People complaining about price drops are asking Tesla to sell fewer cars.

[VQTRVA]

I know the guys sitting next to me on the plane is paying <> than me.
A car is a depreciating asset not an investment.
I guess I have more self control than others here.

 

[Daniel in SD]

From my understanding of buyers of high end variants I think exclusivity really matters. Where there willing to pay a lot more even if they'll never use it.

The other reason is it's important that people get a car that fits their needs. The P3D+ is a track orientated car. So why would it be something for regular folks? All it's going to do is get them into trouble. In fact it's kind of a ridiculous option with the low profile 20inch wheels that are prone to bending, and not meant for cold weather.

The other thing to consider is the suspension.

There have been lots of complaints about the suspension in the Model 3. It works great for me, and is perfectly the norm for the type of car I typically enjoy. But, it's not the right suspension for someone who wants a softer ride.

So that's another thing that should be considerably different in the P version than the none P.

By lowering the price they're just going to get more people in the P3D version when it doesn't really fit their needs.

I think they would have been better off by simply adding more capabilities. Like adaptive suspension, HUD or something else.

The thing is, other than the ridiculous 20" wheels, the P3D is basically the same car with more power. It looks almost exactly the same as the $35k car. I don't think Tesla has the engineering resources to make a more special version right now.
I agree that Tesla should have a softer suspension option (like BMW and Mercedes do).

 

[Joshan]

I smell another loss coming.

I want them to make a profit more than I care about volume.

One is sustainable, and the other not so much.

read up on Amazon some time and all the losses Bezos took while it built up. Great ideas take time and investors know this, hence why everytime Tesla wants to raise cash they have zero problems.

 

[M3Rider]

Sure they might get a few more takers for the P3D over the AWD, but will it be enough to compensate for the drop in profit margins?

Maybe that's what they are trying to find out?
If there are that many more takers at lower price difference, then it's a free advertising from all the Ps on the road. If not, then the price goes back up?

 

[M3Rider]

People are not saying to raise the price, they would just like the option to be rewarded. For example my configuration was $61k and is now $50k. If they offered the FSD upgrade at a discounted price it would help. For example the $50k had to pay the $6k to upgrade and the older only had to pay $1k. In that case you lowered the current price and kept the older owners happy.

The same goes for the 2018 AWD owners where it sounds like they could do a P- update. We would have still paid more versus a new owner but would have similar cars.

First of all, realize that FTC was meant for Tesla the company, not for you to keep.
You get some money back to allow Tesla sell initially at higher prices, improve their efficiencies, and sell cars cheaper. That is the point of FTC. You just benefit from being able to buy a car early, not necessarily cheaper or at the same price as later.

I paid $59k for awd including EAP($5k).
Today it is $49k including AP($2-3k), which translated to EAP would be $51-52k. I.e. $7-8k difference. But the FTC difference I got is $7.5k-$1,875=$5,625.
In other words, today's price is only $1,375 to $2,375 less than when they started selling awd.
Not a big deal.

>>If they offered the FSD upgrade at a discounted price it would help.

In fact they did offer it cheaper back ~Jan-Feb 19:
AP+FSD for $5k or FSD for $2k in addition to EAP.
I did purchase the FSD.

But a lot of owners who paid full price complained about these discounts and Tesla had to end them. This offer ran for around a month.

 

[pagrimm1120]

In March 2018, I purchased a PS100D with Ludicrous for $141,000 less the $7,500 tax credit. Sixteen months later I could buy the same car for under $99,000. Stopped me in my tracks from recommending any thing but a used Tesla so you don't take a big loss. I expect depreciation but not $35,000 that early. Price cuts like that virtually assure that they will run losses well into the future, if they survive.

 

[jeffro01]

In March 2018, I purchased a PS100D with Ludicrous for $141,000 less the $7,500 tax credit. Sixteen months later I could buy the same car for under $99,000. Stopped me in my tracks from recommending any thing but a used Tesla so you don't take a big loss. I expect depreciation but not $35,000 that early. Price cuts like that virtually assure that they will run losses well into the future, if they survive.

Quit whining. I purchased my X in September of 2018 and didn't do the performance due to cost but if I had just waited a little while longer, I could have gotten the X I really wanted... So what? This is one of the reasons why I lease...

Jeff

 

[Chasingmars]

This argument implies the prices have to be dropped to prop up demand to the current production levels.
In other words, you are postulating that the demand is sagging, and sales would be declining at the old price points, along with Tesla's viability as a going concern.

I don't read that as the original argument at all. Demand isn't a binary thing as the internet and pundits seem to treat it (Demand vs No Demand), there's a demand curve and its elastic. How elastic I don't think anyone but Tesla has good data for but I think we can bet their data on demand elasticity is informing their pricing... Lowering the price of something usually increases the demand a certain amount, if the effect of additional volume on your costs, plus the net revenue change on the volume x margin after is positive, you make more money...

Do you have an alternate theory? This really isn't very complicated. If they could sell this many cars at the old price why would they lower the price?

To sell more cars than they would have at the old price. Not complicated indeed. More cars at lower margins can be more revenue than less cars at higher margins.

In March 2018, I purchased a PS100D with Ludicrous for $141,000 less the $7,500 tax credit. Sixteen months later I could buy the same car for under $99,000. Stopped me in my tracks from recommending any thing but a used Tesla so you don't take a big loss. I expect depreciation but not $35,000 that early. Price cuts like that virtually assure that they will run losses well into the future, if they survive.

The S is not like the 3 - the 3 is mass market, the S is the Halo car. This is why I think it isn't a big deal to cut the P3D price, the P3D isn't Tesla's halo car any more than a Civic Type R is Honda's Halo car (the NSX is). Buy a halo car and you're going to pay whatever the market can bear for the number they are willing/able to produce, and in low production that will be a much higher number than when production is higher. company that build only/mostly halo cars like Ferrari deliberately limit production, my guess is Tesla mostly doesn't so, you have the 35K premium to get it a year early.

What I really find remarkable about all the value-angst is that its just a more transparent way of doing what the industry has always done, matching price to the elastic demand curve as competition and production costs and availability change - except traditional manufacturers and dealers pretend via MSRP that the price is somehow fixed for a whole year and then play all sorts of negotiation games and secret rebates and all that to try and soak you individually for as much as possible without you really knowing what the next guy got. Here, you know exactly what the deal is at any point in time... and no one knows what the price will be next week (for any brand), but MSRP price stability on every other car is a fiction. Prices change, cars, bananas, gasoline (not for me anymore!) or whatever. That's a free market economy.

Also... sometimes I think people need to go read Tesla's mission statement (About Tesla | Tesla). It doesn't say dominate the car market, or make tons of cash. Those are means to an end for Tesla's mission. Important, but not the goal... So they may not be optimizing the same point on the demand curve that Toyota or VW would (profit maximization) if a different point (maximize cars & growth over time while staying afloat) meets their mission better.