$5K price drop?

[AMPd]

Just Tesla moving options and money around to spur new sales.
5k off but no free supercharging is just another way to get news sites talking Tesla
I’m willing to bet at the end of the year free supercharging will be back

 

[vonbock]

I was considering buying a 2017 LR FSD S to save some money. But if I price out a new white ext, black interior with FSD, the price difference is about 11-12K. Is it worth buying used or buy brand new?

 

[Marvin]

I was considering buying a 2017 LR FSD S to save some money. But if I price out a new white ext, black interior with FSD, the price difference is about 11-12K. Is it worth buying used or buy brand new?

2017 still has MCU1. So with some bad luck you will have to replace this outside warranty which sets you back 2.5k.That and the older tech, less warranty etc makes the 2017 too expensive you mentioned too expensive compared to the new on IMHO.

 

[cruiserlarry]

Free supercharging has been removed for new S and X orders....at least, for now lol

 

[JPoldo]

IMHO, their strategy was to remove supercharging now so it can be added near year end to boost sales. The only way to add it later is to take it away now. We've seen that before. Keeping free charging on inventory models helps clear out inventory in anticipation of a hardware change. To compensate prospective buyers for charging loss, they announced a simultaneous price reduction.

Anyone planning to spend $80-100K for a new vehicle is not persuaded by a 5-6% discount. It's much too small so I highly doubt it will increase demand. Would it motivate you?

It doesn't affect owners (me) on a current lease because payments are fixed. Although it rarely makes sense to buy-out a lease, it makes less sense after a price reduction. As a result of price reductions and optional equipment becoming standard, you probably can get a new 3 year lease for less than your old one. And think about all the new technology now available.

 

[BESLA]

Chatted online with a Tesla guy in Belgium and he told me that as of today for new orders the free supercharging is indeed gone
Granted a 5k reduction (actually 4800 Euros here) gives you quite a lot of charges....

Marvin, I took delivery of my model s just 2 weeks back .... I had taken the financial leasing option from tesla at 0.99% interest rates (equates to 733 euro/month vat excl) , 4k upfront payment & 20000 kms/ year (autosalon conditions) and now the interest rates for leasing are increased to 2.8% (equates to 764 eur/month) ... As per my calculation after 5 years if I decide to buy the car it would still be cheaper than paying 2.8% interest. I know you can hunt for lower interest rates in the market for a loan ..but then you pay higher emi per month as no other financial leasing considers the residual value of a car to be 40% after 5 years. If your were to pay it all in cash then yes the 4800 eur discount is quite huge.

 

[CapeOne]

I was considering buying a 2017 LR FSD S to save some money. But if I price out a new white ext, black interior with FSD, the price difference is about 11-12K. Is it worth buying used or buy brand new?

A new 2020 MS LR+ would have longer range (391 miles vs. 335 miles for 2017) but you may be able to get a 2017 100D with FSD, free supercharging and 4/50 warranty from Tesla right now for even more than just $11k-$12k less. Here are a couple of examples that are over $20k less than a new 2020 MS with FSD:
2017 Model S | Tesla
2017 Model S | Tesla

 

[CapeOne]

IMHO, their strategy was to remove supercharging now so it can be added near year end to boost sales. The only way to add it later is to take it away now. We've seen that before. Keeping free charging on inventory models helps clear out inventory in anticipation of a hardware change. To compensate prospective buyers for charging loss, they announced a simultaneous price reduction.

Anyone planning to spend $80-100K for a new vehicle is not persuaded by a 5-6% discount. It's much too small so I highly doubt it will increase demand. Would it motivate you?

I disagree. I think you’ll find many buyers of cars in the $80k-$100k range are price sensitive and would view a 5%-6% discount as meaningful. I also think many buyers would take $5k over "free" supercharging so if you think free supercharging would be used to boost sales than a $5k price reduction would as well.

 

[ThomasBehan]

I have a new 2020 MS LR+ on order. I called Tesla yesterday to ask about the price decrease. I was given a choice of unlimited supercharging or a $5,000 price adjustment. I chose the price decrease.
I got the impression that had I not called, nothing would have changed.... but do not know that for sure.

 

[Aleks0404]

I am in the same boat waiting for 2020 MS Performance to be delivered on 16.06. Checked today my account and i saw that they adjusted my price automatically. Again i am in Canada so maybe different rules apply.

 

[craigger]

I take delivery of my MS Performance on Monday (got one from inventory). The sale associate I was working with was as surprised as I was at the price drop. I was able to get the price adjusted and keep the free supercharging but lost my original $100 deposit (I had to get unmatched from the car then re-buy). So, it looks like any new builds will not have the free supercharging but has the lower price. Any current inventory has free supercharging and the lower price. Timing worked out for me.

 

[JPoldo]

[QUOTE="craigger, post - I was able to get the price adjusted and keep the free supercharging but lost my original $100 deposit (I had to get unmatched from the car then re-buy). So, it looks like any new builds will not have the free supercharging but has the lower price. Any current inventory has free supercharging and the lower price. Timing worked out for me.[/QUOTE]

WOW, you got the best of both worlds. Kudos !

 

[Naekuh]

So, it looks like any new builds will not have the free supercharging but has the lower price. Any current inventory has free supercharging and the lower price. Timing worked out for me.

To be honest IMO, if you can afford a performance not having free supercharging is not a deal breaker, because you can afford to charge the car on your own or at a charge point and just pay for it.

The reason i say that is the lines one has to wait to use a super charger.
Well its a lot better during COVID-19 because no one drives, but still the lines to charge can get really ridiculous, especially when your fighting against all the M3 drivers.

It is much more convient to just drive from A to B and back to A, and then plug the car in your own private charger.

I had my car for 2 yrs now, and now i tend to avoid supercharging unless i need the juice for a long distance drive, as i just do not want to hassle with the lines.

 

[DBV1]

That would be annoying waiting in line for 20 to 30 mins to charger your car. I don’t think in Ohio we have those issues yet, but they definitely need to be addressed with more adoption, otherwise I would just stay gas car.

 

[craigger]

To be honest IMO, if you can afford a performance not having free supercharging is not a deal breaker, because you can afford to charge the car on your own or at a charge point and just pay for it.

The reason i say that is the lines one has to wait to use a super charger.
Well its a lot better during COVID-19 because no one drives, but still the lines to charge can get really ridiculous, especially when your fighting against all the M3 drivers.

It is much more convient to just drive from A to B and back to A, and then plug the car in your own private charger.

I had my car for 2 yrs now, and now i tend to avoid supercharging unless i need the juice for a long distance drive, as i just do not want to hassle with the lines.

Since I picked up the car during COVID-19 I haven't experienced the lines at the superchargers. Not looking forward to that. The free supercharging is nice but you're right - it wouldn't bother me that much to pay for it. In fact, if paying for it somehow resulted in lower wait times at superchargers, I'd actually prefer it.

-craigger.

 

[whttiger25]

At some point Tesla will start behaving like a more normal car company. For the past 8 years they been building factories and growing in a way that inflated the costs of their vehicles dramatically. As they've matured their production processes, costs have naturally come down. This is not an issue with a traditional car company because their costs are already pretty much constant. When it comes to mature companies like BMW, every year their respective models increase incrementally in features and price. Tesla, on the other hand, has been able to bring the price down as they've matured. That cannot keep happening, at some point their pricing strategy for any given model will become more traditional.

I suspect we are nearly there. I can't imagine they are making a ton of money on model s at $75k. Now, they can justify price increases with future enhancements and start moving with inflation. Elon has hinted at this already with future FSD price increases discussed. Those of use who bought vehicles in the last decade gave up some of that rapid depreciation as an "early adopter" fee, we essentially helped Tesla build out their infrastructure so they could keep operating. I think now is probably the most optimal time to buy a new Tesla when it comes to the value proposition offered, including current features and prospects for future decreases in price. I could be wrong, but my reading of the tea leaves says this is the cheapest you will ever see a new Model S.

 

[CapeOne]

At some point Tesla will start behaving like a more normal car company. For the past 8 years they been building factories and growing in a way that inflated the costs of their vehicles dramatically. As they've matured their production processes, costs have naturally come down. This is not an issue with a traditional car company because their costs are already pretty much constant. When it comes to mature companies like BMW, every year their respective models increase incrementally in features and price. Tesla, on the other hand, has been able to bring the price down as they've matured. That cannot keep happening, at some point their pricing strategy for any given model will become more traditional.

Other automakers regularly develop new products, upgrade or build new factories, etc. too. I think what we are seeing has much more to do with the technology side as well as the evolving and growing, although still small at this point, EV marketplace.

Of course even outside of the EV world, inflation adjusted car prices have come down a fair amount versus decades ago especially among some luxury brands. Look at how much Mercedes prices have dropped since the 1990s, for example. This is a reason why Mercedes sales had grown so much in the U.S. in the last 20 years or so.

 

[whttiger25]

Other automakers regularly develop new products, upgrade or build new factories, etc. too. I think what we are seeing has much more to do with the technology side as well as the evolving and growing, although still small at this point, EV marketplace.

Of course even outside of the EV world, inflation adjusted car prices have come down a fair amount versus decades ago especially among some luxury brands. Look at how much Mercedes prices have dropped since the 1990s, for example. This is a reason why Mercedes sales had grown so much in the U.S. in the last 20 years or so.

I think the difference I was trying to make is that Tesla was starting from zero, while other automakers already have an existing network of factories, and consistent and relatively stable capex already built into their long term financial models. Ramping up a manufacturing company from scratch is much more costly and incrementally adding manufacturing capacity to an existing company. It happens in all industries, the difference here is we haven't seen a "new" car company for generations. These drastic price drops in the Model S are a reflection of that, and as Tesla becomes bigger and more stable, you will stop seeing those decreases.

And I agree inflation adjusted prices have come down, and in large part that's due to technology making manufacturing more efficient. However, you definitely never see a particular model, say, BMW 328i, EVER drop in base price one year to the next.

 

[CapeOne]

I think the difference I was trying to make is that Tesla was starting from zero, while other automakers already have an existing network of factories, and consistent and relatively stable capex already built into their long term financial models. Ramping up a manufacturing company from scratch is much more costly and incrementally adding manufacturing capacity to an existing company. It happens in all industries, the difference here is we haven't seen a "new" car company for generations. These drastic price drops in the Model S are a reflection of that, and as Tesla becomes bigger and more stable, you will stop seeing those decreases.

And I agree inflation adjusted prices have come down, and in large part that's due to technology making manufacturing more efficient. However, you definitely never see a particular model, say, BMW 328i, EVER drop in base price one year to the next.

Yes, I understand. My point was the even old established car companies build brand new factories and/or update/expand existing ones. Many have opened new factories here or abroad for car assembly, engine/transmission assembly, etc. in just the past 20 years or so. Tesla isn't alone there.

I still think more of the Tesla price reductions are technology and EV related including being tied to the reduction or elimination of federal tax credits as they reached certain sales thresholds. GM has also seen federal tax credits disappear (as of April 1) and are now offering $8,500 rebates on new 2020 Chevrolet Bolts.

 

[whttiger25]

Yes, I understand. My point was the even old established car companies build brand new factories and/or update/expand existing ones. Many have opened new factories here or abroad for car assembly, engine/transmission assembly, etc. in just the past 20 years or so. Tesla isn't alone there.

I still think more of the Tesla price reductions are technology and EV related including being tied to the reduction or elimination of federal tax credits as they reached certain sales thresholds. GM has also seen federal tax credits disappear (as of April 1) and are now offering $8,500 rebates on new 2020 Chevrolet Bolts.

Where Tesla is alone is the rate of increase in their manufacturing capacity and technology. Older companies of course build and upgrade new factories, but Tesla started with no assets just 15 years ago, so on a relative basis that capex is a much higher percentage of the company and has been the entire time, compared to say GM or BMW. GM and Tesla both spending the same amount on new factories is a very different equation for the two companies, and my point is that as time goes on it is less so that way

I think the tax credits helped them keep the price as high as they needed to to cover their higher costs, at the time. In the end, your goal as a company is to set the price as high as possible regardless of tax credits, and get the costs as low as possible. Luckily for Tesla there was demand for the Model S at prices then that fewer would pay now, because it was really the only EV option (no longer the case) and thus early adopters were willing to pay more for that perceived emotional benefit. In addition, as capacity has expanded and initial capital investment is amortized, you can maintain good margins at lower prices. The EV credit was a market disruption that simply allowed them to increase the price $7500 - and the car was still net net much more expensive than it is now backing those rebates out.

So my point here - tax credits helped Tesla survive, and price reductions in concert with the elimination of credits aren't necessarily a causal relationship. Economc theory suggests the vast majority of those credits went straight to Tesla, not to consumers, as consumers would factor in the rebate in their purchase decision. This also explains GM's price reductions, because consumers always had an affordability or value requirement for what they are getting. The difference with Tesla is you are looking at 20-30k price reductions, and dramatic bundling of previously expensive options on top, thus making the comparison to an 8.5k price reduction from GM moot.