Tesla drops prices on X/S $20k. All colors free. Bye bye resale

[rcho8]

I agree with you guys, but I have to say it still hurts. I didn’t buy my Plaid a couple months ago. I picked it up on Wed. The part that really hurts is that I was originally supposed to pick it up on Saturday. Had I stuck to the original plan, I would have saved myself $10k. But Telsa kept texting me every day that my car is available and that I could reschedule for an earlier date. So I went ahead and completely rearranged my schedule so that I could pick it up on Wed afternoon. Then on Thursday night, they drop the price by ~$10k. Ouch.

I did text the dealer, but they said they couldn’t do anything. I even suggested that I’d be willing to split the difference if they gave me a credit on the Zero-G wheels, which are about $5k. Nope.

I understand both sides. But it still sucks. $10k is still a decent amount of money for me.

they know that there will be a price drop, so the keep pushing early deliveries

 

[AMPd]

should we tell em?...

View attachment 970655 View attachment 970656

Even before the price drop those prices are ridiculous.

 

[Tessd]

No, but you’re applying it in a way that doesn’t make a whole lot of sense.

I don't think there is a wrong way to apply the TCO calculator.

While all used car prices have come down from their peaks, Tesla used prices have gone down way more. This means the TCO for Tesla is far worse than it was even pre-pandemic when I bought my car. Is it even debatable to say that Tesla's have suffered some of the worst depreciation over the last couple of years?

I'm not even sure why it is contentious to say that sharp depreciation that increases TCO for EV's is a problem. Cars are not flip phones. They are generally the second largest expense for a family, outside of purchasing a home. TCO matters a whole lot, which is why one of the main benefits of EV's is that they should be cheaper to own. This is why I think it is very reasonable for me to think twice about replacing my Tesla with another EV, especially an expensive one like a Model S. What I'm saying is if an EV saves me $10K on gas/maintenance but it costs me $15K in additional depreciation, then it's not much of a deal.

It is really interesting to me to see people say that depreciation shouldn't matter. When I bought my Tesla, there was a lot of talk about how well Tesla's hold their value and the benefits to TCO. Now that the opposite is true, I'm being unreasonable for saying that the TCO is not so good anymore.

 

[ucmndd]

they know that there will be a price drop, so the keep pushing early deliveries

This is just what they do. As far as I can tell it’s programmed into their system.

I picked up a new Model 3 a week ago today. Every day the week prior I got an automated text saying my car was on-site and providing a link to schedule an earlier delivery if I wanted to.

You’re attributing an awful lot of foresight and calculated thinking to a company that hasn’t given many outward indications they’re capable of such.

 

[ucmndd]

I don't think there is a wrong way to apply the TCO calculator.

While all used car prices have come down from their peaks, Tesla used prices have gone down way more. This means the TCO for Tesla is far worse than it was even pre-pandemic when I bought my car. Is it even debatable to say that Tesla's have suffered some of the worst depreciation over the last couple of years?

I'm not even sure why it is contentious to say that sharp depreciation that increases TCO for EV's is a problem. Cars are not flip phones. They are generally the second largest expense for a family, outside of purchasing a home. TCO matters a whole lot, which is why one of the main benefits of EV's is that they should be cheaper to own. This is why I think it is very reasonable for me to think twice about replacing my Tesla with another EV, especially an expensive one like a Model S. What I'm saying is if an EV saves me $10K on gas/maintenance but it costs me $15K in additional depreciation, then it's not much of a deal.

It is really interesting to me to see people say that depreciation shouldn't matter. When I bought my Tesla, there was a lot of talk about how well Tesla's hold their value and the benefits to TCO. Now that the opposite is true, I'm being unreasonable for saying that the TCO is not so good anymore.

My point is you’re making a sweeping and nonsensical generalization about “EVs” based on broad impacts that have affected the entire auto industry over the past 2 years.

Anyone who bought a Model Y at the high water price of - what was it, like $67,000? - was always in for a world of hurt. Just like any of the thousands of people who paid insane dealer markups on any manner of ICE car during the same period. We were in a bubble. It was super obvious. If you bought at the top, trouble was always coming for you. It wasn’t and isn’t a “Tesla” thing, and it’s most certainly not an “EV” thing. It’s a “US car market” thing.

Tesla’s transparent pricing model just makes it easier to measure, but the same thing was happening everywhere. To think otherwise is incredibly naive.

I also question the overall value you place on depreciation. The average American keeps a new car for 8.4 years. Yeah, no kidding you’re gonna get hosed if you buy a new car at the height of a bubble and want to sell it 3 years later. But most people don’t do that.

 

[brainhouston]

I blame the government for giving ppl extra money during pandemic

 

[Tessd]

All the second hand buyers are rejoicing now
They finally can afford EV.
There's plenty of customers at the low end of income

The problem is that the people who bought these cars new and are taking significant depreciation hits are not rejoicing as much. That is not healthy.

I don’t think it’s good that EVs are not holding their value. And I don’t think it’s good that Tesla is forced to cut prices. But hey, maybe we will all end up with amazing cheap EVs this way.

 

[Zuikkis]

The problem is that the people who bought these cars new and are taking significant depreciation hits are not rejoicing as much. That is not healthy.

I don’t think it’s good that EVs are not holding their value. And I don’t think it’s good that Tesla is forced to cut prices. But hey, maybe we will all end up with amazing cheap EVs this way.

I own a 2016 MX P90DL and have been planning to upgrade to a new MX LR when I can afford it.

Now, obviously my old car dropped value when new car prices went down. But I'm pretty sure my "out of the pocket" price is now considerably lower than it was a week ago!

Even if you have just bought a Tesla at old high price and now feel you lost money.. was your previous car a Tesla too? In that case you were probably "overpaid" for that, and today would get much lower price.

Tesla MSRP changes mostly affect cases where you are changing brands. "I'll never buy a Tesla again" means you'll get maximum loss.

 

[Tessd]

My point is you’re making a sweeping and nonsensical generalization about “EVs” based on broad impacts that have affected the entire auto industry over the past 2 years.

Anyone who bought a Model Y at the high water price of - what was it, like $67,000? - was always in for a world of hurt. Just like any of the thousands of people who paid insane dealer markups on any manner of ICE car during the same period. We were in a bubble. It was super obvious. If you bought at the top, trouble was always coming for you. It wasn’t and isn’t a “Tesla” thing, and it’s most certainly not an “EV” thing. It’s a “US car market” thing.

Tesla’s transparent pricing model just makes it easier to measure, but the same thing was happening everywhere. To think otherwise is incredibly naive.

I also question the overall value you place on depreciation. The average American keeps a new car for 8.4 years. Yeah, no kidding you’re gonna get hosed if you buy a new car at the height of a bubble and want to sell it 3 years later. But most people don’t do that.

Oh my. Now I’m making nonsensical generalizations. Sigh. I’m not one to insult people, even online. But I have noticed a dig with each comment and it’s really not necessary. I am simply stating my opinion and I am more than happy to learn from yours.

Yes there were people who paid crazy markups. That’s a very good point. But Tesla has done worse overall. I could have bought a new BMW at the height of the pandemic and done way better in terms of depreciation, even compared to my used Tesla. Of course I would not have paid ADM. I am also seeing Taycan values taking massive hits now. I’m not sure about BMW EV values but I see a whole lot of them discounted at the local dealer. So yeah, it sure seems to me like price drops and significant depreciation may extend to the overall EV market.

I don’t think I’m the only one who places a lot of importance on depreciation. Again, when depreciation on EVs was low, that was a selling point. Now that depreciation is high, it’s not fair to say that depreciation shouldn’t matter.

I’m a relatively early adopter with Tesla so I’m far from being a Tesla hater or anything like that. I hope it doesn’t seem like I’m bashing Tesla. Maybe we could agree that it would be better if Tesla’s could hold their values like they did in the past and leave it at that.

 

[dinosoar888]

But Non teslas at a supercharger should be at different pricing>>> unless they have a Tesla in the same household!!! LOLOL

 

[patgilm]

I bought my MSP in December of 2021 at a $40k premium than what they are going for now. I thought the first $20k price drop hurt but this second one hurt even more. I usually like to change cars every three years and have never had a car depreciate so fast. I guess it is what it is. I’ll just lease next time and maybe I will try a Lucid or something else with better build quality for the price.

 

[FLRifleman]

I don't think there is a wrong way to apply the TCO calculator.

While all used car prices have come down from their peaks, Tesla used prices have gone down way more. This means the TCO for Tesla is far worse than it was even pre-pandemic when I bought my car. Is it even debatable to say that Tesla's have suffered some of the worst depreciation over the last couple of years?

I'm not even sure why it is contentious to say that sharp depreciation that increases TCO for EV's is a problem. Cars are not flip phones. They are generally the second largest expense for a family, outside of purchasing a home. TCO matters a whole lot, which is why one of the main benefits of EV's is that they should be cheaper to own. This is why I think it is very reasonable for me to think twice about replacing my Tesla with another EV, especially an expensive one like a Model S. What I'm saying is if an EV saves me $10K on gas/maintenance but it costs me $15K in additional depreciation, then it's not much of a deal.

It is really interesting to me to see people say that depreciation shouldn't matter. When I bought my Tesla, there was a lot of talk about how well Tesla's hold their value and the benefits to TCO. Now that the opposite is true, I'm being unreasonable for saying that the TCO is not so good anymore.

I'm guessing you don't run a business. People like myself who do, and purchase durable & expensive equipment calculate the TCO (Total Cost of Ownership) when comparing equipment and making decisions. The TCO in terms of a car is the purchase price + operating costs + maintenance & repair costs - residual value at the end of it's expected lifespan.
Notice I said expected lifespan. The depreciation in any year is irrelevant. Deciding you want to replace it with something else earlier for emotional reasons is a personal decision, and in that case you take the hit.
I drive ~30k miles a year. I calculate the TCO over a 10 year lifespan when comparing models to purchase. The problem with $85,000+ EVs is that even with the high mileage I drive, the TCO is break-even at best, or negative compared to a gas vehicle at that purchase price. With the drop in the prices, this TCO begins to shift. It would need to come down more for those who only put on average annual mileage. These price reductions are good & needed.

 

[RUK MINI]

These are not cars. . . but computers on wheels. . .so such price drops are to be expected with digital technologies. Except that it is painfully happening at $50 to $100k price points. . .

 

[ucmndd]

Oh my. Now I’m making nonsensical generalizations. Sigh. I’m not one to insult people, even online. But I have noticed a dig with each comment and it’s really not necessary.

I’m sorry if you’re taking it that way. I do believe your argument is making generalizations that are nonsensical. That’s not really intended to be a personal insult.

I could have bought a new BMW at the height of the pandemic and done way better in terms of depreciation, even compared to my used Tesla. Of course I would not have paid ADM.

Then, to put it bluntly, you very likely would not have bought a car because nobody would sell you one. BMW’s year over year transaction price was up nearly 15% from 2021 to 2022.

New-Vehicle Prices Set Record in July 2022, According to Kelley Blue Book, as Inventory Improves Year-Over-Year and Luxury Share Remains Elevated

New-vehicle buyers remain in an "over sticker" market, paying above MSRP every month this year. Inventory improves year-over-year but remains low; incentives increased slightly in July over June...

mediaroom.kbb.com

I am also seeing Taycan values taking massive hits now. I’m not sure about BMW EV values but I see a whole lot of them discounted at the local dealer. So yeah, it sure seems to me like price drops and significant depreciation may extend to the overall EV market.

Yes - price drops and significant depreciation has extended to the ENTIRE vehicle market, as the bubble has popped and interest rates are at 20 year highs.

I don’t think I’m the only one who places a lot of importance on depreciation. Again, when depreciation on EVs was low, that was a selling point. Now that depreciation is high, it’s not fair to say that depreciation shouldn’t matter.

Again, this is generally applicable to the entire auto market. The same trends are affecting everything.

Yes, if you measure depreciation from a pure transaction price perspective when new and then however many years later, EVs depreciate faster. The two main reasons for this are:

1) the emerging technology aspect I mentioned in an earlier post

2) Market manipulation via government incentives. Almost every new EV sold for the past decade has received significant government incentives via tax credits and local rebates. Those obviously affect resale value and show up as “depreciation” the way most firms like KBB and others calculate it. You can’t really call that depreciation from the owner’s perspective though as you were compensated for it.

Example: you buy an EV for $57,500 and get a $7500 federal tax credit. Your car is now worth about $7500 less on the open market than it would be otherwise (because why would someone buy your car when they can get a new one with their own $7500 coupon). Is that “depreciation”? My answer is “no” even though it shows up that way in most market analyses.

A personal example with real (but rounded) numbers:

I bought a Model S for ~$80,000 in 2016. I put 175,000 miles on it and just sold it for ~$20,000. Per traditional measures of depreciation that KBB or others could calculate with the records available to them, my car depreciated by 75% over my ownership.

However, I received $13,000 of federal, state, and local incentives when I purchased the car, making my “real” transaction price $67,000 and my observed depreciation only 70%. Whose numbers are correct, and how would this compare to an ICE model over the same 7 years and 175k miles?

Maybe we could agree that it would be better if Tesla’s could hold their values like they did in the past and leave it at that.

I dunno. This seems like a very necessary correction to me. Prices were astronomically high and had to come down one way or another.

 

[wwu123]

I bought my MSP in December of 2021 at a $40k premium than what they are going for now. I thought the first $20k price drop hurt but this second one hurt even more. I usually like to change cars every three years and have never had a car depreciate so fast. I guess it is what it is. I’ll just lease next time and maybe I will try a Lucid or something else with better build quality for the price.

So did you not sell/trade-in your previous 3-year-old vehicle around the same time period, when used car prices were basically at an all-time high? Seems like most folks who bought a new car during the peak also sold a used one at the peak too, and if one is in the habit of doing this every 2-3 years, it all pretty much just evens out on the ups and downs of the economy....

 

[Drew-MS]

Tesla drops price of Model S/X, Model X now qualifies for US tax credit

Tesla has cut prices on the Model S and X, with price drops of 15-19% in the US on all...

electrek.co

FML. Bought 3 months too soon

I paid $130k lol so yeah it sux. Regardless, I love my car so it is what it is. Only option is to just keep it for many years.

 

[patgilm]

So did you not sell/trade-in your previous 3-year-old vehicle around the same time period, when used car prices were basically at an all-time high? Seems like most folks who bought a new car during the peak also sold a used one at the peak too, and if one is in the habit of doing this every 2-3 years, it all pretty much just evens out on the ups and downs of the economy....

I did sell my car about 6 months prior to the lease end date for a $5k premium. No car I know of in the price range I looked at had a $40k markup and the M5 I was considering ordering was MSRP. $5k and $40k are vastly different.

 

[Drew-MS]

Outside of the melting/peeling yoke, it's the best car I've ever owned and Tesla said they would fix the yoke when the new one comes out at the end of the month.

I repaired my peeling yoke with a simple leather repair kit. It took about 15 min. Is it perfect ? No, but you can’t tell unless you stare at it from very close. It definitely looks a hell of a lot better than it did before.

 

[ginmqi]

I repaired my peeling yoke with a simple leather repair kit. It took about 15 min. Is it perfect ? No, but you can’t tell unless you stare at it from very close. It definitely looks a hell of a lot better than it did before.

Nice. I wonder if the current yokes have a better production process to reduce the peeling issue....

 

[Drew-MS]

I imagine 4 years from now the resale market will settle somewhere between all the various prices. That 20k decrease in cost today will not equate to a 20k less resale value in 5 years. Just a guess of course. I'm sure it lowers it some but my guess is the resale market will average out somewhere between all the prices. P100D still has decent resale / trade-in value so I can't imagine it just killing the resale market altogether. If you bought the car and plan on selling it within a year or two, yea, you probably will feel it a bit more.

I'm not mindless, it would have been nice to get this price 6 months ago (20k is a significant amount of money), but I just love everything about the car. I was ok paying what I did, and have 0 regrets. The car is just awesome. I bought the car when the big price drop happened then, I surely can't be too surprised with another price drop now.

When I purchased my 1st Tesla (from Tesla) in 2019, I paid $74k for a fully optioned P100D with 20k miles. The original owner paid $156k just 2 1/2 years earlier. At that time in 2019, a new one was $50k less expensive compared to just 2 years earlier.
Since the same thing happened before, I’m not really surprised that the car I paid $130k for 2 years ago is now selling for $90k. Unfortunately, I didn’t have the discipline/patience to wait until Sept 2023 to buy the car for $90k.