More evidence that Tesla’s Elon Musk’s investor day was a complete waste of time and a badly executed PR job, even though credulous Australian investors belatedly took fright when he claimed Tesla would not be using rare earths in the drive trains of its future vehicles.
That panicked some local investors into selling down shares in Lynas Rare Earths, the biggest producer outside China, even though they pushed up the shares of emerging rare earths group, Hastings Technology Metals.
Analysts pointed out that, even if Tesla does cut the amount of rare earths used in its drive trains, other carmakers won’t necessarily follow.
And they also pointed out that Musk and Tesla have yet to meet any deadlines they announce for significant changes – the smaller battery and $US25,000 small Tesla are still in development, well after an update was expected.
As well the options for Tesla to replace rare earths or reduce the amount use involve using other minerals that would lower efficiency and increase the weight of the drive train.
And with EV sales rising, more rare earths will be used anyway – especially in non-auto areas such as wind farms and electric motors and similar equipment in many other areas (trains, planes, boats trucks).
But the most important news from Tesla didn’t come from the March 1 investor day or any of Musk’s subsequent tweeting on his Twitter black hole – no, it was the quiet announcement on the Tesla website early Monday morning that confirmed the company was cutting prices on some of its US models for the 5th time since the start of the year.
Tesla revealed price cuts on its two most expensive electric vehicles, days after its chief executive, Musk told the investor day that price cuts on other models had stoked demand.
And surely any move that boosts sales is good news for Tesla and its suppliers.
Musk has said time and time again in the past few months that Tesla would focus on lowering prices to drive demand and that it had seen success in sparking orders with global discounts introduced in January.
Tesla slashed prices on its cars across all its markets in January, offering discounts of up to 20%. They were the second cuts in China in less than a month after an earlier cut in December to drive sales growth.
It has been changing prices since with a pace and frequency that goes beyond what US car companies usually do. There has been at least one small price rise of $US500 in early February on some models.
The Model S and Model X, which come in base all-wheel drive (AWD) and performance “Plaid” editions, made up around 4% of Tesla’s global deliveries last year. Its two cheaper models, the Model 3 sedan and Model Y crossover, made up the rest.
Tesla’s website showed it had cut prices on both versions of its Model S by $US5,000. The basic version of Model S was cut by 5% to $US89,990.
Prices of both the performance and basic variants of Model X cars were cut by $US10,000, the electric vehicle maker’s website showed. The price of the basic, AWD version of the Model X was cut by 9% to $US99,990 while its performance Plaid version was cut by 8% to $US109,990.
Those prices are well above the $US55,000 limit for the $US7,500 subsidy under the Inflation reduction Act. Tesla’s January price cuts positioned the cheaper versions of the cars under the $US55,000 limit to encourage sales interest from consumers.
One drawback for owners of Tesla vehicles is that the used car price fall as they did after the global cuts in January, sparking protests in China and an upsurge in complaints in the US.
And if these price cuts do lift demand for Tesla vehicles, then more lithium will be needed, more nickel, copper, iron, graphite and a host of so-called green minerals – and rare earths. A win-win situation?
