New Teslas now on sale!

[MichaelB]

The Inflation Reduction Act set the 2023 cap for sedans at 55,000. That the price dropped to $52,900 tells you everything you need to know - there is no 'perhaps' to it, and it's not hard to say at all!

As far as current owners go, Elon has said in the past that he has never had an owner contact him to pay extra when their has been a price hike, so why expect a refund when there's a price drop?



It has nothing to do with competition, it is a logical response to production capacity vs. demand. Until recently the demand outpaced production and wait times stretched out to months. Prices were raised, in part, to help stem that. The prices were very high! This should tell you how insane the demand has been.

Now that Shanghai production is massive (Giga Shanghai is now rolling out a new Tesla every 40 seconds) the prices have to drop to adjust the production/demand curve, otherwise they'd have a ton of Teslas parked somewhere. According to the Earnings Call a few days ago, orders began outpacing production capacity by a 2-to-1 margin after the price drop.

There are many factors at play here, but falling demand isn't one of them. They are hiring everywhere, starting up new plants, and generally exceeding YoY in production and delivery and profit by margins that any other car company in the world would kill for.

Pricing always has to do with competition and demand. Tesla also reduced prices in Europe, Canada and China, by similar amounts. The US rebate has no relevance to them, so the price reduction appears unrelated to the rebate.

 

[Midpack]

Now that Shanghai production is massive (Giga Shanghai is now rolling out a new Tesla every 40 seconds) the prices have to drop to adjust the production/demand curve, otherwise they'd have a ton of Teslas parked somewhere. According to the Earnings Call a few days ago, orders began outpacing production capacity by a 2-to-1 margin after the price drop.

There are many factors at play here, but falling demand isn't one of them. They are hiring everywhere, starting up new plants, and generally exceeding YoY in production and delivery and profit by margins that any other car company in the world would kill for.

Actually Tesla is facing more competition, first and most acutely in China. That's why prices dropped there first. https://www.firstpost.com/world/chi...n-line-due-to-lacklustre-demand-12058032.html

Their US inventories did trend up in Nov-Dec so something had to give - as you noted their prices were ridiculously high just to stem demand (nice problem to have). The first orders after the Jan price drop were filled within a week, and now there's a short wait out into March so far. Their demand is back to too strong already, which suggests price increases again sooner or later?

Tesla is facing more competition in the west as Ford, Hyundai, VW and others are slowly increasing production. So they had to get their prices more in line with what's coming. Fortunately, they've continued to drive down production costs, and their profits/car are MUCH higher than any other Western carmaker. It was time to reset the bar, and they can continue to be profitable. Most other carmakers are losing money on EVs, and Ford just dropped their prices on the Mach E in response to Tesla. VW has refused so far, but then their uptake is dismal. Look at the income statements from any other automaker...

 

[joesxm3]

Keep in mind too that before this EV credit, most brands except Tesla and GM already could have a $7500 credit but everyone bought Tesla anyway.

 

[kgtest]

S Plaid base is $115k. Yepp, still can't afford it. $150,468.52 with all the options and accessories.

I think the Vette is similarly priced though so not out of range...but with TSLA you get AutoPilot, FSD and the "coolness" of electric with 0-60 in 1.99s @1000 peak hp.



I was able to spec out a $174k Z06 vette on the build program Chevy offers. SO they still have the TSLA beat on spec'd option cost...but you only get 0-60 in 2.6s @670 hp and that dreaded gas guzzler tax lol. Alas, the E-ray will be in production in a year, but even then that is a hybrid. Sure you could put some $$ into the vette and get it to outperform the TSLA...but still missing FSD lol.

 

[audreyh1]

Why would you buy an S Plaid? The S Long Range is less expensive, more range and still very high performance.

 

[tulak]

From what I'm told GM is closer than the others, along with Tesla. Only Waymo and Argo AI are in the running for full self driving. The others are nowhere near it yet.

Don’t want to derail the thread, only want to add Mercedes-Benz as a major player in FSD tech. They recently received level 3 approval in the US.

https://www.msn.com/en-us/news/tech...vel-3-automated-driving-to-the-us/ar-AA16OAXu

 

[Midpack]

Don’t want to derail the thread, only want to add Mercedes-Benz as a major player in FSD tech. They recently received level 3 approval in the US.

https://www.msn.com/en-us/news/tech...vel-3-automated-driving-to-the-us/ar-AA16OAXu

Good add, thanks.

 

[flyingaway]

The Tesla problem in China is that people bought Tesla before are asking their money back.

 

[aja8888]

S Plaid base is $115k. Yepp, still can't afford it. $150,468.52 with all the options and accessories.

I think the Vette is similarly priced though so not out of range...but with TSLA you get AutoPilot, FSD and the "coolness" of electric with 0-60 in 1.99s @1000 peak hp.



I was able to spec out a $174k Z06 vette on the build program Chevy offers. SO they still have the TSLA beat on spec'd option cost...but you only get 0-60 in 2.6s @670 hp and that dreaded gas guzzler tax lol. Alas, the E-ray will be in production in a year, but even then that is a hybrid. Sure you could put some $$ into the vette and get it to outperform the TSLA...but still missing FSD lol.

But no one, including Tesla, has FSD that is truly FSD yet, and may not have for many years.

 

[kgtest]

Why would you buy an S Plaid? The S Long Range is less expensive, more range and still very high performance.

I wouldn't. Well, maybe I would but I can't afford either. I drove the model 3 dual motor and it wasn't fun to me like a stick shift ICE can be. Its just a personal preference though. I wasn't a fan of the interior design of the vehicle and I also don't like the way the exterior looks. Its just a matter of preference.

IF I was purely going for the fastest car available, I would definitely consider it.

 

[audreyh1]

Ha ha, yeah no gears (except forward and reverse). No need for gear shifting. That’s the beauty of it. Max torque at 0mph - so ready to go. Really a pleasure to drive. Perfect control below 1 mph too.

Right, to each his own obviously.

 

[dixonge]

Pricing always has to do with competition and demand. Tesla also reduced prices in Europe, Canada and China, by similar amounts. The US rebate has no relevance to them, so the price reduction appears unrelated to the rebate.

Right, which is why I referenced the U.S. act - specifically referring to U.S. prices.

Outside the U.S. the reductions are related to demand and production. I don't think they are really thinking about competition yet. Once Battery EV's stop eating into ICE sales, *then* competition will become key. But also, by then, there won't be as many car companies around...

 

[dixonge]

Actually Tesla is facing more competition, first and most acutely in China. That's why prices dropped there first. https://www.firstpost.com/world/chi...n-line-due-to-lacklustre-demand-12058032.html

China is complicated. It is a unique market in many ways. BYD has a big leg up, and yet Tesla is still dominating Battery EV sales, in spite of big problems from COVID measures, lockdowns, quarantines, and an economic slowdown. However, there's no need to cut prices just to sell them - what doesn't sell in China is exported elsewhere. According to this article, there isn't a single Tesla left on the lot at the Shanghai port:

"Now that Giga Shanghai is essentially capable of producing more cars than Tesla typically sells domestically and abroad, the automaker appears to be ramping up exports yet again."

https://insideevs.com/news/642257/tesla-china-huge-fleet-exports/

In addition, the Giga Shanghai expansion wasn't cancelled due to "lackluster demand" - instead, China's government expressed some concerns, mainly due to Starlink. The request for expansion was denied. I presume some sort of talks are underway...

https://www.bloomberg.com/news/arti...y-expansion-plans-in-doubt-amid-data-concerns

https://www.scmp.com/business/china...pansion-after-failing-get-government-approval

Their US inventories did trend up in Nov-Dec so something had to give - as you noted their prices were ridiculously high just to stem demand (nice problem to have). The first orders after the Jan price drop were filled within a week, and now there's a short wait out into March so far. Their demand is back to too strong already, which suggests price increases again sooner or later?

I did see a $900 increase in one model's price already.

Also, don't forget the tax credit issue - once it was announced that it would restart on Jan. 1 that *definitely* impacted sales in November and December. Who wouldn't want to wait for $7500 off? So you cut prices and make some deals and offers to give the buyers a reason not to wait. That's why the inventory went up, not some sort of 'soft demand' bs the auto media jumped on.

Tesla is facing more competition in the west as Ford, Hyundai, VW and others are slowly increasing production. So they had to get their prices more in line with what's coming. Fortunately, they've continued to drive down production costs, and their profits/car are MUCH higher than any other Western carmaker. It was time to reset the bar, and they can continue to be profitable. Most other carmakers are losing money on EVs, and Ford just dropped their prices on the Mach E in response to Tesla. VW has refused so far, but then their uptake is dismal. Look at the income statements from any other automaker...

So far I'm not impressed with the so-called competition. A few models are decent hardware-wise, but the main differentiator is the software and overall driving experience. To some people that won't matter as much...

 

[Chuckanut]

Ha ha, yeah no gears (except forward and reverse).

Maybe not even two actual gears. IIRC, all reverse does is spin the electric motor backwards. Virtual gears!

 

[Chuckanut]

Maybe not even two actual gears. IIRC, all reverse does is spin the electric motor backwards. Virtual gears!

Tesla’s ace is the Supercharger network, IMHO. While the driving range is still well under that of my RAV4 Hybrid (540 miles)the Supercharger network does take the edge off of that deficiency, IMO. Out West there are still many stretches of road with signs that say No Services for NN Miles so having a supercharger nearby would be handy, again just my opinion.
YMMV.

 

[audreyh1]

Maybe not even two actual gears. IIRC, all reverse does is spin the electric motor backwards. Virtual gears!

Well I think of going forwards or backwards as a gear shift as traditional language says “to shift in reverse”, but yes, that’s all it is spinning the motors forwards or backwards.

And to go forward or reverse I just swipe the left edge of the display in the direction of travel, although the car does a very good job of guessing which direction to go after being parked.

 

[Midpack]

FYI. I know customers who ordered new Model 3's or Y's when the big price decrease hit around 1/13, who have taken delivery, some in less than a week. I ordered less than 2 weeks later, and the wait time is already out to 2 months (an update from the prelim generic date range). Evidently they've pretty much scrubbed off all the inventory they had prior to 1/13 (it was reported their inventory rose above normal in Nov-Dec) and now they're selling much faster than they can produce again. You would think another price increase might be coming soon? And getting the $7500 tax credit may be no longer possible if you haven't already ordered.

 

[audreyh1]

I think the inventory rose in Nov-Dec simply because people decided to wait for the tax credit.

 

[dixonge]

And getting the $7500 tax credit may be no longer possible if you haven't already ordered.

The 2023 Inflation Reduction Act removede any cap limit on tax credits. Tesla could make 2 million cars this year and buyers in the US can still get the credit.

 

[Midpack]

The 2023 Inflation Reduction Act removede any cap limit on tax credits. Tesla could make 2 million cars this year and buyers in the US can still get the credit.

But as you know, any Model 3 or Y over $55K (unless a 7-seater) does not qualify - that leaves room for almost no options in the case of the Model Y. If there's another price increase (US demand has spiked again already), even more Model 3/Y's won't qualify. And the $7500 tax credit is good until the end of Feb, then the IRS is going to clarify the battery qualifications cutting the potential tax credit in half - we don't know yet. I wouldn't bet on loosening the tax credit qualifications, but I've been wrong many times before.

No Model S or X's qualify now or presumably after Feb.