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Tesla cuts prices by up to a fifth in US and Europe as EV price war starts
- rootusrootus 4y agoIf you bought a Model Y a week ago, I'm especially sorry. Even people who bought a Model 3 LR when it was discounted in December just got hosed, 7-10K or thereabouts. Oh well, that's part of what happens when the manufacturer is also the only seller. Interestingly, when GM did something similar to 2022 Bolt customers, they cut them a check to make them feel better about the slashed price on the 2023 model. Tesla definitely won't do any such thing, of course. Most manufacturers probably wouldn't. It's interesting that GM chose to. I'm also seeing some regret on the part of Ioniq 5 owners who say they'd have bought a Model Y at this price instead of the I5. It's interesting how many people bought competing EVs just because Tesla was too expensive.
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- laluser 4y ago> just got hosed It's a car; a depreciating asset. I think people got way too attached to the idea that cars were going up in value. In this case, they tried to curb demand by increasing prices when everyone seems to have been doing the same. Countless dealerships added BS overhead as supply was so low last year. That's all changing.
- ceejayoz 4y ago> It's a car; a depreciating asset. Sure, but cutting prices 20% on new ones means your asset you bought last week just depreciated substantially faster than planned.
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- rootusrootus 4y agoExactly. It's getting an entire year's worth of extra depreciation in an instant. It's just on paper until you go to sell, but that doesn't mean it isn't real.
- lanstin 4y agoAnyone buying a car in the last year or two had ample data that it was a bubble due to supply issues causing sellers to be unable to maintain the volume. i bought a used model 3 for 35k usd before the bubble, saw the prices for that same car and mileage spike to 65k and then drop to 45k and now still 40k I do find it interesting that with all the data out there, i find it hard to see a graph of prices over time for cars. not the instantaneous prices, thwy are ineascapable, but the trend and history.
- KerrAvon 4y agoRe Ionia 5 customers: If so, I don’t think that regret will last long — the Hyundai EV products have better ergonomics, a real support network, and they’re not electric MAGA hats. And non-Tesla charging networks will improve.
- rootusrootus 4y agoMost people will have moved on to other cars by the time the CCS1 network reaches parity with the supercharger network, though. Right now it's still a compelling reason to buy a Tesla. Maybe the best reason.
- boredpeter 4y agoTesla actually did give model 3 performance owners in 2018 the option of getting a check for $5k after they made the performance upgrade option free. The only downside was you would lose your free supercharging for life. But that was back before Elon was a massive d-bag.
- W-Stool 4y agoI'm not sure Elon was not a massive d-bag back in 2018 - he just didn't have the platform (Twitter) to show those traits off back then.
- herpderperator 4y agoHe didn't? He joined Twitter in 2009.
- hacym 4y agoHe was on Twitter in 2018. People just started listening to him for some reason.
- rootusrootus 4y agoInteresting. Well, maybe as a consolation prize for slashing the price on the Performance model so much, they could give away the Performance Boost to anyone who bought a LR relatively recently. Please. :)
- genderwhy 4y ago> If you bought a Tesla, I'm especially sorry. Drove a Tesla for ~10 years. What a disaster of a vehicle to own. Great delight to drive, huge headache owning it.
- coolbreezetft22 4y agoWhy did you drive it for a whole ten years if it was such a disaster? Seems like an excessively long time to tolerate something that's causing you such headache.
- genderwhy 4y agoThe answer to that is complex, and involves personal finances, shame, papering over concerns, the desire to use electricity as fuel, not understanding what the other options were, etc. etc. People get attached to bad ways of doing things all the time. This was no different.
- sva_ 4y agoA friend just ordered a Model Y a couple days ago and apparently got 20% refunded.
- elteto 4y agoThat's because he has not taken delivery. If Tesla didn't do this automatically he would just cancel his order and place it again to get the new price, thus generating more churn for Tesla.
- yardie 4y agoThe Model Y was approaching premium car prices without the premium interior. In 2020, they were hovering at $50k but when the pandemic started they raised the price practically every week. If you’ve driven an Audi, BMW, Mercedes you kind of know what to expect and where the luxury price comes from. Except the Model S I never got the impression the 3 and Y were worth that price Tesla was charging. And I think the market made that determination as well. It’s great technology but 60x $1000 car payments is still a big commitment for a lot of people. There just aren’t that many buyers in that class.
- BoorishBears 4y agoIn my experience the majority of the Teslas are luxurious noise comes from the fact it's often the first "luxury" car people have owned People who normally drove "boring" cars like Civics and Camrys because they saw cars as a utilitarian purchase swung for a Tesla because it was more of a tech purchase than a car purchase. So a lot of people insist it's the best car they've ever driven, and they're not lying... they just haven't driven many non-utilitarian cars.
- tverbeure 4y agoI'm surrounded by middle aged high-tech-earning Bay Area Tesla-owning colleagues who used to drive (or still have as their second household car) BWMs, Audis, Lexus etc. I'm one of them. We didn't buy a Tesla because it was a step up from a Camry, but because Teslas are so much more fun to drive. It's really that simple.
- rootusrootus 4y agoIt can't be quite that simple in general. There have always been really fun cars, even some that were sedans. Maybe the niche Tesla figured out how to exploit was stoplight racers. Enthusiasts have never had trouble finding fun daily drivers.
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- lotsofpulp 4y ago> Oh well, that's part of what happens when the manufacturer is also the only seller. I am not seeing the connection. If the manufacturer reduced the price it was selling at to the middlemen, why would the middlemen (assuming there are numerous) not also lower their price to win more customers?
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- erulabs 4y agoOr the implication that the middlemen keeping the prices high is somehow a good thing?
- rootusrootus 4y agoTesla raises and lowers prices instantly in response to the market. They're essentially doing the markup that dealers do, except they get to keep it for themselves. And they don't have competitors who can sell you a Tesla.
- lotsofpulp 4y agoHow is this dynamic changed by adding a middleman?
- josefresco 4y ago> I'm also seeing some regret on the part of Ioniq 5 owners who say they'd have bought a Model Y at this price instead of the I5. Sounds like people who are more committed to the brand than the product. Hyundai makes quality cars, Tesla does not... anymore.
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- adam_arthur 4y agoShould’ve bought something cheaper if you care about that. Hard to feel sorry for people blowing their budget on a car when they all functionally do the same thing at the end of the day
- r00fus 4y agoYeah, I don't really see sympathy with those paying more for the same thing because timed it worse than someone else. This happens in concert tickets, airlines, even appliances all the time. Heck even housing - asking a new family to our neighborhood then telling them what you got your (very similar) house for 3 years (or sometimes even 3 months) ago...
- potatochup 4y agoThe GM bolt rebate came with a condition saying that you wouldn't join any class action against GM w.r.t. the battery fires they were having. GM is also somewhat more desperate to sell bolts because it saves them buying emissions credits.
- candiddevmike 4y agoDoes this mean their stock will continue dropping? This is typically seen as a reaction to poor bookings/forwarding looking revenue, no?
- qwytw 4y agoIt's getting increasingly clearer that Tesla won't be able to maintain both high margins and huge growth figures (despite the market believing they will be able to pull it off ,for some reason, because nothing else would have justified their extremely high valuation). So probably.
- cduzz 4y agoTesla seems to be making bets in huge volumes of cars sold. Possibly with their manufacturing decisions (a couple of really big plants making only a couple of varieties of models, with the models not changing much from year to year) they'll be driving unit costs way down such that they can reduce their sales price and keep their margins. If it's a bad bet they're sitting on a lot of stranded manufacturing assets. If it's a good bet they'll look pretty smart. Their unit prices have historically had pretty dynamic pricing both up and down, though in the past 18-24 months it's mostly been up.
- qwytw 4y agoI think they'll do fine. It's just that their peak valuation was unreasonably high. Basically many expected it to become the Apple of the automotive world (i.e. both huge volumes and much higher margins than anyone else) and that's probably unfeasible longterm due to a variety of reasons if their competitors eventually catch up. Obviously Tesla will still be valued at premium even compared to the legacy car makers who transitioned successfully to EV (and that makes sense from a financial perspective e.g. high debt levels and various other obligations). But it really made no sense for Tesla to have a higher market worth than all the other car manufacturers combined..
- dragontamer 4y agoNo guarantees. I'm of the opinion that TSLA's stock has largely dropped due to Elon Musk selling $40,000,000,000+ worth of stock over the last couple of years. Look at every major TSLA price drop. They coincide with Elon Musk's sells. Ex: Elon Musk's December 14th filing (https://www.sec.gov/Archives/edgar/data/1318605/000089924322038522/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1318605/000089924322...), or Elon Musk's November 11th filing (https://www.sec.gov/Archives/edgar/data/1318605/000089924322035394/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1318605/000089924322...), etc. etc. Feel free to search SEC's "EDGAR" database for Form 4, Tesla and Elon Musk. Now line these up with TSLA's stock price. What pattern do you see? When a "whale" sells huge amounts of stock, it just causes the price to drop. No matter what the fundamentals are. -------- Now "why" is Elon selling TSLA stock? Is it just to fund Twitter? Or is Elon cashing out of TSLA because he's losing confidence in it? Hard to say, its not like the man is very honest about his intentions (and he shouldn't be). But its always a good idea to keep an eye on the actions of the insiders and how they trade.
- korroziya 4y agoI used to report auto sales as part of my role as a business analyst more than five years ago. During that time my editor used to chew me out for including Tesla sales, saying quantity > quality. The amount being sold at that time was of course, dwarfed by ICE sales (still the case even in Cali) and there weren't as many competitors in the EV scene. Sometimes I wonder whether he still would be chewing me out for trying to deep-dive into EV sales. Just food for thought.
- hgsgm 4y agoRemember when Musk promised a $35K Tesla? OP: > The Model 3 dropped to $43,990, a $3,000 reduction. https://www.tesla.com/blog/35000-tesla-model-3-available-now https://www.tesla.com/blog/35000-tesla-model-3-available-now > February 28, 2019 > $35,000 Tesla Model 3 Available Now https://electrek.co/2020/11/16/tesla-stops-selling-35000-model-3-2021-model-year-refresh https://electrek.co/2020/11/16/tesla-stops-selling-35000-mod... > Nov 16 2020 > Tesla stops selling $35,000 Model 3 with new 2021 model year refresh
- throw_nbvc1234 4y agohttps://fred.stlouisfed.org/series/CUSR0000SETA02 https://fred.stlouisfed.org/series/CUSR0000SETA02
- Dylan16807 4y agoSo you're linking the used car chart specifically, which changed a lot more than inflation. Is that to say they're greedily following the market, promises be damned? As far as inflation goes, Dec 2019 to Dec 2022 is about a 15% increase, which would bring the equivalent of that $35000 car up to $40500. This $3k price drop still leaves a more than $3k gap in inflation-adjusted price.
- bryanlarsen 4y agoThe $35,000 promise was made Jan 2015. 35,000 in 2015 is over $43k today.
- Dylan16807 4y agoI think it's fair to go based on actual launch date. They knew they weren't going to offer it right away. Inflation was normal from 2015-2019 so that should have been baked into the announcement. Imagine if it had launched with inflation included. Here's your $35000 car, for only $38500. I don't think people would have been happy.
- danans 4y ago> In the US the entry-level version of its Model Y now costs $52,990 This is still more than the top level trim of the VW ID.4, and comparable to the top level trim of the Ioniq 5 and EV6. Of course the range is still better on the Teslas. However, there is a greater realization that for day to day driving 250 miles of range is sufficient, especially if you can charge at home. For multi car households (common in the US), you can also have a secondary gas car for long road trips. Nonetheless, a price war for EVs is good for their adoption, and hopefully also drives down used EV prices too.
- eisa01 4y agoIn Norway, the entry level Model Y is $43.5k compared to 48.5k for the entry level ID.4 So it looks like Teslas are selling relatively better in the US than Europe?
- lastofthemojito 4y agoMSRP sure, but dealers are still marking most EVs up. And it seems like very few low-trim level cars are actually being made, so in practice buying any of these EVs ends up being more expensive than one might first expect. If I go onto cars.com and search for new ID.4s in my area, they're listed between $47-55k. $47-64k for Ioniq 5s and and $51-69k for EV6s. Ok, $68,660, but still, that's an expensive Kia!
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- anovikov 4y agoAt least the original 2016 promise of a $35K electric car is now fulfilled, because that's what it will now cost in 2016 dollars, or so.
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- downrightmike 4y agoTesla is now Toxic because their leadership has made it a point to be toxic. No one wants to deal with toxic people.
- tverbeure 4y agoThe new price of the long range Model Y, $52990, is still $4000 higher than the $48,990 base price that's printed on my February 2021 invoice. Back then, the delivery time of a Model Y was only 3 weeks, ridiculously short compared to any other car or car brand at the time. Shortly after, delivery times shot up to over 6 months or more, and the price went along with it. The price that I paid was IMO fair. I've had zero issues with it, it's much more fun to drive than the more expensive German car of my wife, I love autopilot for long distance driving (I will never buy or use FSD though), and 30k miles later, I've saved around $5k (ok, let's make it $3k) compared to using gas in the 2 years that I've owned it. But I would never have bought it for yesterday's price of $65k.
- fallingknife 4y agoThat's 8%. Close to inflation. edit: it's actually much less. According to the BLS inflation calculator $48,990 is equivalent to $55,282 now
- tverbeure 4y agoGood point. Inflation may well have been higher than 8% over 2 years.
- ericpauley 4y agoHow does that $5k savings number work out? If electricity were free, that'd be an implied gas price of $6/gal for the entire time (for a 35 mpg car). Anywhere with gas prices that high (e.g., California) probably has high electric prices to match (e.g., 30c/kWh in CA would imply $8.50 per gallon at a conservative 4mi/kWh).
- tverbeure 4y agoThe night time PG&E EV rate in the Bay Area is something like $0.25c/kWh and $0.15c/kWh flat-free in Truckee where we spend a lot time. We also have solar. It's probably a bit less than $5k, but still a good first-order engineering approximation.
- danpalmer 4y agoMy take on this is that Tesla are still targeting the top ~10% (maybe?) of the car market and so it's unsurprising that they're starting to struggle with their pricing. Something I think a lot of people, particularly in car enthusiast circles, or highly paid Hacker News reader circles, is just how little people want to pay for cars. A £45k car is an expensive car for most people. Bearing in mind that there are plenty of good cars at £25k (new) and plenty of supply of second hand cars that are only a few years old and much cheaper. As a comparison, I'm happy to spend £2k on a laptop, but the vast majority of people are buying in the £500-1k range (or replacing with a cheap tablet etc). A £2k laptop is probably in the top ~10% of the laptop market, as much as it might seem totally normal to me. Tesla really need to expand to more of the market, with, say, a $35,000 car. I'd love to see a small hatchback for £20k from them, and I think it would do very well in Europe. Much better than an £80k ~tank~ truck.
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- josefresco 4y ago> A £45k car is an expensive car for most people. I agree but there was an article shared here the other day that outlined how new car prices are higher than ever. The average new car (non-luxury) price was/is around $45K
- danpalmer 4y agoGood point, although that may be a bit US centric, and that's only new cars – much of the market is second hand cars. I don't know the numbers for Europe/UK, but anecdotally, that sort of price doesn't seem at all common to me, whereas I do know people who would only ever consider buying second hand cars. Plus the fact that trucks aren't a thing here probably brings down our prices significantly. A quick look at the Office of National Statistics suggests that the average UK price is £36500 for electric/hybrid, or £29000 for petrol/diesel (still the majority of the market here). That seems quite a bit lower than the US, and is still only the new car market.
- gambiting 4y ago
- bertil 4y agoThe title quotes one financial analyst who expects a price war, but is there any evidence of that happening? My understanding is that all non-Tesla EVs are sold at a loss. I’d be surprised if they lowered their prices soon in a similar fashion.
- enslavedrobot 4y agoIt's hard to know because most don't report EV margins separately.
- germinalphrase 4y agoWhere are they making up that subsidy? Lower maintenance costs seems to be a key selling point for EVs, so I’d imagine it’s not that.
- rootusrootus 4y agoPeople who are shopping on TCO aren't buying Ioniq 5s, EV6s, or Teslas. If they are, they're delusional. These aren't cars you buy to save money. If that's your goal, a Bolt has >250 miles of range and costs 26K. Or 11K if you live in Oregon and have a moderate income. It's tough to find a car from any manufacturer with any fuel source that can touch the TCO on that.
- drcongo 4y agoAre we sure this isn't just because Tesla is tainted by association with Musk, and the whole world has finally realised what an awful human he is? I'd be embarrassed to be driving one.
- rootusrootus 4y agoOutside of our tech bubble, most people probably couldn't tell you anything about Musk. I think what we're seeing here has little to do with his antics, and everything to do with high production, niche market, and faltering economy.
- nikau 4y agoHe has always been in the mainstream press, its just now articles have gone from "idiosyncratic genius" to "moron".
- perfecthjrjth 4y agoWhy buy performance "California Camry"? Just buy model Y. You gonna get bullied if you drive Cali Camry aka Model 3 :)
- Dudelander 4y agoThis needed to happen. Even with tax credits EVs are not as good as a fuel efficient gas cars. I think the price needs to come down a little bit more to compete with hybrids, but this is a step in the right direction. I also think that the high-end models need to have a better trim - because if you shell out that kind of money you ought to enjoy it.