Current Tesla owners low take rate on reservations

[TexasEV]

Median households don’t necessarily buy new cars. More used cars are sold than new cars.

 

[ChrgdTeCHick]

I'm in my 30s. My household makes around 100K+ a year and I own a home.
I think represent the "average" person that stood in line on 3/31.
I don't own many luxury things and i think i live pretty modestly. My current car is an old 1998 acura.

With that being said, we I thought this was going to be a 35K car and with options I would probably spend around 40-45K.
With the 7500 tax credit, it brings it down to a reason price where I am willingly to splurge a little. Yes, you got to live a little.

BUT 2 years later...
The car is actually 55K (with taxes, no EAP), and the fact that the 7.5k tax credit will be reduced by the time the 35,000 car comes out, it has us all looking for other options.

While I probably will get a STILL get a 3, if another car company (specifically honda or toyota) announces an EV like the BOLT or the 3 but at a 30K price tag i am sold. (i specifically did not buy a bolt because I will not buy from GM)

And for those that speak of supercharging network, well guys.... i rather just fly and rent a car with all the $$$ i saved from not buying a 55K car.

While many people that drive teslas make $$$$ and can easily buy a 100K car, there is a market of people like me who just want a really good deal like Elon stated. "Best car for 35000" Well that hasn't come and i'm starting to look elsewhere.

Not to go into much detail, but I'm in a similar life cycle/income range as you and ended up with a CPO MS at $45k last Summer and it was the best decision I ever made. And that was making the switch from a new Honda odyssey minivan as I have three kids. Low interest rate on the loan, $30 a month to charge VS $300 in gas, and just a trully amazing car makes it all worth while. Oh and the Model S is our only vehicle. That's how well the car works for us, even after owning brand new minivans and the space and convinience they had. Maintenance, payment and gas made it more expensive.

No looking back, I smile every day that I hop into my car and drive.

Brand new 3 at $55k or CPO at $55k or less, would be a better choice than any other EV out there.

Oh and I still fly, but nothing like taking a road trip and not paying a dime to get me there. Just plug in and enjoy the driving break while you charge up and go.

In other words, keep an open mind about it. You will love it.

 

[MXWing]

Why do you say that? While the tax credit lasts it benefits new cars by the amount of the credit but if Bill Gates gave me a Lamborghini for free tomorrow and I went to sell it, I'd get exactly the same amount for it as if I'd paid for the car myself. If Joe gets a $10K tax credit for buying a car in his state, and Bill gets no tax credit in his state, assuming the cars are the same, their re-sell value will be the same.

"Given away" was not completely literal.

$20,000 off of a BMW i3 final negotiated price is I would consider "given away" as it cuts the MSRP by half.

I won't be able to sell it for $30,000 the day after I bought it since I am assuming a new buyer would get the same deal I did.

 

[slipnslider]

That 10K savings upfront doesn't bite you on the resell....?

Game changes a bit with a tax credit phase out and expiration but cars that were "given away" will also need to be given away on the sell side.

No since the tax credit is expiring, to get an equivalent car the buyer would have to pay full price. If the tax credit continued, it would hurt the resale value of used models.

 

[MXWing]

No since the tax credit is expiring, to get an equivalent car the buyer would have to pay full price. If the tax credit continued, it would hurt the resale value of used models.

Yes, I'm an Economist - I understand that.

Tax credit has not expired yet. Always the possibility that gets modified. Easier to model prices today versus prices tomorrow.

No Federal subsidy would raise the price of used cars relative to new. Used cars were even worth more than new cars when they had HOV stickers that were no longer issued.

 

[slipnslider]

Yes, I'm an Economist - I understand that.

Tax credit has not expired yet. Always the possibility that gets modified. Easier to model prices today versus prices tomorrow.

No Federal subsidy would raise the price of used cars relative to new. Used cars were even worth more than new cars when they had HOV stickers that were no longer issued.

Unrelated question - as an economist, how long would you give it before the newest round of trickle down economics blows up the economy again?

 

[MXWing]

Unrelated question - as an economist, how long would you give it before the newest round of trickle down economics blows up the economy again?

Not an easy question at all.

I do not believe that the wealthy will ever redistribute their assets from free will of their own own volition. Forcing them to do so or not is not in scope and 100 pages of debate with no conclusion.

The most honest answer I can give without taking political sides is "It's gamble".

We have
+Overseas income repatriation
+Lower corporate tax rate
+Higher profits from US Corporations
---Massive revenue reduction and exploding deficit

It will be a race to see if GDP grows faster than increasing deficits. The "can" and results has been kicked about 10 years down the line.

 

[Bartman1]

Surprisingly, Most Tesla Model S and X Owners Haven't Opted For Model 3

I’m afraid Tesla is about to learn something that most legacy automobile manufacturers have had to learn the hard way.

Lots of initial interest, pre-orders, reservations, etc, frequently do not translate into actual orders and sales. Especially with EV’s. This is still a niche market. It’s unlikely there is anywhere near 400,000 a year actual demand for the M3.

I agree. After the hype dies down, the $7,500 tax credit is gone (price goes up by $7,500), the competitor's quality EV cars start coming out (and they will), the demand WILL go down. Furthermore, Tesla WILL need to start tightening up on the quality & QA, or people are going to go elsewhere. Tesla's "take it or leave it" policy is working now, but it's not going to work in the long term.

I love my Model 3! That being said, I also realize that my particular model is never going to have full self driving capability. The software can be updated at technology improves, but the hardware is not there yet. And as the software improves, the hardware will need to evolve to support the new software and technology. It's just not there yet and Tesla is knowingly taking peoples $3K for something they know they have no possibility of delivering with the current hardware. Just mentioning this because sadly there are suckers out there that think this car will actually be FSD after they make a few changes to the software and "flick a switch" to turn it on. Once more people realize the FSD thing is a pipe dream with the current hardware, that may diminish the hype a little.

 

[ℬête Noire]

Why do you say that? While the tax credit lasts it benefits new cars by the amount of the credit but if Bill Gates gave me a Lamborghini for free tomorrow and I went to sell it, I'd get exactly the same amount for it as if I'd paid for the car myself. If Joe gets a $10K tax credit for buying a car in his state, and Bill gets no tax credit in his state, assuming the cars are the same, their re-sell value will be the same.

If Gates handed out them to a number of people along with you it would likely have some residual effect on the used Lambo market, diminishing over time after he stopped giving them out. It wouldn't be the full offset he had but it's hard to assert there would be no effect.

Of course that's an extreme, the tax credit isn't nearly as large an effect and as such will decay away to negligible over probably a year or two.

 

[daniel]

"Given away" was not completely literal.

$20,000 off of a BMW i3 final negotiated price is I would consider "given away" as it cuts the MSRP by half.

I won't be able to sell it for $30,000 the day after I bought it since I am assuming a new buyer would get the same deal I did.

Of course that's true. But how many car buyers want to sell their car the day after they bought it? Most keep a car from 1 to 10 or 15 years. And those are extremes. In 3 to 6 years, when these cars will likely be available in numbers on the used market, the tax credit the buyers got will be irrelevant to the re-sale value.

The re-sale value of my Model 3 today is of zero importance to me. I expect to keep it until there's a car sufficiently better for my needs to be worth the hassle. That might be the as-yet unannounced Tesla Mini, a Civic-size car with a 350 mile range (if I'm still in Spokane) or a 200-mile range if I'm on Maui. (The whole island is only about 130 miles around.)

 

[MXWing]

Of course that's true. But how many car buyers want to sell their car the day after they bought it? Most keep a car from 1 to 10 or 15 years. And those are extremes. In 3 to 6 years, when these cars will likely be available in numbers on the used market, the tax credit the buyers got will be irrelevant to the re-sale value.

The re-sale value of my Model 3 today is of zero importance to me. I expect to keep it until there's a car sufficiently better for my needs to be worth the hassle. That might be the as-yet unannounced Tesla Mini, a Civic-size car with a 350 mile range (if I'm still in Spokane) or a 200-mile range if I'm on Maui. (The whole island is only about 130 miles around.)

You can look up the 2012-2014 Volts and Leafs. The $7,500 credit has been around for a long time.

Those cars what down to 25% of their price? Even less if you account for inflation.

 

[ℬête Noire]

You can look up the 2012-2014 Volts and Leafs. The $7,500 credit has been around for a long time.

Those cars what down to 25% of their price? Even less if you account for inflation.

They've got other problems that confound that, though. Particularly with the Leaf the designs didn't protect the battery life very well and very limited range made them a small niche product to start with. Reselling of a niche product is always a tricky thing and with quickly increasing EV ranges in the marketplace that's naturally going to beat the crap out of their price.

 

[MXWing]

They've got other problems that confound that, though. Particularly with the Leaf the designs didn't protect the battery life very well and very limited range made them a small niche product to start with. Reselling of a niche product is always a tricky thing and with quickly increasing EV ranges in the marketplace that's naturally going to beat the crap out of their price.

I hate GM as a company but the Volt itself is a damn fine concept. $10,000 gets you into a Used Volt that lets you be on EV 80-90% of the time.

Leaf has massive problems yes, I definitely agree. Using the PHEV Volt as a better example. Much less niche and can charge overnight on just a 110v socket.

 

[ℬête Noire]

I hate GM as a company but the Volt itself is a damn fine concept. $10,000 gets you into a Used Volt that lets you be on EV 80-90% of the time.

Agreed, it takes some styling knocks in some circles but nowhere near universally, and my understanding is the electric drive on the early models were a bit noisy. Only ever saw 2 in person in the wild and noticed straight off because of the somewhat exaggerated whir as they passed by in the parking lot. But none of that should take much off the price of an otherwise serviceable vehicle (I'd never see 80-90% EV but still at least it's not a hard range cap).

So....KBB has pricing average for a 2014 Volt at about $15K. To get down to $10K range it says I need to go all the way back to 2012. That's pretty similar to price range for our 6 y-o Camry Hybrid, which probably had MSRP a bit higher and no tax credit. That's pretty damn impressive holding of value in the face of the tax credit. I checked local prices in CA (Los Angeles), a touch lower but relatively in line, too.

EDIT: Nearly all the listings I see have crazy low mileage for their age, like 7K-8K/year. That might have some bearing on their prices.

 

[JPP]

Yes, I'm an Economist - I understand that.

Tax credit has not expired yet. Always the possibility that gets modified. Easier to model prices today versus prices tomorrow.

No Federal subsidy would raise the price of used cars relative to new. Used cars were even worth more than new cars when they had HOV stickers that were no longer issued.

...except when the HOV stickers expire in December 2018...

 

[MXWing]

...except when the HOV stickers expire in December 2018...

Cars who got stickers as of 01/01/17 get another 3 year run. My example was meant to illustrate impact of subsidies to used market pricing.

 

[keydiver]

I am in the group of: I already have my dream car, my 2015 Model S 70D, which is our touring car, great for trips and passengers. The Model 3 is going to replace our 2012 Leaf, which is my wife's errand/appointment car, which we use for every day stuff, like getting groceries, going to the gym, etc. So, even the SR Model 3, no PUP, that we are waiting for is a huge upgrade. That is why I have deferred, and have no problem waiting for now. I also don't want the glass roof in south Florida. The only reason I might not wait is if the AWD is available with SR and no PUP.

 

[MXWing]

I am in the group of: I already have my dream car, my 2015 Model S 70D, which is our touring car, great for trips and passengers. The Model 3 is going to replace our 2012 Leaf, which is my wife's errand/appointment car, which we use for every day stuff, like getting groceries, going to the gym, etc. So, even the SR Model 3, no PUP, that we are waiting for is a huge upgrade. That is why I have deferred, and have no problem waiting for now. I also don't want the glass roof in south Florida. The only reason I might not wait is if the AWD is available with SR and no PUP.

LR AWD has unlimited demand. Tesla could throw in a $500 mandatory Elon Musk poster option and it would still take.

 

[ChrisH]

LR AWD has unlimited demand. Tesla could throw in a $500 mandatory Elon Musk poster option and it would still take.

You really think this is true? There’s only so many already Tesla owners who can just nonchalantly afford to buy another Tesla (this version). I realistically can’t and I want a Tesla really bad.

 

[ℬête Noire]

LR AWD has unlimited demand. Tesla could throw in a $500 mandatory Elon Musk poster option and it would still take.

Funny 'cuz here's the one you just know Musk would riff on......

P.S. That's an actual honest-to-goodness poster for sale on Amazon. Authenticity may not apply. For other more legit images go here: Fold Outs | The Official David Hasselhoff Website