Pricing strategy for 2023?

[Kokukenji]

Tesla demand has fallen, expect the Model Y Performance to be $45k 6 months from now

Although it's janky for the value of the MY we just bought would be good for new folks giving the brand/car a try. I don't think it's realistic tho, a Lexus NX Plug in Hybrid is around $60K and that's if you can get it. Until the entire market dips, highly unlikely.

Alternatively, they can create another model, like an MY standard range or RWD for $50Kish. That's realistic.

 

[WyoDude]

Tesla demand has fallen, expect the Model Y Performance to be $45k 6 months from now

Just quoting this so I can revisit it this summer and it can’t be deleted.

 

[YNoVA]

Just quoting this so I can revisit it this summer and it can’t be deleted.

You missed my post where I changed that to $30k

 

[WyoDude]

You missed my post where I changed that to $30k

I saw that also but at least with this one people can assume you were being serious and only slightly insane when you said it.

 

[rjpjnk]

Fwiw, it looks like the 2023 Chevy Bolt can be had for about 16k now in NJ after fed and state rebates. Combine that with no sales tax and it’s hard to believe one can buy a brand new EV for so little. I couldn’t believe this was true until I checked the price yesterday. Is this crazy?

Why the Chevy Bolt Is Such a Great Deal Right Now

Until March, you can get the 2023 Chevrolet Bolt EV for much less after a tax credit.

lifehacker.com

 

[fonger]

Tesla Likely To Announce New Lower-Priced Model Y Soon | Carscoops

Back-end website source code indicates a new base price of $61,990

www.carscoops.com

So maybe short range model y?

 

[tangible1]

Fwiw, it looks like the 2023 Chevy Bolt can be had for about 16k now in NJ after fed and state rebates. Combine that with no sales tax and it’s hard to believe one can buy a brand new EV for so little. I couldn’t believe this was true until I checked the price yesterday. Is this crazy?

https://lifehacker.com/why-the-chevy-bolt-is-such-a-great-deal-right-now-1849951365[/URL

Tesla sold every car they could make last year at the prices on offer. They’re like Apple, not Rolex. There is no artificial scarcity to prop up pricing.

When demand drops, pricing will follow.

Tesla Likely To Announce New Lower-Priced Model Y Soon | Carscoops

Back-end website source code indicates a new base price of $61,990

www.carscoops.com

So maybe short range model y?

MY-AWD 4680 279mi range 64K

 

[AndrewZ]

Not sure why people are acting like Tesla can’t cut prices on existing models, they have before in the US market and they just massively cut prices in China. They’re offering discounts all over the place in Europe, and we came out of a $7500 discount at the end of 2022 and a discount in Canada xespite the IRA tax credits obviously not applying here.

Demand doesn’t even need to decrease, it can increase but Tesla also needs to move massively more vehicles this year compared to last. And then more vehicles in 2024, and more vehicles in 2025, pursuing 50% compounding annual production growth. There are only so many buyers of vehicles in this price range, especially in this type of economic environment.

The quarter just began and inventory is blowing up, give it some time and those prices are coming down.

 

[ZenRockGarden]

Not sure why people are acting like Tesla can’t cut prices on existing models, they have before in the US market and they just massively cut prices in China. They’re offering discounts all over the place in Europe, and we came out of a $7500 discount at the end of 2022 and a discount in Canada xespite the IRA tax credits obviously not applying here.

Demand doesn’t even need to decrease, it can increase but Tesla also needs to move massively more vehicles this year compared to last. And then more vehicles in 2024, and more vehicles in 2025, pursuing 50% compounding annual production growth. There are only so many buyers of vehicles in this price range, especially in this type of economic environment.

The quarter just began and inventory is blowing up, give it some time and those prices are coming down.

I don't think anyone is claiming Tesla "can't" cut prices in the US.

What many including myself are saying is that Tesla will steer prices to simply balance demand to what its factories can build. Yes, there were incentives and a demand divot in December because hello $7500 tax rebate in Jan.

With that out of the way, Tesla will re-measure demand, and tweak prices as needed - probably in increments as the factories increase pace. Yes they have tons of room to drop prices (more than their competitors can and remain profitable). But Tesla is playing the long game. Keep the factories rolling at full speed and access max profit at whatever that level is.

 

[tangible1]

Not sure why people are acting like Tesla can’t cut prices on existing models, they have before in the US market and they just massively cut prices in China. They’re offering discounts all over the place in Europe, and we came out of a $7500 discount at the end of 2022 and a discount in Canada xespite the IRA tax credits obviously not applying here.

Demand doesn’t even need to decrease, it can increase but Tesla also needs to move massively more vehicles this year compared to last. And then more vehicles in 2024, and more vehicles in 2025, pursuing 50% compounding annual production growth. There are only so many buyers of vehicles in this price range, especially in this type of economic environment.

The quarter just began and inventory is blowing up, give it some time and those prices are coming down.

People acting like Tesla can't cut prices ?
People are insisting that Tesla WILL MUST ABSOLUTELY cut prices.

Neither is true. Tesla is gonna do what Tesla is gonna do. We will not make their decisions.

 

[fonger]

People acting like Tesla can't cut prices ?
People are insisting that Tesla WILL MUST ABSOLUTELY cut prices.

Neither is true. Tesla is gonna do what Tesla is gonna do. We will not make their decisions.

I wouldn't say we, the consumers, can't make their pricing decision, we absolutely can. If we don't buy their cars, inventory go up, discount will be happening (look what happened in December). This happens all the time at regular car dealership, when they have a lot of cars, they're more willing to negotiate.

 

[acpd]

I wouldn't say we, the consumers, can't make their pricing decision, we absolutely can. If we don't buy their cars, inventory go up, discount will be happening (look what happened in December). This happens all the time at regular car dealership, when they have a lot of cars, they're more willing to negotiate.

Agreed! Tesla will keep price tag at $66k as long there are buyers at that price.

Tesla will try to make every extra $ they can and they should like any public company. They will prioritize orders that are booked at higher price than those who ordered earlier. They don't care about customers. I never want to here Tesla's goal is anything other than to make money (which is totally fine but don't BS that they care about environment or people).

With that said. Everyone knows price cut is coming, just when and how is the question.

 

[RedSupraT]

May have been mentioned but looks like they raised the price of the Tow Package from $400 to $1,000.

 

[tangible1]

I wouldn't say we, the consumers, can't make their pricing decision, we absolutely can. If we don't buy their cars, inventory go up, discount will be happening (look what happened in December). This happens all the time at regular car dealership, when they have a lot of cars, they're more willing to negoti

I wouldn't say we, the consumers, can't make their pricing decision, we absolutely can. If we don't buy their cars, inventory go up, discount will be happening (look what happened in December). This happens all the time at regular car dealership, when they have a lot of cars, they're more willing to negotiate.

go ahead, get that organized. and good luck with that.
this is wishful thinking at it's most utopian.
sure it's possible, but the probability is low low low.

BTW, lead times on the MY have just gone up.

 

[AndrewZ]

I wouldn't say we, the consumers, can't make their pricing decision, we absolutely can. If we don't buy their cars, inventory go up, discount will be happening (look what happened in December). This happens all the time at regular car dealership, when they have a lot of cars, they're more willing to negotiate.

This is exactly why deflation can be a real concern and Elon was tweeting about it not that long ago. When people get a sniff of price decreases, there's a tendency to hold back and wait for the dust to settle in case there are more decreases coming -- it's like inverse FOMO and it can exacerbate the problem. Low and stable inflation is best, it ensures people don't delay purchases excessively because you can assume prices will slowly move up.

Why wouldn't people now just wait until the end of quarter unless they absolutely need a vehicle ASAP? With inventory growing so strongly in the first two weeks, we'll likely see price movement much sooner since there will be potential logistical issues with trying to deliver even more vehicles in a mad EOQ wave spurred on by last minute discounts.

Maybe it'll come after the earnings call on Jan 25th. Either way, Tesla can't sit on that much inventory or there will be consequences for the stock when delivery numbers don't deliver. This is all good stuff for consumers, and it'll pressure other brands to drop prices to win our business. Lower auto prices feed into the inflation metrics monitored by central banks, and prices coming down means the rate hikes can stop.

 

[tangible1]

This is exactly why deflation can be a real concern and Elon was tweeting about it not that long ago. When people get a sniff of price decreases, there's a tendency to hold back and wait for the dust to settle in case there are more decreases coming -- it's like inverse FOMO and it can exacerbate the problem. Low and stable inflation is best, it ensures people don't delay purchases excessively because you can assume prices will slowly move up.

Why wouldn't people now just wait until the end of quarter unless they absolutely need a vehicle ASAP? With inventory growing so strongly in the first two weeks, we'll likely see price movement much sooner since there will be potential logistical issues with trying to deliver even more vehicles in a mad EOQ wave spurred on by last minute discounts.

Maybe it'll come after the earnings call on Jan 25th. Either way, Tesla can't sit on that much inventory or there will be consequences for the stock when delivery numbers don't deliver. This is all good stuff for consumers, and it'll pressure other brands to drop prices to win our business. Lower auto prices feed into the inflation metrics monitored by central banks, and prices coming down means the rate hikes can stop.

lead times on the MY just went up.

 

[AndrewZ]

lead times on the MY just went up.

Lead times on new orders? There are almost 1,100 inventory listings, however many vehicles that represents, probably many of every configuration possible.

I wonder if that suggests they're actually scaling back on Y production output rather than running at full bore, no surely that can't be the case. Maybe it's another attempt to push people towards inventory rather than placing new orders, similar to how they recently brought the Inventory page to the forefront of the website rather than shunting you directly into the Build page.

Or they're trying to send US production to other areas? Switching production to something other than Ys? Lots of possibilities

 

[fonger]

go ahead, get that organized. and good luck with that.
this is wishful thinking at it's most utopian.
sure it's possible, but the probability is low low low.

BTW, lead times on the MY have just gone up.

you did see what happened in December right? I mean i dont know what else to tell you.

 

[fonger]

lead times on the MY just went up.

My recommendation to you is to wait till the end of the quarter to take delivery if you can.

 

[tangible1]

My recommendation to you is to wait till the end of the quarter to take delivery if you can.

I'm already a MYLR Owner. Put 10K miles on it so far.

My point is that despite the pronouncements of excess inventory and Tesla pricing declines.....lead times are going back up and pricing has not fallen.

Let's all remember we just got thru another EoY cluster caused by Government tax incentives, just like last year.
Let's also bear in mind that Tesla has 35,000 cars in transit to fulfill existing orders (please see Q4-22 production vs deliveries).
And EDD's for new orders on the configurator just went up. For the M3, you still can't even order a M3LR.

Further, competitors still can't deliver any volume in North America. In fact, MY alone outsold all others combined.
The top 10 best-selling electric vehicles in the US of 2022

Time to settle down and see how things develop.
Tesla has lots of ways to pull demand levers aside from dropping prices, and it's still not a necessity given the limited competition.