Prediction: Model X price will be reduced to $78K in January 2024

[Sunshine Speed]

I predict Model X 5-seater will be priced at $78K in January 2024. My reasons:
1) Federal EV tax credit enables SUVs priced under $80K to get $7500 discount. And starting January 1st, this will be a point-of-sale discount, given upfront.
2) Model X Long Range was already priced at $80K from May to December of 2020.
3) Model X production is ramping up heavily now, and providing supply to the whole world from Fremont.
4) Interest rates are high now, and high loan rates push down the prices of expensive luxury vehicles like the X.
5) With price of $78K, you can choose among 4 exterior paint colors, or get white paint with 3 different interiors, and stay under $80K price.
6) Tesla has been discounting the X recently, at end of June there was lots of inventory on Tesla website in the $90K to $92K price range.

Tesla has now dropped their 2023 Model Y price lower than the 2020 Model Y price. They will now do the same for the X. Anything else is just leaving money on the table. Comments/corrections are welcome.

 

[WhiteCHX]

I predict Model X 5-seater will be priced at $78K in January 2024. My reasons:
1) Federal EV tax credit enables SUVs priced under $80K to get $7500 discount. And starting January 1st, this will be a point-of-sale discount, given upfront.
2) Model X Long Range was already priced at $80K from May to December of 2020.
3) Model X production is ramping up heavily now, and providing supply to the whole world from Fremont.
4) Interest rates are high now, and high loan rates push down the prices of expensive luxury vehicles like the X.
5) With price of $78K, you can choose among 4 exterior paint colors, or get white paint with 3 different interiors, and stay under $80K price.
6) Tesla has been discounting the X recently, at end of June there was lots of inventory on Tesla website in the $90K to $92K price range.

Tesla has now dropped their 2023 Model Y price lower than the 2020 Model Y price. They will now do the same for the X. Anything else is just leaving money on the table. Comments/corrections are welcome.

What is 3) based on? What are the indicators that they plan to increase production "heavily"? The numbers don't seem to suggest that, while Q/Q is not always a good indicator, it's down quite a bit.


They always produced X at Fremont for the whole world. The X is expensive to produce and has high warranty costs on top. I'd assume margins are not very high.

 

[Tiger]

There are not so many complaints in comparison to the number of cars sold now vs. when the refresh came out, so definitely they have ironed out the kinks and production should ramp up naturally. Production is already higher than what it was before the 2020 shutdown. Everyone Except the Ultra Red waiting room, is waiting for the price drops. Or the CT.

 

[mswlogo]

I suspect OP is correct. And it will have Free Super Charging.

 

[Canikony]

If you're right, I would be extremely tempted to upgrade my 2019 raven to a new X.

 

[Billstickers]

I'm hoping you're right. I've been looking to upgrade as well sometime soon.

 

[CapeOne]

I predict Model X 5-seater will be priced at $78K in January 2024.

If that were to happen, it would further destroy resale values especially on MXs bought last year or early this year. The MX base price (before destination fee, order fee or any potential extra cost options) was $120,990 at the beginning of the year. $78,000 would be more than a 35% retail price reduction in just one year.

 

[Tessellation]

If that were to happen, it would further destroy resale values especially on MXs bought last year or early this year. The MX base price (before destination fee, order fee or any potential extra cost options) was $120,990 at the beginning of the year. $78,000 would be more than a 35% retail price reduction in just one year.

Agreed; but Elon has made it clear that Tesla's goal is to ramp-up production even at the expense of lower margins (hence the price reductions). Target is 1.8 million vehicles for 2023, and so far, they seem on track.

 

[CapeOne]

Agreed; but Elon has made it clear that Tesla's goal is to ramp-up production even at the expense of lower margins (hence the price reductions). Target is 1.8 million vehicles for 2023, and so far, they seem on track.

Yes, but destroying resale values can turn off current owners and/or concern potential future buyers. Also, what about all of the higher priced cars eventually coming off lease? That can be a real financial hit to Tesla or whatever companies underwrote those Tesla leases.

Although I think these are/were extreme times in the auto market, we're potentially looking at a 50% drop in value in just one year. If a 2023 MX sold new for $122k in January 2023 and new 2024s are selling for as little $72,500 (with potential federal tax credit) in January 2024, that early 2023's wholesale/trade value may only be as little as half its original purchase price. Older MXs would be impacted as well.

 

[Tessellation]

Yes, Tesla's 'dynamic price adjustments' can definitely impact resale values. But I don't get the sense that Tesla cares much about the used/CPO vehicle market. Even 'ownership loyalty' is limited to an occasional trade-in credit/incentive.

Elon feels Teslas are already very desirable, and price reductions are one way to unlock sales volume. I guess time will tell if this is the right strategy!

 

[ginmqi]

If that were to happen, it would further destroy resale values especially on MXs bought last year or early this year. The MX base price (before destination fee, order fee or any potential extra cost options) was $120,990 at the beginning of the year. $78,000 would be more than a 35% retail price reduction in just one year.

From what Tesla has done to the Model S Plaids...they seem to not care at all about secondary market value destruction. Plaids that were bought in 21 and 22 for 140k++ are getting slaughtered as used market for Plaid is horrendous. There's a new 2023 ultra red plaid ready for delivery at my local tesla center for $104k...just a year ago....AND it's sitting there for almost a month now...still not selling even at this crazy low of a price. 2021 Plaids are worth like almost half their value now...with how low a new plaid MSRP is relative to 1-2 years ago

I personally would love a sub 80k 2023 MX since we're looking to upgrade to a better family SUV here pretty soon. I too am also very curious to see how they will price the MX with the 2024 terms setting in for the IRA with regards to EV tax credits.

I've always heard that Tesla has very high margins on their vehicles, of course I can imagine the Model X margin is likely smaller than the Model 3 but they may have room to cut that much off of the MX MSRP and still remain profitable on that production line...it could very well be starting MSRP of $79,990 with no options/extras...who knows....

 

[WilsonWilbur85]

People buying the model X don’t get the tax credit.

 

[WilsonWilbur85]

Agreed; but Elon has made it clear that Tesla's goal is to ramp-up production even at the expense of lower margins (hence the price reductions). Target is 1.8 million vehicles for 2023, and so far, they seem on track.

They only made ~20k S/X for the whole world last quarter. The X isn’t the one driving the numbers.

The 80k X was the end of the life cycle. The promise was 90k for refresh when announced. I think we could see price cuts to move inventory but they want to keep the X and a premium offering and they have opportunities to sell these all over the globe.

 

[Tiger]

They only made ~20k S/X for the whole world last quarter. The X isn’t the one driving the numbers.

The X has historically had more sales than the S as it is more versatile.

The 80k X was the end of the life cycle. The promise was 90k for refresh when announced. I think we could see price cuts to move inventory but they want to keep the X and a premium offering and they have opportunities to sell these all over the globe.

There is no value in having a "premium offering" if it does not sell. Profit is simply margin x volume. They have the Roadster for Halo effect.

Let's see the effect of CT prices on the demand for S/X as these relative levels.

https://twitter.com/x/status/1680940984874434562

 

[bayareaever]

As much as I’d like to personally see the base price come down to $78,000, I have my doubts because:

-demand would likely far outpace production capacity creating a long back log, which Tesla has recently eliminated on all models for better customer service/ order management/etc.

-even if the S/X battery sourcing meets the ftc requirements this year (no one seems to know that for sure), that’s even less likely in 2024 with increasing % requirements.

The biggest reason- I bought my 2022 refresh MX with fsd for $116k all included last year (it was the lowest price ever offered since the refresh launched in 2021). I’ve since traded in, but if I buy an identical new discounted inventory MX with fsd and with all the referral discounts, it’s basically $116k all included. I don’t think that’s a coincidence.

In other words, the inventory MXs with ~$8k discounts I see in the SF Bay Area are already at all time low prices, assuming the buyer uses a referral code (which has to be virtually all buyers at this point).

 

[Tessellation]

Another possibility is that Tesla refreshes the Model S/X by 2024 with improved 4680 battery tech, and keep prices (mostly) the same. Personally, I think that would be a better strategy in the light of growing competition.

 

[fishy21]

The X prob cost them tons of money dealing with warranty claims. Otherwise, it probably would come down in price to $80k.

 

[EbS-P]

The MX/S was never designed to be a high volume product with lower margins. It’s the opposite. Low volume high margin product. As a flagship product it’s about flashiness not practicality. It’s not a large SUV, not a mini van, not a sport wagon… it’s the biggest Tesla and has FWDs, get the Plaid and it’s a 3 ton 6 passenger land rocket. Depending on how the Kia EV9 pans out it could get some more competition.

I don’t see prices dropping until battery pack costs drop considerably like 20-40% from current prices.

 

[X Fan]

Tesla should build a bigger Y and replace the current X. Easier to build, less complex and could be offered more cheaply.

 

[ItsNotAboutTheMoney]

Another possibility is that Tesla refreshes the Model S/X by 2024 with improved 4680 battery tech, and keep prices (mostly) the same. Personally, I think that would be a better strategy in the light of growing competition.

Probability 0. 4680 will go to Cybertruck, Semi demo vehicles and Austin Model Ys.