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Electrek: "Tesla owners literally protest over drastic price cuts"

Electrek: "Tesla owners literally protest over drastic price cuts"

www.electrek.co/2019/03/04/tesla-owners-protest-price-cuts/#disqus_thread

Some of the cases seem excessive, Tesla needs to get better at pricing moving into the mainstream.

pcgdelgado | 4 marts 2019

pcgdelgado

El Mirio | 4 marts 2019

The forums have become alive!

carlk | 4 marts 2019

Tesla is doing something luxury good producers would never do. On the other hand Tesla does not intend to be only a luxury good producer. It wants to be a mass market EV producer also. There is a fine line between them Tesla better be very careful threading it.

carlk | 4 marts 2019

The only thing that might make this to make sense is Tesla is about to announce new models especially new Model S soon. People can wait to order the new model or to order the cheaper old model. We'll see.

El Mirio | 4 marts 2019

On an earnings call Elon was asked whether he would pick profits over volume, he said probably volumes. Now we have defenitve answer.

I think Elon realized by pushing volume relentlessly higher it caters to the "acceleration" part in Teslas mission statement.

Tesla is trying to make OEM´s realize their current cash cows are under fast approaching extinction threat if they don't accelerate immediately.

TeslaTap.com | 4 marts 2019

Obviously other car companies never do promotions, discounts, rebates, and price reductions. (/sarcasm/).

El Mirio | 4 marts 2019

@TT true, but the Taiwan story, IF true, seems a bit much. $100k difference is not something I could just chalk up as bad luck or philantropy either.

TeslaTap.com | 4 marts 2019

Since no numbers were provided, I suspect typical math errors we've seen elsewhere for extreme exaggerations or comparing completely different models and features as if they are the same. Also consider some countries impose extreme taxes (some as much as 100%). I don't think Taiwan does this, but I also couldn't run it down other than a 17.5% duty. Without a clear detailed comparison, I suspect it's fake news. Not saying some situations might have some significant differences, but I really doubt $100K difference.

El Mirio | 4 marts 2019

I think they are comparing within Taiwanese market, however I suspect it could be the 40% duty, compliments by Prima Dona Trump, which might have been lifted recently.

Electrek should to better looking into all possible aspects of price finding, especially since they get info early and MSM shadow reads their stuff.

Tropopause | 4 marts 2019

Maybe increasing volume to 600,000 cars in 2019 to strengthen case against SEC.

El Mirio | 4 marts 2019

Maybe, I think Tesla will get over 500k this year.

regarding SEC

The SEC settlement just said they need to monitor communication, no further specificity. They did not specify when and how.

Tesla board review and Elon clarified, based on SEC settlement wording there is now infraction, they are in compliance with the monitoring part.

stevenmaifert | 4 marts 2019

Ref: https://www.sec.gov/news/press-release/2018-226

The settlement agreement says "Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;" That goes beyond just monitoring what he says on Twitter. A reasonable Judge might conclude that "controls and procedures to oversee" means pre approval of any Tweet that contains "material information about Tesla ".

T35LAX | 4 marts 2019

My first "home computer" was Commodore 64 in 1992. It cost 600 $.
Today 600 $ PC is very good and capable.
Should I cry for spending 600 $ for worthless computer in 1991?

sschaem | 4 marts 2019

Some people are dense. The issue it not about comparing a computer in the 80s vs 30+ years later.
Its about slashing the price on luxury cars outside of some liquidation events.

You have to look at company like Apple to see how its done right. The price point stay about the same, but the product gets better.

Here we have none of this... the product is the same, but its now $10k to $22k cheaper.

For a buyer this mean in a week, its decimate the resell value. Not only you get the depreciation for driving it off the lot, but now a brand new model is amlost cheaper then a user mode.

I think every S &X owner expected new model to include better interior, better build quality, better range, etc.. and the price would be about identical. But at least you got the car a year+ already and you had the benefit of drivcing it.

Here recent buyers get NOTHING but a massive "punch in the face"

NRGrin | 4 marts 2019

I was upset at first too, even taking to the forums to voice my displeasure. But after thinking it through and setting my initial "feelings" aside, I'm not upset at all. Let me explain. BTW: 2018 MS 100D delivery date 11/24/18 (95 days ownership).

The side by side comparison on my car (100D, blue metallic paint, cream interior upgrade) was $101,300 versus new price of $86,000. That looks like a drop of $15,300. However you must include that I get full $7500 tax credit. So that removes $3,750 from the equation. Next, I didn't purchase EAP of FSD. Now I can save $6,000 by adding that. This too must be included. Now look what happens:

$15,300 difference
-3,750 tax credit difference
-6,000 AP/FSD savings
=$5,550 cost reduction.

This is in line with the 6% reduction the call mentioned. We didn't lose 15%-25% value as some have claimed.

Now you have to add back in all the new features that Tesla will roll out in future updates that we are going to get for FREE!!!

Remember, you buy from a traditional car company and they come out with new features next year your car is now obsolete and nobody wants it. Now you have to trade in a one year old car. Talk about a loss.

But with Tesla, as new features become available, you just need to make sure you are plugged into WiFi overnight and we get to wake up the next morning with a brand new car!

What is that worth to you? It's priceless to me! My car will not be obsolete, but it will continue to get better.

Last thought: For all of us recent buyers, why are you worried about resale value? Did you really buy this awesome car with the intention of flipping it? You're really going to sell it in the first year of ownership? If so, that's on you.

Stop the fretting and enjoy your car! Keep grinning! :)

SO | 4 marts 2019

@NRGrin +1

Yodrak. | 4 marts 2019

"For a buyer this mean in a week, its decimate the resell value."

How many buyers plan to resell in a short time? In a couple of years the normal depreciation will depreciate the difference in resale value to a meaningless amount.

carlk | 4 marts 2019

One thing I can say is Electrek needs to hire a writer who can write titles that make sense. There are too many recent examples that they don't know how to do that.

kcheng | 4 marts 2019

"El Mirio | March 4, 2019
On an earnings call Elon was asked whether he would pick profits over volume, he said probably volumes. Now we have defenitve answer.
...Tesla is trying to make OEM´s realize their current cash cows are under fast approaching extinction threat if they don't accelerate immediately."

Definitive?!? Did you forget Elon fired 7% of the workforce recently, and just announced most of the stores were closing and sales were going online with the goal of cutting costs, in order to achieve sustainable profitability? He's sacrificed thousands of jobs for profits. Without profits, he can't fulfill your wish of cashcow extinction. They'll just wait until Elon runs out of money. Of course, PROFITS are more important.

El Mirio | 4 marts 2019

@kcheng yeah I know he is sacrificing jobs. Usually follows with huge expansionists and hiring. If you ever where in real life biz you would know that firing people is essential to keep a company afloat.

blue adept | 4 marts 2019

Overly dramatic price variations like those alleged to have occurred in Taiwan are, more likely than not, specific to that market and devoid of any influence from Tesla.

Other than that a lot of you are overlooking the fact that Elon is no longer at the helm of the Tesla flagship, the "board" is, meaning that his hands are tied (thanks to the SEC and, IMHO, bad advice on behalf of Tesla's counsel at the time) and these changes we're seeing are reflective of THEIR desires for their profit margins and not necessarily those of Musk himself...

Just keep that in mind going forward.

carlk | 4 marts 2019

It's the brutal business world of survival of the fittest. The fittest is the one who is the most lean and mean and moves the fastest. To save 6% of worker jobs is never the priority of a company. At least not a company that can survive.

My second most admired company Netflix has a documented company culture policy since its funding everyone needs to follow. It will recruit best people and pay them above market compensation but it will only keep the best and let go even B+ workers. Everyone in the company understands that. Result speaks for itself.

blue adept | 5 marts 2019

There might be something to your "lean and mean" observation, @carlk, but I'm more interested in what I'm seeing as an emerging trend of workforce trimming and company consolidation and mergers all across the market hinting not at a recession (which we've obviously been in for a while), but at a forthcoming depression...

Thoughts?

carlk | 5 marts 2019

It's ough but that's just the way it is. More people will lose their job if the company does not survice. Remember companies hire people for the sole purpose of to contribute and generate revenue/profit. The situation will only get worse when automation and AI becomes prevalent. The online sales model is possible only because of the internet and related technologies. Elon and few others have proposed minimum universal income which is probably a good if not the only solution. We can not expect everyone will be needed for a job in the future. Although I'm sure conservatives will call it socialism and try their best to shoot it down.

bp | 5 marts 2019

For customers who hadn't yet purchased EAP/FSD, Tesla has helped soften the blow by discounting after delivery activation of the AP features - and doing that not only helps those customers, but also generates additional revenue for Tesla.

However, for those customers who had already purchased both EAP & FSD, this is a 15% price drop - which will reduce future resale prices, and offering an invitation to the Early Access Program to help Tesla find bugs before general release (something they should have been doing all along) may not be viewed as doing much to recognize the loyalty of those customers (by spending $ up front for features Tesla hasn't yet and may never deliver).

Like with any new technology product, price drops were inevitable - and something we're likely to see again in the future. Customers can decide to wait for future price drops or new features, or take the plunge and purchase a vehicle knowing that they may have some frustration down the road when Tesla lowers the price again or continues to update their vehicles.

Though Tesla can still do more to reinforce the loyalty of their current customers who purchased vehicles before the price drop (without impacting near term profitability)...

carlk | 5 marts 2019

To be honest "loyalty" is an over-used and over-rated term. To most people loyalty means I'm with you if you provide me what I want. I'll be loyal to someone else if that is more beneficial to me. The only way to keep people "loyal" is to continue provide the best product at the best price. Not to mention that will convert people who were loyal to other brands to become "loyal" to Tesla.

sschaem | 5 marts 2019

Speaking of EAP / FSD. I tool delivery of a X in late november, EAP never worked, and about 2 weeks ago it got fully replaced.

I drove less then 200 miles with it, and poof the EXACT same HW is now 15% cheaper.
Looking at my configuration, Tesla drop the price from $162K to $140K, for EXACTLY the same car.

And the price drop is not from reduce production cost... and not because a new flagship model is taking its place.
its the exact same everything, but not the trade in value dropped my $22k, while nothing changes.

This only happen when you are desperate. S & X sales in January/February must have been the worse in Tesla history. (they money making line) and had to cut cost (closing showrooms/firing staff) to avoid massive cash flow problems

El Mirio | 9 marts 2019

If FSD turns into reality, wouldn't that boost all prices with the ability? Which car has that potential to boost resale price?