $8,000 to gain the extra range (335 for the Model S, 295 for the Model X).
Earlier in the month, Tesla dropped the 75D and made the 100D the new base model (which in turn raised the base price by $15,000 or more).
Hat tip to @dfelt for tipping us to this story
Tesla announced yesterday that it will reduce production hours for the Model S and Model X. This follows news of Tesla cutting seven percent of their workforce and dropping 75D variants of the S and X.
“We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3. As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly,” Tesla said in a statement to Bloomberg.
According to unnamed current and former employees, Tesla has set "substantially lower daily production targets" on the Model S and X. Tesla declined to comment when asked about the production targets.
This is causing concern to grow about the demand for Tesla's more expensive (and profitable) vehicles, as it gears up to get more Model 3s out the door.
Hat tip to @balthazar for notifying us about this story.
In an email to all employees today, Elon Musk has announced that Tesla plans to layoff 7% of its staff or about 3,150 jobs. In addition to these cuts, Tesla will also retain only the most critical of contractors and temporary workers. Tesla's workforce grew by 30% last year.
Musk reported that preliminary financial results for Q4-2018 show a small profit, smaller than the 4% profit reported for Q3-2018.
Musk stressed that Telsa must work to get the mid-range Model-3 available in all markets by May in order to target a tiny profit for that quarter.
The email was also posted to Tesla's company blog.
Hat tip to reader @Cmicasa the Great for notifying us of the story.
Dropping the base 75D, the new entry-level for Model-S and Model-X is the 100D.
Tesla is moving further into exotic car territory with the Model-S and Model-X. Elon Musk announced in a tweet on January 9th that after January 13th, the 75D versions of both vehicles would no longer be available for order and the new entry-level model will be the 100D.
The starting price for Model-S 75D is $76,000. That gets you an AWD EV with 259 miles of range that can do 0-60 in 4.2 seconds. Telsa's AutoPilot is available for an additional $5,000. Moving to the 100D is an increase of $18,000 to $94,000. That increases the range to 335 miles and cuts a tenth of a second off the 0-60.
The Model-X 75D starts at $82,000 with a range of 237 miles. With that gone, the new base Model-X 100D results in a $15,000 increase in Model-X base price to $97,000 with an increase of range to 295 miles.
These price increases come on the back of the reduction in federal tax credits that begin this year, from $7,500 to $,3750. That brings the total effective price increases for the Model-S and Model-X to $21,750 and $18,750 respectively. After June 30th of this year, the tax credit will fall further to $1,875.
The Model-S and Model-X have been selling well against such heavyweights as the Mercedes S-Class and BMW X5. However, Porsche, Jaguar, Mercedes, and Audi, as well as upstart Rivian , are all releasing competitors to the Telsas in the coming months. Whether Tesla can maintain that momentum with $20,000+ price increases remains to be seen.
Hat tip to reader @balthazar for pointing us to this story.
Helping soften the blow of the reduced federal tax credit
A new year marks the beginning of the reduction of the federal tax credit for Tesla - from $7,500 down to $3,750. To counteract the reductions, Tesla has instituted a $2,000 price cut on all models. Here is how the pricing looks like,
$52,200, Long Range
This reduction comes on the same day that Tesla announced fourth quarter production numbers. The past few months saw Tesla making cuts in colors and equipment to help reach their goal of delivering 100,000 Model S and X vehicles by the end of this year - they narrowly missed it with 99,394 deliveries. For the Model 3, Tesla was able to deliver 145,846 vehicles in 2018.
Source: Bloomberg, Tesla
Tesla Q4 2018 Vehicle Production & Deliveries, Also Announcing $2,000 Price Reduction in US
PALO ALTO, Calif., Jan. 02, 2019 (GLOBE NEWSWIRE) --In Q4, we produced and delivered at the rate of nearly 1,000 vehicles per day, setting new company records for both production and deliveries.
Production in Q4 grew to 86,555 vehicles, 8% more than our prior all-time high in Q3. This included:
61,394 Model 3 vehicles, in line with our guidance and 15% more than Q3.
25,161 Model S and X vehicles, consistent with our long-term run rate of approximately 100,000 per year.
Q4 deliveries grew to 90,700 vehicles, which was 8% more than our prior all time-high in Q3. This included 63,150 Model 3 (13% growth over Q3), 13,500 Model S, and 14,050 Model X vehicles.
In 2018, we delivered a total of 245,240 vehicles: 145,846 Model 3 and 99,394 Model S and X. To put our growth into perspective, we delivered almost as many vehicles in 2018 as we did in all prior years combined.
Our Q4 Model 3 deliveries were limited to mid- and higher-priced variants, cash/loan transactions, and North American customers only. More than three quarters of Model 3 orders in Q4 came from new customers, rather than reservation holders.
There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019.
1,010 Model 3 vehicles and 1,897 Model S and X vehicles were in transit to customers at the end of Q4, and will be delivered in early Q1 2019. Our inventory levels remain the smallest in the automotive industry, and we were able to reduce vehicles in transit to customers by significantly improving our logistics system in North America.
Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000. Customers can apply to receive the $3,750 federal tax credit for new deliveries starting on January 1, 2019, and may also be eligible for several state and local electric vehicle and utility incentives, which range up to $4,000. Combined with the reduced costs of maintenance and of charging a Tesla versus paying for gas at the pump – which can result in up to $100 per month or more in savings – this means our vehicles are even more affordable than similarly priced gasoline vehicles.
Tesla’s achievements in 2018 likely represent the biggest single-year growth in the history of the automotive industry. We started the year with a delivery run rate of about 120,000 vehicles per year and ended it at more than 350,000 vehicles per year – an increase of almost 3X. As a result, we’re starting to make a tangible impact on accelerating the world to sustainable energy. Additionally, 2018 was the first time in decades that an American car – the Model 3 – was the best-selling premium vehicle in the U.S. for the full year, with U.S. sales of Model 3 roughly double those of the runner up.
We want to thank our customers, suppliers, investors, and especially our employees, who worked so hard to accomplish this.
Love the Tour de Costco lunch. I have no guilt over it, after all they are there for you to sample and see if you like it. Nothing about purchasing now, but you might in the future. Love when the Aidells Sausage bazaar comes to town.
Love the costco special edition of Chicken sausage with Mushroom and mozzarella.
Houston can be cool, as in likable. At least it's a major Texan city near a large body of water. I know summers there can be ridiculously hot. Enjoy.
Man, I don't think the ladies with their hair in hair nets at Costco like folks who, once they catch on, are doing the "Tour de Costco" lunch.
"I'm in the tire shop."
"I came to look around to see if there are any specials on clothing."
Blah, blah, blah.
Have you ever done that? Sometimes, when traveling or commuting, you're driving down a freeway, it's about feeding time, and, there, like a mirage, a Costco appears. For what I pay for my annual membership, I don't buy much, so WTH. Then, if I do the "Tour de Costco," I might have some pangs of guilt, so I head to "Cafe 1.50" and get their hot dog (with sauerkraut) and a soft drink.