4 ms·

> Loss aversion is real, and people aren't going to be happy about being asked to suddenly pay ~20% more for the exact same car. It's 10% more at most, and the

> Loss aversion is real, and people aren't going to be happy about being asked to suddenly pay ~20% more for the exact same car. It's 10% more at most, and they are making it pretty clear now that the Short Range model will not be available before January 2019. Even then, many people can't even realize the entirety of a $7,500 tax credit. A single person needs $60k in income to generate $7,500 in taxes due after the standard deduction, and a married couple needs $80k to reach that point. Most people who are holding out for the $35k Tesla because that's all they can afford are also going to have a Tax due of less than the $7,500 credit.

jhauris 8y ago
Do people in those income brackets purchase vehicles that are that expensive? It doesn't seem wise to spend nearly half your pre-tax family income on a single vehicle. I've been assuming the average income of purchasers of the model 3 was in the $120k range, and even that seems on the low side for the price.
tedunangst 8y ago
Is 50% of annual income a typical price point for car purchases?
- ovao 8y ago
  The median household income in the U.S. was $57,617 in 2016. The average transaction price for a new car in the U.S. was estimated at $36,270 in January '18. So, for new car purchases at least, American buyers spend more than half the median yearly household income.
  - dwaltrip 8y ago
    New car purchases are likely made disproportionately by people who earn more than the median income, so we can't probably can't say much from those 2 numbers alone.
ProfessorLayton 8y ago
"The average new car buyer is now 51.7 years old and earns about $80,000 per year" [1] In a study from 2003 the new car buyer income was $69,875 [2] which is $96,905.51 in 2018 dollars [3] [1] http://www.autonews.com/article/20150804/RETAIL03/150809938/car-buyers-getting-older-richer-nada-economist-says http://www.autonews.com/article/20150804/RETAIL03/150809938/... [2] https://www.bls.gov/cex/anthology/csxanth8.pdf https://www.bls.gov/cex/anthology/csxanth8.pdf [3] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=69%2C875&year1=200301&year2=201806 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=69%2C875&year1...
gamblor956 8y ago
7500/35,000 = 21.4% It's a 21% price increase, assuming the buyer would have been fully eligible for the credit. Yeah, that's definitely going to change the math for a lot of prospective buyers. A basic Model 3 isn't worth $35,000 cash compared to other similarly priced EVs, especially not when those competitors will still qualify for the rebate.
- secabeen 8y ago
  >It's a 21% price increase, assuming the buyer would have been fully eligible for the credit. True, but not until 2020. In H1 2019 there is still a credit of $3750, and in H2 2019, there's a credit of $1875, so it doesn't fall off a cliff.
ggm 8y ago
Tesla alone decides if the slot in the queue is tradeable. before it can be held to be a net loss of sale, They have the option to say "oh, ok then, its transferrable" and not have the hypothetical hole to fill.
deleted 8y ago
[deleted]

jhauris 8y ago

Do people in those income brackets purchase vehicles that are that expensive? It doesn't seem wise to spend nearly half your pre-tax family income on a single vehicle. I've been assuming the average income of purchasers of the model 3 was in the $120k range, and even that seems on the low side for the price.

tedunangst 8y ago

Is 50% of annual income a typical price point for car purchases?

ovao 8y ago
The median household income in the U.S. was $57,617 in 2016. The average transaction price for a new car in the U.S. was estimated at $36,270 in January '18. So, for new car purchases at least, American buyers spend more than half the median yearly household income.
- dwaltrip 8y ago
  New car purchases are likely made disproportionately by people who earn more than the median income, so we can't probably can't say much from those 2 numbers alone.

ProfessorLayton 8y ago

"The average new car buyer is now 51.7 years old and earns about $80,000 per year" [1] In a study from 2003 the new car buyer income was $69,875 [2] which is $96,905.51 in 2018 dollars [3] [1] http://www.autonews.com/article/20150804/RETAIL03/150809938/car-buyers-getting-older-richer-nada-economist-says http://www.autonews.com/article/20150804/RETAIL03/150809938/... [2] https://www.bls.gov/cex/anthology/csxanth8.pdf https://www.bls.gov/cex/anthology/csxanth8.pdf [3] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=69%2C875&year1=200301&year2=201806 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=69%2C875&year1...

gamblor956 8y ago

7500/35,000 = 21.4% It's a 21% price increase, assuming the buyer would have been fully eligible for the credit. Yeah, that's definitely going to change the math for a lot of prospective buyers. A basic Model 3 isn't worth $35,000 cash compared to other similarly priced EVs, especially not when those competitors will still qualify for the rebate.

secabeen 8y ago
>It's a 21% price increase, assuming the buyer would have been fully eligible for the credit. True, but not until 2020. In H1 2019 there is still a credit of $3750, and in H2 2019, there's a credit of $1875, so it doesn't fall off a cliff.

ggm 8y ago

Tesla alone decides if the slot in the queue is tradeable. before it can be held to be a net loss of sale, They have the option to say "oh, ok then, its transferrable" and not have the hypothetical hole to fill.

deleted 8y ago

[deleted]