I live in the US. I’ve noticed that Tesla pricing (cars and software) varies drastically by country after converting the price to USD. I can understand a higher price in other countries, but only if this price includes any additional taxes or features. However, what really triggers me is that Teslas sold in China are HUGELY less expensive than one made in the US, even before China govt grants. I also recal the MY was significantly less expensive in Germany. Can someone help me understand this or are customers in certain countries, getting ripped off? If pricing varies by “demand”, how is this any different than a Ford dealer adding markup to a Lightning or a Chevy dealer to a C8 Corvette? Been lots of discussion how Tesla customers are not subject to this, but I think BS.
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TESLA PRICING
- Thread starter Cookie71
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exxxviii
Member
It's entirely likely that the cost of labor for manufacturing in China, plus the lower supply chain costs, contribute to lower COGS.
Also, Tesla is probably not using cost-plus, competative, or markup pricing. They are probably using demand or premium pricing. This makes the most sense, given where they are in the industry, and these would lead to different pricing points between local markets. This is the way a lot of luxury brands price as well. Very different from a race-to-the-bottom, commodity, cost-plus pricing mindset.
Want your mind blown a teensy bit... The cost to manufacture a Porsche 911 Carrera is only a few thousand dollars USD lower than the cost to manufacture a 911 GT3 RS, but the retail prices are approaching $200K apart.
Also, Tesla is probably not using cost-plus, competative, or markup pricing. They are probably using demand or premium pricing. This makes the most sense, given where they are in the industry, and these would lead to different pricing points between local markets. This is the way a lot of luxury brands price as well. Very different from a race-to-the-bottom, commodity, cost-plus pricing mindset.
Want your mind blown a teensy bit... The cost to manufacture a Porsche 911 Carrera is only a few thousand dollars USD lower than the cost to manufacture a 911 GT3 RS, but the retail prices are approaching $200K apart.
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EM and Tesla will charge whatever the market will bear. As long as Tesla had wait lists that were months long they could keep raising the price indefinitely. The wait lists have pretty much gone away and you could by inventory cars pretty easily this past month.
High gas prices also goosed demand until recently. According to AAA gas prices peaked on 6/14/22 at 5.01 per gallon. Right now they are just a shade over 3 dollars per gallon. My guess is will will see prices below 3 dollars any day now. That has hurt demand for EV's.
In years past the price of TSLA stock was going up like there was now tomorrow. People were speculating on the stock and using the profits to buy the cars. This past year the stock prices has tanked about 70%. That game is over for the time being.
High gas prices also goosed demand until recently. According to AAA gas prices peaked on 6/14/22 at 5.01 per gallon. Right now they are just a shade over 3 dollars per gallon. My guess is will will see prices below 3 dollars any day now. That has hurt demand for EV's.
In years past the price of TSLA stock was going up like there was now tomorrow. People were speculating on the stock and using the profits to buy the cars. This past year the stock prices has tanked about 70%. That game is over for the time being.
ucmndd
Well-Known Member
thesmokingman
Active Member
WTH are you triggered and angry???
It costs less there cuz it cost less to make besides a variety of other real reasons.
The Chinese cars use less energy dense batteries. Tesla also us going to charge what each market will bear
Brian-MS90D
Member
I work for a global company (sells and manufactures globally) and it is very common for globally regional price differences well above currency conversions and tax differences. The reasons include but are not limited to different supply chain cost structures (a topic in itself), different local market objectives (local competition pressure, goals for market share or profit, etc), fixed costs differences (land, building, insurances, and more), and more.
There have been a few times in my career where we lost business in the US because a global customer price shopped and found a better deal by ocean freighting equipment in from Europe or Asia made by my company there. In other words, my company ended up competing against itself. And, the opposite has happened (equipment purchased from our USA office and shipped globally).
You suggest that price discrepancy among global regions should only be attributable to "any additional taxes or features." However, these are often the least attributable factors.
Maybe someday there will be a better "global price." However, that is nearly impossible today for complex manufactured items (without price gouging or operating at no profit in one market or another).
This is very, very different than dealerships in one jurisdiction selling vehicles above MSRP due to demand greatly outstripping supply. First, Tesla is selling their vehicles within each jurisdiction for the same non-negotiable price. Price increases are across the board in that jurisdiction. Rare, time limited price discounts are available to anyone buying and with the goal of maximizing production (not limiting production as a way to increase price/profit). Second, legacy auto MSRP's vary by global jurisdiction as well (for all the reasons I noted above). Third and as I noted already, even if Tesla tried to make a global price, for all the reasons I already listed this would end up over-charging customers in one jurisdiction in order to ensure a profit in Tesla's most costly jurisdiction.
I would also note that my company has never increased price because of temporary insufficient supply of our product. That practice actually violates our company's ethical standards and sales managers can be terminated for violating this. I will not go so far as to declare this universally unethical or morally objectionable, but it is not a fair business practice and this is why the legacy auto dealership's practice is so frowned upon by almost all consumers (except for the few with financial means who appreciate being able to jump to the front of the line by paying the dealership's mark up).
There have been a few times in my career where we lost business in the US because a global customer price shopped and found a better deal by ocean freighting equipment in from Europe or Asia made by my company there. In other words, my company ended up competing against itself. And, the opposite has happened (equipment purchased from our USA office and shipped globally).
You suggest that price discrepancy among global regions should only be attributable to "any additional taxes or features." However, these are often the least attributable factors.
Maybe someday there will be a better "global price." However, that is nearly impossible today for complex manufactured items (without price gouging or operating at no profit in one market or another).
This is very, very different than dealerships in one jurisdiction selling vehicles above MSRP due to demand greatly outstripping supply. First, Tesla is selling their vehicles within each jurisdiction for the same non-negotiable price. Price increases are across the board in that jurisdiction. Rare, time limited price discounts are available to anyone buying and with the goal of maximizing production (not limiting production as a way to increase price/profit). Second, legacy auto MSRP's vary by global jurisdiction as well (for all the reasons I noted above). Third and as I noted already, even if Tesla tried to make a global price, for all the reasons I already listed this would end up over-charging customers in one jurisdiction in order to ensure a profit in Tesla's most costly jurisdiction.
I would also note that my company has never increased price because of temporary insufficient supply of our product. That practice actually violates our company's ethical standards and sales managers can be terminated for violating this. I will not go so far as to declare this universally unethical or morally objectionable, but it is not a fair business practice and this is why the legacy auto dealership's practice is so frowned upon by almost all consumers (except for the few with financial means who appreciate being able to jump to the front of the line by paying the dealership's mark up).
Almost everything is priced to local markets. Big companies have a lot of MBA's whose job is to figure out how to maximize profit in each market where the company chooses to compete. It works best (for the companies) when there are legal/regulatory/shipping cost barriers that prevent customers or arbitragers from buying in the "cheap" market and moving the product to the "expensive" market themselves. Plenty of those barriers for cars. The only place it doesn't happen so much is in world commodity markets (think oil) where prices are mostly set globally in an auction-like setting.
In short, not remotely surprising or unusual.
In short, not remotely surprising or unusual.
I would also add as I also work for a Fully American made Manufacturer of Premium machine tools I as do my customers Value that USA commitment. Few if ANY high end products are made in the USA so I accept that we may not offer the Cheapest product.
Difference is that the manufacturer is also seeing the pricing boost... whereas with dealers, the local dealer eats into the manufacturers' profit by markup
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