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

[Neon001]

They have sold 2023 year's new production for those hopeful to catch the rebates before year's end. Early next year builds go to EMEA so February is the earliest possible new North America builds, i.e., there is zero order backlog, plus the inventory is growing. They will heavily discount the X in 2024 Q1 if they whish to move it.

I keep seeing this rhetoric, and I'd like to know why. You're citing irrelevant (international) data where pricing has not tracked NA market, and the facts are in contradiction to your story. How does the below look like "inventory is growing"? (NA Inventory for MX)

Prices bottomed on 9/1 (in NA) and inventory plummeted. Since then, price has risen in several ways: options getting more expensive, referral bonuses cratering, and now Plaid MSRP rising. Inventory is not growing here in NA. Look at that graph. We keep seeing the same messaging from a few: discounts are forthcoming if you wait. Your logic doesn't appear sound.

Outside of the 5 day shutdown that completed in late Sep, there have been no reported interruptions to production. And yet lead times to delivery are growing. Orders on 9/1 initial EDD (after order) was mid-Sep to late-Oct. New orders are early-Dec to mid-Feb 2024. In 1.5 months the lag time from order to estimated delivery has slipped 3-3.5 months. How are you seeing this as a "zero order backlog"?

After the recent earnings call and quarterly reports, Tesla's margins are being questioned, and they have a backlog that is growing by the week (MX specific, NA territory). It makes zero sense to lower prices. Prices are rising and perks are being cut. There's a very small chance we'll see a bone thrown to folks hopeful for a late year delivery for a late Q4 surge, but it's unlikely given that even current orders are probably delivering next CY unless you're in the bay area or SoCAL.

Will they lower prices in the new year based on credit changes and other factors? Maybe, but it certainly won't be this CY. Buyer beware.

 

[Tiger]

Prices bottomed on 9/1 (in NA) and inventory plummeted. Since then, price has risen in several ways: options getting more expensive, referral bonuses cratering, and now Plaid MSRP rising. Inventory is not growing here in NA. Look at that graph.

As said, all this year's new builds are sold out in hope for the rebates and credits before the year ends so what the curve you plotted shows is that the inventory is not selling without further discounts and incentives. There is no sugarcoating this.

 

[Breakthrough]

Yeah I mean you can afford it technically. That is true. You'll just be working until you are dead at that rate.

Still amazes me that people who judge other's entire life over a single event.

 

[mathnerd88]

As said, all this year's new builds are sold out in hope for the rebates and credits before the year ends so what the curve you plotted shows is that the inventory is not selling without further discounts and incentives. There is no sugarcoating this.

I mean, if you think about it, Tesla just increased the MXP by $5k, to MAYBE discount it $5k by the year's end to sell the rest of the MXP's in inventory. As for the MXLR that do not qualify for tax credit, well, they might need to offer some incentives, but those who don't qualify for tax credit will probably pick those up. 400 left in inventory isn't going to make a big difference. They can easily convert those vehicles to demo models for future test drives.

Also, aren't half those vehicles in inventory like used vehicles/demo vehicles for sale? Of course it's a given that an older vehicle will be discounted more than a newer vehicle.

However, I don't see the actual MSRP of the vehicle dropping until at least Tesla catches up with demand on new orders. That was the point of this thread.

 

[Tiger]

I mean, if you think about it, Tesla just increased the MXP by $5k, to MAYBE discount it $5k by the year's end to sell the rest of the MXP's in inventory.

The sales price of new cars does not affect the sales price of inventory cars, it only makes them look more or less attractive relative to new orders.

Also, aren't half those vehicles in inventory like used vehicles/demo vehicles for sale? Of course it's a given that an older vehicle will be discounted more than a newer vehicle.

You can filter those out quite easily.

However, I don't see the actual MSRP of the vehicle dropping until at least Tesla catches up with demand on new orders. That was the point of this thread.

There is no order backlog for model X after EoY as the delivery time is immediate after january which is dedicated for EMEA builds. This means there is no demand and price will need to drop to sell more new builds.

 

[AJ..]

Yes, my prediction is another $2000 drop in Model X price by December. Detailed predictions:
- Inventory of Xs will keep rising due to economic slowdown and interest rates staying high and Model Y being a great car for way cheaper.
- Tesla orders and secures more materials for the 3rd row seats, and also white interiors, to prepare for high volume.
- Tesla drops the 3rd row seats cost from $3500 to $2000.
- Tesla drops the base price of Model X by $2000 down to $77,990.
- Now anyone can order the 7 seater with black interior, or 5 seater with white interior, and stay under $80K.

Tesla could save 1000$ by making tow hitch optional (or can be paid later as an upgrade). Making 6 or 7 seater options minus tow hitch (to save Tesla some money) under 80k for 7,500$ rebate would make lot of folks considering not just Model Y but other SUVs interested in a family use X.

 

[Neon001]

There is no order backlog for model X after EoY as the delivery time is immediate after january which is dedicated for EMEA builds. This means there is no demand and price will need to drop to sell more new builds.

This statement doesn't make sense to me. I can see them trying to clear out inventory (of which there's almost none) in 2023 EoY, but you seem to imply that they will refuse new orders from the NA market throughout the entire month of Jan. Logic would dictate if there is demand (your statement about no demand is dubious - the effects you've discussed only pertain to supply), orders will continue at roughly the same pace. Inventory buys will have little impact on that. If demand keeps up, the backlog will only grow if they changeover to EMEA production.

Can you explain your thought process here?

 

[Tiger]

This statement doesn't make sense to me. I can see them trying to clear out inventory (of which there's almost none) in 2023 EoY, but you seem to imply that they will refuse new orders from the NA market throughout the entire month of Jan.

It is not about refusing orders. They simply queue the NA orders during January, while they build for other markets. It is because the cars have different configurations, they do not build to different markets at the same time. Thus if the expected delivery time for NA is in February, it means there is zero queue. At least @Troy calculates it along those lines.

Logic would dictate if there is demand (your statement about no demand is dubious - the effects you've discussed only pertain to supply), orders will continue at roughly the same pace. Inventory buys will have little impact on that. If demand keeps up, the backlog will only grow if they changeover to EMEA production.

Can you explain your thought process here?

It's just math, no emotions. The reasons for this are macroeconomical and ofcourse the fact that people who can afford the higher prices, nowadays have alternatives and won't put up with Tesla's build quality at current prices.

 

[Neon001]

It is not about refusing orders. They simply queue the NA orders during January, while they build for other markets. It is because the cars have different configurations, they do not build to different markets at the same time. Thus if the expected delivery time for NA is in February, it means there is zero queue. At least @Troy calculates it along those lines.



It's just math, no emotions. The reasons for this are macroeconomical and ofcourse the fact that people who can afford the higher prices, nowadays have alternatives and won't put up with Tesla's build quality at current prices.

Still, this makes no sense. Let's talk fundamentals: production and availability do not - in any real way - affect demand. Demand is driven by price, quality and desirability of the product. Shutting down production for NA destined models is NOT going to affect demand. Demand translates directly to orders placed. Orders, therefore, will not be affected by a production shutdown, just like they weren't in late Sep.

Some more specific questions: while production switches to other regions, do you believe that demand will fall to zero? If so, why/how, given all of the above? If not, why would orders on the website not continue to accumulate? If orders continue to accumulate during production shutdown, how would new orders accepted after production returns to NA market not have a lag time since there are clearly unfulfilled orders in the queue (that were accepted during production shutdown)?

How, in light of the fact that supply will decrease (while demand remains relatively constant) during production shift, do you think a backlog will also decrease (and more specifically, decrease to zero) given level demand?

Orders today - even if they falsely claim a potential Feb delivery time (why would they even do that, btw, if it weren't true?) - still have a lead time. This is obviously true because the average time to get a car has remained constant, if not increased, from 1.5 months ago.

 

[Tiger]

Still, this makes no sense. Let's talk fundamentals: production and availability do not - in any real way - affect demand. Demand is driven by price, quality and desirability of the product. Shutting down production for NA destined models is NOT going to affect demand. Demand translates directly to orders placed. Orders, therefore, will not be affected by a production shutdown, just like they weren't in late Sep.

Correct, but in reverse, we can calculate outstanding orders from the expected delivery date on Tesla's website. If the delivery date is effectively immediate after manufacturing for NA re-starts next year, that means zero queue which means they are making more than they can sell.

Some more specific questions: while production switches to other regions, do you believe that demand will fall to zero? If so, why/how, given all of the above? If not, why would orders on the website not continue to accumulate? If orders continue to accumulate during production shutdown, how would new orders accepted after production returns to NA market not have a lag time since there are clearly unfulfilled orders in the queue (that were accepted during production shutdown)?

The orders seem to accumulate (affecting delivery estimates) only when there are huge discounts, i.e., demand meets/exceeds demand.

How, in light of the fact that supply will decrease (while demand remains relatively constant) during production shift, do you think a backlog will also decrease (and more specifically, decrease to zero) given level demand?

Let's put some algebra examples. Current capacity to produce until end of year 2023 in NA is Z. There are currently y<Z orders because you can still order a Model X and Tesla expects to deliver it this year. This means their production capacity exceeds the demand for the respective period. Once they start pulling some demand levers (pricing, superchariging deals, etc.) you will see the expected delivery date on the website pushed forward towards february, if the demand levers are aggressive enough. At the same time they will be trying to clear out 2023 new inventory before year 2024 so those old 2023 discounted vin prices will be competing with new 2024 vin build appeal.

Orders today - even if they falsely claim a potential Feb delivery time (why would they even do that, btw, if it weren't true?) - still have a lead time. This is obviously true because the average time to get a car has remained constant, if not increased, from 1.5 months ago.

Tesla does not manufacture to order so at most the lead time is statistical and typically in the range of 2 weeks from production start if there is no order backlog/queue.

 

[bnsfengineer]

This post keeps going on and on with pure speculation ....

 

[Neon001]

Correct, but in reverse, we can calculate outstanding orders from the expected delivery date on Tesla's website. If the delivery date is effectively immediate after manufacturing for NA re-starts next year, that means zero queue which means they are making more than they can sell.

The orders seem to accumulate (affecting delivery estimates) only when there are huge discounts, i.e., demand meets/exceeds demand.

Let's put some algebra examples. Current capacity to produce until end of year 2023 in NA is Z. There are currently y<Z orders because you can still order a Model X and Tesla expects to deliver it this year. This means their production capacity exceeds the demand for the respective period. Once they start pulling some demand levers (pricing, superchariging deals, etc.) you will see the expected delivery date on the website pushed forward towards february, if the demand levers are aggressive enough. At the same time they will be trying to clear out 2023 new inventory before year 2024 so those old 2023 discounted vin prices will be competing with new 2024 vin build appeal.

Tesla does not manufacture to order so at most the lead time is statistical and typically in the range of 2 weeks from production start if there is no order backlog/queue.

Lol, now I understand the disconnect. You believe the EDD posted on Tesla's sales page is valid for all orders when in fact it's best case scenario.

Okay then, nothing more to add.

 

[Neon001]

This post keeps going on and on with pure speculation ....

Did you expect otherwise with that thread title?

 

[Tiger]

Lol, now I understand the disconnect. You believe the EDD posted on Tesla's sales page is valid for all orders when in fact it's best case scenario.

It does not make much difference to the reality that the orders are not overgrowing the production, which should be the case in order to sustain current prices.

This post keeps going on and on with pure speculation ....

Let the last "never ending" quarter end push for 2023 begin.

 

[SpicyPaneer]

Last time I checked Tesla inventory, there are over 300 MXLR u sold as they are over the poverty level threshold. I can see those see the price or dealer drops but not a new configuration. There are also 16 plaid models all above $95k and after the price increase, cars have become stale with one or two sold.

 

[domonas]

Last time I checked Tesla inventory, there are over 300 MXLR u sold as they are over the poverty level threshold. I can see those see the price or dealer drops but not a new configuration. There are also 16 plaid models all above $95k and after the price increase, cars have become stale with one or two sold.

Where's all this inventory? It's only a few model x (no plaids) near me in Maryland.

 

[Tiger]

Where's all this inventory? It's only a few model x (no plaids) near me in Maryland.

2023 models 342 pcs as of today in the whole "US" region.

 

[Hbcubs]

2023 models 342 pcs as of today in the whole "US" region.

I’m only showing ~30 available across all deliverables. All but one are demo vehicles.

 

[Tiger]

I’m only showing ~30 available across all deliverables. All but one are demo vehicles.

Strictly new shows 60pcs. With demos included is 316.

 

[Hbcubs]

Strictly new shows 60pcs. With demos included is 316.

I wouldn’t consider all those demos a glut of inventory. Those will move quick.