Nickel Prices (The bubble has popped)

[Ogre]

Remember a few months ago when there was near panic when spot nickel prices increased 20x?

Remember how people said it was going to cause a huge increase in the price of the Cybertruck?

Remember how some of us said it was a short squeeze and temporary and that Tesla has long term contracts?

Well the bubble popped. We’ve returned to sane nickel prices. Turns out the stainless prices and battery cell prices are going to be more-or-less inline with inflation, not 20x. Shocking.

Don’t worry, I’m sure there is some new short term panic around the corner for those who love high prices, bugbears, and boogeymen.

 

[Bill906]

Remember a few months ago...

Remember how people said...

Remember how some of us said...

If it was more than one 24-hour news cycle ago, no. We don't have the attention span for anything that happened back in the ancient times (Over 24 hours ago).

 

[Tinker71]

Great news. This will make it easier to level off the price increases on the 3Y. Maybe even decrease.

The $65,000 Y was making the CT2 look impossible.

 

[Crissa]

Until supply ramps up (it's rising) and meets demand, we aren't going to see any drops in Tesla prices.

-Crissa

 

[charliemagpie]

The price could drop, stay the same, or increase.

I am very confident it will be one of these 3 lol.

I feel, the Austin 4680 is going to cost far far less than advertised. But scarcity remains.
It is possible, that potential hidden profit of the 4680 can help Tesla achieve an acceptable GP. This, perhaps keeping the prices as is.

Yet, a price drop is not impossible. A long shot.
Announcement was in 2019. But the further out you are, the more conservative I think you need to be. The 4680 is now in production, and the cathode plant is nearly done…. Tesla would be close to verifying efficiency/cost and may well in fact have some percentage up its sleeve.

 

[Ogre]

I’m not holding my breath on price drops for Teslas. As @Crissa suggests pricing on the Model Y is largely demand driven.

 

[Tinker71]

With market drops, crypto demise , higher borrowing costs and layoffs/uncertainty in the upper labor markets the demand for $65000 cars is going to plummet.

I would love to see the trend line in quoted wait time vs actual delivery. I bet internal numbers already show this over the last month.

Like the nickle market demand could really crash if people wait to order if they expect the price to drop.

 

[charliemagpie]

With market drops, crypto demise , higher borrowing costs and layoffs/uncertainty in the upper labor markets the demand for $65000 cars is going to plummet.

I would love to see the trend line in quoted wait time vs actual delivery. I bet internal numbers already show this over the last month.

Like the nickle market demand could really crash if people wait to order if they expect the price to drop.

Good point. As a comparison, I looked at Mercedes & BMW sales history in periods of upheaval, it wasn't as bad as I expected.

All things being equal, Tesla with a long wait times, should fare better.

Telsa advantage :
- lower price points than Merc and BMW
- scope to lower prices in line with lower costs ( its a recession after all)
- opportunity to advertise. I'd venture to say, a campaign would outpace any drop.

https://carsalesbase.com/us-mercedes-benz/

2008	225,009	-11.2
2009	190,538	-15.3
2010	224,944	18.06
2020	325,915	-8.89

https://carsalesbase.com/us-bmw/

2008	249,113	-15.2
2009	196,502	-21.1
2010	220,113	12.02
2020	278,732	-14.2

 

[Tinker71]

Good point. As a comparison, I looked at Mercedes & BMW sales history in periods of upheaval, it wasn't as bad as I expected.

All things being equal, Tesla with a long wait times, should fare better.

Telsa advantage :
- lower price points than Merc and BMW
- scope to lower prices in line with lower costs ( its a recession after all)
- opportunity to advertise. I'd venture to say, a campaign would outpace any drop.

https://carsalesbase.com/us-mercedes-benz/

2008	225,009	-11.2
2009	190,538	-15.3
2010	224,944	18.06
2020	325,915	-8.89

https://carsalesbase.com/us-bmw/

2008	249,113	-15.2
2009	196,502	-21.1
2010	220,113	12.02
2020	278,732	-14.2

Great research and thank you. . Telsa is a little different than BMW and Mercedes. It is a prestige brand, value brand, and eco conscious brand at the same time. Tesla customers do the math. I am not sure if BMW customers care as much. Tesla customers are just different, I am not exactly sure how this will help or hurt in a downturn.

I think the difference this time is people know there is a bubble about to burst.

I think Tesla has done everything right and timed things perfectly. They built most of 2 each 1 million cars per year factories mostly before the inflation spike and are well into their ramp up. They did this when demand was high and margins through the roof.

Costs per unit are going to come way down as quantities increase. I predict inflation adjusted price of a model y @ $55k next year this time. Margins will go down but net profits will actually increase. Tesla will continue to invest in FSD, Robotaxi, Omnibot, virtual grid etc. which will actually be bigger drivers for profits and stock price over that next 10 years than the vehicle production division.

The big 3 are going to try to increase capacity/change infrastructure when prices are still on the upswing and demand is falling at the same time. I am so sorry for them, except they had ample opportunity over the last 20 years to change their ways.

Tesla will increase capacity and vertically integrate at their 5 campuses but I don't expect them to actually break ground on a new gigafactory site. You bet they will study the shit out of it and something will be shovel ready when the conditions are optimal, but not for 2 years IMHO.

 

[charliemagpie]

It is going to get ugly.

Business is tough, for 100 years they have toughed out tough times. Their ethic and culture is telling them they will survive through this other one. Reality will hit soon.
I am starting to see -20%

Forget a drawn out ending. It is a spiral from 40% down.

 

[Tinker71]

It is going to get ugly.

Business is tough, for 100 years they have toughed out tough times. Their ethic and culture is telling them they will survive through this other one. Reality will hit soon.
I am starting to see -20%

Forget a drawn out ending. It is a spiral from 40% down.

I actually think we might be ok if the US Federal reserve raises rates .5 % we will get a handle on inflation. Commodities, food and fuel are already coming down, but included in the nasty June numbers.

A 1% rate hike might trigger a recession. The other world banks should act fairly similar given their countries position.

Some of the last rounds of stimulus were overkill. We should have reacted a little earlier. Fine. But don't let us not overreact. I have seen reports that we may see deflation in 6 months and I believe it.

Job cuts, market loses, $2-3 Trillion lost because of the crypto scam all affect inflation.

 

[Ogre]

if the inflation data which is trickling out now is legit, it would be irresponsible of the fed to do a big rate hike right now.

It takes months for rate hikes to take effect so they could easily trigger a recession even after inflation is settled.

 

[charliemagpie]

Copper price has fallen... below is a chart over the last 10 years.. It is quite significant. If we are to take it on face value, it would seem some heat is coming out. Material orders are shrinking, production is shrinking, customer orders are shrinking. In reverse order lol

I'm interested in discretionary spending on Mens clothes, massage, restaurants... these are my canary in the cage.

https://tradingeconomics.com/commodity/copper

 

[FutureBoy]

I'm interested in discretionary spending on Mens clothes, massage, restaurants... these are my canary in the cage.

I need some sleep. I seriously read your post as:

I'm interested in discretionary spending on MARS clothes, massage, restaurants... these are my canary in the cage.

Was thinking your canary was going to die from old age before anything else.

 

[rr6013]

Short term the world is subject to outside impacts to wit: AGW,RU, Famine and disease. The USD is only safe-harbor store of value in the world so inflationary interest rates are attracting refuge monies to safety. That’s taking money out of circulation. Supply drives interest rates further the less money in-circulation. It is setting up to completely reset the global industrial economy for what comes after…

Nickel mines take 10 yrs to bring to market. That’s new or expansion of existing mines. Industry insiders are doubtful BEVs move the needle off petroleum until 2040’s beyond.

FYI:


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