[UK] Price cuts

[init6]

I'd hang fire. The new Y-0 (pronounced Y-nought) is due out any time soon. USS makes a return and replaces Vision for all functions - even Netflix! Although apparently only bats can follow the plots.

In 6 months time the car will possibly have some more functions than a current car. Tesla don't do normally big refreshes, they tend to be incremental changes.
If you like the car as it is now and the price it is, then buy now.

 

[Artiste]

Tesla will want every vehicle sold by end of quarter (to keep Wall Street happy). So all inventory will be sold (as in "paid for") by 31-March

So why are there still scores on new M3 and MYs in inventory?

 

[CWT3LR]

So why are there still scores on new M3 and MYs in inventory?

They have gone from 4 days of sales in stock, to 16 days, and rising. Further price cuts almost inevitable to reduce stock holding costs, and also because Tesla don't have dealers they don't really have secure storage.

 

[Medved_77]

They have gone from 4 days of sales in stock, to 16 days, and rising. Further price cuts almost inevitable to reduce stock holding costs, and also because Tesla don't have dealers they don't really have secure storage.

The delta between produced vs delivered was 18k units, or 4% worldwide for this quarter. That's just new cars though so not surprising to see many genuinely new cars available in inventory but for some reason, Tesla also considers demo cars, some with just under 4k miles to be new too.

Further price cuts are indeed likely, and if that can spur sales, then not really a bad thing given their current margins, especially on the Y.

Good news for new buyers who can buy at reduced prices without long wait times anyway.

 

[HaggisMan]

Up until a few weeks ago I also noticed a few more used m3p available for sale from 2021 and newer. Now there is only 1 solitary high mileage example. I think there is definitely some “management” of advertised stock going on here.

 

[Alan J]

I drove past Tesla Glasgow earlier and there were literally hundreds of Cars in the lot, very unusual for the start of a quarter, wonder what's going on ?

 

[The_Cable_Guy]

I drove past Tesla Glasgow earlier and there were literally hundreds of Cars in the lot, very unusual for the start of a quarter, wonder what's going on ?

supply has overtaken demand i would imagine.

 

[HaggisMan]

Total guess but is this past quarter the first one where higher interest rates have really kicked in? Maybe would-be buyers are holding off for the time being given that monthlies have shot up.

 

[Adopado]

I drove past Tesla Glasgow earlier and there were literally hundreds of Cars in the lot, very unusual for the start of a quarter, wonder what's going on ?

The economy? People making ends meet rather than splashing out on "new things". People on strike (even "middle class" people)? Electricity price uncertainty? High interest rates? High insurance rates? Reduced financial advantage of going EV. Tesla excitement tainted by the realisation that they have turned out to be (shock horror) cars and not futuristic spaceships. Brand fans can now consider buying an EV from the old ICE brand they know and love. Persistent sense of anti Tesla mood in the press. Persistant sense of anti EV mood in the press. Elon Musk being a pratt. etc etc

 

[MrT3]

If they sell a cheaper Model Y or better in 6 months this will be a bad time. WHat do you think ? Is buying a demo car on discount a good idea ?

Personally I think there will be another price drop in a few weeks - I noticed the prices on the UK website were all £2k cheaper a couple of weeks ago for a few hours before it was pulled - a mistake or just premature?

Even without an official price drop the discounts they are currently offering on the demo cars aren't as good as the unused ones last week at the end of quarter. If I were you I would wait until the last week in June before ordering, with the ability to complete in a couple of days, and pick up a bigger discount and some free supercharger miles.

 

[Durzel]

I do wonder how finance companies are dealing with these price movements. Teslas are a known quantity at this point, we're not in 2019 where early adopters got great monthlies because no one knew the future value of them. We're in a the world that @Adopado describes, with interest rates jacked, where finance companies don't want to be holding the bag if/when Elon spontaneously drops the prices by another 10-15% - because he wants more volume.

If I were providing finance for one of these cars I'd want to err on the side of caution and charge higher premiums and assume a lower GFV.

I kinda feel like things are good to great if you're a Tesla shareholder, but if you're just buying a car there's a decent chance you're going to take a bath on the residuals during your time owning it, unless you buy used at a knock down price already.

 

[WannabeOwner]

So why are there still scores on new M3 and MYs in inventory?

I haven't seen the figures, but each quarter they sell more cars than the previous one - so if the percentage of "not quite sold" is staying the same that will be a larger number of cars each quarter

@Medved_77 said above that 4% of cars produced were not sold (worldwide), I reckon that's pretty tight! There must be some territories (e.g. UK) where they predicted more sales than the got, so will have proportionately more inventory in those countries.

UK being RHD they can't just move the cars - whereas they do have that option in EU countries

 

[2020M3SR]

I am wondering if now is a good time to buy a Model Y RWD considering the price cuts that happened and the end of quarter push. I can now buy a Demo vehicle for about 44k which is really good but I am wondering what they plan next if they have that many vehicles in inventory at a discount.

If they sell a cheaper Model Y or better in 6 months this will be a bad time. WHat do you think ? Is buying a demo car on discount a good idea ?

You'll get one for sub £40k if you wait until June IMO

 

[GeorgeSymonds]

I haven't seen the figures, but each quarter they sell more cars than the previous one - so if the percentage of "not quite sold" is staying the same that will be a larger number of cars each quarter

@Medved_77 said above that 4% of cars produced were not sold (worldwide), I reckon that's pretty tight! There must be some territories (e.g. UK) where they predicted more sales than the got, so will have proportionately more inventory in those countries.

UK being RHD they can't just move the cars - whereas they do have that option in EU countries

They’ve made more than they’ve sold every quarter for a year now. I think it’s accumulated to about 80k cars or 4-5% of annual production, or 2.5 weeks production. That’s not a case of they have 2.5 weeks production as inventory, it’s they have 2.5 weeks more inventory (it might be a bit more complicated as numbers have all grown, but I doubt by that much, they used to carry very little stock over). I also suspect given the number of demo cars that they’ve registered a load of cars for demo cars to boost sales, but that might be a regular thing.

I can’t see conditions changing much short term, so if you’re thinking of buying then middle of May the discounts will start to return if you can hold off. Some new cars have bigger discounts than the current demo cars do.

I’m just going to stir the tea leaves to see if there are any other predictions

 

[CWT3LR]

I haven't seen the figures, but each quarter they sell more cars than the previous one - so if the percentage of "not quite sold" is staying the same that will be a larger number of cars each quarter

@Medved_77 said above that 4% of cars produced were not sold (worldwide), I reckon that's pretty tight! There must be some territories (e.g. UK) where they predicted more sales than the got, so will have proportionately more inventory in those countries.

UK being RHD they can't just move the cars - whereas they do have that option in EU countries

That 4% of cars produced not sold is additive to the cars produced but not sold the quarter previously though. That's why days of stock held has now increased. They are continuing to ramp production faster than orders are being received. The only way to address that imbalance is to reduce the rate of production increase (which Musk seems to reject, given plans to increase production in Germany and the US) or to reduce prices to stoke demand.

 

[Exy1]

The £5k discounts on M3 LR have all disappeared so back up to £51k.

To be fair there are precious few cars on the website so providing Tesla are listing them all they did shift most of the LR's!

Stacks of SR+/RWD kicking about though albeit quite a few with miles on them, are they delivering them by road now 'Delivery Miles'.

I'm thinking the sweet spot will be end of September or whichever quarter the Highland gets released, perhaps the remaining 12-15% of margin will be sacrificed for volume then.

Whichever way you look at it it's difficult to know when prices have bottomed out before I then have to wait for that to reflect in the 2nd hand market.

 

[init6]

I drove past Tesla Glasgow earlier and there were literally hundreds of Cars in the lot, very unusual for the start of a quarter, wonder what's going on ?

I was in Aberdeen SC this afternoon and there are no unregistered and only one '23 plate car. Perhaps the glut hasn't made it that far North.

Incidentally while we were Supercharging/drinking tea I overheard a salesman talking on the phone to a customer. He said that if the customer ordered now they could defer delivery until September. Not sure how that would impact the number of cars. Sounds to me something they'd do if they couldn't deliver until September - although the sale would be on the books now I suppose.

 

[AndyFov]

Perhaps the customer was saying "I'd like one, but won't the Highland be worth waiting for?", and the salesman just wanted the deposit today?

September seems like it ought to be a long way away, still, but it's only 5 months.

 

[Utumno]

if the customer ordered now they could defer delivery until September. Not sure how that would impact the number of cars. Sounds to me something they'd do if they couldn't deliver until September - although the sale would be on the books now I suppose.

Sale would be booked on collection date, not order date. Hence the end of quarter pushes.

 

[init6]

Perhaps the customer was saying "I'd like one, but won't the Highland be worth waiting for?", and the salesman just wanted the deposit today?

September seems like it ought to be a long way away, still, but it's only 5 months.

No, that was the salesman's opening gambit - should have made it clearer. This was coming from Tesla not the customer.