Disappointed in Tesla's pricing on paint

[timk225]

Successful troll is successful.

I didn't start this topic as a troll post, it's a legitimate issue, but you people have really taken it to new heights these last two or three pages on your own.

I was completely correct in my original assertion, as I was with the key fob issue, not being able to buy a base $35K car, and my other complaints and grievances.

I didn't like the topic title being censored, what was wrong with how I worded it?

Someone mentioned I have a lot of dislikes, I checked and I am currently at 777. I'm not trying for the record there either, but people do seem to like a winner!

Anyhow, back to the issue at hand. If $1000 was enough money for white paint on my 3, how does Tesla justify doubling the price now?

 

[FourOhFour]

Anyhow, back to the issue at hand. If $1000 was enough money for white paint on my 3, how does Tesla justify doubling the price now?

Simple: People are buying it. Tesla doesn't have to justify it, their customers do with their wallets.

 

[MXWing]

Successful troll is successful.

I didn't start this topic as a troll post, it's a legitimate issue, but you people have really taken it to new heights these last two or three pages on your own.

I was completely correct in my original assertion, as I was with the key fob issue, not being able to buy a base $35K car, and my other complaints and grievances.

I didn't like the topic title being censored, what was wrong with how I worded it?

Someone mentioned I have a lot of dislikes, I checked and I am currently at 777. I'm not trying for the record there either, but people do seem to like a winner!

Anyhow, back to the issue at hand. If $1000 was enough money for white paint on my 3, how does Tesla justify doubling the price now?

Hint #1 : Red is bad.

Hint #2 : 4 more consecutive red bars and your warranty will be NULL AND VOID as those liabilities will be discharged through bankruptcy.

 

[timk225]

No big deal, Elon can cash in a couple billion of his own stock and keep the company going until the Model 3 is out in mass volumes.

 

[MXWing]

No big deal, Elon can cash in a couple billion of his own stock and keep the company going until the Model 3 is out in mass volumes.

10 billion shares * $0 = 0.

Elon’s shares are trapped. He can’t cash out without signaling Tesla is dead.

Doesn't change the fundamentals, positive FCF has to be achieved.

Realistically anytime anyone says why Tesla charges so and so just look at the graph.

 

[timk225]

Again, no big deal. Elon can lean on Gates, Buffet, Bezos, Zuckerberg, and the guys at Google to each throw in a billion or two, for the good of the planet. Might be tax deductible, even!

 

[Runt8]

Someone mentioned I have a lot of dislikes, I checked and I am currently at 777. I'm not trying for the record there either, but people do seem to like a winner!

So what does that make you?

 

[MattMatt]

I had a thought on this today. What if all of the price hikes are so they can reduce the price once the tax credit halved. They will come out, drop paint by 1k, drop awd by 1k, and use it to show empathy for losing the tax credit or if they don't deliver your car in time. Something along the lines of you ordered and we will honor the tax credit. In the mean time they get the extra bump of profit also.

 

[P85_DA]

If $1000 was enough money for white paint on my 3, how does Tesla justify doubling the price now?

I have been hanging around @MXWing so I will throw an Economic term ..you suffer from Rational Actor Theory

 

[MXWing]

I have been hanging around @MXWing so I will throw an Economic term ..you suffer from Rational Actor Theory

Rational actor vs troll test unfortunately can’t be modeled as people can say whatever they want without actual consequences.

If @timk225 was offered two choices:

1.) Tesla drops white paint by $1000 to all other buyers and in exchange @timk225 loses all warranty, support, and updates modeling a Tesla bankruptcy.

2.) @timk225 shuts his mouth and he gets to keep his warranty.

Pretty clear what the rational actor would do.

It’s consequence free to start imflammatory troll threads to get off on.

 

[School_is_buns]

The paint is not the same.

The fact they charge more for paint is. So basically the uproar is Tesla charges more than other car companies for the "same" paint. But it is no secret it costs Tesla more money to do things than a car company that has been going on for 80 years and has economics of scale on its side.

What paint is not the same?

If it truly costs Tesla more for the "same" paint then they would have been charging more all along. Producing more cars over time = reduction in overall operating costs due to efficiencies. If they are inefficient with their painting process then I don't know what to say.

The uproar is Tesla is charging more for the same basic colors than they were a few weeks ago, a considerable % more. If they were offering more premium colors for that price, fine.

As an aside, the website is now quoting 5-8 months for standard range - one month less that last month. This may just be a simple bit of automation on the website, but to me it hints that Tesla is serious about their timeline for the standard range (as opposed to “some unknown point in the future, maybe, let’s just say 6-9 months”).

The reason the website is now showing 5-8 months now is because a month has passed since it was showing 6-9 months. Next month it will show 4-7 months.

 

[Tozz]

I understand why they want to do it, but that doesn't make it right.

Actually it does. Prices are not fixed. Tesla can decide they want to change their prices every day, every hour if they wish. They can add 'Happy-hours' or 'Blue is free on Wednesday before noon!'.

Just as your groceries may go up and down in price or your plane ticket will go up as soon as you Google for that flight more often.

Prices are not set in stone. Not for your groceries, not for your car.

Perhaps this more expensive paint is of a better quality? Would it be okay for you than?

 

[Tozz]

But it's still bullshit*t to charge $2k for premium paint. What does BMW charge, $550? It was high when it was $1k. It was bananas when they raised it to $1.5k.

$2k? Where the hell are they importing that red paint from, Mars?

Let me start by saying I have no clue about the costs of painting a car. I do know that getting a panel repainted is expensive. But let's say that painting a body in white costs $2k (primer, the paint itself, production facility, inspection, etc, etc).

BMW could say 'We make the base price $1500 more expensive, charge $500 for the paint'
Audi could say 'We make the base price $1000 more expensive, charge $1000 for the paint'.
Tesla seems to say 'We charge what it is, $1500 for the paint. Blue needs a bit more paint, $2000 for blue. Black is easy, black is included in base price'. ( I just made up the colors, you get the idea)

Other brands might have incorporated the costs in the base price, maybe Tesla doesn't. It's not the first time Tesla does things differently.

 

[spacemnspiff]

Hint #1 : Red is bad.

Hint #2 : 4 more consecutive red bars and your warranty will be NULL AND VOID as those liabilities will be discharged through bankruptcy.

Thanks for posting that chart, could you point me to the source of the chart? Thx.

 

[voip-ninja]

Let me start by saying I have no clue about the costs of painting a car. I do know that getting a panel repainted is expensive. But let's say that painting a body in white costs $2k (primer, the paint itself, production facility, inspection, etc, etc).

BMW could say 'We make the base price $1500 more expensive, charge $500 for the paint'
Audi could say 'We make the base price $1000 more expensive, charge $1000 for the paint'.
Tesla seems to say 'We charge what it is, $1500 for the paint. Blue needs a bit more paint, $2000 for blue. Black is easy, black is included in base price'. ( I just made up the colors, you get the idea)

Other brands might have incorporated the costs in the base price, maybe Tesla doesn't. It's not the first time Tesla does things differently.

All speculative on your part, as you admit.

The big hole in your theory is that Tesla started out by charging much less for paint and now charges more. Did their costs suddenly skyrocket? Doubtful.

There is currently a lot of demand for the Model 3 and many people will be willing to spend an extra few thousand $$$ to take delivery of their car before tax incentives are halved. Tesla knows this and is able to milk current demand for a few extra dollars.

That's the most likely theory anyway.

They are a startup that is hemorrhaging cash, so doing something like this might make financial sense, even if it leaves a bad taste in their mouth.

 

[diamond.g]

All speculative on your part, as you admit.

The big hole in your theory is that Tesla started out by charging much less for paint and now charges more. Did their costs suddenly skyrocket? Doubtful.

There is currently a lot of demand for the Model 3 and many people will be willing to spend an extra few thousand $$$ to take delivery of their car before tax incentives are halved. Tesla knows this and is able to milk current demand for a few extra dollars.

That's the most likely theory anyway.

They are a startup that is hemorrhaging cash, so doing something like this might make financial sense, even if it leaves a bad taste in their mouth.

It could also be a form of thanks to the folks that ordered early. Or maybe they are hiding Steel and Aluminum component costs increase in the paint cost.
I did note that the Model 3 paint was cheaper than the S/X paint, knowing they used the same paint/paint shop. So I am not terribly surprised they raise the 3 pricing to match the S/X.

 

[voip-ninja]

It could also be a form of thanks to the folks that ordered early. Or maybe they are hiding Steel and Aluminum component costs increase in the paint cost.
I did note that the Model 3 paint was cheaper than the S/X paint, knowing they used the same paint/paint shop. So I am not terribly surprised they raise the 3 pricing to match the S/X.

It will be interesting to see what things Tesla does with pricing next year after the tax credit is mostly phased out. They could do option bundling that keeps MSRP and profit margins fairly high but gives customers more value for $$.

Also production costs will continue to drop which gives them more flexibility to do price adjustments. This is pretty much how other manufacturers do it, but typically later in the generational life of a model.... BMW/Audi/Merc will start to bundle more goodies effectively making a higher optioned car cheaper than "early adopters" paid...

I don't think that once the glut of reservation holders is satisfied that they will be able to charge $2,000 for paint on a car with a $35,000 starting price... especially when all of their competitors in this segment charge less than $800 for similar paint colors.

 

[Runt8]

The reason the website is now showing 5-8 months now is because a month has passed since it was showing 6-9 months. Next month it will show 4-7 months.

Yes, that was my point. As opposed to "6-9 months" being a generic placeholder that means some undefined point in the future like many people seem to think it is.

 

[MXWing]

I don't think that once the glut of reservation holders is satisfied that they will be able to charge $2,000 for paint on a car with a $35,000 starting price... especially when all of their competitors in this segment charge less than $800 for similar paint colors.

Tesla should drop the Model 3 price by $5,000 and make the tablet optional.
All premium paint options are now free. Tesla gives you a mail in rebate if you choose black.

If you want to know your speed, navigate and turn on AC, bring your own iPad and interact on the Tesla app.

Comparing how BMW prices paint and how Tesla prices paint is comparing submarines and tangerines.

“Dollars” are fungible no matter where the cost center is to the consumer.

I would failing tons of people here if I taught their high school Econ.

 

[MXWing]

Thanks for posting that chart, could you point me to the source of the chart? Thx.

There are variations of the graphs everywhere that is generated off of quarterly report data. The scaling of the graph differs depending on how much you want to manipulate the data.

The particular graph above comes from here.

www.bloomberg.com/graphics/2018-tesla-burns-cash/

I really hope people would stop whining and look at the big picture.