We are paying too much for EV in the US.

[RT1 MME266]

Tesla are dropping its car prices in Asia (China), which were already lower than in the US. US consumers are paying too much, in my opinion. This slows down EV adoption.

(Jan 6, @Bloomberg News)

BTW. these are MME 2023 MSRP base prices.

IRS listed MME as car for 2023 $7,500 tax incentive with $55K MSRP limit. I think tax incentives could actually contribute to higher prices. What do you think?

Update Jan 9, 2023:

"Tesla owners in China protest against surprise price cuts they missed" I don't blame them, the tax incentive expired and demand slowing down, causing end of last year buyers to protest.
https://www.reuters.com/business/au...t-surprise-price-cuts-they-missed-2023-01-07/

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[Shelbeast]

Agree. The prognosticators have said EV will be for the rich for a while. Then once that runs its course, the gas cars will shoot up in price for the rich.

EV is high because know you get tax benefit. For now.

 

[MachEMaster]

Tesla are dropping its cars in Asia (China), which were already lower than in the US. US consumers are paying too much, in my opinion. This slow down EV adoption.

(Jan 6, @Bloomberg News)

BTW. these are MME 2023 MSFT base prices.

IRS listed MME as car for 2023 $7,500 tax incentive with $55K MSRP limit. I think tax incentives could actually contribute to higher prices. What do you think?

I think there is a direct relation to '23 price increase and rebates/incentives.

 

[RT1 MME266]

I think there is a direct relation to '23 price increase and rebates/incentives.

Yes, I think so. However, it seems that @Ford Motor Company missed its mark, it raised too much. Making most MME models beyond the IRS $55K limit.

 

[Logal727]

We gotta remember China is just now benefiting from a booming middle class, this is why big American companies have been building theme parks for Chinese families. Also Tesla can benefit from cheaper labor in China and also lax human rights protections, which allows for lower prices.

 

[voxel]

I guess the answer is to shutdown US and Mexican factories and import all EVs from China, right?

 

[roamtheworld]

Tesla are dropping its cars in Asia (China), which were already lower than in the US. US consumers are paying too much, in my opinion. This slows down EV adoption.

IRS listed MME as car for 2023 $7,500 tax incentive with $55K MSRP limit. I think tax incentives could actually contribute to higher prices. What do you think?

We still have production problems for most manufactures. Ford, VW, Rivian, Kia and Hyundai all have large backlogs of orders. It's a simple supply versus demand issue. Tesla produced 1.3 million EVs in 2022 and Ford just celebrated it produced its 150K Mach E. It was recently reported that Tesla is producing a Model Y body in white every 40 seconds in Shanghai.
Also the cost to produce Teslas in China is way cheaper than US or Germany with labor being the largest impact. Tesla China has way over 20% margin and can cut prices by 50% and still make the margin the largest car companies make like GM and Ford currently at 9-10%.

It's business 101

 

[MellowJohnny]

Completely agree. I never think the MME is expensive becasue there is no ICE version to straight-up compare it to. But when I look at the price difference between the ICE and electric Kona models.

In Canada the ICE Kona starts around $25k, the electric starts at $47k. Granted the base electric may have more standard features than a bone stock ICE Kona, but still, that’s a massive gap.

 

[RT1 MME266]

We gotta remember China is just now benefiting from a booming middle class, this is why big American companies have been building theme parks for Chinese families. Also Tesla can benefit from cheaper labor in China and also lax human rights protections, which allows for lower prices.

I guess the answer is to shutdown US and Mexican factories and import all EVs from China, right?

How about investing in more modern manufacturing facilities in the US, making more of the battery components in the US. Car manufacturers are investing in new facilities for EV batteries in the US. The answers should be more efficient supply chain, reliable, cost competitive made in the USA.

 

[Logal727]

I guess the answer is to shutdown US and Mexican factories and import all EVs from China, right?

How about investing in more modern manufacturing facilities in the US, making more of the battery components in the US. Car manufacturers are investing in new facilities for EV batteries in the US. The answers should be more efficient supply chain, reliable, cost competitive made in the USA.

Ford is doing this.

 

[Cm12]

How about investing in more modern manufacturing facilities in the US, making more of the battery components in the US. Car manufacturers are investing in new facilities for EV batteries in the US. The answers should be more efficient supply chain, reliable, cost competitive made in the USA.

It’s not that simple. We can’t produce the battery minerals because it destroys the environment. We have lithium deposits but won’t mine them for that reason.

As much as people say they want manufacturing in the US, they don’t want it in their backyard. Look at how much Georgia residents have been fighting the state of the art Rivian plant. Everything costs a lot more at every stage in the US.

 

[Jimrpa]

I think y’all are putting too much thought into it ? Look at it from a simple macroeconomic perspective. What we’ve seen with the Mustang Mach E consumer pricing, from the introduction has been classic monopolistic supply and demand pricing ?

The supply has always been below natural market demand (and there are a myriad of reasons why, none of which are “evil”), but this naturally drove consumer prices artificially higher than they normally would have been in the market. We initially saw those as ADM. Ford then stepped in to attempt to soak up some of those “excess profits” (which is reasonable for the “monopolistic” actor (I use “monopolistic” in the sense of the only source of Mustang Mach Es)), Now, what we should see is a drop in demand for Mustang Mach Es as more “economic substitutes” come on the market, which will force Ford to adjust prices. Auto makers rarely lower prices, so Ford will toy with things like rebates, financing and possibly … gasp … adding features!

 

[Blue highway]

How about investing in more modern manufacturing facilities in the US, making more of the battery components in the US. Car manufacturers are investing in new facilities for EV batteries in the US. The answers should be more efficient supply chain, reliable, cost competitive made in the USA.

The China advantage has a lot to do with geographic density of suppliers. There are way more suppliers close to final assembly plants in China than anywhere else in the world. It is a lot more than just batteries, chips, steel, etc... The cost advantage of manufacturing in China remains significant. The advantage is so significant that it is possible that almost all car manufacturing will be done in Asia within the next 20 years.

There is a similar situation with high tech startups in the US... the reason Silicon valley is the center of these start ups is largely because all the pieces needed are easier to find there than anywhere else... talent, money, etc.

 

[roamtheworld]

The China advantage has a lot to do with geographic density of suppliers. There are way more suppliers close to final assembly plants in China than anywhere else in the world. It is a lot more than just batteries, chips, steel, etc... The cost advantage of manufacturing in China remains significant. The advantage is so significant that it is possible that almost all car manufacturing will be done in Asia within the next 20 years.

There is a similar situation with high tech startups in the US... the reason Silicon valley is the center of these start ups is largely because all the pieces needed are easier to find there than anywhere else... talent, money, etc.

100% agree

I've seen a recent quote that 95% of Tesla suppliers in China are local (within a few hundred miles).
That is a huge departure from the massive outsourcing efforts auto manufactures have been doing for the past 30+ years.
This is what the IRA should be all about IMO bringing back US based production including all the parts and components that go into the automobile.
Ford, GM and others are stepping up efforts but the current supply issues with parts that have stopped Ford production it will take some time.

 

[RickMachE]

Tesla dropped China prices due to slack demand and surplus inventory...

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