One thing I love about Tesla is their plan was always all about the Model 3 (and eventually Y). They didn’t relegate their best technology into S/X and hobble the 3. They put everything they had into TM3 to make it the pinnacle of what they could accomplish and as forward thinking as possible. It’s an absolute generational leap which I think will sell very strongly for a decade. All the while they will continue to work on cost efficiency, margins, and scale, while delivering a constant stream of software and hardware updates to the growing fleet.
The next big refresh of S/X will drive them forward with their newest battery tech, powered by their Maxwell acquisition, and motor, suspension, and most notably I would assume materials improvements which will re-differentiate S/X from the 3 and pull more buyers up to that level.
But TM3P is just so incredibly compelling I’m not at all surprised a Tesla buyers at the $60k+ price point would go with that over the S.
I think we will see in Q3/Q4 that Tesla does not need a $60k ASP in order to be profitable. Part of that of course will be buoyed by credits and rebates which is an important part of their overall strategy. Legacy carmakers will pay Tesla billions to cover their ICE pollution cost.
How about addressing my points. Specifically focusing on profitability and their declining ARPU.
The Model 3 is substantially cheaper than the S/X models which means you get more volume with lower margins. And we are seeing quarter by quarter a drop in the ARPU as the S/X models are being cannibalised by the Model 3.
It's amazing that Musk has twisted the narrative to be all about deliveries instead of profitability. But ultimately unless they can dramatically reign in costs it will be their downfall.