Tesla Announces Model S Price Increase | Hacker News Reader

Tesla Announces Model S Price Increase

14 pointsjread7 comments

November 28, 2012

Dear xxxxx,

We will be announcing a price increase for Model S in the next few days.

This is our first price increase since the introduction of Model S and it is very important that we implement this in a way that recognizes those who already have a Model S reservation. This price increase will not apply to anyone with an existing reservation... as long as they finalize their order within a reasonable, predefined timeframe after receiving their "Invitation to Configure."

You will likely receive your invitation to configure between now and the end of January depending upon when you made your reservation. If you configure your car and finalize your order within four weeks after receiving your invitation, you will not be subject to the price increase.

Customers most often want to know if they will be invited to configure in the order in which they placed their reservation. The answer is 100% yes. However, we are finding that some customers finalize their order quickly while others take longer to complete their design and submit final paperwork. As a result, those invited later with "higher" sequence numbers are moving ahead of those with "lower" sequence numbers on a weekly basis.

To be fair, we fill all open production slots with the lowest sequence number reservations that have finalized their order. We need to do this in order to fill all production slots each week. This means the sooner you finalize your order, the sooner your Model S will be headed your way.

Keep an eye out for your Invitation to Configure your Model S!

A looming price increase should help convert reservations into sales, swiftly, while simultaneous rewarding early adopters. I wonder how much of an increase it is, and how long before it drops back?

Having worked in starting up new communities anything that makes the prospect more "real" tends to work as you described for one portion of the population but is usually offset by a spike in withdraws as well. Once people are faced with a final commitment point the end result seems to trend words a small decline. How much of that applies to the car market I do not know,

I'm not sure Tesla needs to drop the price back at all. I recall many iPhone buyers who were upset when Apple reduced the iPhone price.

If Tesla's costs to make each Model S go up, they can't avoid raising their prices.

It'd be nice if they were dropping prices, but I assume only a new model of Tesla would feature a lower price.

The early adopters are already "ahead" (pricing wise) on this decision for now, and most new car buyers seem to accept gradual depreciation as a fact of life. I also don't think Tesla could unveil a radical price cut like the iPhone scenario (~30%) without some serious red ink and damaging their price anchor against German luxury cars.

I'd assumed costs gradually decreasing over time - especially in the (currently) very expensive battery technology. I'd guess they'd want to pass these savings on to increase market share as quickly as possible, rather than try and squeeze some extra margin by maintaining prices.

i understand there is a limited supply? And huge demand, following hugely positive reviews and publicity. So by "supply and demand" economics they can, and should, increase the price irrespective of their costs. Actually i would expect their costs to decrease as mass production increases.

Is there any chance this is a production driven cost increase versus a demand driven increase?

Just received this email, hasn't been posted to their website yet.

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