Speculation on Model S/X Pricing Strategy

[Saimaannorppa]

Here is my game theory. One of the main drivers for huge price drop in MS and MX is to lock in existing customers.

Why? Imagine taking your car for trade in valuation at a Taycan / éTron / i-Pace dealer? I think most of us will find the hit too hard to take.

Now if you go to Tesla, relative valuation stayed the same.

As a customer, I don’t appreciate, but as a business person, I salute the idea. You can play this card only once, though.

This may also indicate current version of Model S/X nearing end of lifecycle, which will likely bring new pricing for a refreshed car.

 

[Destiny1701]

This could also be a precursor to a new battery coming out ie. 130kw and having to sell as much of the 100kw as they can in the interim?

Just some positive speculation here

Somewhat like liquidating an outgoing model before the new engine an design are released.

 

[cciesingh]

I have a fully loaded silver 2014 P85+ which I purchased as an inventory vehicle in Nov 2015 with 7k mileage.

Vehicle has AP1

The vehicle cost 105k + sales tax.

My vehicle only has 23k mileage and has been lightly driven and very well looked after

I am considering purchasing another inventory Tesla P100D, especially with the recent discounts announced this week.

I have a few questions to help make a decision.

1. Resale value - what should my vehicle be worth? I am guessing 50k which is a huge hit in 39 months.
2. Is AP 3 wOrth the upgrade ?
3. I see big discounts on inventory vehicles following the price cuts, my guess is these Prices May come down further.
4. Seems like a lease is the best option rather than buying

 

[Saimaannorppa]

It will take a while for the inventory prices to settle to a new level.

I'd wait for AP HW3 news before decision. It may be a larger update to MS than just that, and it should be revealed in near future.

I wonder what the leasing companies will do to future Tesla leases as they have to model in sudden pricing drops.

 

[cciesingh]

My question was incorrect, is the current AP HW 2.5 worth the upgrade and Is V3 due soon?

 

[Vitaman]

1. Resale value - what should my vehicle be worth? I am guessing 50k which is a huge hit in 39 months.
2. Is AP 3 worth the upgrade ?
3. I see big discounts on inventory vehicles following the price cuts, my guess is these Prices May come down further.
4. Seems like a lease is the best option rather than buying

Been interested in some of this as my P100D is coming off lease and I want another but after a refresh. Since nobody knows when....considering either a high end rental or Used Tesla purchase for the interim.
1-Best way is to check the Tesla used inventory. Their inspected cars with warrantees are priced somewhere around 10% higher than what you can expect to get. Your car would sell on their site for around 50K so I would expect you could get a bit less in sale or trade in.
2-AP 2.5 or 3 is not worth that much to me but all depends what excites you about a car.
3- Used Teslas will definitely come down. New ones? No idea how to even guess.
4- Wish I had bought instead of leasing. Would have more flexibility now to wait out the Refresh.

 

[mattwhite]

I have a fully loaded silver 2014 P85+ which I purchased as an inventory vehicle in Nov 2015 with 7k mileage.

Vehicle has AP1

The vehicle cost 105k + sales tax.

My vehicle only has 23k mileage and has been lightly driven and very well looked after

I am considering purchasing another inventory Tesla P100D, especially with the recent discounts announced this week.

I have a few questions to help make a decision.

1. Resale value - what should my vehicle be worth? I am guessing 50k which is a huge hit in 39 months.
2. Is AP 3 wOrth the upgrade ?
3. I see big discounts on inventory vehicles following the price cuts, my guess is these Prices May come down further.
4. Seems like a lease is the best option rather than buying

Unfortunately, I think you’re probably looking at a mid 30s value right now for your car. Tesla has a used 2014 + model for $46,000 on their website with mileage in the 30k range. That probably means it was traded in at a value in the mid 30s. You could go private party but then you’re competing with brand new Model 3s with all the new tech and full warranty.

 

[sandpiper]

This could also be a precursor to a new battery coming out ie. 130kw and having to sell as much of the 100kw as they can in the interim?

Just some positive speculation here

Somewhat like liquidating an outgoing model before the new engine an design are released.

So why drop the price early? Unless they've got tons of inventory of old pack sitting around - and they don't. I hope a new pack is coming, but I suspect it will be a bit.

 

[Saimaannorppa]

So why drop the price early? Unless they've got tons of inventory of old pack sitting around - and they don't. I hope a new pack is coming, but I suspect it will be a bit.

I think they don't need to have physical inventory. Commitment to buy cells from Panasonic is enough. If such exists, they need to sell them first.

 

[sandpiper]

I think they don't need to have physical inventory. Commitment to buy cells from Panasonic is enough. If such exists, they need to sell them first.

The last I heard, that agreement was over? I may be wrong. In any case, Tesla can only produce 100K SX cars per year. It's not like dropping the price would allow them to push out a lot more of them for a short period, to eat up the requirements of a Panasonic contract.

No... this is about demand. The 3 is cannibalizing the S/X. And some S buyers are looking at the Taycan. Arguably they should have been reducing the price on the S earlier than now.

 

[johnc11050]

Do not know about the wisdom of Tesla closing most/all of its showrooms/sales centers at this time. At one time, Tesla was the only game in town so if you wanted a luxury EV (not counting there Volt/Bolt, Leaf) you went to Tesla. Now, however, with big-time players getting into the game, like Porsche, Audi, Cadillac, etc. I am uncertain that the Tesla name is going to be sufficient to generate sales. Also, I am very skepitcal of the return policy as brought out in other posts---just does not work very smoothly and is dangerous in my view. Also, who is going to take in the trade-ins and who is going to sell the trades.? You have to have some mechanism to do that. Just does not 'happen."

 

[Saimaannorppa]

No... this is about demand. The 3 is cannibalizing the S/X. And some S buyers are looking at the Taycan. Arguably they should have been reducing the price on the S earlier than now.

Agreed. One of the main drivers is cannibalizing effect of M3.

Could also be that they got a better deal for 18600 cells now.

Do not know about the wisdom of Tesla closing most/all of its showrooms/sales centers at this time. At one time, Tesla was the only game in town so if you wanted a luxury EV (not counting there Volt/Bolt, Leaf) you went to Tesla. Now, however, with big-time players getting into the game, like Porsche, Audi, Cadillac, etc. I am uncertain that the Tesla name is going to be sufficient to generate sales. Also, I am very skepitcal of the return policy as brought out in other posts---just does not work very smoothly and is dangerous in my view. Also, who is going to take in the trade-ins and who is going to sell the trades.? You have to have some mechanism to do that. Just does not 'happen."

The truth of actual scale back may be less than it looks from the announcement. They probably look at sales guys and location performance data and let the worse performing units go. Regular layoff style, but making it look like a strategic win by emphasizing online channel. If experiment fails, they’ll hire assumed better performers without media announcements.

 

[cciesingh]

Unfortunately, I think you’re probably looking at a mid 30s value right now for your car. Tesla has a used 2014 + model for $46,000 on their website with mileage in the 30k range. That probably means it was traded in at a value in the mid 30s. You could go private party but then you’re competing with brand new Model 3s with all the new tech and full warranty.

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

 

[Uncle Paul]

An existing Tesla owner will see very little net difference when they trade in their current Tesla for a new one.

They will recieve less for their trade in but also pay less for their new car. The delta will remain similar to what they would have previously paid.

Only problem will be with owners that want to still get the original higher price for their trade in, while getting the new lower price on the new one.

More of an emotional issue than a financial one.

Land Rover has been doing a similar thing for years. Typically the resale value will tank on a Land/Range Rover. Mostly due to high maintenance and dependability issues. Owner will be dismayed to see how little they can get when selling. The highest value that they can usually get is to trade it in on another Land Rover. They will get a better offer there, but only if they are buying a new Rover at the same time. Kinda locks owners into one Rover after another.

 

[Vitaman]

1. Resale value - what should my vehicle be worth? I am guessing 50k which is a huge hit in 39 months.
2. Is AP 3 worth the upgrade ?
3. I see big discounts on inventory vehicles following the price cuts, my guess is these Prices May come down further.
4. Seems like a lease is the best option rather than buying

Been interested in some of this as my P100D is coming off lease and I want another but after a refresh. Since nobody knows when....considering either a high end rental or Used Tesla purchase for the interim.
1-Best way is to check the Tesla used inventory. Their inspected cars with warrantees are priced somewhere around 10% higher than what you can expect to get. Your car would sell on their site for around 50K so I would expect you could get a bit less in sale or trade in.
2-AP 2.5 or 3 is not worth that much to me but all depends what excites you about a car.
3- Used Teslas will definitely come down. New ones? No idea how to even guess.
4- Wish I had bought instead of leasing. Would have more flexibility now to wait out the Refresh.

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

1-Not sure
2-$3750
3-I would lease as short a term as possible lest that P125D catch your eye.
4- Nah. I get cold sweats thinking about giving up my leased P100D in 4 weeks. It's a daily Blast.

 

[wwu123]

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

Not to offend, but isn't that 51 months since Dec 2014? If we use the old 2% depreciation per month standby, you're holding up fine assuming 39 months, well ahead assuming 51 months.

Now yours is a low mileage vehicle so should be somewhat higher, but your 4 year warranty is already expired except on the drivetrain, so that's going to take a hit.

 

[mattwhite]

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

I'm guessing Tesla's offer of $46k wasn't in the last 5 days. The giant price drops on the S/X since Friday are going to affect used values all the way down the line. What was $46k a week ago will be $35k or less now. If you think that's bad, if someone took delivery of a fully loaded P100D in the UK recently, the've probably lost around $80,000, and that could just be in weeks or even days!

 

[neroden]

Here is my game theory. One of the main drivers for huge price drop in MS and MX is to lock in existing customers.

Why? Imagine taking your car for trade in valuation at a Taycan / éTron / i-Pace dealer? I think most of us will find the hit too hard to take.

Now if you go to Tesla, relative valuation stayed the same.

As a customer, I don’t appreciate, but as a business person, I salute the idea. You can play this card only once, though.

This may also indicate current version of Model S/X nearing end of lifecycle, which will likely bring new pricing for a refreshed car.

I think Tesla is also undercutting the Taycan, Audi, Jaguar, etc. prices. They were all priced to be competitive with Model S at the OLD pricing. Now all the EV "competitors" are all more expensive.

 

[neroden]

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

Since day one, the rule has been that every single option except the big battery depreciates to zero *immediately*. So value it as an 85 with no options, then consider how much it's dropped since then.

 

[electracity]

I have been offered $46k for a trade in for my P85+ from Tesla.

My vehicle cost me $98k plus $8394 in CA sales tax (total $106k) in Dec 2014.

In 39 months that is a loss of 52k (not including the sales tax), considering that I only used it for 15k miles that is a huge hit.

After all that for some stupid reason I still want a new P100D top of the line and have been checking out inventory vehicles online this weekend, discounts of around 35 for a 2018 year old low mileage exammple.

Am I mad?

I also have a couple of questions:

1. Do current owners still get the 1k referral discount?
2. How much of a tax credit is still available?
3. Leasing - What terms is is Tesla offering recently and what is the sweet spot? e.g 2 or 3 yr lease
4. Am i crazy?

Lease
If you are attracted to Tesla as a high tech item and want the latest and greatest then take the lease cost as the true cost of the car for you. What would have been the lease cost on the P85+?

I normally don't think leasing makes sense. But Tesla is not a normal car.