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Price change in Belgium (lowered)

Price change in Belgium (lowered)

This weekend I was going through the final configuration options so I could have a product specialist in the Brussels Service Centre take our order, but this morning I noticed that the prices had changed. A maxed out model s (with metallic paint) went from €129.190 to 123.240 thats almost €6000 less!
(for our configuration the price difference was almost €4400 so we decided to take the high fidelity sound after all)
This is a nice surprise, however it also makes me wonder: What happens when I order and before the Model S is delivered/in production the prices change (down or up)? Do I benefit from a lowered price and am I 'protected' against an increased price? (Either way, we'll still order this amazing car!)

Thanks!

Lycanthrope P85 | January 27, 2014

I confirm @arneva's findings.

I specced up my order and got to €107k instead of €111k

I would assume that prices are fixed at order/confirmation time. This would be the only way to do it IMO.

Basic car spec is about 4% less and some options are reduced, so for instance the interior lighting is now €950, I think it was €1100 before. CF dash is €750 insetad of €800.

Some appear unchanged, so rear shelf is still €250, alarm €500 etc.

arneva | January 27, 2014

I believe pricing of the options follows this pattern: over €2000 -> €100 less; between €2000 and €500 -> €50 less; and €500 or less -> no change

Base price is indeed about 4% less. (as @lycanthrope noted)

Lycanthrope P85 | January 27, 2014

So in fact it would be cheaper to cancel my current order and re-order... Not that I'm inclined to do so...

I will query Tesla, but I'm sure there's no refund to be had.

arneva | January 27, 2014

@lycanthrope that is what I was wondering, it seems a bit strange to me that when you cancel and reorder (and mess up their timeline) you save money, but sticking with the order you 'over' pay. (although you were willing to pay that much, the €4000 buys you a set of winter rims + tires)

anyway, I'm just wondering, as I said before, still ordering the car. (and I hope I get a bumped up deliver like you did @lycanthrope)

Mathew98 | January 27, 2014

TM is not obligated to refund your deposit once the order is finalized. So you can lose $2500 to reconfigure your car to save $1500 net.

arneva | January 27, 2014

In @lycanthrope's case, it would be €2000 loss and €4000 gain -> €2000 net gain, for a maxed out version this changes to €2000 loss and €6000 gain -> €4000 net gain.
Anyway, i simple noticed it and wondered how Tesla would respond when (if) somebody brought this up.

Jolinar | January 27, 2014

is there any known reason for lowering the price?

arneva | January 27, 2014

Not that I have seen/heard, I thought that maybe it was an adjustment based on exchange rates? (I don't know how the prices in other European countries were before, but I would guess they got the same adjustment?)
Perhaps they no longer need to bring the euros to the US because they're investing them in Europe and as a result don't need the high(er) exchange rate?

chrisdl | January 27, 2014

Ah, my configuration is now again at virtually the same price as it was in August.

I'd of course get power folding mirrors and red brake calipers "for free" if I would reconfigure ;-)

Mathew98 | January 27, 2014

@chrisdl - Yes, and go to the back of the line and wait an additional six months...

chrisdl | January 27, 2014

I updated my price diff. post with the new prices:
http://www.teslamotors.com/nl_BE/forum/forums/new-pricing-europe-cheaper...

Especially the bare-bones prices became a lot lower. About 10% cheaper compared to August last year (only 5 months ago)!

thranx | January 27, 2014

There's a fair amount of excess shipping around. Perhaps the company negotiated a better trans-Atlantic rate, or given the success with sales, was able to secure a better shipping rate via a long-term contract with one shipper.

Brian H | January 27, 2014

Switching to a new order would just involve transfer of your deposit, not loss, AFAIK. Probably these are quarterly currency and transport adjustments, as suggested.

Lycanthrope P85 | January 27, 2014

Any kind of fluctuation like this is going to piss off anyone who's got a pending order. If I were Tesla then I would meet halfway on the price difference, offer some specification upgrades for free or thow in the four year service plan.

arneva | January 27, 2014

@Brian H: it depends how you look at it. When i cancel my order after two weeks tesla is no longer required to refund my deposit, when I place a new order I have to pay a new deposit. The way I understand it is that as long as your deposit is returnable, you can still freely change the selected options on your Model S (and i would assume you can profit from the new prices)

@Lycanthrope: You will always piss someone off, if not the people with pending orders, then it will be those whose car has just been delivered and payed. On the other hand, it is fair to adjust the prices downward based on exchange rates (or better shipping deal), they could've just kept the prices the same and taken the extra money...

KrisB | January 27, 2014

IMO it's for Tesla quite simple to deal with fluctuations in price:
1. Price decrease:
- cars delivered: nothing changes, since not relevant (sales process is completed)
- cars ordered, not delivered: offer price protection in full (or partly)
- cars to order: new price of course

2. Price increase:
- cars delivered: nothing. owners are happy as they escaped from a higher price
- cars ordered, not delivered: price protection, to-be owners happy
- cars to order: new price (they may feel unhappy they didn't order earlier)

Any other policy will likely grow endless frustration and hurt the reputation / trust in the vendor...
I'm afraid that last sentence is already hitting me now :-((

arneva | January 27, 2014

+1 KrisB
I agree that would be an ideal solution for the customers

Koz | January 27, 2014

My recommendation is that they offer any differential from a price decrease on an ordered but not built product as a credit on your account. You can use it to upgrade or buy accessories. Upgrades could be problematic for production, however, depending on where the process is.

KrisB is great for the customer and sounds equitable but in the scenario that really matters, ordered but not delivered Tesla loses in either scenario.

So far, Tesla has honored pricing on all deposited and/or confirmed orders.

KrisB | January 27, 2014

@Koz: We're on the same page.
Additionally, I believe Tesla won't have to lose either, since they are perfectly capable of figuring out a price strategy that is capable of offering price protection for customers that have open orders. That's a matter of budgeting, and focusing on a customer centred organisation.

Lycanthrope P85 | January 27, 2014

I emailed Tesla yesterday and await a reply. Be sure I will discuss with them and repost here!

arneva | January 28, 2014

@Koz in case of a price decrease, tesla doesn't really lose. Assuming they changed the price because of better exchange rates, they still earn the same amount of US dollars.

@lycanthrope I'm curious, thanks

Koz | January 28, 2014

By "lose" I mean they make less under that scenario. That lesser amount may be acceptable but it is certainly within their rights and within reasonable fairness if they choose to have people honor their own commitments. That said, I can certainly see them lower prices on finalized but not built models for the sake of good will. I just don't think it is fair for the buying public to expect or demand that. You can't expect others, individuals or companies, to honor their commitments when you don't feel obligated to honor your own.

Lycanthrope P85 | January 28, 2014

I think the principle is well established that when you have a pending order where the price reduces you benefit from that reduction - Amazon apply such a policy.

It's the same for technical specification changes. If you have an Apple MacBook on order and they upgrade the spec in the interim then you get the new product.

I'm personally particularly annoyed as I was considering to hold-off ordering until the Belgian Motor Show - in fact I posted about this in December, but I was told by Tesla that they expected no special offers, however had I held off I would have still been in my two week period and would qulify for this new pricing.

Lycanthrope P85 | January 28, 2014

I spoke to Tesla, they have a LOT of irate customers right now and and trying to get a policy directive from the mothership...

It's the whole of the Euro Zone that has the price changes...

J.T. | January 28, 2014

I do not understand how they did not anticipate this reaction. Has any of them ever bought anything, anywhere?

The policy directive from the mothership should have been in place BEFORE the change. Makes me think the company is run by Sheldon Cooper.

arneva | January 28, 2014

Tesla employee called today to answer some questions I asked (about center console and delivery). During the call I asked him what happens if the prices change (up or down) in the future. He answered that the price you configured your car for will be the eventual price. So basically you agreed to pay a certain price for a certain car and it will stay like that.