Submitted by TSLA4LIFE1 t3_10iwv6e in wallstreetbets
Sup regards, with Tesla's recent price cuts I wanted to quickly see what we can expect for gross margins which is typically the argument that Tesla bulls use to justify Tesla's insane valuation.
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The recent price cuts went to show that Tesla is indeed a Car company, and not a Tech company and the times of insanely high margins are now in the rear view mirror.
I took the average price cut weighted for car distribution (40/60% split between model 3 and y respectfully), and took a roughly 12% percent hit to ASP, and wanted to see what the margins would have been in Q3 of 2022 if they had instead had the new prices, and we can see it at 15.16% which is closer in line to traditional auto makers.
Calculations:
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Q1 margin calculations with -12% ASP
Thus we see the problem with car companies being high capex with low margins.
Keep in mind these price cuts came after Q4 so Tesla's upcoming earnings have the potential to be juicy, if we see a big run up prior/post earnings I plan on shortly Tesla down to new lows.
Also, of course Tesla always has grown deliveries so the margins wont be this bad in Q1 since they would have more units to spread over the fixed costs, but ASP would still be the biggest factor
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Positions: Wait for a earnings run up and short the shit our of this turd to <100 $TSLQ $ TSLS