Tesla Price Drop Angers Current Owners | Hacker News Reader

Tesla Price Drop Angers Current Owners

bloomberg.com

33 pointsspking81 comments

This is not a price DROP. Tesla JACKED up prices on ALL models last year and people forgot about it and now TESLA just went back to the original prices. I been following them since 2016 and they have done this in 2018 with the MODEL S / X P100DL. Exact same shit happened with the first tax credit around 2017 with the release of the MODEL 3. I been scraping their inventory and you can plot the price changes and their used inventory prices are UPSIDE DOWN. Nothing new tesla normal behavior its just that a LOT of news outlets forget this that do not FOLLOW the price volatility. I am now thinking to do a youtube channel to lay it out. -2cents

Not the original prices, actually. They're back to where they were in mid-pandemic. And "JACKED" is a bit spun. It was the market for used Teslas that drove the price increases. They got way above the retail prices; people were actually scalping Teslas. Someone was going to make that money, it might as well be the manufacturer.

I think the price of a base model 3 went from 40k to 60k during covid. I don't understand why people are surprised it's going down now that the car shortage is coming to an end.

I bought a Model Y in 2020 and, during the peak of used car price inflation, I could have sold it used for a good bit more than I paid for it new.

Indeed if you hibernated in early 2021 and just woke up, the prices would look kind of same.

But the other side of the coin is also interesting. Up to six months ago, they couldn't make them fast enough when they were selling the cars for $15-20k more. Now the inventory is piling even with incentives and discounts.

Really curious as to how you choose which words to capitalize and why.

I'm guilty of this so I'm interested in his answer. In my mind it wouldn't read correctly without it.

Say something. SAY something. say SOMETHING.

... this doesn't read well.

"and now TESLA just went back to the original prices". sounds like there are multiple people that went back to original prices but they are trying to point out that the discussion is about tesla. If this was spoken, the emphasis I would place would be on original, "and now tesla just went back to the ORIGINAL prices"

Intonation. He writes by thinking aloud (or in his head) how he says it. Usually we type simply by following grammar. But the way you read a sentence can imply different meanings or subtle emphasis what matters or "between the lines thingy". You can see TESLA being capitalize seems to hint he is a bit emotional whenever TESLA topic being brought up. As poster commented below, he should be capitalizing ORIGINAL given his observations of past price volatility. But instead, TESLA is consistently capitalized. I could be wrong if he intended to use the stock ticker name TSLA (perhaps the E is typo).

Yeah, I am not a strong writer. I just write how i think. I have ADHD + dyslexia and I can't follow grammar. :-( Im just trying to get it out of my head as fast as possible. Thank you.

guessing they didn't know how to make things italics

This is great perspective. Would be awesome if you could share a spreadsheet. So often things are reported in terms of "up X%" or "down Y%", when a simple line chart would tell a more complete and understandable story.

"JACKUP up prices..."

Price fluctuation is standard with virtually every product ever made. Prices rise and fall based on market circumstances. One day cables might cost more, another day the price of aluminium might go down. Last year prices of every goods went up dramatically. Haven't you been to the grocery store?

The way luxury car brands usually do this is by slowly lowering the price, $1K-$2K a month, or offer incentives.

Tesla couldn't do that here because they need to quickly come in under the cutoff for the new laws.

But if they didn't want to take a huge PR hit, they could have sent checks to all the recent buyers. Say $13K to someone who bought in the last month, $10K if you bought 1-2 months, and so on.

Then the new prices would fit the new laws and the recent buyers would actually be happy and do marketing for you instead of being angry and do anti-marketing, which will be more powerful since they just bought it. Going and telling their friends "I just bought a Tesla and you should not" will be way more costly to them than the checks.

Unless they complain on Twitter.

I don't know what specific laws you mean but they dropped the price worldwide, no?

There are a bunch of new US tax credits that have income and vehicle price limits.

I'm not sure if "I just bought a Tesla and you should not" is a compelling argument if it's followed by "because it's a great car and I like it but now it's cheaper!"

I think the argument would be "wait and see if they drop the prices again before buying".

People act like price changes have never happened with car dealers.

The Prius for the first several years always had extra tacked on. Then it suddenly cost less as the numbers in production went up. That was with dealers.

Luxury cars are regularly unobtainable at list -- you have to pay more, get service plans, buy options, or sometimes buy more than one. Again at dealers.

If we took every complaint about the sales process from marques that use dealers, the automotive journalism industry would have nothing else to write about.

Buy a car for a price that is justified by the use and enjoyment you will receive from it. If you're price is based upon speculation of the future price of the car, you shouldn't be buying a luxury vehicle.

Dealers play tricks all the time, but the price they pay from the manufacturer is what we're talking about. Tesla took the dealers out so they could keep all the profit, and now they're paying the price for that by also taking all the blame.

People rightly blamed dealers for marking up prices, but they also had a recourse -- go to another dealer. With Tesla they have no such recourse. They just pay what Tesla asks or not. So they rightly blame Tesla for pricing shenanigans.

People, not being idiots, aren't going to torpedo their own argument by saying Tesla is great and cheaper.

They are going to rant about being nicked and dimed on FSD versus other car brands. They will say the trim isn't up to luxury standards and they feel they paid too much. They will say it's nice not buying gas, but it's too expensive up front.

In a word, they will rationalize why they are correct to feel badly about the price drop, and tell themselves the price drop was merely a trigger to make them realize how much of a flawed and expensive car they bought.

And they may be right.

> The way luxury car brands usually do this is by slowly lowering the price, $1K-$2K a month, or offer incentives.

lowering the price for 2-3mos will make some people wait for next month to get it for a cheaper price. if enough people does that, it could affect their quarter.

i do like the incentives idea. if someone complains within x days, give them the same incentive or offer something else.

Angers some current owners. You can always find people to complain about anything. It's just that bashing Tesla sells newspapers today, and that's where the news industry is going.

I bought a Model 3 seven months ago. At the time it was a good car, at a fair price. Even with perfect hindsight, it was a good decision.

I got a Model Y three months ago.

Je ne regrette rien.

And as Musk pointed out, back in the days when Tesla raised prices, no customer who got the prior low price volunteered to send Tesla a check for the difference.

That's not a good argument.

The general expectation is that customers should know when lowered prices start and end, and be able to take advantage of them.

Not that they want the newest price.

I know it's not. I was being tongue-in-cheek.

Usually the fairness that people seek in these situations is just the desire to dump the unfairness on someone else. E.g. the demand to extend the discount to 3-month old purchases ignores the fact that the people who bought a car 3 months and 1 day ago will feel more upset and wronged.

More wronged? Maybe a couple very unreasonable people. In general I doubt it.

Also you can handle that with a staggered discount.

More meaning they would have felt wronged even before that.

In general I agree that it’s unreasonable. Discounts happen, prices change, we can’t always time purchases perfectly.

There's also no advertising relationships that would dissuade anyone from bashing. This is not to say that Tesla doesn't deserve the bashing (it does).

Hard to feel bad for someone complaining they paid too much for a $77K luxury car.

Hah, the person quoted:

> Marianne Simmons, a self-professed “Tesla fan girl,” bought her second electric vehicle from the company in September

Yeah, if someone can afford multiple Teslas I don't see why I should care about how they feel about prices.

These fanboy people are disturbing. I recently met an apple fanboy for the first time and it's unbelievable the mental gymnastics he used to explain how everything apple does is amazing. This is even though his his iphone, which is only 3 years old, is sluggish as shit. Thats not a problem according to him, because it's an intentional design decision by apple.

Some people pick a brand and it becomes their identity.

Now realize people do that with politics, science (climate change), etc.

I have also observed that the intensity of someone's opinion is often mirrored in the intensity of their opponents contrary opinion, and if they argue about it long enough both of them will soon drift towards irrational fanatism on either side of the topic.

Yes instead everyone should be numb and cynical to everything /s

I’m not a Tesla fanboy, but what’s wrong with being one? If someone is getting enjoyment from something in life, isn’t that a good thing? Is it rational to love the sports team that just happens to be where to live, regardless of circumstance? Most aesthetic decisions in life aren’t “scientific” and cold.

I'll bite. Tying your identity and self-worth to a corporation that will not reciprocate, and in many cases will start specifically extracting more money from you, is bad both for your pocketbook and self-esteem. It's a milder case of Stockholm syndrome.

It's fine to be a fan of something. It's probably not fine to suspend your critical thinking skills, and applaud actions that specifically do you harm.

Does Beyoncé reciprocate fandom when you’re into her? Does the Mona Lisa reciprocate when you’re a fan of that painting? Fandom is always one way, whether to a person, object, country/group of people, team, company, etc.

Fanboy-ism in of itself isn't an issue. It's when someone starts deriding other options without honest consideration for differing considerations that it becomes obnoxious.

I think of it a lot like sports. Ppl see some product/company as their team, and identify with it. Of course they’re coming in with that perspective to any conversation.

Hey, don't let me stop you. I'm not advocating for you or anyone to NOT be a fanboy. In a capitalistic society, the existence of fanboys makes the world better of the rest of us.

How could his 3 year old iPhone be sluggish as shit? Mine is 3 years old and still feels as snappy as when I purchased it, usually they get sluggish around the 6-7 year mark, in my experience.

This sentence doesn't necessarily imply she currently owns two Teslas. She may have bought them consecutively. Heck. Semantically her first electric vehicle could have even been a different brand. English is a weird language.

Even if she owned them consecutively, to have done that she needs to be quite well off.

Or just one, even. Most of this country doesn’t even consider a new car of any kind a financial possibility.

The average vehicle on US roads was built before the Model S even existed and people were not yet sure if Tesla was going to make it as a company.

Agreed.

i wouldn't even call it a luxury car. it's a wannabe luxury car made out of poor materials and terrible assembly.

Tesla can offer the recent buyers some credit toward their next purchases of Tesla products on a sliding scale, with more credits for more recent purchases. The credits can be time limited, like within 2 or 3 years.

This addresses the complaints and ropes in their next purchases.

Doug DeMuro has a pretty good video of some other issues at play for drops in Telsa used car values. https://www.youtube.com/watch?v=GT-9_As6qq4

I lost the previous $7500 EV tax credit thanks to the IRA kicking in before my ordered (and overseas manufactured) EV arrived. If my household is successful enough financially the next few years I won't qualify for the new credit due to income limitations, but only by a few ten thousands in gross income over the limit.

Sure, it kind of sucks to miss out on thier, but I'm still glad that the IRA passed and that the benefits are targeted at people making half what my household makes. It's time for mass EV adoption, not just EV adoption for the upper middle class and above.

I barely qualified for a previous state credit within $1000 of the cutoff, right before more than doubling my income during the pandemic industry craziness. I think cutoffs that don't scale or prorate somehow are so ridiculous. There's no reason to make things all-or-nothing. The criteria should still give you something if you're rich, even if it's $1, so everyone else in the band doesn't get screwed.

I am really happy about cheap model Y Europe in Germany. Even with that crippled range and acceleration. I ordered Kia EV6 10 months ago and have no idea when it arrives. No communication from Kia at all. List price increased by 3200€ since I signed contract. Makes me sad and willing to cancel my order. I hate being treated like shit for years by a car company. After cancellation I will seriously consider purchasing model Y. It’s big enough for small family and should cover my driving needs for a week on a single charge.

I can almost guarantee you that the EV6 would be a low-maintenance car. Hyundai/Kia EVs are well-built and very reliable. With Tesla, it’s quite the mixed bag, some people are regulars at their repair shop. I value my time highly and will not take that risk.

Hyundai sends out more recall notices than I’ve ever seen before. We got 11 in 6 years for our Elantra.

I bought one four months ago. I wouldn't have pulled the trigger if I didn't think I was getting my money's worth.

Would be nice to have 10k extra, but such is life.

JS-free archive link:

https://archive.today/eEBxn

Note: This article is from 2 days ago (Friday, January 13th).

Smart money says to wait a few more months before buying a Tesla — the price is likely to drop again. Especially likely if everyone waits a few months more…

This price cut was done to be eligible for the US tax credit. Once March hits there will be battery requirements which will limit the amount a Tesla owner can receive as a tax credit. Feel free to wait, but I doubt the price is going to drop much more.

Or they would have to drop the price even more because the buyers cannot use the credit as a discount.

> One half is based on the EV battery having at least 40 percent of its critical minerals sourced in the US or one of its free trade partners; the other half is based on the EV battery having at least 50 percent of its components manufactured or assembled in North America. Those percentages are meant to scale up in the coming years as well. This is because the IRA seeks to make certain that batteries are sourced and built in North America, not just the cars themselves.

That feels like it might take a while to meet.

No, the price cuts were international.

> “I have solar scheduled to be installed soon. Really having a hard time giving Tesla any more of my money and can’t even look at the car this morning,” Checketts said in an email. He said he instead drove a Prius today.

It never ceases to amaze me how wealthy people can be so incredibly immature. "I didn't get a discount on my expensive car, so I cannot look at it / drive it. I will drive another vehicle."

Wealth has curious ways of keeping you in arrested development.

I suppose the difference is that they can afford to be. If any of the rest of us stopped liking our car on an arbitrary whim, we'd have to suck it up and drive it anyway.

This article is kinda dumb. Looks like they managed to track down a handful of people who were bothered by the price cuts. Wouldn't it be more surprising if they couldn't find anyone that was bothered by them? If they had cited some kind of survey where a significant portion of respondents had expressed frustration, then I think we'd have a story. The title suggests that many more owners are upset than just a few.

And no I don't own a Tesla nor do I plan to.

Around here they had to do something; cars like the MG4 are just silly value compared to Tesla at the old prices.

It could have gone the other way:

With EV sales doubling every year, battery production might hit a price surge like chips have.

Companies in commodity electronics and stuff try to fight this with a 30 d price protection guarantee and stuff. Ultimately, though, it's unlikely to move sales that much for Tesla.

Anyway, I'll do the required stuff on this thread and mention Osborne Computers.

This is an interesting price drop.

One of the key value proposition of Tesla is unique among car companies in terms of the premium it can charge. This has kept $TLSA so high. This is why it has been so highly valued in comparison to say Toyota. If for some reason they need to start discounting their cars in order to move them, it means that they may be losing this premium, which could permanently affect their long-term stock price.

The question is why would that premium now be dissipating? Why is Tesla just becoming another car company? Because of competition finally catching up? Because of the macro-economic factors? Because of Elon Musk's reputation hit because of the twitter mess? How much can we attribute to each factor?

I think that's all needlessly complicated. This is just market economics 101. There was a huge boom in demand over the past two years (used Teslas were literally selling for more than new ones because they had "stock"!) and the price rose to catch up. Now the economy is cooling and inventories are rising, so the price is dropping.

FWIW: the same Model Y configuration that I purchased in early 2021 is still $1000 more than the price I paid (actually quite a bit more if you buy FSD, which is $5k more than it was on mine). It's not like these are fire sale prices. They got very expensive very fast, and that's being unwound just as fast.

> Now the economy is cooling and inventories are rising, so the price is dropping.

US car sales are not dropping across the board, it is specific to Tesla. New car sales volume in $ has been consistent since September 2021.

https://ycharts.com/indicators/us_total_vehicle_sales

> the same Model Y configuration that I purchased in early 2021 is still $1000 more than the price I paid

That is lower than inflation for the car industry in general, which is somewhere around 7%. So Tesla prices are dropping relative to the car industry in general.

This is interesting and reinforcing that something is going on.

Not sure that's responsive? Tesla production has been growing 40-50% per year, so flat sales would absolutely be expected to produce huge inventory shortfalls. In fact Tesla sales aren't flat, but the factories did for sure get ahead of sales.

Again, you're reading tea leaves here. There's nothing weird about this at all. It's a high demand product in a volatile sales environment and it's modulating prices (in both directions) to try to keep demand and supply even. This happens everywhere, it's not special just because the CEO is a hate magnet.

It is pretty clear what is happening:

Tesla captured 72% of EV sales in 2021. But only 65% of EV sales in 2022, and it dropped to just 58% in Q2 of 2022. So Tesla's market share is dropping pretty rapidly in comparison to its EV competitors.

https://www.barrons.com/articles/tesla-lost-market-share-in-...

"Tesla grew 40% in 2022 — selling 1.3 million cars — falling short of the EV industry growth and below its 50% growth target."

https://www.forbes.com/sites/petercohan/2023/01/15/how-elon-...

Right now it is in the stage where the competitors take big shares out of the market at Tesla's expensive now that there are serious competitors to Tesla both in North America and in China. Not sure when we get to a new equilibrium here.

There is nothing weird about a car in the luxury space dropping its prices 20% overnight? Are there other examples of cars (in the same price range, volume levels) doing this? Is it that common?

Are you implying all price fluctuations are uninteresting because they are all a matter of matching supply with demand?

Luxury car prices jump around like crazy. Go call five dealers and get quotes on the same BMW. Turn on your TV in the holiday season and try to dodge all the "Lexus Holiday Sales Event" ads.

Yeah, this absolutely happens all the time. It just doesn't reinforce your priors when someone gets a deal on a Porsche.

I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those?

I'm not even assuming to know the answer (might not be enough info; although i know many car manufacturers do sell direct to consumer, although it's not as common). I differentiate this between the dealership model since there is an additional middleman (and they have different cost structures; how they hold/buy inventory on lot, etc etc). So, the more direct comparison would be the price that dealerships pay overnight drop 20%.

Either way, I don't think you will be convinced that this price drop is interesting since it's all just matching supply and demand.

edit: grammar -- distracted so i think i wrote sentences in the wrong tense.

> I'm looking examples where a car manufacturer dropped their prices overnight by 20%. Do you have example of those?

Every week? That's a ridiculous question, and you know it. Luxury car brands never sell for MSRP. Everything is always "discounted", and by a different amount for every sale. You genuinely think those price changes are not due to market factors? The only reason you're even able to assert this point is that Tesla, almost alone among major manufacturers, sells directly to customers for a fixed sticker price.

Assuming (naively) that you paid 50k for your configuration, and it’s now 1k higher, then the increase is 2%. That’s way below inflation.

Another important factor for the premiums (both for car price and stock price) may be FSD. If we were guaranteed that FSD would never happen, the stock price would suffer more than the unit economics, but both would suffer. (I think!)

But who knows, this is all armchair quarterbacking.

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