Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Official: Upcoming Model S Price Increase & Timeline

This site may earn commission on affiliate links.
While it's not a bad thing that they're making profit, I don't see how they can justify raising the price because of increased demand when they should really be raising the supply to meet the demand. Raising prices will only turn people who are 'on the fence' off from purchasing.
The only way I can see this making any kind of sense is if the new reserve holders will actually be purchasing a new and updated 2014 version of the model S. Not the same exact thing. Is Tesla going the rout of a new 'version' per year?

It makes sense in a demand/supply driven situation for example if they expect to be able to max out production capacity even with higher prices, and if expanding production would delay Gen III, which has much higher potential for both volume and profit.

In any case, the sales volume of Model S is likely to pale in comparison to Gen III, so the goal should be to maximize total profits so that investments in Gen III can be made sooner.
 
It makes sense in a demand/supply driven situation for example if they expect to be able to max out production capacity even with higher prices, and if expanding production would delay Gen III, which has much higher potential for both volume and profit.

In any case, the sales volume of Model S is likely to pale in comparison to Gen III, so the goal should be to maximize total profits so that investments in Gen III can be made sooner.
(sorry, I'm new here) I'm assuming Gen III is to come after the model X? Or is the model X gen III?
 
Ah I was confused and thought that it was their third generation car, thank you. I guess I'm just upset that my dream car is now going to be that much more out of reach! Someday.

Model X is a variant of Model S, built on the same (almost) "skateboard" platform, and both are considered 2nd generation.

Model X will be built more or less on the same production line, however it will require some additional investment for additional manufacturing equipment. But far less than Model S required, since they share a lot.
 
At a targeted manufacturing rate of 20k / yr, they have roughly 6 months in backorders if there is a lower percentage of dropouts.

Actually, the current estimated net total of reservations is over 15,000, according to michiganmodels tally. Therefore, the first car likely to be sold at the higher price will probably be sometime in August or September. That seems like a reasonable time to raise prices to me. They are announcing the price increase now, but the prices don't go up until people have to pay them, and that will be more than a year after they started shipping cars.
 
They have supply and demand in their favor now. Heck, they had 10k reservations before they delivered their first Model S! The reservation book is still full with early adopters, EV fans, and auto enthusiasts. Fast forward a year from now when those reservations have been filled, and I don't see Tesla selling 40k units/year (20k Model S and an additional 20k Model X) at an average selling price of $70k. I expect Model S prices to come down in 12 - 18 months once the reservation backlog thins out.

I don't really know, many potential buyers here are like me. My current car does cost half of what a Model S costs. We are all hyped about this car, it being electric, elon is tony stark yadayadayada...

But in the end we want to buy a car wich is very expensive for us already. Making it more expensive will make a lot of people draw back their reservations, just because it really got over the point where we can justify it, hype or no. And I think the genious of this car was that it brought so many new people to this car-price segment...

All this talk about the supercharger cost for the 60KW battery, the high service costs and now the more expensive car are not really good news for my 'wealth-segment'.
 
Whilst I completely understand your disappointment in the forthcoming Model S price increase, and agree that some "reservationists" may have to scale back their desires for the Model S due to their financials, we still have to remember that at the end of the day, the Model S and Model X are not typical mass market vehicles nor were they ever meant to be (according to TM's business model)...(the same as BMW 5's / Audi A6's / Porsche Cayenne's / etc / ...)

It might be a nice goodwill marketing move by TM to establish their GenIII reservation list "a little early" by allowing those who must drop off of the Model S list to be first on the list for GenIII...


I don't really know, many potential buyers here are like me. My current car does cost half of what a Model S costs. We are all hyped about this car, it being electric, elon is tony stark yadayadayada...

But in the end we want to buy a car wich is very expensive for us already. Making it more expensive will make a lot of people draw back their reservations, just because it really got over the point where we can justify it, hype or no. And I think the genious of this car was that it brought so many new people to this car-price segment...

All this talk about the supercharger cost for the 60KW battery, the high service costs and now the more expensive car are not really good news for my 'wealth-segment'.
 
Last edited:
Whilst I completely understand your disappointment in the forthcoming Model S price increase, and agree that some "reservationists" may have to scale back their desires for the Model S due to their financials, we still have to remember that at the end of the day, the Model S and Model X are not typical mass market vehicles nor were they ever meant to be (according to TM's business model)...(the same as BMW 5's / Audi A6's / Porsche Cayenne's / etc / ...)

It might be a nice goodwill marketing move by TM to establish their GenIII reservation list "a little early" by allowing those who must drop off of the Model S list to be first on the list for GenIII...

(Emphasis mine.)

While I don't like to nitpick, I think it's important to emphasize that current reservation holders won't be affected by the price increase, as long as they don't defer.
 
It might be a nice goodwill marketing move by TM to establish their GenIII reservation list "a little early" by allowing those who must drop off of the Model S list to be first on the list for GenIII...

I am in that exact boat, I had to drop the Model S due to finances, but I am going to put down a reservation on a GenIII the second that I am able to.
 
I am in that exact boat, I had to drop the Model S due to finances, but I am going to put down a reservation on a GenIII the second that I am able to.

It looks like the price hike will change the game for many people going forward. I would rather TM tell us that the price hike is due to the cost of the Aluminum, the cost securing parts from the third party vendors and the cost of hiring more employees instead of a price hike for options. Some of the options that are missing on the S are considered cheap options. I understand it's about the bottom line.
 
I think there's nothing wrong with raising the prices because of demand. If I was a shareholder, that's what I'd want them to do. I've also had a feeling all along that the 40kWh model is priced at or under cost, and I would be shocked if the price for that doesn't go up substantially. If the tax credit doesn't continue into 2013, the increase will hurt a lot of people who are planning to reserve and get a 40kWh. I would be even less shocked if the 40kWh goes away completely. I think it doesn't fit in with Tesla's model of super practical EVs. By the time you're done with the EPA rated (more realistic) mileage, load a wife and 2 kids into it, add some A/C and 70mph, you may be talking around 100 miles range.
 
It looks like the price hike will change the game for many people going forward. I would rather TM tell us that the price hike is due to the cost of the Aluminum, the cost securing parts from the third party vendors and the cost of hiring more employees instead of a price hike for options.
I agree, though I'd note that world aluminum prices are moderating from their summer highs [graph]--probably the result of slackening global demand (not a good thing).
 
Does any company divulge that level of detail in their pricing?

Not that I've ever heard of.

Can they even legally give out that sort of inside information?

No reason why it would be illegal--hiding things or not giving them to some but not all is more typically illegal--but they'd be foolish to do so because that would tell the competition exactly what they needed to do to undercut prices.