Tesla Slashes Prices

[Ming]

Over 90% of Tesla sales are model 3 and Y which are under $60k and likely average price is something like $50k. That’s not particularly what I would call “Luxury”. The lowest price Macan for Porsche is like $65k and the average selling price is over $100k. The “luxury” segment of Tesla - Model S/X sell in very few numbers. While maybe not “Toyota” I would certainly never point to a model 3 or Y and say “oh that’s luxury”. Same for MME. It’s not luxury either. Rather $50-60k price point is basically slightly above average I would say

It doesn't matter whether you consider it as luxury. Majority of the US population would compare a $50k-60k car against Mercedes or BMW, well known luxury brands with great build quality.

Having a sale number over them is a great achievement of Tesla.

Also, Tesla #1 volume for 2022 is model Y, which had average price about $65k last year.

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[Scooby24]

Exactly how are Tesla owners suckers?
In case you haven't noticed, used car values have tanked in the last month. There are multiple threads on this forum where owners were offered 50k for their MME by one of the online dealers, then one week later, the offer was down to 40k by the same dealer.

https://www.macheforum.com/site/threads/used-mach-e-pricing-dropped-carvana.25091/post-581720

Either way, if you find the offer to low, maybe Tesla just doesn't want use cars, take it somewhere else and get another offer. Don't have to be insulted.

Go check your local tesla facebook group for all the folks Tesla suckered into 3500 discounts last month, and then 7500 discounts...and now an overnight 13k discount plus 7500 tax credit. They aren't happy.

Tesla doesn't care about being fair to their buyers or owners. Telsa is worried about Tesla.

Which is their prerogative but I'm not going to be one of those buyers...solidified now.

 

[Ghost Ryder]

Go check your local tesla facebook group for all the folks Tesla suckered into 3500 discounts last month, and then 7500 discounts...and now an overnight 13k discount plus 7500 tax credit. They aren't happy.

Tesla doesn't care about being fair to their buyers or owners. Telsa is worried about Tesla.

Which is their prerogative but I'm not going to be one of those buyers...solidified now.

Tesla also raised their prices by 15k over the past 2 years. Owners that bought cars before the raise in price were happy.
It's how the free market works. You can think of ADM the same way. What about all the MME owners that bought their cars with ADM last year, but now that the market cooled down, dealers are selling at MSRP, and soon will likely sell for less. Should those owners be upset also?

A car is no different from any other commodities. You buy it if its worth it to you at the current price. No one can predict the future resell value.

 

[EVS]

Over 90% of Tesla sales are model 3 and Y which are under $60k and likely average price is something like $50k. That’s not particularly what I would call “Luxury”. The lowest price Macan for Porsche is like $65k and the average selling price is over $100k. The “luxury” segment of Tesla - Model S/X sell in very few numbers. While maybe not “Toyota” I would certainly never point to a model 3 or Y and say “oh that’s luxury”. Same for MME. It’s not luxury either. Rather $50-60k price point is basically slightly above average I would say

Very good points. I guess people conflate luxury car pricing with luxury car.
Tesla itself calls its cars "premium", not luxury. Most will find that it's an econobox at a luxury car price. A whole lot of plastic parts, almost no sound profing, missing dash board and missing many other things isn't really luxury. Guess some people want to pay more for less.

What it does have are thousands of toothbrush batteries, a cheap paint job, optimistic (false?) EPA numbers and vaporware FSD for another $10k. But hey, branding is everything. It's very easy to be brainwashed, to "show" others that you can buy a more expensive car even though value wise it is much cheaper.

 

[Scooby24]

Tesla also raised their prices by 15k over the past 2 years. Owners that bought cars before the raise in price were happy.
It's how the free market works. You can think of ADM the same way. What about all the MME owners that bought their cars with ADM last year, but now that the market cooled down, dealers are selling at MSRP, and soon will likely sell for less. Should those owners be upset also?

A car is no different from any other commodities. You buy it if its worth it to you at the current price. No one can predict the future resell value.

They were suckers. But at least that was an issue with certain dealers and not a move by Ford.

Ford kept price protections and options incentives from time of order.

They did much better by their customers in my book.

You can think otherwise but we're not going to agree here

 

[awp0]

Go check your local tesla facebook group for all the folks Tesla suckered into 3500 discounts last month, and then 7500 discounts...and now an overnight 13k discount plus 7500 tax credit. They aren't happy.

Tesla doesn't care about being fair to their buyers or owners. Telsa is worried about Tesla.

Which is their prerogative but I'm not going to be one of those buyers...solidified now.

I think the point is that using your logic all current EV owners are fools, including MME owners. Every EV owner’s value is taking a hit. You can buy a brand new model y for $20k less than the comparable MME. Why would anyone expect a used MME to sell for more than a new Model Y? That’s why resale value for MME is appropriately so low right now. Let’s put brand loyalty aside for the moment.

 

[EVS]

Exactly how are Tesla owners suckers?
In case you haven't noticed, used car values have tanked in the last month. There are multiple threads on this forum where owners were offered 50k for their MME by one of the online dealers, then one week later, the offer was down to 40k by the same dealer.

https://www.macheforum.com/site/threads/used-mach-e-pricing-dropped-carvana.25091/post-581720

Last 1-2 years have been crazy for used car prices. If people still expect to get more for their used cars than new ones, they are in for some major disappointment. However, it seems Tesla used car prices have dropped much more than other used cars, even before these price cuts.

Either way, if you find the offer to low, maybe Tesla just doesn't want use cars, take it somewhere else and get another offer. Don't have to be insulted.

I think there is a sales tax implication here, right? With a trade-in, the buyer only pays the sales tax on the difference. If he sells it separately, does he still get that benefit?

 

[Ghost Ryder]

They were suckers. But at least that was an issue with certain dealers and not a move by Ford.

Ford kept price protections and options incentives from time of order.

They did much better by their customers in my book.

You can think otherwise but we're not going to agree here

Tesla also kept price protections for people that placed their orders at the time order before they increase their prices by 15k last 2 years. So no difference from Ford.

FYI, Ford decreased the price of the MME in China in Oct of 22 in response to Tesla's price reduction there. Wouldn't surprise me if Ford is going to do the same in the next few weeks.

 

[Ghost Ryder]

Last 1-2 years have been crazy for used car prices. If people still expect to get more for their used cars than new ones, they are in for some major disappointment. However, it seems Tesla used car prices have dropped much more than other used cars, even before these price cuts.




I think there is a sales tax implication here, right? With a trade-in, the buyer onyl pays teh sales tax on the difference. If he sells it separately, does he still get that benefit?

How sales tax is calculated is State dependent. In California, you get no breaks for trading in your used car. California wants their money and will tax you on the price.

Regarding the decrease in Used car values, I wonder what it is for EVs. I suspect it would be higher than the industry avg of -5% because of the IRA. It's easy to explain the -14% decrease value in used MY in the 3rd quarter. Once the $7500 rebate was announced, all MY instantly lost 7.5$k in value. There's your -14% depreciation.

 

[KevinS]

Having my MME be worth less a year and a half later than what I paid for it would have been considered reality up until recently. It doesn't faze me much.

Anyone who was speculatively buy/sell cars for tax credits thinking they could play the game and profit is now seeing the downside of that.

And I have zero sympathy for dealers who price-gouged customers for the past 2 years.

On the whole recent Tesla buyers are the ones getting shafted the hardest. Think about making those loan/lease payments if you bought last October or November. I wouldn't be surprised to see a wave of loan defaults in the near future.

 

[tdmeng]

Go check your local tesla facebook group for all the folks Tesla suckered into 3500 discounts last month, and then 7500 discounts...and now an overnight 13k discount plus 7500 tax credit. They aren't happy.

Tesla doesn't care about being fair to their buyers or owners. Telsa is worried about Tesla.

Which is their prerogative but I'm not going to be one of those buyers...solidified now.

Everyone complained car prices were too high, ADM, now people are sad cars aren’t appreciating in value anymore.

I was one of those suckers that bought a M3 LR 12/30, since my promised GT didn’t show 12/30. Still struggling hard if I should walk away from the GT. But $77k even with the private offer (which my sales is still dancing and pretending I may not get the full $8500 either due to ignorance or managing expectations) seems like a unsound financial decision now.

Either way, price drops are good for the consumer, and good for the BEV market.

 

[EVS]

How sales tax is calculated is State dependent. In California, you get no breaks for trading in your used car. California wants their money and will tax you on the price.

Regarding the decrease in Use car values, I wonder what it is for EVs. I suspect it would be higher than the industry avg of -5% because of the IRA. It's easy to explain the -14% decrease value in used MY in the 3rd quarter. Once the $7500 rebate was announced, all MY instantly lost 7.5$k in value. There's your -14% depreciation.

That was before the price cuts. IRA isn't the only factor here. Gas prices have come down a lot. So fewer people are looking for an used EV. I believe you are right. Other used EV price declines are probablycloser to Tesla's than the general used cars. But Tesla's over production may be making it a little worse for its used car prices.

In other news, this is what Chevy did when it cut its Bold prices last year by $6300, IIRC.
Of course, they only sold may be a 1000 Bolts in first half of 2022. But it's a nice gesture.
https://jalopnik.com/chevrolet-is-giving-money-back-to-bolt-owners-who-purch-1849133934

Chevrolet Is Giving Money Back to Bolt Owners Who Purchased the EV Prior to its Price Cut
Chevrolet is giving Bolt EV and EUV buyers up to $6,000 back to make sure its EV buyers are happy.

 

[Ghost Ryder]

Having my MME be worth less a year and a half later than what I paid for it would have been considered reality up until recently. It doesn't faze me much.

Anyone who was speculatively buy/sell cars for tax credits thinking they could play the game and profit is now seeing the downside of that.

And I have zero sympathy for dealers who price-gouged customers for the past 2 years.

On the whole recent Tesla buyers are the ones getting shafted the hardest. Think about making those loan/lease payments if you bought last October or November. I wouldn't be surprised to see a wave of loan defaults in the near future.

If people default on their loans, and their cars get repossessed, it's going to kill their credit. Not going to be able to finance another car for a while. I'm going to guess that most people don't have 50k cash to pay for a new car.

I think everyone that bought last year, especially those that bought used cars last year is in a world of hurt. Used cars prices increase 89% in one year. That's going to come crashing down to earth soon. Great if you're looking for a car in the next year, not good if you bought last year.

 

[KevinS]

If people default on their loans, and their cars get repossessed, it's going to kill their credit. Not going to be able to finance another car for a while.

Dude, look to the housing market crash for precedent. I think people would walk away from a car quicker than a home, and many people did just that. At least they were able to live in the house during foreclosure.

 

[Ghost Ryder]

Dude, look to the housing market crash for precedent. I think people would walk away from a car quicker than a home, and many people did just that. At least they were able to live in the house during foreclosure.

Exactly my point. During the Housing crash, it took 1-2 years to evict someone, so they were living rent free during that time. Plus you can also rent a place after foreclosure.
Default on a car loan, and it get repossessed in 3 months. Then what are they going to drive? How will they get to work or take their kids to school? With poor credit, it's going to be real hard to get a loan to buy or lease a car. Can't exactly rent a car like you can rent a place to live.

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