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Tesla Drops Prices... Will Ford?

Mach Daddy

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To compare apples to apples: let's say you can buy one apple for $40,000; or you can buy another apple for $47,500 with a tax credit.
I am not interested in apples, I am buying a Cyber Orange 😉

But being honest, Covid is probably the only reason why my wife and I didn’t immediately go with a MY when we started shopping for a BEV. Makes no sense to make a large purchase to leave in the garage, so the time difference between getting a MY and the competition is not an issue.
 
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opennetus

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Not so sure Tesla is on solid financial ground as they never made a yearly profit. Many feel their stock price is inflated and is Tesla just a two car company now with dismal "S and X" sales with no plans for newer versions? I won't go on further.
If you making a net profit as a growth stock, then you are not investing enough or being aggressive enough in gaining marketshare. They are selling as many cars as they can physically produce with current factories, so I don’t think a lack of models a problem right now. I do agree with you that Tesla stock is too inflated and I personally wouldn’t buy new stock.

It is good Ford cut their dividend this year; they need all their cash going into innovation and restructuring right now.

Don’t get me wrong; I am still buying the Ford Mustang Mach-E despite the price drop. I think it is a great car and it would take a lot more to change my mind. To me styling and ergonomics are very important components and trumps all the advantages the model Y has.

However, if the Mach-E styling doesn’t excite you personally, and you like how the model Y looks, then I can see a price drop being the nudge you needed to switch.
 
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Did some cost comparison (with my 9.25% local tax rate):
MY LR AWD: $49990
MME ER AWD: $57700 + 693 (extra tax on $7500) - $7500 = $50893. ==> +$903 higher
MME ER RWD: $55000 + 693 (extra tax on $7500) - $7500 = $48193. ==> -$1797 lower

Now comparison on spec:
0-60: 4.7 vs 6.5
Max Speed: 135 vs 111 (?)
Range: 315 vs 270/300
Tires: P255 vs P225
AP: generations apart?
Charging: 350KW vs 150KW. From SF to LA, SC has 10x more stalls than EA. Most of EA location on the route only have 2/3 stalls which practically not usable during holiday traffic

Obviously MME ER AWD completely loses to MY LR AWD from every angle, except probably better interior and build quality. For MME ER RWD which will be around $2K lower in most states, the price diff is not competitive either given all the compromises on the spec.

Ford has to lower the MME pricing, otherwise I don't think they will have a chance. It's just when. The worst thing may happen is that for the first adopters who will pay full then after couple months, retail customer bonus kicks in just like what Tesla is doing with MY right now. Lose thousands within your couple months ownership.

If I were Ford, I will choose to match MY in order to keep upcoming MME still be relevant. Of course, there is another way to stay in the race, making spec more attractive against MY, which we all know it is not practical. Making profit is important only when you have the market shares secured not the other way around.
 
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JCHLi

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Did some cost comparison (with my 9.25% local tax rate):
MY LR AWD: $49990
MME ER AWD: $57700 + 693 (extra tax on $7500) - $7500 = $50893. ==> +$903 higher
MME ER RWD: $55000 + 693 (extra tax on $7500) - $7500 = $50893. ==> -$1797 lower

Now comparison on spec:
0-60: 4.7 vs 6.5
Max Speed: 135 vs 111 (?)
Range: 315 vs 270/300
Tires: P255 vs P225
AP: generations apart?
Charging: 350KW vs 150KW. From SF to LA, SC has 10x more stalls than EA. Most of EA location on the route only have 2/3 stalls which practically not usable during holiday traffic

Obviously MME ER AWD completely loses to MY LR AWD from every angle, except probably better interior and build quality. For MME ER RWD which will be around $2K lower in most states, the price diff is not competitive either given all the compromises on the spec.

Ford has to lower the MME pricing, otherwise I don't think they will have a chance. It's just when. The worst thing may happen is that for the first adopters who will pay full then after couple months, retail customer bonus kicks in just like what Tesla is doing with MY right now. Lose thousands within your couple months ownership.

If I were Ford, I will choose to match MY in order to keep upcoming MME still be relevant. Of course, there is another way to stay in the race, making spec more attractive to the MY, which we all know it is not practical. Making profit is important only when you have the market shares secured not the other way around.
If we want to be exact, you need to consider that by paying extra sales tax, this may reduce your income tax burden (federal, state, maybe even local). I guess it depends on how deep in the weeds you want to go to get a true comparison.

In the end, Ford will charge what they can to make as much money as that can. There is currently no motivation for them to make any price adjustments.

P.S. if we believe the finance incentive rumors, you also probably should compare the NPV of buying a MME at less then 1% compared to 3% or 4% from the other guys
 

dbsb3233

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Personally, the Model Y was never a consideration for me because I simply don't like the look. Still looks like a Prius to me. Too much sedan/hatchback, not enough SUV. (Granted, the Mach-e doesn't exactly scream "SUV!" either, but it's closer, and has that cool Mustang look on the front half).

So it doesn't really matter to me what the Model Y price is. I'd buy an ICE or a PHEV before I'd buy a Model Y, if those were the only choices. Now, if Tesla started making something that looks closer to an SUV, I'd be more interested.
 

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Did some cost comparison (with my 9.25% local tax rate):
MY LR AWD: $49990
MME ER AWD: $57700 + 693 (extra tax on $7500) - $7500 = $50893. ==> +$903 higher
MME ER RWD: $55000 + 693 (extra tax on $7500) - $7500 = $50893. ==> -$1797 lower

Now comparison on spec:
0-60: 4.7 vs 6.5
Max Speed: 135 vs 111 (?)
Range: 315 vs 270/300
Tires: P255 vs P225
AP: generations apart?
Charging: 350KW vs 150KW. From SF to LA, SC has 10x more stalls than EA. Most of EA location on the route only have 2/3 stalls which practically not usable during holiday traffic

Obviously MME ER AWD completely loses to MY LR AWD from every angle, except probably better interior and build quality. For MME ER RWD which will be around $2K lower in most states, the price diff is not competitive either given all the compromises on the spec.

Ford has to lower the MME pricing, otherwise I don't think they will have a chance. It's just when. The worst thing may happen is that for the first adopters who will pay full then after couple months, retail customer bonus kicks in just like what Tesla is doing with MY right now. Lose thousands within your couple months ownership.

If I were Ford, I will choose to match MY in order to keep upcoming MME still be relevant. Of course, there is another way to stay in the race, making spec more attractive to the MY, which we all know it is not practical.
I don't think you're a troll, and agree with much of this. I disagree that Ford will need to cut the price of the 2021's: I think there will be enough enthusiastic early adopters for them to sell all of those without any discounts. The real question is what happens after that? Depending upon how sales of the Escape hybrids goes, the 2022's will probably have the $7500 tax incentive, but after the 2022 model year the incentives will certainly begin phasing out. If the reviews of the 21's are gushing and Ford's handsfree driving works as advertised then they will likely be able to sell 50k 2022 model year cars without discounts, but maybe with better options rates. After the incentives lapse or if they make more then 50k 2022's, the price will have to come down or they'll see the same sales pattern as the Bolt..
 

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If $50,000 Is the breakpoint for people's budgets, then the Tesla Model Y dual motor in white with a black interior is the obvious choice. Things get more interesting when you change the Model Y's colors for the exterior and interior plus swap out for nicer rims.

As for the performance specs, it might be worth it to wait a bit to see what Ford has up their sleeve. There's a good chance it is better than the initial target specs for range, acceleration and charging speed.

@RunningHorse is hinting that the GT Performance is next level crazy. @hybrid2bev hasn't concurred but based on the information we have, something special is being cooked up by the Ford Performance team.
 

silverelan

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98.8kWh isn't cheap. I am not sure that Ford can actually sell the MME Premium ER for much lower than is already listed.
 

Mach Daddy

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So it doesn't really matter to me what the Model Y price is. I'd buy an ICE or a PHEV before I'd buy a Model Y, if those were the only choices. Now, if Tesla started making something that looks closer to an SUV, I'd be more interested.
Same reason given by my two friends that chose a Porche Macan...one was already a Porche-head though.
 

Mach Daddy

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Things get more interesting when you change the Model Y's colors for the exterior and interior plus swap out for nicer rims.
Charging +$2,500 for Red given their paint quality issues annoys me. If I went with the Y I would go with the white and chose a nice wrap...installers are they overcharging Tesla owners in the Seattle area though. I was quoted $7,000 for a full wrap back when I was seriously considering the Y.
 

timbop

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As for the performance specs, it might be worth it to wait a bit to see what Ford has up their sleeve. There's a good chance it is better than the initial target specs for range, acceleration and charging speed.
Which is why I'm waiting to decide on which way I'm going. If Ford significantly sandbagged the efficiency/range numbers (and the options rates are good), then I'll be back in the MME camp and will gladly convert my reservation to an order. There's no point making a rash decision I might regret when I learn the whole story.
 

opennetus

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If we want to be exact, you need to consider that by paying extra sales tax, this may reduce your income tax burden (federal, state, maybe even local). I guess it depends on how deep in the weeds you want to go to get a true comparison.
It only makes sense to claim sales tax for a federal income tax deduction in states that have no income tax and when it makes sense for you to itemize instead of claiming (the now much larger) standard deduction. Even then, paying less sales tax is always better than paying more. I agree that the impact will vary from state to state and for some it might not be a big difference. I just wanted to point out that is not exactly a $7,500 discount. It might only make around a $6,500 impact even if you have plenty of tax liability, when considering the other factors.

For the poor folk in New Jersey, it might not make any net difference if they lose their state incentives to gain the federal one.
 
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dbsb3233

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Ford has to lower the MME pricing, otherwise I don't think they will have a chance. It's just when. The worst thing may happen is that for the first adopters who will pay full then after couple months, retail customer bonus kicks in just like what Tesla is doing with MY right now. Lose thousands within your couple months ownership.
In other words, just like Tesla did with their models. And like happens when the newest iPhone comes out.

Yes, when a hot new product comes out that has early demand, they can price higher. Then after the first wave, and as other manufacturers improve their competing offerings, the price comes down. Basic market economics.
 

opennetus

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In other words, just like Tesla did with their models. And like happens when the newest iPhone comes out.

Yes, when a hot new product comes out that has early demand, they can price higher. Then after the first wave, and as other manufacturers improve their competing offerings, the price comes down. Basic market economics.
True, reducing prices after a product has been on the market a while is natural. However, because Ford is releasing second, a whole model year later their discounting clock started when the model Y was released; not when the Mach-E will be released. That is the advantage of getting to market sooner. You can demand higher prices on launch because there is no competition yet, however slower to market competitors cannot. Because when they launch, viable alternatives already exist. That is the downside of playing catchup.

I wouldn’t be surprised though if Ford waits until reservation orders are all delivered before price dropping, just like Tesla did. Their max production levels are so low that they can always sell a discounted version on the dealer lots later; no need to do so now, particularly since a lot of people (me included) will continue to buy even without a price cut. They all know the Tesla fan boys and Ford fan boys are willing to pay more and are taking advantage of that.

Tesla does charge a lot for extras, like certain paint colors and interior colors. If you like, for example the color Red, or don’t care about AWD or some of the bells and whistles (aka, California route 1), the price difference is smaller, or still in the Mustang’s favor. Also, with plan pricing and possible other incentives at delivery time, the Mach-E might still be cheaper.
 
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Mach Daddy

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P.S. if we believe the finance incentive rumors, you also probably should compare the NPV of buying a MME at less then 1% compared to 3% or 4% from the other guys
I had forgotten about this. Tesla is currently offering as low as 72 months at 2.5%...and I believe they were offering 60 months at 4% back in March? If Ford sticks with 1% then the financing difference is more than $3k.

...dealers accepting X-plan pricing (another $1k off), trade-in values, and insurance rates all factor in to the total cost of ownership.

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