Discussion: Model 3 Price reductions - Jan / April / Oct 2023 and all other pricing discussions

[TesslaBull]

It's understandable how Tesla can be such a famously customer hostile company when their customers just bend over and defend them no matter what. You guys really are amazing . Tesla is worth hundreds of billions of dollars, but you are contorting yourselves every which way just to rationalize a shitty decision on their part. Even resorting to namecalling. This is what the greater world means when they say "Tesla Stans" or fanboys. It's such a sad look.

The only realistic solution for no one to be upset that the price was going down would have been to notify all customers as soon as they knew they were going to lower prices to come in below the IRA limits. In other words, completely stop selling cars for a while.

Serious question....assuming they knew 2-3 months ago that they were going to lower prices below $55k, should Tesla have put out a statement saying "Do not buy a car from us now. Wait until the middle of January when we will lower prices and you may get a tax credit."

I mean, we are all reasonably intelligent humans with brains......do you really expect a company to not sell any cars for months because a decision to reduce prices is likely in the future due to new legislation? Or should they have lowered prices AND handed you another $7500 on top of it to give you the tax credit in advance? Seriously people.

My previous post was a bit sarcastic obviously, but there is no realistic way for this to have made everyone happy IMO. I mean, I got $8,000 off and free supercharging, so basically the same price being offered now, but no tax credit. I'm not happy about it, but I know there isn't an easy solution.

 

[TesslaBull]

On a positive note, the IRA's tax credit is going to cause *massive* inflation reduction in the car market.

 

[DrChaos]

The only realistic solution for no one to be upset that the price was going down would have been to notify all customers as soon as they knew they were going to lower prices to come in below the IRA limits. In other words, completely stop selling cars for a while.

Serious question....assuming they knew 2-3 months ago that they were going to lower prices below $55k, should Tesla have put out a statement saying "Do not buy a car from us now. Wait until the middle of January when we will lower prices and you may get a tax credit."

I mean, we are all reasonably intelligent humans with brains......do you really expect a company to not sell any cars for months because a decision to reduce prices is likely in the future due to new legislation? Or should they have lowered prices AND handed you another $7500 on top of it to give you the tax credit in advance? Seriously people.

My previous post was a bit sarcastic obviously, but there is no realistic way for this to have made everyone happy IMO. I mean, I got $8,000 off and free supercharging, so basically the same price being offered now, but no tax credit. I'm not happy about it, but I know there isn't an easy solution.

I think they didn't actually know what their pricing after Jan 1st would be. There was uncertainty whether the demand drop was due to people anticipating the tax credit on Jan 1st (hence the incentives prior) or more serious because of interest rate increases. So after Jan 1st, they looked at the sales rate for two weeks, and found it didn't bump back up, so then the price cuts.

They move fast, unlike other automakers who would take 3 months to make this decision until quarterly results are in. Also, they have the advantage of knowing direct sales rates to drivers vs legacies who sell to dealers, and then don't know promptly for how much or when the dealers sell the car.

 

[I<3URANUS]

This is kinda funny. The market completely changed. What do y'all expect them to do? If demand is high, they're going to charge more. Tesla just acts quicker than the other manufacturers. This is because they dont have a dealer network to mess with. Ford messed up big time with the MachE's prices increases last year and are absolutely going to suffer. It sucks when this happens but at the same time, it was pretty obvious it was inevitable.

 

[I<3URANUS]

It's understandable how Tesla can be such a famously customer hostile company when their customers just bend over and defend them no matter what. You guys really are amazing . Tesla is worth hundreds of billions of dollars, but you are contorting yourselves every which way just to rationalize a shitty decision on their part. Even resorting to namecalling. This is what the greater world means when they say "Tesla Stans" or fanboys. It's such a sad look.

What on earth. lol. It is 100% the fault of people that kept buying them after they raised their prices. When I bought in 2019 my sr+ was about the same cost as they are today. Totally worth it. At peak (something like $47k) definitely not worth it. Ford is about to get wiped all over the floor since they raised prices of the MachE by so much. lol.

The warning signs were all over the place. Unless you absolutely had to, there was no reason at all to buy a car yet SO MANY POEPLE did anyway.

 

[mylapore]

If I had to speculate, I'd say recent price drops are only partially attributable to spurring demand, but may also be about flushing out inventory with sensor-less cars before they do a big model refresh with the latest sensors. When the new model comes out, pricing will revert back to higher levels as it does when new phones are released.

 

[tlr1000]

If I had to speculate, I'd say recent price drops are only partially attributable to spurring demand, but may also be about flushing out inventory with sensor-less cars before they do a big model refresh with the latest sensors. When the new model comes out, pricing will revert back to higher levels as it does when new phones are released.

Agreed. Bottomline, Tesla made a business decision they believe is best for the company. Of course, like with any significant change, there are people that are negatively impacted (those who bought before the price drop) and people positively impacted (those who will buy after price drop). Those negatively impacted will be vocal and understandably so. I wonder if there will be new members starting threads with, "I bought a new Tesla because of the new pricing made it affordable for me".

 

[1flossedm3]

Say what you want it was a terrible move for long term customer retention. They basically said we don't care about anyone who bought in 2022 and we can do it again in the future. No manufacturer has ever dropped $10K overnight on a model. (Negotiating with dealers discounting off msrp is nowhere near the same so stop quoting that). I think Elon wants out and he's trying to sell as much as he can before he cuts the cord. It also introduces brand instability.

 

[I<3URANUS]

Say what you want it was a terrible move for long term customer retention. They basically said we don't care about anyone who bought in 2022 and we can do it again in the future. No manufacturer has ever dropped $10K overnight on a model. (Negotiating with dealers discounting off msrp is nowhere near the same so stop quoting that). I think Elon wants out and he's trying to sell as much as he can before he cuts the cord. It also introduces brand instability.

They're not saying that at all. Plus people have short memories.

Ford/Chevy/Dodge used to do it all the time with rebates. lol literally ALL THE TIME. That's not negotiating, it is a manufacture's rebate. No one, and I mean no one was haggling 10k off a new car, EVER. It was, and always have been, rebates.

 

[1flossedm3]

They're not saying that at all. Plus people have short memories.

Ford/Chevy/Dodge used to do it all the time with rebates. lol literally ALL THE TIME. That's not negotiating, it is a manufacture's rebate. No one, and I mean no one was haggling 10k off a new car, EVER. It was, and always have been, rebates.

Random rebates for a week or two a year is not the same as a FLAT OUT price drop of $10k+ off models permanently. You are also wrong, I haggled 8K off msrp on a BMW 335i 5 years ago.

 

[3sr+buyer]

Random rebates for a week or two a year is not the same as a FLAT OUT price drop of $10k+ off models permanently.

When the big rebates become effectively permanent month after month, year after year, that is basically equivalent.

 

[I<3URANUS]

Random rebates for a week or two a year is not the same as a FLAT OUT price drop of $10k+ off models permanently. You are also wrong, I haggled 8K off msrp on a BMW 335i 5 years ago.

You're right, it's worse. (what the big three do because their pricing is inconsistent) Tesla changed their prices based off the entire economy changing. They're not remotely the same. And those rebates were all the time to varying degree.

ok, cool. perhaps I was a bit too absolute with the no one getting way under msrp. That happens with dealer loaners, demos, vehicles wrecked during delivery, etc. They even have volume kickbacks, etc. How much do you think dealers make on a car (in a normal non adjusted market) per car? Just curious. Also, did you buy that BMW brand new? Cause BMW stopped using the 335i name in 2015. So you might have your dates off.

oh, and what makes you think the change is permanently? lol, Tesla changes their prices all the time. They will again.

 

[Copes]

Here is Vroom’s offer for my 2022 Model 3 Performance with 13k miles in excellent condition. They offered me $66k for it 6 months ago.

View attachment 895118

Just tried getting an offer from Vroom for my 2020 M3 SR+ and got a screen that they “are not providing offers on Teslas at this time”

 

[texas_star_TM3]

Just tried getting an offer from Vroom for my 2020 M3 SR+ and got a screen that they “are not providing offers on Teslas at this time”

i dont think carmax/ carvana or vroom going forward will offer realistic or any offers for Tesla's. What if Tesla cuts prices again by 10-20% and these guys are caught upside down in their inventory?

 

[Lavender]

It's understandable how Tesla can be such a famously customer hostile company when their customers just bend over and defend them no matter what. You guys really are amazing . Tesla is worth hundreds of billions of dollars, but you are contorting yourselves every which way just to rationalize a shitty decision on their part. Even resorting to namecalling. This is what the greater world means when they say "Tesla Stans" or fanboys. It's such a sad look.

So true. Well hopefully Tesla goes out of business soon, and in 20 years will be a dodo bird like the Delorian or AMC. You will see them on the road and say “Look dear, remember those? We had one back in the day but because Elon Musk doesn’t give a *sugar* about customer satisfaction, they went out of business”.

 

[PNWLeccy]

Can you believe Audi via dealers are dropping prices $15-$20k? Everyone’s trying to copy Tesla

 

[SO16]

Can you believe Audi via dealers are dropping prices $15-$20k? Everyone’s trying to copy Tesla

Yup!

Not just them.

“

Xpeng Follows Tesla With Major Price Cuts on China Electric Cars​

• Xpeng slashes $22,000 off G3i base models, P7 sedans also cut
• Many automakers lowering prices in world’s biggest EV market”

Xpeng Follows Tesla With Major Price Cuts on China Electric Cars

Xpeng Inc. has bowed to an intensifying price war in China’s electric-vehicle market, lowering those on its models by as much as 12.5% Tuesday after Tesla Inc.’s surprise cuts at the start of the year.

www.bloomberg.com

 

[PNWLeccy]

Yup!

Not just them.

“

Xpeng Follows Tesla With Major Price Cuts on China Electric Cars​

• Xpeng slashes $22,000 off G3i base models, P7 sedans also cut
• Many automakers lowering prices in world’s biggest EV market”

Xpeng Follows Tesla With Major Price Cuts on China Electric Cars

Xpeng Inc. has bowed to an intensifying price war in China’s electric-vehicle market, lowering those on its models by as much as 12.5% Tuesday after Tesla Inc.’s surprise cuts at the start of the year.

www.bloomberg.com

Yea, Tesla is just more transparent. The market has changed. I think ripping off the bandaid is the best way to do it

 

[SO16]

Yea, Tesla is just more transparent. The market has changed. I think ripping off the bandaid is the best way to do it

Absolutely.

 

[launchd]

My opinion...

What we're seeing is the emergence of a serious competitor that is now forcing Tesla's hand.

BYD beat Tesla in 2022 as the worldwide EV* sales leader.
*Plug-in hybrid models from BYD are counted in this ranking. If looking at BEV only, Tesla is still leading but, BYD is closing in FAST. The soon to be released BYD Seal / Atto 4 is BYD's first real Model 3 competitor.

According to sales data, the average price of BYD's vehicles for 2022 was $35,000 (down from $49,000 in 2021).
Gee that's nice, BYD reduced their prices into 2022 - $35,000 is pretty affordable if you ask me!

According to sales data, the average price of Tesla's vehicles for 2022 was $63,000 (up from $58,000 in 2021).
This could simply mean Tesla sold a lot more S, X or higher trim Ys which brought up the average but, take notice of the price difference between BYD and Tesla, this is big.

On a per vehicle basis, BYD makes an average profit of ~$1,100 per car sold.
What? Shame on you, did you learn nothing from Tesla? A mere $1100 per car sold? Ha, Elon laughs at you.

On a per vehicle basis, Tesla makes an average profit of ~$9,500 per car sold.
Seriously Tesla? How long were you going to milk your consumers for huge profit? Oh, right... until you felt threatened and/or it became a risk to your business.

So, if you're losing to your biggest competitor on sales, yet you make 8x (almost 9x) more profit than them per unit sold and you almost double their average unit cost... you may think to yourself gee, we should really consider lowering our prices/reducing our costs to be more competitive or we're going to be in a lot of trouble. And, just as BYD increased their prices (End of Nov) due to "higher material costs", Tesla aggressively dropped theirs in an attempt to capitalize. BYD woke the sleeping giant. The price adjustments we are seeing in the US were inevitable, thanks to the Chinese market and competition.