People in favor of price cuts.

[Black Dahlia]

I like how people are chill with Tesla prices dropping 30% every quarter. Maybe it's supply and demand, but that wouldn't make much sense since the demand is higher than the supply. Just the demand from the lower class is higher, just like Apple products are, seeing people with WIC and rocking that new iPhone XS.

Let's take a serious sport car that is still around and hasn't changed much in over a decade: Nissan GT-R.

2007 Base GT-R: $68,900
2019 Base GT-R: $99,900

2007 Premium GT-R: $71,900
2019 NISMO GT-R: $175,540

Where's the depreciation? In the used car market, NOT the new car market. Okay, you can get several grand taken off if you're REALLY good at negotiating or have a good connect. But the fact remains, the face value of the car is what the average consumer will and expect to pay. That consumer expects that car to hold its value considerably well for the majority of their loan.

I'll be the realist that everyone hates, but being broke and claiming you know economics and business don't mix as a reasonable excuse to say "depreciation" is acceptable for a Tesla. Regardless if it's electric like a phone or whatever people are comparing it to. It's still a car, and last I checked... People don't buy a car to ditch every 3 years, they lease them like a cell phone. Again, why are people comparing something 5000% less in face value to this? You wanna be that way, let's compare it to a house.

Your bought a brand new track home in SoCal for $750K in the first quarter of 2020 and some person buys the same exact house down the street, brand new, in Phase 2 with more bells, whistles and design quirks fixed for $525K in the next quarter. But that's okay, because you moved in 4 months earlier, so you've been enjoying it that much longer! It's all good right? Cost of living is still raising, property taxes are still raising, but hey, it's okay, you got a $50K state rebate for your home and the owner that got his for 30% less is only getting a $25k rebate. So it's totally cool.

Just because you want a Tesla but can't afford it right now for whatever reason, doesn't mean you bash on owners currently facing this 30% drop saying they adopted early into Tesla. Forcing someone to change their mind about their anger and accept their losses is just another way to make them be okay for getting suckered. Either go make more money or save longer, this self-entitlement and wanting everything NOW needs to end.

Bring the downvotes, bring the laughs but this is a better comparison than a damned Apple cell phone. Because these cars are bought to last and the public has held them as a vanity that also gives you a ton of perks. Vanity, luxury, performance, and reliability. It's okay to want the whole cake... But to support massive price drops and devalue the product is not what true invest in. Don't be a vulture or a hawk disguised as someone trying to invest in the future.

 

[jjrandorin]

Your real estate example actually happened not that many years ago... and what did those people do who bought it at the higher price? Did they go complain to the neighbor who got it cheaper? The bank? Who "fixed" it for them? They either rode it out, or sold the house at a loss, or declared bankruptcy to get out from under it.


Also, this post should be in the price discussion thread.

 

[67King]

Tesla makes more 3's in a month than Nissan does GT-R's in a decade. Tesla's goal is to be a mass manufacturer who, like Ford 100 years ago, seeks to make its product affordable for everyone. Henry Ford understood that doing so would yield far more profitability than keeping cars niche products. And along the way, he changed the world.

Your comparisons are like comparing caviar to a ham sandwich.

And there has been nothing resembling a 30% price cut every quarter. Sheesh, the last one wasn't all that much, except for the Performance..........and especially the white performance. Which happens to be what I have. But I love the car, and realize what a great value it was at the price I paid.

Besides, used Teslas go for almost as much as new ones, which is why I bought new. A GT-R will lose 30% in a single day, the day it is driven off of the lot.

 

[RacingFerret]

I think Tesla is doing just fine. Recent GTR sales are not looking so good however (no demand?).

 

[dmurphy]

I'm completely in favor of price cuts. Lower prices on electric cars mean more people can afford them. I want that.

 

[TMThree]

Tesla doesn't care about anything other than making a product people want. Lower prices helps keep momentum up. They need sales, and they need market infiltration. Every model 3 that sells is at least a dozen friends and coworkers exposed to the vehicle, which means even more sales.

If sales of model 3 slowed, the stock would crash, their borrowing costs would rise, and your car may end up being the last of its kind, and who knows what happens to your 8 year warranty.

Be glad Tesla is so on the ball with rapid changes that respond to the market, and not a monolithic beast that gets a fatal blow without knowing it.

 

[ewoodrick]

30% price cuts every quarter? That would put the price well below $30k.

Let's go buy a Ford F-150 when the new model comes out. I suspect that you'll pay a little below list. Wait 6 months and you'll see $15,000 off signs, and pay even less.

And yes, a LOT of people do buy a car and sell them in 3 years. Go to a dealer and listen to the conversations. Way too many people do this.

BUT along the same lines, saying that you aren't going to do this, then you have 4+ more years before you are needing to worry about the depreciation, so why worry now?

What you are seeing is a new model for selling cars, Most people have never seen the manufacturer price after all rebates. Tesla doesn't allow a dealer to absorb part of the price and put $10,000 dollar off signs up, so they have to do what they can. And with having to learn how to make cars at the same time, price changes are required.

You knew when you bought the car that there would be risks, accept them

 

[KenC]

I like how people are chill with Tesla prices dropping 30% every quarter. ...

Maybe show how Tesla prices are "dropping 30% every quarter" first, then, when you've proved that, we'll listen to the rest of your argument; otherwise, it's nothing but a straw man argument. Also, shouldn't we be talking about the post-federal tax credit price, since that's primarily what Tesla has been responding to, since customers are factoring in the tax credit changes into their buying decisions. Demand drops when the tax credit drops, so Tesla tries to counter that with a lower price. The net effect is a little higher post-tax credit price.

Seems nonsensical to keep dropping the price when they're borderline profitable, but they're in the car industry with high fixed costs, so they need to keep the assembly lines humming. So, they are trying to keep up demand, while continuing to work on lowering costs. That's the path to profitability they've chosen.

 

[Leafdriver333]

Tesla makes more 3's in a month than Nissan does GT-R's in a decade. Tesla's goal is to be a mass manufacturer who, like Ford 100 years ago, seeks to make its product affordable for everyone. Henry Ford understood that doing so would yield far more profitability than keeping cars niche products. And along the way, he changed the world.

Your comparisons are like comparing caviar to a ham sandwich.

And there has been nothing resembling a 30% price cut every quarter. Sheesh, the last one wasn't all that much, except for the Performance..........and especially the white performance. Which happens to be what I have. But I love the car, and realize what a great value it was at the price I paid.

Besides, used Teslas go for almost as much as new ones, which is why I bought new. A GT-R will lose 30% in a single day, the day it is driven off of the lot.

I bet Ford didn't lower the price on the model A after first year even though the factory line became more efficient.

 

[Leafdriver333]

I'm completely in favor of price cuts. Lower prices on electric cars mean more people can afford them. I want that.

Are you implying Tesla doesn't have enough demand to exhaust the rate of production?
If the demand is there to consume the product why do they lower the price when this is not a charity.

 

[Leafdriver333]

Tesla doesn't care about anything other than making a product people want. Lower prices helps keep momentum up. They need sales, and they need market infiltration. Every model 3 that sells is at least a dozen friends and coworkers exposed to the vehicle, which means even more sales.

If sales of model 3 slowed, the stock would crash, their borrowing costs would rise, and your car may end up being the last of its kind, and who knows what happens to your 8 year warranty.

Be glad Tesla is so on the ball with rapid changes that respond to the market, and not a monolithic beast that gets a fatal blow without knowing it.

You are saying the momentum will slow down if the prices stayed the same

 

[scubastevo80]

I'm completely in favor of price cuts. Lower prices on electric cars mean more people can afford them. I want that.

Fellow Morris countyian, I’m also in favor of cheaper EVs, but I also believe there’s a reason a BMW 3 series and Honda Accord are in different classes and price points. I was of the belief that early adopters were financing Tesla’s ability to deliver the 220mi $35k car, not that the higher end models would finance cheaper higher end models.

I saw a stat on NJs rate of EV adoption - 1.5cars per 10k people. I think we’re a ways off from mass adoption, but I do believe Tesla is leading the charge here.

 

[dmurphy]

Fellow Morris countyian, I’m also in favor of cheaper EVs, but I also believe there’s a reason a BMW 3 series and Honda Accord are in different classes and price points. I was of the belief that early adopters were financing Tesla’s ability to deliver the 220mi $35k car, not that the higher end models would finance cheaper higher end models.

I saw a stat on NJs rate of EV adoption - 1.5cars per 10k people. I think we’re a ways off from mass adoption, but I do believe Tesla is leading the charge here.

You are correct. The S & X financed the 3. Now we’re actually getting the $25k Model 3 being built.

$35k is a good starting point, and if you do a full TCO analysis, it’s right on par with that Accord. But not the buy price.

I just left Wegmans. I was the 4th Model 3 in the lot that I saw. So it’s getting there. Gotta start somewhere. Places like Morris and Somerset will be first, but as the prices trend down, it’ll grow.

Even moreso, as used models enter the market, they’ll pop up all over the place too.

Remember where Lexus started? Now they’re everywhere!

 

[dmurphy]

Are you implying Tesla doesn't have enough demand to exhaust the rate of production?
If the demand is there to consume the product why do they lower the price when this is not a charity.

Nope. I think the demand is there, but it’s going to naturally ebb and flow. That’ll get the stock clobbered.

Wall Street ANALysts won’t accept anything less than a hockey stick - so now that they’ve had a banner shipping quarter, if they don’t repeat that, the stock will tank.

Better for them to drop the price, oversell what they can produce and build a backlog.

That’ll at least get us to a time when GF3 comes online.

 

[Knightshade]

I bet Ford didn't lower the price on the model A after first year even though the factory line became more efficient.

The Model T, not A, was the first mass production car.

Funny you mention price cuts though.

Model T in 1909 when it launched- $825 initially... this went up to $900 in 1910.

In 1911 volume had scaled, and Ford cut the price to $680.

In 1912 they cut it further to $590.

1913? $525

1914? $440

1915? $390

1916? $345

Tell me again how NOBODY cuts car prices repeatedly as production scales?

 

[dmurphy]

The Model T, not A, was the first mass production car.

Funny you mention price cuts though.

Model T in 1909 when it launched- $825 initially... this went up to $900 in 1910.

In 1911 volume had scaled, and Ford cut the price to $680.

In 1912 they cut it further to $590.

1913? $525

1914? $440

1915? $390

1916? $345

Tell me again how NOBODY cuts car prices repeatedly as production scales?

There’s a volume chart floating around comparing the Model T & Model 3. It’s particularly apt.

 

[VQTRVA]

30% price cuts every quarter? That would put the price well below $30k.

Let's go buy a Ford F-150 when the new model comes out. I suspect that you'll pay a little below list. Wait 6 months and you'll see $15,000 off signs, and pay even less.

And yes, a LOT of people do buy a car and sell them in 3 years. Go to a dealer and listen to the conversations. Way too many people do this.

BUT along the same lines, saying that you aren't going to do this, then you have 4+ more years before you are needing to worry about the depreciation, so why worry now?

What you are seeing is a new model for selling cars, Most people have never seen the manufacturer price after all rebates. Tesla doesn't allow a dealer to absorb part of the price and put $10,000 dollar off signs up, so they have to do what they can. And with having to learn how to make cars at the same time, price changes are required.

You knew when you bought the car that there would be risks, accept them

Spot on here on everything.
To add onto your comments - find it ironic that the same people who are complaining about the price cuts are also the same people if given a chance that matches their budget would gladly trade or dump their Tesla to get into a better fitted, newer, or better equipped Tesla.

Thereby, exacerbating the drop in used Tesla pricing.
I mean you see some stupidity where they cars are dump within first 6-12 months.
Tells me someone is making money & it isn't the original owner.

 

[67King]

I bet Ford didn't lower the price on the model A after first year even though the factory line became more efficient.

What are you betting? The Model A did, indeed, get less expensive over its four year run. As did the Model T.

 

[Leafdriver333]

What are you betting? The Model A did, indeed, get less expensive over its four year run. As did the Model T.

I stand corrected.
But I bet they lowered the price yearly and only about 5% each.
And thanks to no internet the people were not as upset as people on this forum today.

 

[Knightshade]

I stand corrected.
But I bet they lowered the price yearly and only about 5% each.

How much are we betting, since I already debunked that claim like 5 posts ago with specific #s?