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Is now the worst time to accept delivery of a Model Y?

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Just to put everything in perspective, My Model Y AWD (Long story, but it's the 4680 structural pack build) is scheduled to be delivered in November. Looking at everything going on at the moment, it seems like this could be the worst time to accept delivery of a Model Y for the following reasons:

1. Prices are at all time high and both new and used car demand is weakening very quickly. The idea that Tesla prices only go up is false and most likely will be coming down soon. Used Tesla prices are trending down quickly as we speak.
2. Removal of ultrasonic sensors with a yet to be proven alternative.
3. HW3 is over 3 years old with HW4 likely coming soon. Given that Tesla is betting everything on Camera + AI, HW4 will most likely be a significantly improvement over HW3 over the next 5-10 years if holding the car for a while.
4. Customer Service nightmares seem to become commonplace.
5. Quality control on the Model Y is still hit or miss, I was hopeful that Austin produced model Y's would be much better, but there seems to be a ton of reports of Quality issues out of Austin as well.

For an over $60k car, this seems like it's going to be a major regret at the moment. We do need a second car, but I'm considering something else for now and see what the EV Market is like in a year or so. Just would love other peoples thoughts who own the car and I realize this is going to be a biased audience towards Tesla.
 
Competition: Name one solid EV competitor to Tesla. How about everybody? Open your eyes and look around. Everybody now has a brand new one for sale. Startups that were no-names just a few years ago.. to carmakers who have been in business for over 100 years.. have all announced shiny new EVs. So yes.. the Supercharger network is absolutely awesome and I'll be the first to admit it works better than everything else. But the real question is how many people really care about that? The reality is most EV owners do most of their charging at home. Many non-Tesla EVs come with 3 years of free charging on CCS networks. And some EVs now charge so fast.. you can go from 0-80% in 18mins. Biden has $ 5 billion to spend on expanding EV charging infrastructure. I own a Tesla + CCS1 adapter.. and use my wife's ID.4 free charging promo code to charge my Tesla absolutely free at any EA CCS charger. I can tell you with first-hand experience that while it has headaches, that having the option to charge free/cheap/350kW is so lucrative that I dont bother looking for Superchargers anymore on long-distance trips. And that's just charging networks. There are still plenty of reasons to choose a non-Tesla EV. Prominent features that are flat out missing on Tesla 3/Y vehicles like better build quality & noise insulation, comfort/adjustable suspension, CarPlay & Android Auto, 360 bird's eye view, ventilated seats, opening sunroofs, truly luxurious interiors, physical buttons, extra screens, drivers cockpit, HUD, etc. Hell even if you wanted an EV truck.. Rivian, GMC, and Ford all have been selling an EV truck over the past year, while Tesla has yet even to start production on the Cybertruck. And if the Chinese EV brands ever get their way in the American market.. they will do exactly to Tesla in the US.. what they have done to Tesla in China.

Thank you for your long/detailed post...I've always felt for some folks, the Tesla formula isn't a positive and it's nice you have multiple EVs to compare. If someone can get a Bolt (assuming GM doesn't raise prices in 2023), even though not a Tesla for $14k-$17k new sounds pretty crazy even though it doesn't have all the great things as a Tesla. Saving that much $$ from basic transportation with decent range seems good if you don't need to road trip.

I agree with you and always felt it's a supply/demand thing and Tesla will have more competition now and in the next few years. There seems to be a bit more competition in China and Europe (they don't build many small EVs in the USA) and seems priced wise, more competitive in those countries. BMW i4 gets free 3 year charging which is a lot for someone forced to charge outside. Even if Tesla opened up the supercharging network, prices have been preatty high I've read for charging even for Tesla folks.
 
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The laws of supply & demand work both ways. And you guys (yes, you) have to consider the same temporary socio-economic factors that sent the price of Teslas flying up.. have changed.. and are the same ones that will send the price back down.

So let's play this game. Let's look at exactly why the price of a Model Y went from $48,990 to $65,990 ($17,000 difference) in the span of only about 15 months. Why were people waiting over a year to get a new Model Y delivered? Let's break this down factor by factor.

  1. Supply: Somewhere around the spring/summer of 2021 the wait to get a new Model started expanding beyond the typical 2-4 week which was pretty common for the past year. What has changed since then.. is that Tesla doubled the number of factories and currently has 4 factories running full speed. This has quadrupled the production of Model Y's available on any given day. Last year Tesla produced 500,000 cars annually.. meanwhile, their current run rate is now around 2 Million vehicles annually and they are still expanding & increasing production. And that's before the recent talk about their plans to open another factory in Mexico. It is also before we talk about the used market. There is an absolute glutton of low mileage Model Y's sitting around many used dealerships. A lot of these vehicles are almost brand new as they were bought and quickly flipped for a slight profit. The days of anyone waiting a long time to get a Model Y are over and they are NEVER coming back. You can't have it both ways. You can't say that Tesla is going to build upwards of 5-10M vehicles a year AND expect those vehicles to keep selling for record-high prices. The reality is the Model Y is a $50K vehicle.. that is based on the Model 3.. a $40K vehicle. It was always intended to be a high-volume, low-cost entry vehicle. Outside of the hatchback, height risers, extra speakers, foglights, and a few other cosmetic bits.. a current Model Y isn't that different than the promised $35,000 Model 3.
  2. Gas Prices: It's easy to forget what just happened earlier this year. Russia's invasion of Ukraine basically doubled the price of gasoline and people started panicking. Gas got as high as $7 in some parts of the US alone. Of course, any incredibly dramatic spike in gas prices will cause the same dramatic spike for vehicles that dont use gas.. aka EVs. And this is what really set off the chain reaction of people lining up to buy a $70K Model Y. Even better, if did buy a $70K Model Y you turn right around and sell local dealer for $75K. None of this remains true. Gas prices have fallen so much in just the past few months, they are already UNDER the $3 mark in half of the US. If you think I'm lying go take a look for yourself: AAA Gas Prices. Granted nobody knows what's going to happen to gas prices going forward. But there is no reason to think they won't continue to go even lower.. after all that's been the weekly trend for about the past 6 months. Gas prices are literally lower right now.. than they were a year ago.. before the war in Ukraine even started. With the war being what it is & mid-term elections over.. there are just not many people speculating on gas prices right now. So once again we get right back to the point where the ONLY reason Tesla was able to sell so many EVs at extremely high prices.. is that gas prices were also at extremely high prices. Gas prices were literally the HIGHEST they have ever been in history. This was a temporary condition.. and it is no longer the case. If anything it's the opposite.
  3. COVID/Chip/Component shortage: Tesla/Elon has gone on record mentioning that the cost of many components had increased during the COVID/chip/component shortages experienced from 2020-2022. And while there is a lot of truth here (everything got more expensive).. the reality is many of those components and chips are readily available again. For example radar. I have long believed the only reason that Tesla removed radar from the 3/Y.. switched to Vision only is they simply could not source enough radar units to continue supplying every new 3/Y with radar. Their engineers were able to get Vision-based AP to work well enough that they could remove it. Lo & behold.. in 2023 radar is already expected to return to the 3/Y made with the HW4 upgrade. Once again we see that temporary factors were just that.. Temporary. Practically everything that became hard to find in 2020-2022 (toilet paper, lumbar, metals, new vehicles) is back in stock again and starting to pile up.
  4. Interest rates: Simple math is all you need to realize that financing any new vehicle is significantly more expensive than what it was a year ago.. even if the sales price has remained the same. Like many people, I was able to finance my new car purchase for around 2% in 2021. Interest rates right now on new Teslas are running around 7% (I've seen as high as 7.5%). The monthly payment on a $70K car loan financed for 72 months at 2% APR is $1,032. You would pay around 4,342.23 in interest to finance this vehicle over the life of the loan. Take the same factors and change the APR to 7% and the monthly payment jumps to $1,193. The payment jumps a noticeable $160 every month.. but the interest on the loan balloons to an absolute eye-popping $15,926.99. $16,000 in interest.. could buy another freaking car! And now you need to get approved. Higher APR means more restrictive loans. Banks put tighter limits on approvals, and debt-to-income ratios and require bigger down payments.
  5. Competition: Name one solid EV competitor to Tesla. How about everybody? Open your eyes and look around. Everybody now has a brand new one for sale. Startups that were no-names just a few years ago.. to carmakers who have been in business for over 100 years.. have all announced shiny new EVs. So yes.. the Supercharger network is absolutely awesome and I'll be the first to admit it works better than everything else. But the real question is how many people really care about that? The reality is most EV owners do most of their charging at home. Many non-Tesla EVs come with 3 years of free charging on CCS networks. And some EVs now charge so fast.. you can go from 0-80% in 18mins. Biden has $ 5 billion to spend on expanding EV charging infrastructure. I own a Tesla + CCS1 adapter.. and use my wife's ID.4 free charging promo code to charge my Tesla absolutely free at any EA CCS charger. I can tell you with first-hand experience that while it has headaches, that having the option to charge free/cheap/350kW is so lucrative that I dont bother looking for Superchargers anymore on long-distance trips. And that's just charging networks. There are still plenty of reasons to choose a non-Tesla EV. Prominent features that are flat out missing on Tesla 3/Y vehicles like better build quality & noise insulation, comfort/adjustable suspension, CarPlay & Android Auto, 360 bird's eye view, ventilated seats, opening sunroofs, truly luxurious interiors, physical buttons, extra screens, drivers cockpit, HUD, etc. Hell even if you wanted an EV truck.. Rivian, GMC, and Ford all have been selling an EV truck over the past year, while Tesla has yet even to start production on the Cybertruck. And if the Chinese EV brands ever get their way in the American market.. they will do exactly to Tesla in the US.. what they have done to Tesla in China.
  6. Tax Credit: It is awesome that the tax credit has now returned to Tesla. Many people love this credit because they carry heavy tax burdens and most of us hate paying too many taxes. That's exactly how we ended up with the ID.4. We didn't even want the car, we wanted the tax credit lol. That said the game has changed once again. New salary limits.. new vehicle limits.. even new battery construction limits.. mean that the credit is no longer as open or attractive as it was before. Only very specific versions of the 3/Y will qualify for it and there are still questions to exactly how much of the $7,500 applies to any given purchase. I think this is one of the reasons why see Tesla was able to clear out so much existing inventory with the $7,500 incentive + 10K free Supercharger miles promo.. As many people who were questioning if the NEW tax credit would apply to their particular situation.. hopped off the fence rather than wait around to Jan 1st to find out. Also, I dont think other manufacturers are just going to stand on the fence and watch Tesla scoop up the new credits. Ford already has its Mach-E positioned to take advantage.. and VW has started building the ID.4 in Tennessee so that its 2023 model year qualifies. Expect the Koreans to start building their EVs in America. What Im saying is sooner, rather than later the tax credit will apply to more EVs than just Tesla.. and it puts everybody on an even playing field again.
  7. Elon: We dont want to talk about it, but we absolutely got to talk about it. His Twitter acquisition and his actual Tweets have turned off more potential customers than big oil or Tesla competitors ever could. The biggest enemy of Tesla's reputation used to be spreading FUD & anti-EV myths.. nows it's become Elon's ego. The more he spirals out of the control and continues attacking his largest target audience (liberals & progressives) the more people want to spend their money as far away from him as possible. Feel free to debate this, but also take a look a look how much the stock price of TSLA stock has fallen this year due to Elon's behavior, business decisions, and welcoming of hate-friendly speech. As I wrote this the stock is down $122 from a high of $405.. and has lost 70% of its value just this year alone. He is killing the company faster than anyone thought possible.
Appreciate your detailed response. While I have many counter arguments to the above, it’s a better use of time to let it be and just see how the market plays out - as I mentioned, prices coming down “somewhat” versus going back to what they were pre-pandemic is a very different argument.
 
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Tesla purchases are qualified for $7,500 federal tax credit until IRS can figure out the new requirement under IRA (March 2023?)

With the discount and free supercharging offered by Tesla, that is a great deal to take delivery Now!
CASH NOW rather than a tax credit unrealized for a year, and may only be partially qualifying for.
FREE 10,000 miles SuperCharger use.
all better than messing with unknown new tax forms !!
 
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Good morning to you too :) Seems like your hypothesis proved true - I never expected they would cut prices this much and in one fell swoop. Ridiculous!

My consolation is that my net price in December is still 5% lower than todays prices, so I didn’t lose value. However, given what just happened who knows what the F Tesla might do with pricing going forward.
 
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