Tesla cuts car prices by up to $5k

https://www.theverge.com/2020/5/27/21271607/tesla-model-3-e-x-price-cuts-north-america-china

by xoxoy • 6 years ago

88 106 6 years ago

mcot2• 6 years ago

Besides the economic slowdown I suspect some of this is also the Model Y is eating into sales of the other 3 and this price adjustment is mostly to differentiate them a bit more.

brianwawok6• 6 years ago

Makes sense. Model Y is picking up steam. I doubt they are selling 100% production of the other models (Y is eating a bit into sales of all 3). S and X are both in need of a refresh, they have worse battery tech than both the 3 and Y and missing some of the cool Y features (heat pump, octovalve).

Current wait is 8-12 weeks on a Y, and only a week or two on the rest.

In line for my first Tesla (a y). It has been a very different car buying experience!!

new_realist2• 6 years ago

If you expect reliability and quality, you also find the ownership experience to be different. I have owned three.

dvdbloc• 6 years ago

Please elaborate

amcoastal• 6 years ago

Good luck! Tesla's are marvels of technology, but the lockdown they have on maintenance and repair -- which includes extremely high costs -- is enough to shy me away until we get a 'right-to-repair' law.

beamatronic2• 6 years ago

I would just settle for a full pipeline of replacement parts!

revnode2• 6 years ago

You are absolutely right, but it's also not as bad as it was before. You can now buy "unrestricted" parts. Before, you couldn't even buy an air filter.

jm48• 6 years ago

There is hardly any maintenance on them. I had a minor wind noise issue when I first got it that they took care of in a couple hours. Since then, it’s been washer fluid and tires.

The kinds of routine maintenance and repair items you typically don’t want to take your car to a dealer for aren’t much of a thing on a Tesla. Then there are the big ones where you probably do want the dealer working on it. Like if some significant mechanical problem occurs I want Tesla working on it. Not to mention, a lot of the more expensive repairs are going to be covered by warranty or insurance anyway. Sure, they’re expensive, but so is everyone else.

If you bought a new or new-ish Ford and there was a mechanical failure would you want to take it to a Ford shop or a random mechanic? Yes, there’s a significant number of people in the latter group, but they’re going to feel that way no matter what they drive. Most of them probably don’t buy new cars because of it. Many people who buy new cars either don’t care or actually prefer to go to the dealer.

jgalt2122• 6 years ago

the lockdown they have on maintenance and repair

This is not endemic to Telsa, or even to the auto industry. It's in $800K tractors as well.

https://www.bloomberg.com/news/features/2020-03-05/farmers-f...

cptskippy6• 6 years ago

which includes extremely high costs

Yes that's a Tesla exclusive...

I took my Leaf in for a recall repair and they quoted about $800 to replace all fluids and filters. They wanted $120 to swap out the $9 cabin filter from under the dash that took me all of 20 minutes to do. They encouraged me to spend another $600 to replace a door handle because of an engineering defect that was purely cosmetic and easily fixed with a dab of hot glue.

lazyjones6• 6 years ago

Current wait is 8-12 weeks on a Y, and only a week or two on the rest.

Here in Europe it's August for all of S/3/X.

brianwawok6• 6 years ago

You are waiting for Berlin to go up right? Or is that next year?

radicalbyte• 6 years ago

The Y isn't even coming out in Europe for another year. That's probably good because it's the only viable Tesla for me and I'll probably have the budget for it next year.

andrewmunsell4• 6 years ago

There's a couple areas where Tesla needs help, and the two I've experience so far waiting for my Y is logistics & customer service.

They've had extremely lousy communication so far with the delivery.

I was originally supposed to have the car on Memorial Day, but they called the day before saying it wasn't in WA (where I live) yet. When I called back on Memorial Day and asked where it actually was, they told me it got on a truck that morning. Logistically, if they knew the car wasn't getting on a semi anytime soon, why could I schedule a delivery appointment?

Yesterday, they re-scheduled my delivery (which is supposed to now be tomorrow) from the service center to a direct home delivery without notifying me. Of course, I had to call them to confirm and ask whether they were going to try and fit a semi truck on the narrow city streets where I live or if they were going to drive the car itself to me, but the delivery specialist has no clue.

Hopefully things go as planned tomorrow and there isn't another delay, but the communication so far has been worse than my experience dealing with a regular car dealership.

That being said, I'm looking forward to the Y and there's a reason I'm buying a Tesla instead of something else. I can't complain too much since the timing of the delivery (as long as it isn't delayed too much more...) is fantastic since my existing lease ends in a week, but I'm looking forward to actually driving it and forgetting about this headache.

If Tesla figures out the logistics & customer support (and QC...), they'll be worlds ahead in the buying experience, but for now most other car dealers coddle you much more (with the exception of the negotiation process).

dawnerd3• 6 years ago

It seems highly dependent on which service center and who is assigned to you. I places two orders early this year and the first one the guy didn’t really respond to my emails at all but the second one was very responsive and proactive.

Regardless they really really need to work on this.

cptskippy6• 6 years ago

I'm not trying to excuse their poor communication, I think the problem is that they have given the Tesla Stores a lot of autonomy in managing deliveries. That means the mothership is reliant on the Stores for status updates.

That autonomy has benefits for some. In my case, our Model 3 was initially scheduled to be delivered to a Tesla Store an hour from our house. We called to see if we could have it delivered to the location 15 minutes away, they instead offered to deliver it to our home.

The weekend before delivery we received a call from the location 15 minutes away saying they had the car and we could pick it up immediately if we didn't want to wait for them to arrange delivery.

awill• 6 years ago

The Model S came out in 2012. Surely it's time for a full redesign, or at least a refresh with their existing battery tech etc..

gpm2• 6 years ago

People keep talking about batteries getting cheaper, how likely is it that this largely reflects changes in the cost to Tesla to produce these vehicles? On the flip side how likely is it that this is cutting substantially into Tesla's profit margin?

xoxoy• 6 years ago

pricing rarely has anything to do with cost to produce, especially for goods are aren’t perceived as commodities

mywittyname• 6 years ago

Like how the V8 Mustang is a 10k premium over the turbo four, there's absolutely not a 10k difference in production costs.

lazyjones6• 6 years ago

Tesla have claimed before that it does.

“When we launched Model X 75D, it had a low gross margin. As we’ve achieved efficiencies, we are able to lower the price and pass along more value to our customers,” Tesla said in a statement. (2017)

In this case, selling excess inventory/capacity seems a more likely reason, perhaps also the introduction of new Model S/X variants/features.

clouddrover6• 6 years ago

They're trying to boost sales with price cuts:

https://www.reuters.com/article/us-tesla-prices/tesla-cuts-p...

All car manufacturers have seen sales decline due to the coronavirus pandemic.

gpm2• 6 years ago

No doubt, I'm not asking about causality here, just wondering how their project margins are going to be affected.

natch3• 6 years ago

This has always been their stated plan, to pass on cost savings to customers as they get more efficient and profitable. They did some similar cuts last year. Nice to see it continuing.

akmarinov2• 6 years ago

They also raise prices from time to time, it's not all cuts.

natch3• 6 years ago

Right, depends on various factors obviously.

anthony_r• 6 years ago

If this is the stated plan then I really do not understand why the stock behaves like this was the next Apple (i.e., a company with massive margins).

nicoburns2• 6 years ago

You're assuming that people are expecting a monetary return on their investment. I suspect a lot of Tesla investors are expecting a return in the form of reduced problems due to climate change.

3pt14159• 6 years ago

Because Tesla makes the best electric cars and as they reach economies of scale total cost of ownership will dominate fossil fuel cars. They need to lower prices now because Teslas are still relatively expensive compared to, say, a Toyota; but in the long run they won't need to lower prices further than a certain point. Plus Musk sees angles that few others do and a platform of mobile sensors operating around the planet is inherently comercializable.

lazyjones6• 6 years ago

What all media (except Reuters...) failed to report: free Supercharging seems to be gone for S/X.

brianwawok6• 6 years ago

I think someone did the math and you would need to supercharge 100k mikes to pay 5k. The cash is a better deal for almost all.

lazyjones6• 6 years ago

It's a convenience and mental thing. I am more likely to go on long tours/holidays with my S knowing it's free (and bragging about it), so the calculation doesn't really work out.

jm48• 6 years ago

Personally, I’d rather have $5k taken off the purchase price. I got 7500 free supercharger miles with mine and most of them are going to expire. I go on some road trips and use super chargers, but most of the time you’re charging at home. You’d have to do a hell of a lot of supercharging to spend $5000 on it. Frankly, if you can’t charge at home you probably shouldn’t buy the car.

bryanlarsen• 6 years ago

Tesla is going to get a huge amount of free publicity today. First from the SpaceX manned launch today who are going to be driven to the pad in a Model X and then later this evening from Jay Leno's Cybertruck test drive episode.

ghastmaster• 6 years ago

That's a very expensive way to get free publicity.

cptskippy6• 6 years ago

All of Elon's companies give free publicity to one another. They all somehow manage to keep in the active news cycle.

There was an announcement last week about the Boring Company in Vegas that mentioned Tesla's would be used as people movers.

Shivetya• 6 years ago

Free supercharging is not on the X or S now. That is a significant change.

Supercharging Max/ Payment Type200 kW max; Pay Per Use

akmarinov2• 6 years ago

I think that's a good thing. Less people charging exclusively at the superchargers due to it being free - less queues. Also they use a lot of the Supercharger money they get to build more Superchargers.

trade_unionist• 6 years ago

I hope Musk is still cool once Tesla is a monopoly. Companies have a tendency to turn on their users/customers once they get giant.

brianwawok6• 6 years ago

You can always hop brands once someone gets too big and turns evil.

clouddrover6• 6 years ago

Tesla has gone from being the number 1 BEV manufacturer in Europe to now being number 3. Soon Hyundai will also overtake them in Europe and Tesla will fall back to 4th:

https://www.schmidtmatthias.de/post/april-2020-european-elec...

So don't worry about Tesla becoming a monopoly. It's not a practical reality.

steelframe3• 6 years ago

Tesla was amazing and unparalleled from about 2012 to 2018. In the U.S., since the Kona/Niro EVs, I-PACE, e-tron, and Taycan have shipped along with the Electrify America rapid charging network, Tesla no longer has a corner on the EV market. A fully-decked-out Model S costs the same as a base Porsche Taycan 4S. I'd challenge anyone to test drive both cars configured at the ~$115k price point and then come back and tell me you wouldn't chose the Porsche.

mavhc2• 6 years ago

So combined Volkswagen, Audi, ŠKODA, SEAT and Porsche have outsold Tesla? Doesn't really sound like an achievement, except if you're in charge of mergers and acquisitions.

rcMgD2BwE72F3• 6 years ago

Or maybe Tesla couldn't ship car to Europe for delivery in April -- contrary to the VW group, whose sales are mostly local stock and who don't have to ship the cars across the Atlantic.

Also, Tesla delivers most its cars in Europe in the first month of the quarter. So comparing VW and Tesla over two periods with only partial quarter sales makes very little sense. Matthias Schmidt has known this for years, for some reason, he still prefer not to tell his audience about such a huge bias in the data. Weird.

sudoaza• 6 years ago

After the "get back to work" fiasco Musk is dead to me

nojito• 6 years ago

Much more information here.

https://www.reuters.com/article/us-tesla-prices/tesla-cuts-p...

Can we update the url?

archeantus• 6 years ago

If they gave me the 0% financing option like the other auto makers are doing, I’d buy a Tesla today.

oblio• 6 years ago

In Europe the based model 3 is still €47k. So about $50k. And that's the starting price :(

That's an almost 33% higher price than the US version.

varjag• 6 years ago

VAT accounts for the bulk of the difference here.

cptskippy6• 6 years ago

Would VAT apply to cars coming out of their German Gigafactory?

objclxt• 6 years ago

Advertised prices in the US do not include any taxes, whereas in Europe they have to account for VAT.

The average rate of VAT in Europe is around 21% - it represents the bulk of the difference in price. The rest you can put down to currency hedging, import duty, and transport to ship the cars from the US.

guerby• 6 years ago

I think it's because of

- 10% tax/duty on imported cars from the USA to the EU (1)

- shipping costs from USA to EU

- price are with VAT included in EU (all consumer products), so around 20%

When the cars are made in Berlin (mid/late 2021 if Tesla is to be believed) price will probably go down by a significant amount for EU buyers.

And there will be more non Tesla BEV models in the next few years, another factor for Tesla to lower prices.

Peugeot e-208 seems to have a nice success, and Volkswagen will soon have lots of BEV models.

(1) https://www.carfax.eu/article/customs-clearance-and-import-t...

Disclaimer: I own a Tesla Model 3 SR+ since last september, in France.

jmacd• 6 years ago

It seems pretty obvious that the previous prices were inflated to capture the federal and other subsidies. It's clear those aren't coming back, so they are adjusting to the actual market forces.

Tesla cuts car prices by up to $5k

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