Tesla cuts price of Model 3 & Model Y again!

[Blue highway]

Ford still hasn't made any price cuts to the MME's MSRP. Think they will further increase the retail customer cash incentives this month?

Ford and all the legacy manufacturers use incentives as opposed to price changes... same result... pricing is adjusted for market conditions.

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[Blue highway]

Only so far for $$$ to drop before the others will be able to sue Tesla for “dumping” product. Not there yet, but, can’t go down to 0 either. It just reeks of desperation if you ask me. Dude is legit worried. And he should be.

This is the Henry Ford Model T playbook revisited.

Tesla will continue to vertically integrate, and de-content cars to drive out costs. They have a unit cost that nobody else (except maybe BYD) can match. Likely a similar outcome for Tesla that the Model T had... it will be way cheaper than the competition and have dominant market share... until it doesn't because the market moves in a different direction...

It's going to be a rough few years for everybody else... except maybe a few Chinese EV companies.

 

[Blue highway]

Again, it’s not a a price adjustment, it’s a crash when you’re lowering prices $50,000 (36%) in a few months.

I don’t think that any manufacturer in history has done that.

You can’t pretend this is just business as usual.

In 1908, the Model T sold for $825 and by 1925 it only sold for only $260...

 

[Mach1E]

In 1908, the Model T sold for $825 and by 1925 it only sold for only $260...

Interesting.

But do I need to tell you that 17 years is a slightly different time frame than several months and $50,000 is a slightly different price drop than several hundred $$?

I think my prior comment still stands.

But even if the 1908 comparison is valid, when you have to go more than 100 years in history to come up with an example, it’s still safe to say this isn’t business as usual.

 

[superdave80]

In other news, Elon single handedly tanks the resale value of every BEV while giving the middle finger to anyone who bought a Tesla in the last few years.

Did he get marketing lessons from his crack dealer? Give people a free taste and hope they come back for more?

Remember all that bitching and moaning when prices on electronics like computers, flat screen TVs, etc kept dropping year after year? Yeah, me neither...

I'm completely baffled by all these people that complain about prices dropping on EVs. Elon, Ford, etc. are under NO obligation at all to prop up the value of your used vehicle. Their job is to sell vehicles. Period.

 

[superdave80]

If his goal with drive the competition out of the market, why open up the supercharger network?

Probably has to do with getting that sweet, sweet government money to help buy his superchargers. And if he drives them out of the EV market, he won't have to really 'share' his supercharger network anyways. The man is crazy, but he's a genius!

 

[heisnuts]

I think this transition is going to tougher for the major brands than many people think.

Tesla already has a big cost advantage, and that will only get better once they go to diecasting the entire front and rear sub frames in one piece. When the UAW agreement is ratified, the costs to the big 3 will go up substantially and that will only help companies like Tesla. And the final blow is that Tesla has it's own charging network that works, while everything else does not.

I know Tesla is opening up their chargers to everyone, but that is only for V3 and above chargers for one and when you look at the cost for the charge (usually over 60 cents a kWh for non-tesla and anywhere from 16 cents to 39 cents per kWh for Tesla vehicles), it makes an ICE vehicle about the same cost for a non-tesla on a road trip.

I just got back from an 800 mile road trip in my M3P. I used 210 kWh of Supercharging (which went flawless and fast) and that cost me $58.27. Even if all of those stations were open too non-Tesla (only 1 had the Magic Dock) it would have cost me just over $138, and our ICE vehicle would have cost us about $160....

I just don't see how the others will be able to come close to competing with Tesla. It is not just the price of the car, but also how well everything works in the car AND has the superior charging network nationwide that will be very hard for the others to match.

As a funny side note, at one of my charging stops in Eastern Washington, we pulled into an empty 8 stall Tesla 250 kWh station, while there was a long line to get gas/diesel.

 

[LincolnLuvr]

I know Tesla is opening up their chargers to everyone, but that is only for V3 and above chargers for one and when you look at the cost for the charge (usually over 60 cents a kWh for non-tesla and anywhere from 16 cents to 39 cents per kWh for Tesla vehicles), it makes an ICE vehicle about the same cost for a non-tesla on a road trip.

I just got back from an 800 mile road trip in my M3P. I used 210 kWh of Supercharging (which went flawless and fast) and that cost me $58.27. Even if all of those stations were open too non-Tesla (only 1 had the Magic Dock) it would have cost me just over $138, and our ICE vehicle would have cost us about $160....

Wow, that sucks. Was not expecting the non-Tesla charging rate to be so expensive.

 

[heisnuts]

Wow, that sucks. Was not expecting the non-Tesla charging rate to be so expensive.

I don't know if that covers the cost to Tesla to provide the charge, but if so, it only adds to the profits for Tesla.

 

[Blue highway]

Interesting.

But do I need to tell you that 17 years is a slightly different time frame than several months and $50,000 is a slightly different price drop than several hundred $$?

I think my prior comment still stands.

But even if the 1908 comparison is valid, when you have to go more than 100 years in history to come up with an example, it’s still safe to say this isn’t business as usual.

there are other examples of using cost advantage as competitive weapon, but the key take aways are that Tesla is using the same business model as Henry Ford did, and in percentage terms the decreases aren't unprecedented.... and they are not over.

https://www.fordmodelt.net/model-t-ford-prices.htm

 

[Mach1E]

Remember all that bitching and moaning when prices on electronics like computers, flat screen TVs, etc kept dropping year after year? Yeah, me neither...

I'm completely baffled by all these people that complain about prices dropping on EVs. Elon, Ford, etc. are under NO obligation at all to prop up the value of your used vehicle. Their job is to sell vehicles. Period.

Baffled? Did you read the other negative reasons listed in this thread?

Nobody cares about resale values for electronics like a computer or tv. They’re disposable. Not a good analogy.

But if those things kept creeping up in price for decades (like normal), then they dropped 35% right after you bought one…… yeah you would complain too.

No one said Elon or Ford has any obligation. That’s a straw man argument.

Just pointing out the negative effects these moves will have. And yeah, it could alienate some customers away from electronic vehicles.

And Elon and Ford DO have an obligation to their shareholders not to alienate their customer base.

 

[superdave80]

...then they dropped 35% right after you bought one…… yeah you would complain too.

I would not, as I don't really care what the resale value of my vehicle is. I purchased a vehicle for a price that I agreed to, and I'm going to use it for a very long time. What they sell for next is irrelevant to me. If you are buying a vehicle for good 'resale value', then you are buying it for the wrong reason.

And yeah, it could alienate some customers away from electronic vehicles.

Yes, I could completely see how lower priced EVs would drive people away from EVs.

Sarcasm. That was sarcasm.

 

[Mach1E]

I would not, as I don't really care what the resale value of my vehicle is. I purchased a vehicle for a price that I agreed to, and I'm going to use it for a very long time. What they sell for next is irrelevant to me. If you are buying a vehicle for good 'resale value', then you are buying it for the wrong reason.

Yes, I could completely see how lower priced EVs would drive people away from EVs.

Sarcasm. That was sarcasm.

That’s fine that you don’t care about resale value.

But you shouldn’t be baffled that it matters to other people. How many threads are there here taking about “total cost of ownership?”

No need for the sarcasm, especially since it’s not addressing the points I’m making.

And to be clear, I’m not even really saying Tesla shouldn’t do these price cuts.

Just pointing out the negative consequences. It’s not an “all good” or “all bad situation.”

As I’ve been saying, it negatively affects SOME people, and has the potential to have some serious negative effects on the BEV market as a whole.

Possible results-
Some people wait to buy hoping prices keep dropping.

Some people won’t buy at all because of horrible resale values (any interest in a used Etron GT? Didn’t think so)

Some BEV manufacturers can’t get to profitability at these prices and fail.

Some major manufacturers cancel some projects for the same reason.

Tesla struggles to raise prices back up after setting this low floor.

Tesla struggles to sell future models as it sucked up any pent up demand this year.

Maybe some of these things happen, maybe none. But they’re definitely all realistic potential outcomes.

Possible positives-
Tesla sells more cars now.

People who wouldnt have bought an electric car this year did because of the discounts.

 

[nvabill]

I would not, as I don't really care what the resale value of my vehicle is. I purchased a vehicle for a price that I agreed to, and I'm going to use it for a very long time. What they sell for next is irrelevant to me. If you are buying a vehicle for good 'resale value', then you are buying it for the wrong reason.

I am in total agreement with you here, I can say I have never bought any kind of vehicle for it's resale value. But, with that said I can understand why it is a sensitive issues to others.

While I am not an expert, unless the cost of batteries comes down significantly and with the rapid advances in technology, in my opinion EV's will continue to be disposable when used up and have very little resale value.

 

[Ride_the_lightning]

While I am not super sensitive to resale value, I absolutely care that the value of my Mach E has tanked far more than the average vehicle. I planned to keep it a long time, but my family situation has changed and now I am going to need an SUV with a 3rd row. Lucky for me I bought my 2021 Mach E with full tax credit and before any of the price rises or dealer markups, but the resale market has evaporated overnight for these cars. It’s not just that used cars drop in value, it seems nobody wants them at all anymore. That’s not good either.

I’m going to have to trade our Audi Q5 PHEV instead. Demand for PHEVs around here remains strong, and the dealer selling prices for used ones are almost double my Mach E, despite being priced within 4k of each other new in 2021.

Also, I can’t stand that everybody is touting Tesla’s price drop as some brilliant move. It’s a fire sale. People don’t want them either, but Tesla has a much larger EV inventory to move than Ford. They are cutting prices so cars don’t pile up, and unlike Ford, there aren’t even any dealer lots for the cars to pile up on. Luckily teslas costs are lower too, but short term prices aren’t set that way, they are based on the price needed to move the projected inventory.

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