Tesla Slashes Prices

[EVandSolar]

I don't see any way that Tesla doesn't smash EV sales in 2023 while severely converting sales from competitors given the new pricing and rebate situation.

The MachE vs Tesla scenario has been mentioned a lot already, and we already see countless cases where folks on these very forums are cancelling Mach E orders and ordering a MY. But also:
Who would buy a 250 mile, $45,000 Kia Niro or Hyundai Kona vs 330-350+mile Tesla?
Who is going to buy a $36,000 220 mile range Nissan Leaf?
$60,000 Nissan ARIYA?

Yes, there will be diehard fans, so this does not disprove anything. Yes, there will be folks with an irrational hatred of Elon Musk that will cause them to not consider a superior EV at a lower price. But I'm guessing for 90% of folks, they will spend $20k less for a better EV with more range and drastically superior charging. I just see Tesla not only selling their ~2 million EV's this year, but other companies sales will be heavily impacted negatively. Another issue is that it seems it will be tough for other manufacturers to lower prices to compete since margins are already slim to none, or even losing money at current prices.

In the end, I see the price changes as a MASSIVE positive for the industry, and helps to accomplish exactly what the IRA hopes to achieve......MASSIVE inflation reduction across a huge swath of EV options.

$10-$20k+ reduction in price of new Teslas.
$10-$20k reduction in price of used Teslas. Before the price drop, 2-3 year *used* Teslas listed for $45-$60k. New is available for $45k so price must drop to $35k.
Same goes for other used EV's...no one is going to buy a used EV with less range for $40k and no tax credit. In fact, even at $37k, a used is barely at break even price with new Tesla now. So honestly, I don't see how anyone would spend more than $30k for a used EV now.

Literally days ago, many/most EV's were selling and listing for above MSRP. I already see *many* new EV's being listed online for below MSRP! Drastic changes have already occurred and will increase dramatically very fast as inventories sit.

I see the $55k price cap as an immensely powerful tool in lowering EV prices, in large part due to Tesla dropping most offerings below the cap. I'm curious to see what they will do with their $55k+ inventory which appears to be stagnant such as MYP, etc.

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[Rpgonzalez]

Maybe its all part of a longer term play. Tesla have spent years building the supply chain and their own battery tech, not to mention massive purpose built production facilities.

The $60k plus EV sector was getting crowded and the competition are still making a loss on their vehicles. The new pricing model will put extreme pressure on manufacturers struggling to make it work at a much higher price point.

when the model 3 came out, the whole point was for these to be the most affordable EV’s available. THIS was the ORIGINAL pricing model, and Tesla boasted cutting costs by eliminating unnecessary options, buttons, handles etc. Inexpensive manufacturing was ALWAYS the goal and explains some of the reasons that some people can even bash Tesla. Tesla cannot make their cars have the fit, finish, ride quality and sound dampening while being the least expensive.

this is why I bought the Mach-e AWD LR and not a model Y at $65k. THAT was the “new” pricing model. MY and M3 are not luxury automobiles, they are (supposed to be) economy EV’s. By paying $65k we were shoveling money in Elons direction supporting record profits based on the hysteria of rising gas prices. It didn’t want to play in to that. This may sound hypocritical, but since people were willing to net me $5k in profit for my M3 that I drove for 3 years, I couldn’t resist. Now I’m in a weird place, because I really wanted a model y.

that being said, a $53k MY is no doubt more affordable for many people, but if Tesla was sticking to the original plan that put the M3 on the map, they would have a SR RWD version of the model Y for $45-48k.

all this being said, the model Y is cleary superior for all reasons that us techie car nuts care about (in denial or not): speed, energy efficiency, weight, autopilot, software, space efficiency, charging infrastructure. Every one “else” wants one because WE write the online articles about these things and rave about them. There is also no use denying that the design is universal and appealing to many people.

what’s ironic, is that the students at the HS I work at(that didn’t know I had a M3) make fun of the Mach-e because they call it the poor man’s Tesla or Walmart Tesla.

 

[Geniusk24]

I think it would be in Ford's best interest to either reduce the cost of the extended battery or offer lower subsidized interest rates in response to Tesla's price cut. My opinion

 

[EVandSolar]

I think the only way to solve the competitive price/cost advantage that Tesla has now is to offer EV's under $55k, and make sure they are eligible for the tax credit. The double whammy of higher price *plus* another $7500 on top of that due to lack of tax credit is going to crush sales/demand.

 

[st_terron]

I ordered my 3P

 

[Rpgonzalez]

It's a misrepresentation of what is happening. Tesla is not starting a price war and they don't have margin to do that, in fact they will be unprofitable if they keep those prices.
Tesla has inventory problem, or call it demand problem. This is a very serious problem because the only reason investors put money in the company is because they bought the growth story. If there is no growth, Tesla will lose 99% of its valuation and will become a niche car manufacturer. That's why they are desperate to make sales even if it means losing money.
Other manufacturers are not in the same position, because they don't have a demand problem, at least for now.

Investors aren’t aware that Teslas growth spurt was due to panic over rising gas prices? Good for Tesla to be able to raise their prices 7 times in 2022, but it should be obvious that year over year growth is not sustainable. They got lucky again (or is this a conspiracy) that 2023 brought back the tax incentive, and yes they HAD the margins to bring the price down, but what happens when steam runs out on this one? Unless gas prices skyrocket again, going in to 2024 were going to flatline. Which is fine… they’ll still sell plenty of cars.

 

[Rpgonzalez]

Tesla has been losing market share all over the world and now they can't even sell already manufactured cars without deep discounts. Some people are still in denial.

Not a deep discount IMO. THIS is the MSRP, they were just “marking their cars up” like the dealers were doing. Difference here is that we love to call dealers crooked when they charge ADM, but nod in agreement when Elon talks about rising materials costs.
Their record profitability is without a doubt proof that their price increases went straight in to the bank.

 

[PatrickG]

My Ford dealer just left me a voicemail letting me know that they now have Mach-e's in their inventory and they can sell one to me at MSRP so that I won't need to wait for my ordered Mach-E to be built. They had very steep ADM's a month ago when I checked. I haven't yet told them that my Model Y Long Range will be delivered in 6 days. If Ford could offer an AWD extended-range battery Mach-E for the same price as the comparable MYLR, I would blow up the deal with Tesla and continue with Ford, but that would be a $12,000 discount off of MSRP. We'll see what happens ? ?

 

[EVandSolar]

My Ford dealer just left me a voicemail letting me know that they now have Mach-e's in their inventory and they can sell one to me at MSRP so that I won't need to wait for my ordered Mach-E to be built. They had very steep ADM's a month ago when I checked. I haven't yet told them that my Model Y Long Range will be delivered in 6 days. If Ford could offer an AWD extended-range battery Mach-E for the same price as the comparable MYLR, I would blow up the deal with Tesla and continue with Ford, but that would be a $12,000 discount off of MSRP. We'll see what happens ? ?

It'll take another month or two for them to discount that much.

 

[RedStallion]

It'll take another month or two for them to discount that much.

I wouldn't expect any deep discounts from Ford or any manufacturer other than Tesla as they don't have excessive inventory and as the economy slows and demand wanes they will be cutting production.

"Electric car manufacturers in Europe are slowing down production because battery cars have proven too expensive for the middle class and the supply of lithium for their batteries is too uncertain. Production in Europe this year is expected to be 12 million cars—a million less than previous estimates. Tesla, for example, is cutting prices to boost demand. Of more than 900 auto executives surveyed internationally, 76 percent believe that inflation and high-interest rates will slow sales and that EV adoption will take longer.
In the United States, that figure was 84 percent. The median expectation for EV sales by 2030 dropped to 35 percent in the United States, from 65 percent a year earlier. Longer-term impediments cited by the executives include the availability of raw materials for batteries, as well as stricter rules around federal incentives for buying electric vehicles. Also, consumers see touted fuel savings not materializing..."

https://www.instituteforenergyresearch.org/renewable/ev-car-mania-may-be-over-or-at-least-slowing/

 

[Electric Goat]

what’s ironic, is that the students at the HS I work at(that didn’t know I had a M3) make fun of the Mach-e because they call it the poor man’s Tesla or Walmart Tesla.

?? High schoolers are usually good for some solid laughs.

 

[SoCalPony]

That's exactly what they SHOULD do. However, Tesla stock is a giant house of cards, built on a story of hypergrowth forever. If they decrease production and acknowledge that Tesla is on the road to becoming just another low-margin automaker, the stock will crash hard. Even harder than it already has.

Mr. Musk prefers to maintain sales and cut margins, so stockholders can continue to dream of unlimited forever growth.

@phil I think we can officially put to bed any thoughts of Tesla decreasing production. They just announced an expansion of the Nevada battery plant to add an additional 100GWh of 4680 production, which is enough to build 2 million vehicles annually I think that's more than how many vehicles they will sell this year:

https://www.tesla.com/blog/continuing-our-investment-nevada

SCPony

 

[ultramantaro]

My Ford dealer just left me a voicemail letting me know that they now have Mach-e's in their inventory and they can sell one to me at MSRP so that I won't need to wait for my ordered Mach-E to be built. They had very steep ADM's a month ago when I checked. I haven't yet told them that my Model Y Long Range will be delivered in 6 days. If Ford could offer an AWD extended-range battery Mach-E for the same price as the comparable MYLR, I would blow up the deal with Tesla and continue with Ford, but that would be a $12,000 discount off of MSRP. We'll see what happens ? ?

They will need to some serious discounts right now if I were them. Saw dupratt Ford out of Dixon, CA saying "$400"off MSRP on custom orders ....

 

[PatrickG]

I wouldn't expect any deep discounts from Ford or any manufacturer other than Tesla as they don't have excessive inventory and as the economy slows and demand wanes they will be cutting production.

My dealer now has 22 in stock, 2 in transit, and just took time out of their day to call me to ask if I wanted one for immediate delivery at MSRP, $5,000 less than they were selling their limited inventory for 3 weeks ago. Instead of buying one, I called back to cancel my reservation.

Ford's price hikes from last year are easily reversible, but like I said, we'll see what happens. One thing that we can be confident of is that there soon won't be a wait anywhere for Mach-E's, and the prices won't be going up, so the pressure is off for any prospective buyers.

 

[roamtheworld]

My five closest dealers in Austin area (50 miles) currently have 44 Mach Es to choose from all above the $55K price, damn that rapid red paint option.
Just before the end of the year I had a couple of dealers text me telling me they had models in stock. Not sure of the locations because back in April and May of 2022 I was looking at 5 states for inventory.
I found 1 new 2022 Premium MSRP at $50K but not sure if that one is spoken for by customer.

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