By Tim Higgins July 23, 2019 2:15 pm ET Sales of Tesla Inc. TSLA 1.34% ’s high-end Model S sedan have taken a big hit in the company’s most important U.S. market, California, as the electric auto maker is leaning more heavily on selling the lower-priced Model 3 compact car, new data show.
The new data from research firm Dominion Enterprises indicates the stylish sedan that arguably changed car buyers’ view of electric cars is losing its luster. Tesla is increasingly dependent on sales of the smaller Model 3, which starts at about $35,000, less than half the price of the most basic Model S.
Ahead of the earnings, Tesla shares recently traded at $257.80, down 15% over the past year but up 44% from their low in June. Analysts surveyed by FactSet, on average, expect total deliveries of the Model S and Model X vehicles to drop 30% this year compared with last year. Tesla has delivered a total of more than 158,000 of its three vehicles through the first half and would need to increase the pace of sales in the final two quarters compared with the record second quarter to meet its year-end goal.
With Tesla selling cheaper vehicles, analysts are increasingly worried about the company’s ability to maintain higher margins. Analysts on average predict second-quarter margins, excluding revenue from the sale of credits, will fall to 20.1% compared with 24.7% in the fourth quarter. Some analysts, however, think Tesla has made progress in reducing costs and can stave off a steep decline.
That gap has widened to about $16,000. The most expensive Model 3 version now sells for almost $64,000, down from a fully loaded version going for about $69,000. Tesla last week increased the cost of the standard Model S to $79,990. It also effectively lowered the highest-priced version of the Model S to about $113,000 from about $130,000 by making the previous $20,000 Ludicrous Mode upgrade part of the performance version.
Threaten
Nonsense! Why is everyone so blind to the fact that Tesla will likely post a profit for the 2nd quarter? I will highlight information that is public but for some strange reason ignored about 10 to 15 minutes before the market closes Wednesday. Follow me if you are interested.
There are no profit ambitions for Tesla elonmusk
It is evident that the invention of the electric car is the way to the future, but with the super production of oil and the prices becoming very stable is still feasible to walk or buy cars driven to internal combustion.
It’s a fact that the high priced Mod S, X are not depended upon for near term volume sales as the lower price Mod 3. The Mod Y is expected to fill out overall volume sales in the out years and provide bigger margin and make company profitable. S,X refresh can wait.
Design upgrades would be a start.
Is WSJ capable of writing anything other than hit pieces against Tesla? Literally the day before earning and you’re trying to smear them. You’re not fooling anybody timkhiggins
Too damn expensive tbh
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