By the end of the year the base MY will be a $60,000 car? Unlikely, but who knows how high this will go with insane demand, low supply with parts, inflation, potential tax incentives, etc.
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Looks like price increased 500 just now.
- Thread starter rjpjnk
- Start date
jimmyvegas
Member
I mean if the reports are true that they’ve sold out their Q2 production, than it’s an obvious thing for them to do. They’d be missing out on more money if they didn’t increase the price until production was no longer sold out.
OCJeff
Active Member
This could also have to do with the optics of the price change. If they just bumped it up $2000 or $3000 over night, you have many people moaning about how they shouldn't have waited and just placed their order. With the gradual increases you severely decrease those complaints and so it creates less "reaction" in the public/media.
That being said it's supply and demand, why not profit on the demand they already cannot meet?
not to mention, every company would kill to have robust data on price elasticity of their products that tesla is getting right now...
My thoughts exactly. No doubt they should raise the price, and a gradual transition makes fewer people mad. But what about the obvious pattern of every other Thursday? It’s like Tesla wants us to know the price is going up and when so we have a chance to get in before the next jump.
I’m sure they are very smart and do nothing by accident, so what is the angle here business wise? Just curious.
Possible reasons for the now-significant price increase are:
- Fundamental supply & demand. They're selling everything they can make (even disregarding special circumstances mentioned below), so go ahead and charge what the market will bear. This may apply in particular to LR.
- Possible demand spike due to gas shortage news, shining more light on EV alternatives.
- Straightforward protection of profit margin as BOM costs rise due to recent inflation & shortages.
- Known build-up of undeliverable inventory due to some shortage (or delayed firmware support for a replacement part). Try to cool the demand while working through this (but this can, perversely, spike demand if people who were on the sidelines get the idea that prices will keep rising).
- Re-positioning LR as a mid-line model ahead of some upcoming re-introduction of a lower model (SR, SR+, LR-RWD). I have no inside info, just hypothesizing. And if that is indeed a plan, I think they'd wait for the delivery queue to get cleared first - otherwise they'd have a flood of cancellations as people switch to the new cheaper model. Someone would get fired.
- Anticipating an upcoming tax credit subsidy, and positioning Tesla rather than the end customer to be the main beneficiary. This is not just profit-optimization aka greed (although it certainly is that too) - imagine the multiplied chaos of delivery delays from a surge of orders following a $7.5k to $10k subsidy. Whether a subsidy will happen, or should happen, is another discussion.
OCJeff
Active Member
![angus[Y]oung](/tmc/data/avatars/l/141/141264.jpg?1620160343){kind=avatar}
angus[Y]oung
Active Member
@EVHokie07 every 2nd Thursday evening (several in a row now), Tesla has made small price increases on most Model 3 and Model Y configurations.
Didn't they increase $500 last week? Then next Thursday would fit the pattern. But I am losing track of them.
RedWhite19
Member
RedWhite19
Member
I’m greedily rubbing my hands for another hike! I got my SR MY for a little over 40k((Before taxes of course).
Evil laugh ensues.
Thanks. I’m getting them mixed up now. I should have put a deposit down a couple of months ago as I suspected this would happen. But I am not planning on replacing me vehicle for another year.
OCJeff
Active Member
Do it anyway. Have the order placed on hold. Worst case you lose $100. Best case you save $4000.
Yup, ordered a month back, price had already gone up $1000 since my test-drive. It's gone up another $1000 since. Now with Radar gone and all the associated issues and limitations with AP and safety features, I am going to try and eke my order out as long as humanly possible. I'll probably go ahead with the order if any of the following conditions are met:
- Tesla reintroduces radar once the shortage is no more (unlikely they will do this)
- Through some miracle, Tesla actually provides a fully functional Tesla Vision product that works just as well as on cars with radar, without the nerfed max speed limit, larger following distance and terrible forced auto highbeam implementation
- $7500+ tax credit comes back into play and it looks like it may not be very long lived
- Austin starts producing MYs with 4680 cells and better overall quality. Although I probably still won't purchase this without the Tesla Vision situation being sorted out.
To be honest, one of the primary motivators for my Tesla order was the AP experience and I'm miffed about Tesla pretending that their current radar-less car is just as good as what they were shipping. I am concerned that they will never walk back from this and that the overall AP experience will suffer a permanent degradation in capabilities as a result. If that were to happen, I might just have to accept the $100 loss and look elsewhere for my first EV purchase in a few years. Fingers crossed for the future. I really was hoping to give Tesla my money for my first EV purchase for everything they did to kickstart the current transition to EVs from ICE vehicles.
