Inflationary Price Increase coming?

[Unclepaul]

Tesla is not the only one to raise prices on newer high demand vehicles.

It used to be that you could buy a new Mercedes for $500 over dealer cost, from the high volume internet sellers. Now, not has the list price gone way up, but the dealers now have thousands in additional dealer markeup plus another primium if you want to buy something off the lot.

This is why many can sell their in demand model cars for more than they paid for them a couple years ago.

 

[Zebelkhan]

The MYP is basically $70k + TTL now. Had I been in the market to buy now instead of last July, I seriously think I would have either bought a different EV or got another ICE. That would make me sad since I love everything about the MYP. I've put 10k miles in about 5.5 months of driving, so I'm not sure if any of the current EVs in my price range would suffice given that how much cold weather takes a bite out of the range. My wife just got a Volvo C40 Recharge, and while I think it's a great car that I would love to drive daily, the range really could be an issue in cold weather for me.

At the rate it's going, I'm not sure there's another Tesla in my future, but the good thing is there should be a ton of options by the time I'm in the market for another car.

I’m in the same boat. Was looking to buy a second MY but now going to get an X3 instead. If you ever upgrade, your used car value should also be up so you’ll be good there.

 

[gx9901]

I’m in the same boat. Was looking to buy a second MY but now going to get an X3 instead. If you ever upgrade, your used car value should also be up so you’ll be good there.

Unfortunately for me, I got rear-ended last year, so the value of my car isn't as great as it could have been. But that's OK since I tend to keep a car for a long time. Hopefully the MYP will be good for me for years to come as it's by far my favorite of all the cars I've ever owned.

 

[Kairide]

Just to be fair an Audi SQ5 Prestige - to match standard features of Model Y LR and slightly less performance is over $65,000 (to maintain some of the features require $29 month subscription). I like my Model Y more than the Q5 that I sold.

Having owned a lot of Audis in my life, there is a huge difference between Audi and Tesla as a brand. Buying a $65K SQ5 Prestige will get you a true luxury sport SUV with a solid fit, finish and ride and high quality interior. Obviously the 0-60 performance and technology won't match Tesla, but their digital cockpit display is beautiful. I do agree that their $30 a month data rates for Google maps and connected services is ridiculous and idiotic.
You'll also see a difference in how you're treated after the sale. With Tesla, their customer service is non-existent and service is hit or miss. Audi and all of the true luxury brands spend a considerable amount of time and money on customer service and retention.

The Model Y is not a $60k+ plus vehicle. All of the vehicles in Tesla's lineup are overpriced, but they have done a great job at being 1st to market with widescale EVs and Elon has done a great job selling and creating a cult following. The realists know that it won't last the way it's going. Tesla will need to re-evaluate their prices and customer service once there's more competition. The pandemic was a saving grace for Tesla. If not for the pandemic I think Rivian and Lucid would have been able to produce more vehicles undercutting Tesla's market share.

 

[HELL YEAH!]

Elon is crazy like a fox and smarter than everyone. He can raise the price on the current versions of Y's because demand is there. Meanwhile, develop a better/cheaper to produce battery and introduce it in a 'standard' range Y $10-15,000 below current LR version. Sales for it will blow up and THAT is what Giga Texas will build initially. Tesla and Musk are going to own the world.

 

[Midnightsun]

Elon is crazy like a fox and smarter than everyone. He can raise the price on the current versions of Y's because demand is there. Meanwhile, develop a better/cheaper to produce battery and introduce it in a 'standard' range Y $10-15,000 below current LR version. Sales for it will blow up and THAT is what Giga Texas will build initially. Tesla and Musk are going to own the world.

Must agree with this. It's not like people are steering away, more like rushing to buy one before there is another price hike and kicking themselves in the butt for not acting sooner.

 

[Kairide]

Elon is crazy like a fox and smarter than everyone. He can raise the price on the current versions of Y's because demand is there. Meanwhile, develop a better/cheaper to produce battery and introduce it in a 'standard' range Y $10-15,000 below current LR version. Sales for it will blow up and THAT is what Giga Texas will build initially. Tesla and Musk are going to own the world.

Must agree with this. It's not like people are steering away, more like rushing to buy one before there is another price hike and kicking themselves in the butt for not acting sooner.

Hate to burst your bubble, but once the world is able to recover from the pandemic Tesla's prices will come crashing down. Tesla owns the market share now so they can dictate pricing on their own terms. But the Ford F-150 Lightning will own the Cybertruck in sales, if Rivian can ramp up production on the R1s that will outsell the Model X. Fully loaded the R1S is $20K cheaper than the MX starts at. The Lucid is a firm competitor to the S. The I.D. 4, EV6 and Ionic 5 will outsell the Y once dealer markups go away.

Elon is raising prices now to take advantage of the market. The problem is once the market corrects, Tesla will be seen as way overpriced and start losing sales. They will have to drastically lower all of their prices to compete. That will then alienate customers who paid more and instantaneously drop the value of any Teslas on the road. Everyone who bought a Y last year is thrilled their cars are $8-10k positive equity. Imagine when Tesla goes the opposite direction and cars are then $8-10K negative equity.
When making economic decisions you can't just focus on the "now", you need to see what the future is. There is no way any of the Tesla models are worth the same in the next couple of years.

 

[nate704]

Hate to burst your bubble, but once the world is able to recover from the pandemic Tesla's prices will come crashing down. Tesla owns the market share now so they can dictate pricing on their own terms. But the Ford F-150 Lightning will own the Cybertruck in sales, if Rivian can ramp up production on the R1s that will outsell the Model X. Fully loaded the R1S is $20K cheaper than the MX starts at. The Lucid is a firm competitor to the S. The I.D. 4, EV6 and Ionic 5 will outsell the Y once dealer markups go away.

Elon is raising prices now to take advantage of the market. The problem is once the market corrects, Tesla will be seen as way overpriced and start losing sales. They will have to drastically lower all of their prices to compete. That will then alienate customers who paid more and instantaneously drop the value of any Teslas on the road. Everyone who bought a Y last year is thrilled their cars are $8-10k positive equity. Imagine when Tesla goes the opposite direction and cars are then $8-10K negative equity.
When making economic decisions you can't just focus on the "now", you need to see what the future is. There is no way any of the Tesla models are worth the same in the next couple of years.

Most of your “assumptions “are just guessing at this point since F-150 lightening, R1S, and other big things from the legacy markets do not exist. M3 snd MY outsell all the others now.
Tesla invest way more in R&D than any other makers and Tesla will be always years away from others especially the battery management software and hardware.
I’m not a truck guy but if i were one, i would take the cyber truck over other due to superior battery efficiency.
Also, dealers will always have markups and it will never stop.
I’m not saying that the price will not come down but it will not crashing down. minor price adjustment could happen but not major drop.
A lot of experts said Tesla will bankrupt and go down with flames when their stock price was around $100. You know the rest of the story.

 

[Kairide]

Most of your “assumptions “are just guessing at this point since F-150 lightening, R1S, and other big things from the legacy markets do not exist. M3 snd MY outsell all the others now.
Tesla invest way more in R&D than any other makers and Tesla will be always years away from others especially the battery management software and hardware.
I’m not a truck guy but if i were one, i would take the cyber truck over other due to superior battery efficiency.
Also, dealers will always have markups and it will never stop.
I’m not saying that the price will not come down but it will not crashing down. minor price adjustment could happen but not major drop.
A lot of experts said Tesla will bankrupt and go down with flames when their stock price was around $100. You know the rest of the story.

Do you really think Tesla invests more in R&D than all of the other car manufacturers? Tesla owns the market share of EVs, but still a very small player in the auto industry. They what, a 2% market share on the auto industry?

I like how you point out that my assumptions are just guesses. "I’m not a truck guy but if i were one, i would take the cyber truck over other due to superior battery efficiency". How do you know this since neither exist? Are you assuming and guessing the Cybertruck has a more efficient battery?
The F-150 is closer to production than the Cybertruck. If Ford and Tesla could produce an infinite amount of trucks, the F-150 would outsell the Cybertruck. That's based on data, not a guess as the F-150 is the top selling full-size truck in the U.S.

Dealerships did not always have markups. You would see markups on special editions or at the beginning if a new model was slow to production. But dealer markups on mass produced vehicles do not happen prior to the pandemic.

The I.D. 4, EV6, Ioniq 5, Kona e-Tron, etc.. do exist and without supply constraints they would be selling like any other car at or below MSRP. That is considerably cheaper than the Y and they are still eligible for the $7500 tax credit.

Speaking from an honest point of view, do you think people will still be paying $60K for a Y if they can get another EV SUV for $10K or more less, and the tax incentive?

 

[Daniel L]

Do you really think Tesla invests more in R&D than all of the other car manufacturers? Tesla owns the market share of EVs, but still a very small player in the auto industry. They what, a 2% market share on the auto industry?

I like how you point out that my assumptions are just guesses. "I’m not a truck guy but if i were one, i would take the cyber truck over other due to superior battery efficiency". How do you know this since neither exist? Are you assuming and guessing the Cybertruck has a more efficient battery?
The F-150 is closer to production than the Cybertruck. If Ford and Tesla could produce an infinite amount of trucks, the F-150 would outsell the Cybertruck. That's based on data, not a guess as the F-150 is the top selling full-size truck in the U.S.

Dealerships did not always have markups. You would see markups on special editions or at the beginning if a new model was slow to production. But dealer markups on mass produced vehicles do not happen prior to the pandemic.

The I.D. 4, EV6, Ioniq 5, Kona e-Tron, etc.. do exist and without supply constraints they would be selling like any other car at or below MSRP. That is considerably cheaper than the Y and they are still eligible for the $7500 tax credit.

Speaking from an honest point of view, do you think people will still be paying $60K for a Y if they can get another EV SUV for $10K or more less, and the tax incentive?

Tesla is definitely not a very small player anymore. They are selling more Model Ys than any SUV or truck (including the f150) in California. More than any car other than the Toyota Camry according to 2021 numbers. Of course, the rest of the US sales numbers are vastly different.

By the time people can get normal pricing on an EV SUV I think Tesla would be able to lower their price to compete as well.

 

[Kairide]

Tesla is definitely not a very small player anymore. They are selling more Model Ys than any SUV or truck (including the f150) in California. More than any car other than the Toyota Camry according to 2021 numbers. Of course, the rest of the US sales numbers are vastly different.

By the time people can get normal pricing on an EV SUV I think Tesla would be able to lower their price to compete as well.

The auto industry is larger than just California. Tesla is a small player in the auto industry still, having 2% market share doesn't make you a big player.

I know Tesla can lower their prices, and they will have to. That's why I'm saying they may be creating an issue now by raising their prices so quickly and by so much. When the markets stabilizes, they will need to drop them by just as much and that will devalue their cars and alienate customers.

 

[Daniel L]

The auto industry is larger than just California. Tesla is a small player in the auto industry still, having 2% market share doesn't make you a big player.

I know Tesla can lower their prices, and they will have to. That's why I'm saying they may be creating an issue now by raising their prices so quickly and by so much. When the markets stabilizes, they will need to drop them by just as much and that will devalue their cars and alienate customers.

Tesla is at ~2.5% which is very close to BMW and Mercedes (Daimler). Would you call those two small players? There were several months last year where Tesla outsold BMW and Mercedes and if Austin manages to increase production, there's a high likelihood Tesla will outsell BMW this year. They already outsold Mercedes Q4 2021. (Note this is just looking at US sales)

 

[Kairide]

Tesla is at ~2.5% which is very close to BMW and Mercedes (Daimler) at ~3%. Would you call those two small players? There were several months last year where Tesla outsold BMW and Mercedes.

Yes, Tesla is still a small player in global car sales. BMW and Mercedes have been around longer, but are still smaller as well. I guess everyone is small though compared to GM, Ford and Toyota though.

It's also good to see Elon's most loyal follower @WhiteWi has joined the fray. Do you even own a Tesla yet?

 

[nate704]

Since legacy makers cannot raise the MSRP mid year, just wait until announcement of next year model. I’m sure all will match the Tesla price.
Do you really think all the auto makers will kindly lower their prices once this craziness calms down? I bet they will keep the high/inflated prices and raise it every year.
GM said they will not increase their inventory even after this shortages meaning they will not lower the price and no more heavy discount for consumers.

 

[Destiny1701]

I had replied here that I am skeptical that the Y prices would come back down once the supply chain issues get resolved and the materials costs fall. But imagine how pissed off customers would be if they shelled out this much and then the prices DO come back down, kicking their resale value right in the nuts.

Some forget or don’t know That back in 2016/17 the MS and P100D at peak price was 165k and then fell to 130k within a 3-4 month period. Early buyers were quite pissed but nothing they could do about it. Such is the tesla way…

 

[HELL YEAH!]

Hate to burst your bubble, but once the world is able to recover from the pandemic Tesla's prices will come crashing down. Tesla owns the market share now so they can dictate pricing on their own terms. But the Ford F-150 Lightning will own the Cybertruck in sales, if Rivian can ramp up production on the R1s that will outsell the Model X. Fully loaded the R1S is $20K cheaper than the MX starts at. The Lucid is a firm competitor to the S. The I.D. 4, EV6 and Ionic 5 will outsell the Y once dealer markups go away.

Elon is raising prices now to take advantage of the market. The problem is once the market corrects, Tesla will be seen as way overpriced and start losing sales. They will have to drastically lower all of their prices to compete. That will then alienate customers who paid more and instantaneously drop the value of any Teslas on the road. Everyone who bought a Y last year is thrilled their cars are $8-10k positive equity. Imagine when Tesla goes the opposite direction and cars are then $8-10K negative equity.
When making economic decisions you can't just focus on the "now", you need to see what the future is. There is no way any of the Tesla models are worth the same in the next couple of years.

There are a couple of flaws in your thesis. The first is the number of assumptions you make: 'If Rivian' (can survive), 'The Lucid...(same boat as Rivian and may not survive) I.D. 4, EV6 and Ionic 5 will outsell the Y once (IF) dealer markups go away', and Ford is probably still a couple of years out at least before ramping the lightning to 200,000 a year. The other flaw (huge flaw) is that you assume Ford can build new factories/train new people/hire new engineers/maintain their ICE factories/production all without going bankrupt (they carry a large debt load now). That also includes all the other legacy manufacturers including VW. Remember, every single legacy builder is saddled with ICE plants. They need to maintain those AND build NEW factories from the ground up to compete with Tesla. Also, as legacy begins to sell EVs they will be eating into their own ICE sales: as EV sales increase ICE sales will decrease so they gain no ground but increase debt b/c of the new factories they had to build and staff. THEN, there is the issue of batteries, which Tesla is producing their own AND have locked up guaranteed contracts for the foreseeable future.

Stelantis CEO has already stated it costs much more to manufacture an EV than ICE vehicle. Thus, just how low do you think legacy can price their EV without losing cash? I'm willing to bet no domestic can compete with Tesla on price but maybe Korea can due to blue collar wages. Coupled with Tesla's insane 30% margin on each car, who do you think wins the low priced EV war IF Tesla is forced to lower prices? Let's not even talk about economies of scale - it is way cheaper for Tesla to build EVs than it is for anybody else because of how many they are producing. Period.

Who do you think BYD et al would rather sell batteries to? Tesla, with their huge guaranteed demand and cash up front or Ford with 'will you take a credit card? Oh don't mind our huge debt already?' Ford's debt by the way is rated BB+, which is damn near junk so good luck to them trying to raise more capital to build the EV infrastructure and buy the materials they need.

Frankly, the writing is on the wall for a lot of legacy makers. For many, it's bye bye..unless they get bailed out by their governments.

 

[JohnB007]

Shouldn't we also include "fuel" cost into the equation when you want to compare vehicles?

At least for me, I drive 40,000km per year. An X3 with premium fuel would cost me at least $500CA/month MORE compare to owning a Model Y with a charger at home. Obviously this depends on individuals, but for someone like me, the Model Y compares to other ICE cars at least $40,000CA cheaper.

There's no ICE cars remotely comparable to the Model Y at $40k CA price range. Total ownership cost of an SQ5 in this case would be much higher.

 

[Yelobird]

And let’s not forget the battle legacy OEM dealers are going to face when they start slashing all of the Union service centers that will have virtually no purpose without ICE after sale services.

 

[TSLY]

If I had to guess -- which it seems everyone in this thread has -- I foresee Tesla increasing its market share as the EV market expands, allowing other EVs to coexist and profit within a larger slice of the auto sales pie.

 

[origingalatic]

Hate to burst your bubble, but once the world is able to recover from the pandemic Tesla's prices will come crashing down. Tesla owns the market share now so they can dictate pricing on their own terms. But the Ford F-150 Lightning will own the Cybertruck in sales, if Rivian can ramp up production on the R1s that will outsell the Model X. Fully loaded the R1S is $20K cheaper than the MX starts at. The Lucid is a firm competitor to the S. The I.D. 4, EV6 and Ionic 5 will outsell the Y once dealer markups go away.

Elon is raising prices now to take advantage of the market. The problem is once the market corrects, Tesla will be seen as way overpriced and start losing sales. They will have to drastically lower all of their prices to compete. That will then alienate customers who paid more and instantaneously drop the value of any Teslas on the road. Everyone who bought a Y last year is thrilled their cars are $8-10k positive equity. Imagine when Tesla goes the opposite direction and cars are then $8-10K negative equity.
When making economic decisions you can't just focus on the "now", you need to see what the future is. There is no way any of the Tesla models are worth the same in the next couple of years.

You mean like an ICE car that drives off the lot and immediate looses double digit equities? or buying a car is an investment decisions. Word of wisdoms there.