Tesla Increases Prices for Existing 2008 Orders

[tomsax]

Yesterday, my wife and I got word that Tesla Motors was contacting owners whose cars were about to go into production because they are introducing new options and unlocking all remaining 2008 model year orders. We knew that VIN 214 had started production and we're 217, so that's us.

As it turns out, Tesla is adding one new option (performance tires) and raising prices on many of the existing options. For example, the HPC is no longer bundled and is now a $3,000 option (just like the 2009 orders), the destination charge increased from $950 to $1,950, and the SolarPlus windshield which was previously standard is now a $400 option. Also, the audio upgrades are no longer available separately, instead there's one big $3,000 option for everything, a $500 increase over the total cost of ordering them all separately.

These price increases apply to all 2008 model year orders with VIN number 210 and higher, and apply to everyone even though we locked in our options as early as last September.

More details and commentary are on my blog.

Tesla Price Increase - Tom Saxton's Blog

I expect an official letter from Tesla announcing this change in options and pricing tomorrow (Friday, January 16th).

 

[SteveF]

Simply put, this sucks.

 

[graham]

This does not make me very happy at all.

ETA: Typed and erased several rants. Summed up: This is very rude. And very possibly a deal breaker for me.

 

[TEG]

Now I guess we know why they just blogged about all the incentives.
I guess they want a cut of that $7,500...

Condolences to those of you who didn't get in before the cutoff date.
(But those who already took delivery might be lamenting the fact they they didn't have a chance at the Sport package).

 

[doug]

I can imagine that a lot of the affected customers must be pretty unhappy. I can only hope that Tesla Motors considered the balance between revenue and customer good will.

 

[stopcrazypp]

I can imagine that a lot of the affected customers must be pretty unhappy. I can only hope that Tesla Motors considered the balance between revenue and customer good will.

I was thinking about what to say but it's along the same lines. I could see a lot of unhappy customers.

 

[malcolm]

Ouch.

Home recharging takes the biggest price increase. The fast charger is now a $3000 option and the (US only?) mobile charger has been cut to 120V only.

How's that for symbolism?

ETA: fair enough that they have to increase their prices, but not to locked-in customers!

 

[Lancelac]

Tesla always made pretty clear the options and pricing of such was not set until you lock in your car, BUT calling people well after they've locked in, a few days before their car goes into production is a bit much.

I was certainly not expecting the option prices listed on the 2009 spec sheet on Tesla's website to be the same as I'm going to pay (I'm #590), since I knew there would be an updated list of options and prices before I lock in a few months.

Will the extra 5k they get from each remaining 08' make up for the 10 canceled orders, and overall bad will this creates? I doubt it. They knew 2 months ago (when the bailout was passed) that most 2008s would be produced in 2009 and get better tax incentives, and yet they waited until now to spring it on people that they have to pay more...

 

[WarpedOne]

ETA: fair enough that they have to increase their prices, but not to locked-in customers!

I kinda agree.
But after all those new incentives from government you can still be 1000 USD "in profit" though.

 

[graham]

But after all those new incentives from government you can still be 1000 USD "in profit" though.

This is not the case in my situation. Plus since this adds several thousand dollars pre-sales tax, it adds even more once that is added in. Not to mention that it is still unclear if the $7500 tax break is exempt from AMT. If it is not, none of the Tesla buyers are eligible for it anyway.

Part of "the deal" for allowing Tesla to hold tens of thousand of dollars for 2 years waiting for their product was getting to lock in your price early. Early people got a lower price in exchange for helping finance the company to get off the ground. Coming up with a way to essentially raise the price at the last minute is reneging on that deal.

 

[doug]

Tesla always made pretty clear the options and pricing of such was not set until you lock in your car, BUT calling people well after they've locked in, a few days before their car goes into production is a bit much.
...
Will the extra 5k they get from each remaining 08' make up for the 10 canceled orders, and overall bad will this creates?

Yeah, I have to assume someone made that calculation. How many customers does this affect? 300 or so? Many of whom have had deposits down for a long time. It doesn't seem worth it (to me, an outside observer), but Tesla must have deemed this necessary for their midterm goals.

 

[WarpedOne]

300 x 5.000 USD = 1.500.000 USD

How many will cancel their order because of this? Doesn't matter, new orders will come in. Trouble is they are braking their word. You can only loose the credibility once and this might have negative impact on the long run. How many will put down the deposit for Model S if after a year the price might go up?

They would be far better off if they would just offer new options at higher price like new interior for 5000 USD or carbon fiber inserts for 8000 USD. Some might choose to go for them and reduce the financial leakings. Ofcourse, if they aren't too high already. Isn't Elon supposed to have deep pockets? Not deep enough?

 

[SByer]

The only thing I'm really ticked off about is that the information from Tesla has been really slim and scant this week. I also feel for Tom and Cathy - they are definitely being yanked around.

I was always surprised the radio options weren't bundled (though it's not like I'd ever pay for a sat subscription). I'm also wondering if there's a head unit change as part of this, and maybe the cost changes reflect this. Who knows? We're not getting enough info.

If this offers me the opportunity to choose a carbon fiber top instead of the painted one, or the black sport wheels instead... that would be nice. I'm clearly far enough down on the list (482 last I heard) that they haven't gotten to me yet. It's been a mushroom week.

 

[Lancelac]

I didn't even know that anyone had a choice to have the stereo unbundled. I've been annoyed by that since I checked out the 09' spec sheet 6+ months ago. I don't want a NAV unit, a) it's of limited use for a car that can't really go on road trips. I've lived in Chicago for 20 years, I know my way around, b) I can just use my I-phone for GPS in a pinch. I also don't want SAT radio. The reception on the free internet radio I get thru my I-phone (at least in my neck of the woods) is already more reliable than SAT, I've tested them side by side in a friend's car.

All I really want is better speakers and a better head unit, and from what I hear about the "upgraded" unit, it stinks. I could replace all the speakers and unit with better quality stuff for less than I end up paying for the "bundle". I'm probably not going to get the stereo upgrade and spend the money (or half of it) doing the upgrades I want.

 

[vfx]

Isn't there a contract breaking here?

This type of petty action does not sound like a company that (as Elon says) will be making profit soon.

A company that has been in controversy for so long can hardly want to piss off buyers so royally.


TTAC should have a field day with this one.

 

[JRP3]

Yes, I hope the bad press that this generates is worth the extra revenue for them, or vise versa. Terrible idea.

 

[TEG]

But after all those new incentives from government you can still be 1000 USD "in profit" though.

Although news of the $7500 has been out for a while now, so some may have already started to "count their chickens" and figured it was all coming to them.

 

[donauker]

It would appear that this topic of discussion and the comments by various owners has been deemed to not be appropriate for discussion on the Tesla Motors owners forum and have therefore removed by the censors.

It seems they prefer that owners state their opinions in a more open environment.

 

[Palpatine]

The new wheels look horrible to me.

https://www.teslamotors.com/display_data.php?data_name=roadster_wheels

They must be doing that so everyone selects the option for the $2,300 Forged Alloy Tesla Wheels (silver or black finish).

 

[doug]

Jason Calacanis posted an email from Elon to owners about the new options available:
Tesla Customer update…. The Jason Calacanis Weblog

There are lots of new options related to the Roadster Sport. Some already available options are more expensive (~2x). Some things that were previously included as standard are now listed as options. (For example the special Tesla slanted spoke wheels are now a $2300 option.)

There doesn't appear to be any mention of how this affects current 2008MY customers. But looking over things, if you expected a 240V mobile charger (used to be $350~$500, now $1500) and all the other things that used to come standard, you'll be paying at least $7700 more. If you had previously locked in some options like premium color paint and the $800 "seven-speaker premium sound system tuned for Tesla Roadster cockpit" with the standard radio, you'll now pay an additional $3200 over what you would have paid before and have a radio you don't want. So that's a total of $10,900 more for effectively the same options over your previous "contract". And that's before taxes. I see nothing wrong with Tesla raising their prices. But it doesn't seem like a good thing to do to your early customers that have already locked in their options. I hope we can get some clarification on this.