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tesla msrp pricing..

Discussion in 'Model S: Ordering, Production, Delivery' started by stealthnhawk, Feb 8, 2013.

  1. stealthnhawk

    stealthnhawk Member

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    a question here..
    how will tesla be able to sell car at msrp once supply > demand...? I guess Tesla will deliver all the order by end of this year...but how about next year? won't price have to come down like every other car maker?
     
  2. Krugerrand

    Krugerrand Active Member

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    1.) There is no 'supply' and never will be. Tesla intends on being custom order always.
    2.) Reservations continue to come in daily. So by the end of this year, there will still be reservations to build. How many depends on how much backlog Tesla wants to maintain - 2 months? 3 months?
    3.) The only way the Model S becomes cheaper is if the battery cost suddenly drops drastically.
    4.) Do not think of Tesla like every other carmaker. They are not, therefore play by their own set of rules.
     
  3. Kaivball

    Kaivball Member

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    They are a built to order company.

    Unlike other car companies that produce a lot of cars to forecast and fill dealer lots, Tesla only makes a car when they have an order.

    So they are not compelled as easily as others to lower prices I.e. sell below MSRP when inventories grow.

    You may have noticed, there is no "invoice" price for the car.

    Dealers pay invoice price (and get some kick backs in the rear) to the factory. That's what the factory makes.
    Then dealers attempt to sell as close or above MSRP.

    Tesla is the dealer and the factory. There is only one price.
     
  4. stealthnhawk

    stealthnhawk Member

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    but for 1) even as custom car maker, you have expense and you don't want to be idle. I feel that tesla need to operate with certain output to be profitable.. is that right ?
     
  5. artsci

    artsci Sponsor

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    The idea is to build a less expensive car down the road, not lower the price on the Model S. So the whole of Tesla production -- S, X, and a mass-market car -- is the way to think about supply and demand. You have to give up the old car sales model -- it's a new world a coming.
     
  6. Yuri_G

    Yuri_G Member

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    Yes and Musk has said that is around 8000 cars per year. The goal is 20,000 cars per year and reservations show that this rate is possible in 2013 and beyond, given increasing demand.
     
  7. strider

    strider Active Member

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    Apple doesn't discount except at model changes and supply > demand there.

    If Model S demand slows down they'll shift the resources to Model X - like not add a second production line for Model X - just use the S line and swap it back and forth. Yes, if demand truly falls below a baseline they'll start building some cars on spec and having them near dealers for impulse buyers. I don't think "discounts" are in the cards. If you can't bring yourself to pay retail then start scouring the used market.
     
  8. carrerascott

    carrerascott FUEL FTR

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    Maybe Tesla needs "Student pricing" like Apple uses. ;) Hope it's more than $50 or $100 off a Model S, though!
     
  9. stealthnhawk

    stealthnhawk Member

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    thanks all for reply. I am asking bc i don't want to buy something and a few months later, it's on discount for like $1k or $2k.. I like the fact that the price is same for everyone.. no need to deal or haggle..
     
  10. aviators99

    aviators99 Model S - R140

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    So far, the price has *increased* by more than $2500!
     
  11. mattjs33

    mattjs33 Member

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    It might be worth noting here that the domestic automakers learned a long time ago that building cars to order is not cost effective. You can still do it, but they'd rather not.

    Who'd they learn this from? The Japanese. You can't order a Japanese car like you want, never could. You tell the dealer what you want, and they find one like that in dealer stock somewhere.

    Build to order is great if you're Ferrari, but Tesla is not Ferrari. Tesla is aiming for much higher volumes, and this strategy flies in the face of Musk's desire to put an electric car in every garage. The manpower and logistics costs to do so in their current manner would be staggering.

    I grow weary of this talk that Tesla is different and changing the world doing things their own way. The reason things are done the way they are is because everyone's had 100-plus years to figure out the most efficient way to build and distribute automobiles in volume. The entire rest of the world is not wrong, all in the same manner. It doesn't make sense.

    The Japanese are noted for their efficiencies. Take note.
     
  12. joshuaeven

    joshuaeven Member

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    Not entirely true. I special ordered my 2009 370z. There was not a single pewter with orange leather car available in the country when I went in to purchase. I put 10% or so down, and they commmunicated with the factory to have the next similarly equiped pewter unit have orange leather interior installed. The car came in from Japan a month later.
     
  13. tdiggity

    tdiggity Member

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    Fighting back | The Economist

    BMWs are built to order 6 out of 10 times. Tesla isn't building millions of cars like the Japanese. The profit per car on a Japanese car is probably less than Tesla or any luxury brand as well.
     
  14. Krugerrand

    Krugerrand Active Member

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    A couple of things;

    Mr. Musk has never said he 'personally' (as in through Tesla) wanted to put an electric car in everyone's garage. If that's what you think he said, you've completely misinterpreted the goal of Tesla. Rest assured, Tesla can and will continue to be by order only and as long as Mr. Musk is driving the ship, he'll make profit happen.

    The Japanese are efficient for a lot of reasons, one of the biggest being cultural differences.

    I have never been able to get a car/truck configured the way I want from a domestic automaker, despite their gobs of inventory. They decide what the majority will want and that's what they make and market, period, end of story. And when they have leftovers at the end of the year, they give them away.

    If domestic automakers are so good at what they do, so efficient et al...why'd they need to be bailed out?
     
  15. jhs_7645

    jhs_7645 VIN: #3305

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    You're right.. it'll never work. The whole electric thing is a fad, the other auto manufacturers have had over 100 years to advance the technology and have not, Tesla cannot go around saying the entire automotive industry and it's decades of experience is wrong. They should close up shop now.

    Anybody want to by a used Model S P85?
     
  16. jkirkebo

    jkirkebo Model S P85+ VIN 14420 EU

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    VWs are built to order in Europe. And VW sell A LOT of cars in Europe. Same goes for BMW and most other European car manufacturers.
     
  17. gregincal

    gregincal Active Member

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    I'm sorry, there is no way it is more efficient to build lots of generic cars and have them sitting around doing nothing, and then have to have sales at the end of the year to clear them out. They've been doing it this way for most of the last 100 years because the logistics were not in place to do it any other way. They continue to do it now because they have an entrenched system with dealers who prevent them from doing it any other way. Just in time manufacturing has proven to be a much more efficient way of doing business, and almost every other industry has switched to that way of doing things.
     
  18. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    That actually isn't true. You can order a Japanese car the way you want, but the dealer will do everything in his power to convince you otherwise. Because of the way the distribution model works (factory-->country-->region-->dealer) the region places orders country which places the order with the factory for delivery in the quarter after next based on what they guess the dealer want. A custom order could be placed by the dealer through the region at that time. However, it would be about six to nine months before the car arrives.
     
  19. mattjs33

    mattjs33 Member

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    A few responses: the domestic automakers weren't the only businesses to fail/go bankrupt during that time. And there were a lot of reasons for that, not just high inventories. Second, I sold Hondas for a time, and there was no such thing as a custom order. Third, I never said tesla would fail or that EVs were a fad. I simply stated that I think that at volume Tesla will eventually find their distribution model to be grossly inefficient, a view shared by others here, and there are sound reasons for thinking so.
     
  20. Krugerrand

    Krugerrand Active Member

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    Correct. But that's what we're discussing. If you want to discuss some other industry, I'm happy to and apply the same to them.

    Correct, but high car inventories certainly played a role, didn't they?

    Time will tell. My money is on Mr. Musk. I can understand your pov just as well from this side of the fence. :wink:
     

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