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AU Pricing

360C

Member
Aug 5, 2015
87
33
Melbourne Australia
Our fully-optioned Model X P100D was purchased in June 2017 for $334K. A new equivalent today is $208K.

Sure it's $126K less, but most people buy Teslas as a means of transport favored for individual reasons (such as enjoyment, performance, features, environment etc), as opposed to thinking of them as an "asset". Our assets are concentrated in brokerage accounts, not things that require concentration as you drive the kids around. :) We had our last car for 14 years and find if you treat them well, they'll treat you well, and it doesn't really matter what the original cost was.

The positives of this price drop for me are:

* A much wider audience of people can now afford them and enjoy the very different ownership experience vs ICE
* Being less "elite" means fewer people will maliciously damage them or complain about "avoided" fuel taxes etc
* It's cheaper for us to replace them as they age
* It'll become cheaper to insure (as more will get written off than suffer ridiculous repair bills)

I probably would be more tolerant, though still very annoyed, if I kept all of my cars for 14 years as well. In reality cars have always been my "thing", I've owned a lot of them in my time and I tend to change them every 2-3 years. It is rare for me to keep a car for much longer; but I've owned one car for 33 years and counting and there have been a couple of others that have hung around for 5-10+ years; but that is very unusual for me. Hence my obvious annoyance at the unexpected and unpredictable depreciation of my Tesla's. Maybe I'll just hold on to them and give them to my kids when they are old enough to drive :rolleyes:
 

360C

Member
Aug 5, 2015
87
33
Melbourne Australia
I just bought one of those ex demo discounts you are complaining about. It was a one off for me, I doubted I'd ever spend so much on a car again before the cut and this has solidified my position. But I think you are still being a little unfair on Tesla for this. You need to be a little harsher on our government.

When Tesla cut a price by USD$22,000 our progressive tax rates on cars mean that the full impact of all taxes comes off at the top progressive rate, so 33% LCT, 10% GST and upwards of 8% stamp duty, all compounding to give a whooping 58% or turning that US$22k into US$35k or AU$50k. By the time you sell a 4 year old P85D it will have value similar to a car much further down that artificial curve and that is not Tesla's fault.

As a comparison, you wouldn't be mad at Tesla if the government abolished LCT on EVs tomorrow dramatically sinking the cost of a new Tesla. You'd still be mad though.

What I am annoyed at Tesla is changing the value proposition between AU and USA, to say that Ludicrous mode is free here but worth US$15 k over there has given us Australian PXXXD owners a much harder slap than usual. I think though that in time the cost of a Tesla in Australia will return to cost of a Tesla in USA + Shipping + Tax as it has been for a while now, so while its a sting now I think the next price drop will remove the disparity between the two countries and its not a long term plan to have USA subsidise our cars.

I'm very much aware of the effect of all our taxes on new car pricing and depreciation. I've bought a number of cars where the tax component on them exceeded the total OTR cost of either of my P100D's. My point is the expectation of new car pricing stability so the total ownership cost is predictable and you know what to expect when you buy in.
 

100KWH

Member
Aug 20, 2018
77
18
Sydney
This won't be the last time you see price adjustments like this. As this Tech moves forward at a every increasing rate with ever increasing competition it will definitely continue. If not, Tesla will be kneecapped.
We were never going to make money out of cars unless you've bought shares or a super rare collector.

While I want Tesla to succeed I sure hope that 35% price drops won't happen again. Price drops of that magnitude can only happen so many times before profitability is hit from pure COGS and if you want to hurt consumer confidence even more...

The fact that many people complain about resale value does kind of imply that they care about it, so it's not some small drop in the bucket that can be waved away. Of course new customer segments will be opened up with the lower pricing, but some of them too will doubt (and seed doubt) on how their cars' resale value will be affected.

I'm all for lowering the cost of access to tech, but not like this.
 

Vostok

Active Member
Jul 1, 2017
1,376
1,475
Sydney
All new luxury cars these days, ICE or EV are computers on wheels. Buyers expect pricing stability on the new car price, comparing a car to a straight out computer component isn't valid IMHO.
Modern BEV is barely 10 years old. Who would not expect rapid price drops given cost reduction profiles in all other fields of technology when they are in their early adoption phase?

Tell me - did you buy your first flat screen TV when they were $20k, or did you wait like 20 years until a flatscreen TV the same size cost $500 in order to avoid big depreciation hits? We all have choices as to when we buy tech - particularly when it is new.
 

Vostok

Active Member
Jul 1, 2017
1,376
1,475
Sydney
I probably would be more tolerant, though still very annoyed, if I kept all of my cars for 14 years as well. In reality cars have always been my "thing", I've owned a lot of them in my time and I tend to change them every 2-3 years. It is rare for me to keep a car for much longer; but I've owned one car for 33 years and counting and there have been a couple of others that have hung around for 5-10+ years; but that is very unusual for me.
Well that turnover is entirely your choice. If you don’t want to run the risk of what you see as bigger than normal depreciation in newer technology then don’t buy newer technology, but wait out 2, 5, 10 years or whatever you think is needed to reduce the risk of excess depreciation to whatever level you find acceptable.

I’m sure the early Nissan LEAF buyers who purchased at $55k were a bit annoyed when Nissan dropped the price here to $40k. But really, unless one actually plans to sell one’s car in the near term, such “losses” are unrealised, hypothetical and pointless to worry about. It’s sunk capital, your choice is history, it is absolutely pointless to get all het up about it.

Meanwhile, those who have not bought I’m sure will be happy that costs are going down and these cars will now be within reach of a much larger pool of buyers.
 
Last edited:

Vostok

Active Member
Jul 1, 2017
1,376
1,475
Sydney
While I want Tesla to succeed I sure hope that 35% price drops won't happen again. Price drops of that magnitude can only happen so many times before profitability is hit from pure COGS and if you want to hurt consumer confidence even more...
People who have never heard about Tesla before, or never considered a Tesla until now, will either not care or think now or soon will be a good time to buy. The Tesla owning cohort in Australia is a tiny fraction of car buyers, so I doubt this issue has rippled much beyond the Tesla bubble, so saying it will hurt “consumer confidence” is a bit of a stretch. Existing Tesla owners maybe, 99.9% of the car buying public, not so much.

Since I neither own nor run Tesla the company, far be it from me to comment on the wisdom of these price drops from an ongoing company profitability perspective. One has to assume they are not selling below cost but are seeking to maintain market dominance. None of us wants to see Tesla fail as a result of not-well-thought-out price reductions, but it would be beyond arrogant of me to suggest they are not well thought out.

The other thing I find fascinating about this whole discussion is that I would have thought most Tesla owners, given they are not your average car buyer and are generally interested in technology, would have read articles hypothesising as to when BEV and ICE will reach price parity - no doubt excited at the prospect that one day the ICE death-knell will be struck, and be on the sidelines cheering for that day to come soon. Various estimates were between 2022 and 2025, with some pessimists thinking 2030.

So how can one be excited at that prospect, and yet then bitterly complain when the price reductions required to realise that prediction actually occur? What did you think would happen? Price parity won’t occur by 2022 without price reductions like this.
 

100KWH

Member
Aug 20, 2018
77
18
Sydney
People who have never heard about Tesla before, or never considered a Tesla until now, will either not care or think now or soon will be a good time to buy. The Tesla owning cohort in Australia is a tiny fraction of car buyers, so I doubt this issue has rippled much beyond the Tesla bubble, so saying it will hurt “consumer confidence” is a bit of a stretch. Existing Tesla owners maybe, 99.9% of the car buying public, not so much.

Since I neither own nor run Tesla the company, far be it from me to comment on the wisdom of these price drops from an ongoing company profitability perspective. One has to assume they are not selling below cost but are seeking to maintain market dominance. None of us wants to see Tesla fail as a result of not-well-thought-out price reductions, but it would be beyond arrogant of me to suggest they are not well thought out.

The other thing I find fascinating about this whole discussion is that I would have thought most Tesla owners, given they are not your average car buyer and are generally interested in technology, would have read articles hypothesising as to when BEV and ICE will reach price parity - no doubt excited at the prospect that one day the ICE death-knell will be struck, and be on the sidelines cheering for that day to come soon. Various estimates were between 2022 and 2025, with some pessimists thinking 2030.

So how can one be excited at that prospect, and yet then bitterly complain when the price reductions required to realise that prediction actually occur? What did you think would happen? Price parity won’t occur by 2022 without price reductions like this.

If you read my post history, you'll find that I'm pretty mild about the whole affair relatively speaking. Sure, I wish my car didn't depreciate like that, and I'm simply exercising a right to moan a little bit about it. But in the end the mission is the mission.

I still believe that overnight price drops of that magnitude should not happen again. Economically sure, people buy things at a given price implying that they accepted that price to be fair at the time. But generally people only do this with the expectation that it would maintain that value subject to historical norms of appreciation or depreciation schedules. When I buy a house for $1m, I don't expect an overnight drop to 700k. Similarly, when I buy a $274k car, it's very much out of the ordinary to see go down to $178k in 13 months. As another example, the USD wouldn't be the de facto world currency if it was subject to the wild inflationary volatility of the Peso or Zimbabwean dollar. I'm giving extreme examples here, but then again many would agree a 35% price drop is pretty extreme - in that it basically never happens in the car industry for a vehicle of this class.

Besides, the goal of bringing down the cost of BEVs to price parity with ICEs is achievable without doing something like this: it's called the Model 3 SR. Bringing EVs to the masses doesn't mean destroying the value of your flagships which were never intended to be a volume product. That argument is like saying to create more affordable housing we should depreciate the value of waterfront mansions by 35%.

Ultimately, I'm already over it - I'm replying simply because I think we disagree with each others' rationalisations of the situation. I'm glad I'm in a position where this price drop doesn't actually affect me at all. As you've said, if I don't sell I don't realise the loss. But one day I would sell, and while the absolute delta of depreciation would have narrowed, it would have been more than if the car followed standard depreciation curves.
 

Brissienew

Member
Dec 9, 2014
380
137
Brisbane, Queensland
I still believe that overnight price drops of that magnitude should not happen again. when I buy a $274k car, it's very much out of the ordinary to see go down to $178k in 13 months.

I absolutely understand where you are coming from, and I would feel the same if I had bought a P100D before the price drop.
Now for a similar scenario, I wonder what people think about the possible abolishment of the LCT (I am not getting my hopes up that it will actually happen until I see it). Porsche Au thinks it should be phased in over a period of time, rather than removing the LCT overnight, in order to protect the current owners’ “investment”. I disagree. Lower prices benefits everyone, including the current owners when they buy new cars in the future. The same applies to Tesla’s price cut.
Porsche Australia warns government against overnight removal of Luxury Car Tax
 

Sluggabed

Member
May 3, 2014
132
67
Australia
Once the initial pain of pulling this particular band off subsides, i think we, who haven't lost the faith, should be excited by the fact that there's an exciting upgrade around the corner.
They're about to (next 3 hours) annouce 350kw charging and thus a premium flagship car to handle it and refresh that can't be to far away.
 

paulp

Active Member
Jul 23, 2015
2,665
1,200
Adelaide, Australia
People who have never heard about Tesla before, or never considered a Tesla until now, will either not care or think now or soon will be a good time to buy. The Tesla owning cohort in Australia is a tiny fraction of car buyers, so I doubt this issue has rippled much beyond the Tesla bubble, so saying it will hurt “consumer confidence” is a bit of a stretch. Existing Tesla owners maybe, 99.9% of the car buying public, not so much.

Since I neither own nor run Tesla the company, far be it from me to comment on the wisdom of these price drops from an ongoing company profitability perspective. One has to assume they are not selling below cost but are seeking to maintain market dominance. None of us wants to see Tesla fail as a result of not-well-thought-out price reductions, but it would be beyond arrogant of me to suggest they are not well thought out.

The other thing I find fascinating about this whole discussion is that I would have thought most Tesla owners, given they are not your average car buyer and are generally interested in technology, would have read articles hypothesising as to when BEV and ICE will reach price parity - no doubt excited at the prospect that one day the ICE death-knell will be struck, and be on the sidelines cheering for that day to come soon. Various estimates were between 2022 and 2025, with some pessimists thinking 2030.

So how can one be excited at that prospect, and yet then bitterly complain when the price reductions required to realise that prediction actually occur? What did you think would happen? Price parity won’t occur by 2022 without price reductions like this.
I agree with all that, and if you go way back Elon Musk has always been clear that the objective of tesla is to convert the world to emmisions free motoring. He was clear that early adopters would be paying a premium to assist the cause. We are still all early adopters, just some more early than others. The price reductions to reach ICE parity are essential for the stated outcome.
 

paulp

Active Member
Jul 23, 2015
2,665
1,200
Adelaide, Australia
If you read my post history, you'll find that I'm pretty mild about the whole affair relatively speaking. Sure, I wish my car didn't depreciate like that, and I'm simply exercising a right to moan a little bit about it. But in the end the mission is the mission.

I still believe that overnight price drops of that magnitude should not happen again. Economically sure, people buy things at a given price implying that they accepted that price to be fair at the time. But generally people only do this with the expectation that it would maintain that value subject to historical norms of appreciation or depreciation schedules. When I buy a house for $1m, I don't expect an overnight drop to 700k. Similarly, when I buy a $274k car, it's very much out of the ordinary to see go down to $178k in 13 months. As another example, the USD wouldn't be the de facto world currency if it was subject to the wild inflationary volatility of the Peso or Zimbabwean dollar. I'm giving extreme examples here, but then again many would agree a 35% price drop is pretty extreme - in that it basically never happens in the car industry for a vehicle of this class.

Besides, the goal of bringing down the cost of BEVs to price parity with ICEs is achievable without doing something like this: it's called the Model 3 SR. Bringing EVs to the masses doesn't mean destroying the value of your flagships which were never intended to be a volume product. That argument is like saying to create more affordable housing we should depreciate the value of waterfront mansions by 35%.

Ultimately, I'm already over it - I'm replying simply because I think we disagree with each others' rationalisations of the situation. I'm glad I'm in a position where this price drop doesn't actually affect me at all. As you've said, if I don't sell I don't realise the loss. But one day I would sell, and while the absolute delta of depreciation would have narrowed, it would have been more than if the car followed standard depreciation curves.
Given you are in sydney, its likely you will see your house fall in value substsntially. Hopefully not circa 35%, but thay may well happen.
 

paulp

Active Member
Jul 23, 2015
2,665
1,200
Adelaide, Australia
I absolutely understand where you are coming from, and I would feel the same if I had bought a P100D before the price drop.
Now for a similar scenario, I wonder what people think about the possible abolishment of the LCT (I am not getting my hopes up that it will actually happen until I see it). Porsche Au thinks it should be phased in over a period of time, rather than removing the LCT overnight, in order to protect the current owners’ “investment”. I disagree. Lower prices benefits everyone, including the current owners when they buy new cars in the future. The same applies to Tesla’s price cut.
Porsche Australia warns government against overnight removal of Luxury Car Tax
I’m reasonably certain that the instant depreciation you recieve at settlement is the value of the tax. If thats the case, overnight removal wont impact the resale values. This is my opinion only, its an unproven hypothesis.
 

100KWH

Member
Aug 20, 2018
77
18
Sydney
Given you are in sydney, its likely you will see your house fall in value substsntially. Hopefully not circa 35%, but thay may well happen.

Oh definitely. And all again, it would be reasonable to expect some negative emoting to come out of it as a result.
 

100KWH

Member
Aug 20, 2018
77
18
Sydney
I absolutely understand where you are coming from, and I would feel the same if I had bought a P100D before the price drop.
Now for a similar scenario, I wonder what people think about the possible abolishment of the LCT (I am not getting my hopes up that it will actually happen until I see it). Porsche Au thinks it should be phased in over a period of time, rather than removing the LCT overnight, in order to protect the current owners’ “investment”. I disagree. Lower prices benefits everyone, including the current owners when they buy new cars in the future. The same applies to Tesla’s price cut.
Porsche Australia warns government against overnight removal of Luxury Car Tax

I'm slightly irrational here but because the LCT is a dino tax (no local OEMs to protect any more) and isn't something that Tesla as an OEM can directly influence, I'd be perfectly fine for my Tesla to drop in value commensurate to an overnight abolishment of the LCT.
 

Mark E

Member
Jun 27, 2012
860
176
Sydney NSW
While the dramatic drop in price is disconcerting for resale values, it really doesn't mean too much if you are going to buy another Tesla. The real number that is painful in that case is the changeover price to get a new one. Lowering the new car price has a bigger effect on the changeover price- in a good way - ie Buy a $250 car and after 3 years it's with 50% ie $125k, changeover price is another $125k.

Buy a $250k car and after 3 years the new car is $180k. Your car is now worth $90k. Changeover price is $90k. Win.
Buy a $300k car and after 3 years the new car is still $300k. Your car is worth $150k. Changeover is $150k.
Buy a $300k car and after 3 years the new car is $180k. Your car is now worth $90k. Changeover is $90k. Win.


Hopefully you get the picture.
 

Miggy

Member
Jun 23, 2014
318
220
Auckland, New Zealand
I have been keeping an eye on the USA to NZ pricing.
Model S and X were between 70% to 75% added to the US price to get the NZ price, recently this has dropped to between 67% to 73%
most likely to the currenance movements.
So the Model 3 pricing for NZ should be between say 70% to 75%
US$40k = NZ$68k to $70k
US$50k = NZ$85K to $87k
You get the picture, now they just have to make them in RHD.
 

paulp

Active Member
Jul 23, 2015
2,665
1,200
Adelaide, Australia
While the dramatic drop in price is disconcerting for resale values, it really doesn't mean too much if you are going to buy another Tesla. The real number that is painful in that case is the changeover price to get a new one. Lowering the new car price has a bigger effect on the changeover price- in a good way - ie Buy a $250 car and after 3 years it's with 50% ie $125k, changeover price is another $125k.

Buy a $250k car and after 3 years the new car is $180k. Your car is now worth $90k. Changeover price is $90k. Win.
Buy a $300k car and after 3 years the new car is still $300k. Your car is worth $150k. Changeover is $150k.
Buy a $300k car and after 3 years the new car is $180k. Your car is now worth $90k. Changeover is $90k. Win.


Hopefully you get the picture.
Well on that basis I wish they’d drop the 75D price!

If you are correct, is this maybe a masterstroke by tesla. It makes upgrading to the evolving competition much more difficult, without impacting the cost to upgrade to another tesla.?
 
Last edited:

ICUDoc

Active Member
May 19, 2015
1,645
1,014
Sydney NSW
I asked you all to convince me NOT to trade up. But, oh, no, you had to keep talking about good Tesla stuff.
So I dropped in to Artarmon SC today for a changeover price....
Let me just say: they offered me well UNDER what they have guaranteed to buy the car back for in two YEARS from now.
So P90D-to-P100D swaps ain't any prettier than they were before....
 

paulp

Active Member
Jul 23, 2015
2,665
1,200
Adelaide, Australia
I asked you all to convince me NOT to trade up. But, oh, no, you had to keep talking about good Tesla stuff.
So I dropped in to Artarmon SC today for a changeover price....
Let me just say: they offered me well UNDER what they have guaranteed to buy the car back for in two YEARS from now.
So P90D-to-P100D swaps ain't any prettier than they were before....
I may have been guilty of the same excercise yesterday, and came to the same conclusion, which supports MarkE’s theory above.
Will be more interesting when tesla have to honour the buyback guarantee.
 

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