Blog Tesla Increases Prices Again

Another price change has hit Tesla vehicles.

Late Friday, Tesla raised the price on variants of all currently available vehicles.

The Model Y Long Range price increased $2,000 from $54,990 to $56,990. The Model 3 Standard Range Plus price also jumped $2,000 to $43,990 from $41,990.

Tesla’s priciest cars also received the biggest price hike. The Model S sedan and Model X SUV prices are now $5,000 higher. Tesla’s highest-priced Plaid variants of the vehicles were unchanged.

Tesla’s prices have fluctuated all year as the company has tried to overcome challenges with suppliers caused by the pandemic. Tesla did not give a specific reason for the new price increase, but mentioned during its Q3 earnings call that it expected to continue experiencing pains from the pandemic going into next year.

 

[tivoboy]

Were the price increases just in the US, or have prices gone up in other countries too?

that is a VERY good question and to my knowledge they have NOT raised prices in Europe as they have in USA over this period. Last pricing change I read about was in January 2021 and that was a price REDUCTION in Europe. I'll see what I can find, but I would say absent similar prices raises in that large market, either the pricing was perfect there or the motivation here, is clear.

 

[avesraggiana]

I have a 2019 M3 and was going to upgrade to the MY but not anymore! They just lost a sale but I’m sure Elon doesn’t care. I really hope they shot themselves in the foot and sales go down!

Who is Elon?

 

[Fred42]

Who is Elon?

An immigrant from South Africa who made money from PayPal but now lives in a "tiny home" smaller than a house trailer.

 

[Atomadam]

Who is Elon?

I'm sure you can find some info on the internets..

 

[_Redshift_]

Glad I got mine when I did. I figured inflation would be going through the roof late last year and guess what?

This should underscore why it’s so vitally important to start making all of our own stuff (including microchips) right here in the USA.

Yet, what’s the investment into making the chips? Into software that makes them? (EDA)

Yeah, our priorities are really screwed up when dog walking apps get billions in funding, and vital tech gets zilch.

As a society we have become very greedy, and after short term gains at the expense of long term security and well being.

I am ranting as the founder of a revolutionary tech in EDA. As a first time entrepreneur I could not get funding until recently when we got top-tier traction, all on our own with extremely hard work, and hard fought battles. It breaks my heart to see investors flocking to scam crypto stocks or other shiny objects. Biden announced a big push into investment into the chips and EDA as well,but how slow do the wheels of our democracy move?

it’s also made harder by the fact that a chip foundry takes years to set up and requires massive capital.

 

[Cantonalegod]

Were the price increases just in the US, or have prices gone up in other countries too?

In the UK the RWD has had two increases in the last couple of weeks, including one last night. Went from £40990 to £41990 and now £42990.

LR also went up last night from £48490 to £49990, so a £1500 increase.

P remains unchanged at an eye watering £59990! ($80,000!!!).

All prices are "on the road" including all taxes, delivery etc..

There are currently NO incentives for vehicles priced over £35k.

Before this recent activity prices had been pretty stable since March.

 

[Olle]

If you take inflation into account, Tesla's prices are probably standing still or going down. Its hard to fairly define US inflation but the latest CPI is 6.2% Fastest Inflation in 31 Years Puts More Heat on Washington
M2 increased with 26% in 2020. Opinion | The Money Boom Is Already Here Not taking money velocity into account we could somewhat oversimplified say 26% is the real inflation. It just hasn't trickled down to CPI yet, there is inertia.

 

[tivoboy]

If you take inflation into account, Tesla's prices are probably standing still or going down. Its hard to fairly define US inflation but the latest CPI is 6.2% Fastest Inflation in 31 Years Puts More Heat on Washington
M2 increased with 26% in 2020. Opinion | The Money Boom Is Already Here Not taking money velocity into account we could somewhat oversimplified say 26% is the real inflation. It just hasn't trickled down to CPI yet, there is inertia.

That’s not really how inflation tracking works, CPI or PPI or other measurements don’t just apply to everything evenly. Airlines fares are still DOWN from Feb 2020, and certainly from similar months in 2019. Same with hotel rooms and other things that are outpacing historical trends. Usually, we don’t have a deflationary phase (like we had from April-July 2020, for such a short period of time. Usually, it lingers for many months if not easily 12 months. My calculation is that these high water marks will be halved by end of Q1’22, and possibly lower. Time will tell.

Considering that Tesla has tacked on nearly %20 just in 2021, they are well outpacing NEW VEHICLE MSRP price increases from the past 12 months. But then again, not all car manufacturers or ICE cars at least get (or will get most likely) a big fat incentive to the customer (and its looking like straight to the dealer or manufacturer) to offset that price increase.

 

[Olle]

That’s not really how inflation tracking works, CPI or PPI or other measurements don’t just apply to everything evenly. Airlines fares are still DOWN from Feb 2020, and certainly from similar months in 2019. Same with hotel rooms and other things that are outpacing historical trends. Usually, we don’t have a deflationary phase (like we had from April-July 2020, for such a short period of time. Usually, it lingers for many months if not easily 12 months. My calculation is that these high water marks will be halved by end of Q1’22, and possibly lower. Time will tell.

Considering that Tesla has tacked on nearly %20 just in 2021, they are well outpacing NEW VEHICLE MSRP price increases from the past 12 months. But then again, not all car manufacturers or ICE cars at least get (or will get most likely) a big fat incentive to the customer (and its looking like straight to the dealer or manufacturer) to offset that price increase.

Fwiw I have a bachelors' in economics and can probably list 100 different ways to measure inflation. There is unfortunately no way around that money supply increased with 26% per year. Even if GDP growth hypothetically was ten percentage units, we are looking at 16% inflation.

Also, I don't think we can compare to ICE cars. That market is imploding and will see deflationary pressure unless ICE manufacturers can shutter plants quicker than the downwards slope of the demand curve.

 

[tivoboy]

Fwiw I have a bachelors' in economics and can probably list 100 different ways to measure inflation.

I only learned 76 with my BS + 2 ;-)

 

[ArchEtech]

You don’t need a degree to understand that If you print money, and literally put “free” cash into people’s hands the dollar will become less valuable……it also very apparent that many good and services have gone up in cost while salaries have stagnated. Lots of things going on. Supply chain issues. Delivery service shortages. Unfortunately I predict it will get worse.

There could still yet be another huge spike in oil prices too. Heating oil is 2x what it was last year and we are only just starting winter. Food costs are way up - bought a steak lately? I think it’s crazy people are buying cars at all right now with the inflation, and higher costs of essential goods. But….back to thousands of dollars of “free money”….

 

[teslick2]

You don’t need a degree to understand that If you print money, and literally put “free” cash into people’s hands the dollar will become less valuable……it also very apparent that many good and services have gone up in cost while salaries have stagnated. Lots of things going on. Supply chain issues. Delivery service shortages. Unfortunately I predict it will get worse.

There could still yet be another huge spike in oil prices too. Heating oil is 2x what it was last year and we are only just starting winter. Food costs are way up - bought a steak lately? I think it’s crazy people are buying cars at all right now with the inflation, and higher costs of essential goods. But….back to thousands of dollars of “free money”….

Inflation is also caused by the rate in which money changes hands. The world opened back up in 2021 after a long quarantine so increased inflation is to be expected.

That being said, inflation isn’t the driver of higher car prices, it’s supply and demand. Greater demand and limited supply due to supply chain issues (e.g., chips).

 

[ArchEtech]

The world opened up, and what 4 trillion artificially added to the economy.

People bought things, bought cars, supply is used up, cars go up, people get instant equity in their current vehicle, sell at inflated prices, money/cars change hands quickly. Add to that shortage on new cars because of chip shortages and other supply chains, less new cars, more demand on used cars, supply is even more shorted…

It’s ALL driving the current price of cars.

 

[teslick2]

The world opened up, and what 4 trillion artificially added to the economy.

What 4 trillion are you referring to?