chasing nines

Thoughts on the Standard Model 3 and Standard Model Y from someone who spent a lot of time selling Model 3s and Ys: Tesla’s most popular models went down in price where everyone else just got $7500 expensive. They did so while maintaining the things that are most important to CUSTOMERS (range, FSD, and functionality) and the most important thing to INVESTORS (profitability). That’s huge for narrative as well as preventing an extended extreme dropoff in sales that will inevitably result. This is a golden opportunity to seize back market share that they’ve lost in the EV space. Once the sugar crash of the tax credit going away fades, Tesla is extremely well positioned to a degree that nobody else in the America is. The lower pricing means it’s cheaper for Tesla to buy down rates and offer aggressive promotions, making it easier to attract buyers. They were able to get the $43k dollar Model 3 to $299/mo with $0 down at one point so imagine what they can do with the $36k Model 3. As an investor I hope and expect to see Tesla start pushing very aggressive financing and lease deals to acquire more customers. The lower pricing also means that it’s easier for people to qualify for lending and leasing. $100 a month doesn’t seem like a lot but it is. It’s a lot easier for people to qualify for a loan if it’s 5 grand smaller. They also managed to do this without devaluing existing vehicles and burning their owners (again) with an huge depreciation hit. Going from $100k Model S to $45k Model 3 is less of a challenge in some respects because you can delete expensive stuff like the air suspension. It’s way harder to go from $43k Model 3 to $36k Model 3 without making the car feel like a total POS. They’ve made a great car that appeals to a broader group of people. Most importantly, it’s a Trojan Horse to get FSD to more people. The journey is made of many small steps and these vehicles represent another step down the path to a future of sustainable abundance.

ROUGH DAY TO BE A SPACEX HATER