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Impact of February 28 Price Change on Current Owners

Impact of February 28 Price Change on Current Owners

While new technology products are typically expensive when they're introduced and then see price decreases as the technology matures, yesterday's price drop is considerable and could have a huge impact on current customers, by lowering future re-sale prices.

The X 100D we purchased last summer is now $15K cheaper. The S 100D we purchased 2 years ago is now $18K cheaper.

While this was inevitable, Tesla should do something for customers who purchased vehicles in the last few years, that will likely see a quick drop in the value of their Tesla vehicles.

Since Tesla is pushing hard to achieve and sustain profitability, they won't be able to provide cash refunds to those customers, however there are several things they could do that wouldn't have much financial impact.

For recent vehicles (all S/X 100D's - the current Tesla S/X models), Tesla could activate software-limited features, at no charge. This will cost Tesla little or nothing, and since those customers had already decided not to purchase those upgrades and likely wouldn't purchase them anyway. This would include activating EAP, FSD and vehicles with 72A chargers software limited to 48A. For the FSD activation, those owners should be charged for the HW3 processor upgrade in order to take advantage of the FSD activation, but that would still be much less than the cost of activating FSD after delivery.

And for the affected customers, Tesla should provide a credit on a future S/X purchase if their current S/X is used as a trade-in (less the value of the software activations).

While this program will reduce Tesla's revenue for future S/X sales, it might also encourage those owners to purchase more expensive S/X vehicles for their replacements, than going to the less expensive 3/Y models.

With all that Tesla announced yesterday, it's not surprising they didn't take into account the large impact this will have on current owners, essentially reducing future re-sale by 15% of 100D's purchased in the last 2 years. And if enough owners press Tesla about this, perhaps they will do something to reduce the negative impact of yesterday's announcement on their current owners.

In addition to the significant price decrease, they also have a potential problem with owners who purchased EAP and not FSD, since they've replaced EAP/FSD with AP/FSD (AP is now only TACC plus AutoSteer; NOAP, AutoPark & Summon are now part of FSD, likely because they decided those features need HW3).

ckcland2 | 1 marts 2019

You bought when you did because you wanted that vehicle and you accepted the price point. It has changed, Tesla will continue to change. Get over it. Tesla owes you nothing.

El Mirio | 1 marts 2019

By that logic Tesla should retroactively deactivate features or upcharge existing customers if they decided to do price increases on future sales.

lilbean | 1 marts 2019

Wah! I could have had the Performance X for the price I paid! But then I would have missed out on three years of an amazing car, Haha!
People wanted a lower price and whined about the higher price. Now the price is lower and people are still bitching. Can't have it both ways.

El Mirio | 1 marts 2019

there is a thing for people which can't handle price volatility its called... wait for it.... LEASING!!!

reed_lewis | 1 marts 2019

@bp - careful.. You will piss of the Tesla Kool-Aid drinkers....

grins.va | 1 marts 2019

I agreed to the price of my Model S when I bought it in 2016. Not going to start whining about the cost now.

David N | 1 marts 2019

What makes some people feel that they are “owed” something because of the price change?
Price changes all the time in a lot of industries.
Are we in the “I’m owed something” era?
Sounds a bit like a self centered, selfish attitude.

El Mirio | 1 marts 2019

@David N

We are in the pay per use generation/always leave options open generation, people have a hard time to commit without questioning their choices.

If they do commit they seek to blame others for their own decisions.

carlk | 1 marts 2019

Some people still don't have the slightest idea of what signing a sales contract means.

jimglas | 1 marts 2019

I want a refund on my flat screen TV, the price has dropped since I bought mine 3 years ago!
(sarcasm off)

NKYTA | 1 marts 2019

@bp "While this was inevitable, Tesla should do something for customers who purchased vehicles in the last few years, that will likely see a quick drop in the value of their Tesla vehicles."

Why are you leaving 2012, 2013, 2014 and 2015 owners out of this??
What are we, chopped liver?

Did you get the car you paid for, for the cost you agreed to pay Tesla, at the time you wanted the car?

I guess it is time for me to start whining about missing out on parking sensors again...not.

gbgadgets | 1 marts 2019

I agree about expecting price changes, and Tesla doesn't have to do anything for contracts that are done. However, they do have an issue with the cars currently ordered and in process, where the buyers have the option of cancellations, etc.

If I had a car ordered and not yet delivered, I would cancel and re-order at the lower price....so Tesla should have a plan in place to deal with that without having to have buyers and Tesla jump through the formal hoops of buy/cancel/reorder (who knows how many people that is...1k, 5k, 10k).

Then you start looking at anyone who took delivery in the past couple days or even 30/60/90 days....Model S 100D goes from $96,500 to $83,000...that is a $13,500 kick in the....

I wasn't following the forums or Tesla news when they changed battery options and HW versions in the past to see how that impacted price (if at all) when those changes were made. Tesla might have a tough time getting repeat buyers or even current owners recommending the brand for people that fall into that $13,500 kick in the....category.

If you take out the tax credit cut in half, then the kick in the...is just under 10k....so perhaps that is more fair of a number to be disgruntled over. I am not so sure someone who bought the car 2/1/2019 would agree that the price drop is just the benefit of owning the car a month earlier.

VicF | 1 marts 2019

For those that did not purchase EA or FSD, Tesla should give existing customers the same price as today. Existing accounts still show $7K for EA, that is BS.

ckcland2 | 1 marts 2019

@reed_lewis, your sounding like an angry short more every day.

RedShift | 1 marts 2019

My 60 doesn’t have park sensors or even folding mirrors.

It also got devalued by the M3 now going 220 compared to my 208 at just about 24 K in California.

Tesla, start with me first, and others. BP, please, go to the back of the long line, no cutting in line please.

lilbean | 1 marts 2019

I think Tesla owes me a performance Model X since the price is the same as what I paid. Wah!

Tesla2018 | 1 marts 2019

People are complaining about loosing 33k on the price of their cars
Must suck being able to afford almost 200k on cars.

Guess its time to check Ferrarichat and see if 488 owners are crying about how they lost value since the new F8 is coming out.

Would Tesla owners have preferred a facelift on the new cars which would make the value go down instantly on existing cars?

kcheng | 1 marts 2019

"VicF | March 1, 2019
For those that did not purchase EA or FSD, Tesla should give existing customers the same price as today. Existing accounts still show $7K for EA, that is BS."

But, AP is not EAP, and new FSD is not the same as old FSD. I'm totally sympathetic, and feel people should have the opportunity to vent. That's just human nature, but unfortunately, Tesla made the unpopular decision to cut prices. It happens, not quite as much or as often as Tesla seems to do it, but Tesla decided that the benefit of lowering prices to attract a larger pool of customers was more important than keeping their early adopters happy. Unfortunate, but Tesla seems to have a habit of disappointing their early adopters.

skymaster | 1 marts 2019

Wah....I ordered a Model S 85 in December 2012. I paid 90k and took delivery in March 2013. The upgrades started on July 1st 2013 and have never stopped. I sold it after 28 months and 35k of extremely memorable and glorious driving. I wanted to sell it before the autopilot 1 software was released. It has been 42 months (but who's counting) since i sold and I still can't pull the trigger on a new Tesla. I have been really close a couple of times...maybe soon. Tesla told us that the car was going to get continuous upgrades! I have a love-hate relationship with this company.

blue adept | 2 marts 2019

Don't worry, early adopters have not been forgotten:

>>> "Upgrading to Autopilot and Full Self-Driving Capability

The Tesla Team March 1, 2019

All customers who bought a Tesla before yesterday’s price decrease will be able to buy the Autopilot or Full Self-Driving capability for half of what those features would normally cost after initial purchase.

Autopilot, which enables automatic steering, accelerating and braking, normally costs $4,000 after delivery and Full Self-Driving normally costs $7,000 after delivery. Full Self-Driving capability includes Navigate on Autopilot, Advanced Summon, Auto Lane Change, Autopark and, later this year, will recognize and respond to traffic lights.

Any customer who bought a Tesla prior to this week’s price adjustment will be able to upgrade to Autopilot for $2,000 or Full Self-Driving capability for an additional $3,000. In other words, for a customer who previously hadn’t purchased Autopilot plus Full Self-Driving, they will soon be able to do so for $6,000 less than before. Customers who previously purchased Full Self-Driving will receive an invitation to Tesla’s Early Access Program (EAP). EAP members are invited to experience and provide feedback on new features and functionality before they are rolled out to other customers.

Beginning next month, any existing customer who wants to upgrade to Autopilot or Full Self-Driving capability will be able to do so with a one-click payment. There will be no need to call anyone, and it will be as easy as it was to order your car in the first place."

https://www.tesla.com/blog/upgrading-autopilot-and-full-self-driving-cap...

I can only hope that this helps to placate some of your disgruntlement and encourage you to understand that Tesla is doing what they're doing for ALL OF OUR benefit while working to maintain solvency in an ever volatile market environment so that they can continue to do so.

sbeggs | 2 marts 2019

@skymaster,
I love your use of the word glorious!

bp | 2 marts 2019

I was one of Tesla's early Model S owners, purchasing a 2012 S P85 - and went through years of watching Tesla add new features (power folding mirrors, parking sensors, TACC, larger battery packs, AP, dual motors, …). But when they did that, they kept the purchase price about the same, and increased prices for EAP/FSD after AP2 was released. And this helped to maintain the re-sale price.

I'm estimating we lost about $25K in value between our 2017 S 100D and 2018 X 100D after this week's price drop - that's about 2/3 of the price of the new $35K Model 3...

To help current customers, they are offering 1/2 price upgrades for EAP/FSD, which will help those customers who hadn't activated one or both of those features.

For those of us who went "all in" and bought both EAP/FSD, they are only offering to add our vehicles to the early access program, so we'll get software updates a little bit earlier than everyone else.

I agree that current owners are not entitled to anything - we purchased the vehicles as is for the current price and executed a Purchase Agreement that didn't provide for Tesla to do anything about future price/feature changes.

However, Tesla has strong customer loyalty, in part, because they've treated their customers well. Which is demonstrated by their 1/2 price offer for those vehicles without AutoPilot fully activated.

Without impacting their short term profitability, they should do more for those customers who already had EAP/FSD. If those vehicles have other software activatable features, they should also be available at half price (or free), such as battery or charger capacity.

If there are any of the EAP/FSD vehicles that don't have FUSC (Free Unlimited Supercharging), then activate that for those vehicles. And if the vehicles already had FUSC, then provide those customers the ability to add FUSC onto their next Tesla vehicle, if they use the current one as a trade-in.

Overall, these price decreases should be great news for Tesla and new Tesla customers - and bad news for the other manufacturers bringing out competing long range EVs. The shift to only online ordering is also bad news for the dealership lobbies because Tesla has decided to bypass them completely.

And since Tesla has now done something to accommodate those owners who hadn't already purchased EAP or FSD, all I'm recommending is they take that last step and provide something more for those owners who already had EAP & FSD.

NKYTA | 2 marts 2019

@bp, I appreciate most of your posts.

“Without impacting their short term profitability, they should do more for those customers who already had EAP/FSD. If those vehicles have other software activatable features, they should also be available at half price (or free), such as battery or charger capacity.”

Why not do something for the Roadster Owners? Why just EAP/FSD Owners?

Where do you draw the line?

This is perhaps a bigger change than most have experienced.

This will all get figured out...soon.

There, I said it. Fanboy response. But I’ve been in the Tesla bubble for longer than most, having wanted a Roadster but not being able to rationalize it a decade ago.

Have a cocktail, or an ambien, and put your car in Chill Mode. Or Romance Mode. In fact, I think I’ll go down to the garage and sit in the car and take a nap. Yep, my December 2012 has all that romance still.

EVRider | 2 marts 2019

I don’t think it’s fair to blame people for whining a little about these huge price drops — this is unlike anything Tesla has done before. We took delivery of a new Model S and Model 3 in December, and the identical Model S is now $13,500 less (I’ve been avoiding figuring out the Model 3 decrease :-). Plus, since I already purchased both EAP and FSD on the S, I can’t benefit from the discount being offered to existing owners.

I understand that this is the way Tesla rolls, but I don’t have to be happy about it.

SCCRENDO | 2 marts 2019

I still have an early car phone wired to my car. For the same price Apple is offering the iPhone X. I think it would only be fair if they gave me a new iPhone X or even a refurbished one.

Tropopause | 2 marts 2019

Well I guess my hunch proved to be the wrong move. I upgraded to FSD Feb 27, one day prior to the price reductions. I paid $5,000 plus tax and am expecting to get credited $1,000 to drop the price to $4,000.

$3,000 plus tax would be a whole lot better price. At least for the extra money I will be an Early Access Program (EAP) member.

Uncle Paul | 2 marts 2019

I have a different perspective.

Since I purchased my 75 X in early 2017 it has been massivley been enhanced at absolutetly no extra charge to me.

Got many OTA updates that have significantly bettered the car, and added significate value for me.

Vehicle was uncorked, providing inproved 0-60 times from 6.0 to 4.9 seconds. Feels like a rocket ship.
Automatic windshield wipers have been added.
Automatic headlight dimming/brights.
Far improved Autopilot. No more ping ponging, automaticaly selects the faster lane, automatic lane changes with press on turn signal, Better sounding stereo, faster charging, 5X more supercharger stalls, Automated lane obstruction stops, Traffic aware displays, automatic rerouting option if it will save time, and many many more upgrades than I could list.

The car keeps getting better and better. Additional value for me, but no cost to me.

Guess it just depends on how you look at it.

EVRider | 2 marts 2019

@Uncle Paul: No, it depends on when you bought your Tesla. I had no issues with the various price and feature changes that happened while I owned my previous 2016 Model S, but the 2 cars I bought in December are now worth $19,500 less than I paid ($12,000 less after the tax credit). It's hard to find a positive way to look at that.

bp | 2 marts 2019

EVRider - did you purchase EAP/FSD? If not, those options are now available at 1/2 price for activation.

If you already had EAP/FSD, and you're not satisfied with only an invitation to the Early Access Program, then let Tesla know.

Tesla has had strong customer loyalty because they generally do something reasonable for customers, and there are other options they could consider that wouldn't impact short term profitability - such as moving current FSD owners to the front of the HW3 upgrade queue, allowing you to transfer FUSC (Free Unlimited Supercharging) to a new vehicle purchase when you trade in your current vehicles, …

If you're frustrated with the overnight loss in value in your recent purchase - then let them know through a phone call or e-mail...

blue adept | 4 marts 2019

Perhaps all of those here begrudging Tesla should just opt out and go buy a Prius...

Not that that would be a bad thing, but, yeah.

EVRider | 5 marts 2019

@bp: Yes, I already purchased EAP and FSD, so no discounts for me.

@blue adept: Apparently you didn’t take delivery of a new Tesla in the last few months.

sschaem | 5 marts 2019

I think a lot of people that have been waiting for a Tesla are now going to wait for the competition.
Not sure how Tesla pissing off customers is helping when they rely pretty much solely on word to mouth for marketing.

Customer relation is important, pre and post sales. Tesla seem to just not care, or not know how to run a car company in that regard.

I think Elon focus on the technical side, but some monkeys are in charge of the rest :(

Elon also doesn't seem to give a F* about build quality, not then, not now. I'm still outraged at what I have to deal with with a $162K car.

jimglas | 5 marts 2019

ss: I see you are still here spreading your FUD. Who is paying you to post this BS?

kevindk101 | 5 marts 2019

2018 and earlier purchasers got the $7500 tax rebate bennifit, new orders won’t . Just something to think about.

Yodrak. | 9 marts 2019

"2018 and earlier purchasers got the $7500 tax rebate bennifit, new orders won’t ."

Partially true. Purchasers 2018 and earlier got a $7,500 tax credit (not a "bennfit", whatever that is) IF their tax obligation was $7,500 or more. Less if their tax obligation was less.

Purchasers in the first half of 2019 will get a tax credit of $3.750 if their 2019 tax obligation is $3,750 or more. Purchasers in the second half of 2019 will get a tax credit of $1,875 if their 2019 tax obligation is $1,875 or more.

elvnga | 10 marts 2019

I am curious about purchasing the full self drive on my AP2 early 2017 X. Will I have to pay more to get the updated processor? Or will that not be available making the upgrade from EAP not really worth it at even half the price?

carlk | 10 marts 2019

2018 buyers got to drive the car in 2018. 2019 buyers don't. That's pretty simple to me.

pranalli | 14 marts 2019

I'm sorry, but there's no reason for any consumer to defend this practice. Yes, it is their right, but it's also very shitty. A Model 3 Performance sans Premium Upgrade was 70k less than 6 months ago, now the same thing WITH the additional formerly 5k option is 58k and change. That's almost $12k in actual cash value reduction and a total of $17k in total value lost.

At the very least, they could provide the 5K package for free to those of us that purchased the Performance sans package last year. The VERY least.

Don't talk to me about a tax credit. I will happily hand Tesla the check for my tax credit in exchange for this reduction. This far exceeds the value of that credit. But the worst part is that it basically puts people underwater on loans for no reason other than an arbitrary price move.

Yes, we should expect price decreases... but Tesla should also expect push back when they seem to really "stick it" to early adopters.

Yodrak. | 14 marts 2019

The "early adopter" days are long past.

blue adept | 14 marts 2019

@EVRider

They (Tesla) ARE doing what they can to look out for customers:

https://www.tesla.com/blog/upgrading-autopilot-and-full-self-driving-cap...

Anyway, I knew what I was buying when I bought it (and continue to buy it) and bought it for the price as advertised without any qualms whatsoever...I still have no qualms over the latest developments as I'm inclined to support Tesla/Musk in all of their endeavors regardless.

Perhaps it's because I have a better understanding of what they're having to deal with just to bring these wonderful machines to us and the world's ongoing dire necessity for them that I have a far less pessimistic outlook than you.

A word of advice...

Instead of focusing exclusively on the ultimately minute and largely irrelevant issues you should, instead, maintain a 'big picture' view of what this company has accomplished and is diligently working towards accomplishing despite all of the obstacles the antiquated, conventionally-minded place before them.

Oh and, honestly, I'm always in the market for another Tesla! :-)

blue adept | 14 marts 2019

@pranalli

You could always just go buy a Prius or an iMiev or something....

Tesla is being literally FORCED to succumb to market and industry and legislative pressures of which we're ALL fully aware, so if you want to pitch a bitch and gripe about something, do feel feel to direct it towards your state's legislators and your local ICE 'stealerships' who're causing all of the turmoil and forcing Tesla to make such sacrifices.

In otherwords, place the blame where it actually belongs instead of scapegoating Tesla who is an even bigger victim than any of us.

Remember, Tesla are the one's who're trying to help us despite whatever scare/fear-mongering you might hear from all of the critics and detractors!

blue adept | 14 marts 2019

p.s. The Leafs are a pretty neat alternative too.

scerbin | 5 juli 2019

I paid $93,500 for my 75D S in 6/2018 and it was the most amazing thing I ever did. Yes, I can get the equivalent of a 100D for less now - but I would have to pay $1,000 extra for my Obsidian Black paint, I would not get the $7,500 tax credit (only $1,875 now) and would not have free lifetime Supercharging; which I use a lot in the NYC area. So overall I think I did just fine. I'll see what happens with the S in the next few years and maybe upgrade at year 3 or 4. However, I don't think BP's point was unreasonable; especially for folks that bought a new car days/weeks before the price drop.

Uncle Paul | 6 juli 2019

No matter what Tesla does...some people will be upset.

People complaining that they can buy cheaper now, tend to conveniently forget the significant tax credits they got that are not available for current buyers.

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DanFoster1 | 11 juli 2019

What about the computer you bought several years ago that has depreciated nearly 100%? What should the company do for you?