The 18650 cell re-pricing theory of Q3 for $tsla (thread)
Given we have fairly accurate data on ASP for model 3, we can back-calculate ASP and it seems S/X ASP has dropped dramatically in Q3, they've also moved a higher than expected number of these cars. Everyone over-estimated auto revenue as a result. How odd!
In previous quarters this would be a disaster, any ASP fall comes right off a not-too-huge gross margin, all other things being equal.
If one accepts Automotive Revenue and Automotive COG at face value, and ignores leasing, then one way to make this work is to imagine Panasonic lent Tesla a hand and offered a big discount on the most expensive part of the cars: the battery cells. Only applied to old 18650s.
18650s are a dead product for automotive batteries. Panasonic may have felt they can take the hit. In this scenario, power walls and model 3s wouldn't benefit but S and X could dramatically increase their gross margin (depending on discount offered).
A very rough layout of how this might work is shown here. Guessing at ASP and Cost of S/X one can come close to the numbers for Q3.
The implications of this change also explains a reluctance Tesla has to drop Model 3 prices, despite apparently healthy results. Thoughts?
The implications of this change also explains a reluctance Tesla has to drop Model 3 prices, despite apparently healthy results. Thoughts?
