Model Y is now cheaper than a 2023 Premium AWD ER

[Mach1E]

Well, from a lowly, poor, state employee, under $150K person, I can afford both my current $76K '22 Lightning Lariat and $56K '23 MME Premium.

Lightning will get me a $7500 tax credit for 2022 plus $3750 state/utility rebates which drops the cost to around $65K.

My incoming MME will be here next month and it gets a $6000 PCO + $7500 tax credit + $2000 state rebate = $40K net.

Nice!

But still, “many” won’t qualify.

“Many” doesn’t mean “all.” It doesn’t even mean “most.”

It just answers the question that was asked, “how do you get to a $15k price difference.”

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[Mach1E]

The Model Y went from $57,000 to $77,000 in 18 months. Even counting rising inflation, that's still mostly market adjustment (since buyers were paying it). Meaning, they were still making money at $57k, and will again after the price falls back down to normal levels. They just won't be making the WILD profit margins that the market allowed them to make the last 2 years. And now that they're getting a $7500 tax credit again, they probably won't have to drop prices a ton. Although they will surely be coming down some.

I agree about the boring look though, and Tesla risking saturating the market for it. Consumers like variety. Tesla is betting that consumers will be happy with a bazillion of the same model, which is their business model. I think they'll find demand topping out for it, at least in the US.

Were they making money at $57k though?

Without carbon credits and government credits, the margins are nonexistent at that price. Especially with the material cost increases.

Hopefully Tesla hires a designer to keep them relevant.

 

[RedOctobrrr]

Well, from a lowly, poor, state employee, under $150K person, I can afford both my current $76K '22 Lightning Lariat and $56K '23 MME Premium.

Lightning will get me a $7500 tax credit for 2022 plus $3750 state/utility rebates which drops the cost to around $65K.

My incoming MME will be here next month and it gets a $6000 PCO + $7500 tax credit + $2000 state rebate = $40K net.

Lightning Lariat - $1,350 per month

Mustang Mach E Premium - $900 per month

Living paycheck to paycheck but driving very nice cars - priceless

I'm half joking, but this is like the car equivalent of being house-rich. With the cost of normal everyday things like groceries being sky high, I can't imagine driving brand new, very nice cars unless you and a partner are bringing home $120-140k each (technically below the aforementioned $150k), at which point you're far from lowly, poor state employees.

I'm over $150k for my own personal salary and can't imagine buying this car at or below $120k given the $815 monthly payment I have on a SELECT of all things.

But to each their own! Some people sacrifice gadgets and other disposable income uses in favor of really nice cars, I did that when I was a 22yr old sailor spending 60% of my income on a nice car.

 

[dbsb3233]

Were they making money at $57k though?

Without carbon credits and government credits, the margins are nonexistent at that price. Especially with the material cost increases.

Hopefully Tesla hires a designer to keep them relevant.

By most accounts I've read, it appears so. Plus, they used up their tax credits at the end of 2019, so the Model Y was priced with no tax credit in mind. Highly likely they priced it to make a profit.

https://www.notebookcheck.net/Tesla...-reports-envious-profit-margins.596747.0.html

 

[Mach1E]

I hope it isn’t a stretch. I can’t imagine paying $70k for a vehicle with an income under $150k. When I made under $150k I bought a used Acura for $29k. And I live in a low cost of living state. But everyone’s priorities are different I suppose.

Retirees are probably the exception. Assets, not income.

But some people do spend half their income on cars.

 

[Mach1E]

By most accounts I've read, it appears so. Plus, they used up their tax credits at the end of 2019, so the Model Y was priced with no tax credit in mind. Highly likely they priced it to make a profit.

https://www.notebookcheck.net/Tesla...-reports-envious-profit-margins.596747.0.html

The credits I’m talking about are the carbon credits it sells to other manufacturers.

They weren’t profitable from car sales without them until 2021:

https://www.euronews.com/next/2021/...g-on-emissions-credits-but-semi-truck-delayed

“Tesla's current run of eight profitable quarters in a row wouldn't have been possible without the sale of carbon emissions credits to other manufacturers. This is the first time the company has been profitable even without credit sales since October 2019.”

 

[KevinS]

I'm over $150k for my own personal salary and can't imagine buying this car at or below $120k given the $815 monthly payment I have on a SELECT of all things.

But to each their own! Some people sacrifice gadgets and other disposable income uses in favor of really nice cars, I did that when I was a 22yr old sailor spending 60% of my income on a nice car.

Or they trade in a car, thereby reducing the monthly cost considerably.

Don't forget to like and subscribe for more of my life hacks!

 

[dbsb3233]

The credits I’m talking about are the carbon credits it sells to other manufacturers.

They weren’t profitable from car sales without them until 2021:

https://www.euronews.com/next/2021/...g-on-emissions-credits-but-semi-truck-delayed

“Tesla's current run of eight profitable quarters in a row wouldn't have been possible without the sale of carbon emissions credits to other manufacturers. This is the first time the company has been profitable even without credit sales since October 2019.”

They were also blowing through money building the Berlin and Texas factories at that point too though, which factors in to the big picture.

It is hard to boil it all down to whether a particular model is profitable, because there's so much else adding and subtracting from the company as a whole. It's even harder to tell with Tesla because they're so secretive with things. But on the Model Y itself, it does appear they had a significant profit margin on it right from the start. Although can't be 100% sure.

I think the Y became the bulk of their sales rather quickly too, suggesting that it's the bulk of their profits.

 

[BMT1071]

Lightning Lariat - $1,350 per month

Mustang Mach E Premium - $900 per month

Living paycheck to paycheck but driving very nice cars - priceless

I'm half joking, but this is like the car equivalent of being house-rich. With the cost of normal everyday things like groceries being sky high, I can't imagine driving brand new, very nice cars unless you and a partner are bringing home $120-140k each (technically below the aforementioned $150k), at which point you're far from lowly, poor state employees.

I'm over $150k for my own personal salary and can't imagine buying this car at or below $120k given the $815 monthly payment I have on a SELECT of all things.

But to each their own! Some people sacrifice gadgets and other disposable income uses in favor of really nice cars, I did that when I was a 22yr old sailor spending 60% of my income on a nice car.

Not sure what kind of financing you're working with but I pay $516/mo for my MME.

 

[Vulnox]

Not sure what kind of financing you're working with but I pay $516/mo for my MME.

Not sure how this post adds anything. You either bought a $37,152 MME after tax and everything on 72 months at 0%, or you traded in another vehicle to lower the principal or put down a cash down payment for the same. Others on here have probably paid cash in full on their MME. Others took 1.7% interest with a small down payment and have a high monthly payment, but are enjoying watching that $30k they could have put down accrue 3+% interest right now and chuckling at those that put all that money down on their down payment to have a lower monthly payment instead of having that cash make them money.

There are a lot of ways you could buy a car, or house, or whatever, and they were clearly just covering an example finance price for someone that just did a 60 or 72 month with a smaller down payment, which is likely fairly typical. Without down payment our MME would have been 900 on options or 1100/mo with 60 months @ 1.7%.

 

[Mach1E]

They were also blowing through money building the Berlin and Texas factories at that point too though, which factors in to the big picture.

It is hard to boil it all down to whether a particular model is profitable, because there's so much else adding and subtracting from the company as a whole. It's even harder to tell with Tesla because they're so secretive with things. But on the Model Y itself, it does appear they had a significant profit margin on it right from the start. Although can't be 100% sure.

I think the Y became the bulk of their sales rather quickly too, suggesting that it's the bulk of their profits.

That’s fair.

Would also stand to reason that the Y doesn’t cost much more to build than the 3.

 

[moparguy]

For MSRP?

At MSRP?

I am on this big dealers network group, this week 5 F150 Lightening were sold at MSRP, took each car few hours to sell in a 100K group.

So you go figure ....
I let go of my Mach E CA-RT1 last month, I didn't pick it up, my dealer sold it for $2k above, and that was in bundles of care/nitrogen bs etc ...

 

[HGxxx]

Right - My girlfriend and I visited a Tesla showroom before chosing the MachE. She saw a few white Teslas and laughed and laughed because they all looked like suppositories.

That's what my wife said of Tesla ?

 

[KevinS]

Not sure how this post adds anything. You either bought a $37,152 MME after tax and everything on 72 months at 0%, or you traded in another vehicle to lower the principal or put down a cash down payment for the same. Others on here have probably paid cash in full on their MME. Others took 1.7% interest with a small down payment and have a high monthly payment, but are enjoying watching that $30k they could have put down accrue 3+% interest right now and chuckling at those that put all that money down on their down payment to have a lower monthly payment instead of having that cash make them money.

There are a lot of ways you could buy a car, or house, or whatever, and they were clearly just covering an example finance price for someone that just did a 60 or 72 month with a smaller down payment, which is likely fairly typical. Without down payment our MME would have been 900 on options or 1100/mo with 60 months @ 1.7%.

Thanks for explaining how loans work.

 

[Vulnox]

Thanks for explaining how loans work.

Always happy to help when someone seems to be out of their depth.

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