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Model X pricing

Model X pricing

Just saw a tweet from Elon that the X will cost $5K more than the S

https://twitter.com/elonmusk/status/639170376186990592

Jon Wray | 4 september 2015

Tesla announced pricing and options for Model S in December 2011 six months before the first delivery:

http://www.teslamotors.com/blog/model-s-update-pricing-and-options

(Note the links in the post don't show the original pricing anymore, but it included both Signature and regular pricing, with list of options included for Signature.)

When will Tesla announce detailed pricing and options for Model X? Answer I got from Tesla was "sometime in the next few months." Why is this taking so long?

richpandolfi | 6 september 2015

don't understand hesitation for release of base price and options unless dramatically different from what Musk has indicated. Customers don't like surprises
If within a reasonable S range the its not because of holding back from competition or just a poor Marketing decision by a young group.
They need to be honest if there are no significant changes or there sales forecast will go to hell because new customers will be waiting for the second shoe to drop. Normal people don't like mysteries and will switch to alternatives. Being patient for a few years is getting tired

Red Sage ca us | 6 september 2015

God.

This basically means that the base version of Model X will cost $5,000 more than either the Model S 70, or the Model S 70D.

Damn.

vandacca | 7 september 2015

@richpandolfi, it's entirely possible that Tesla hasn't yet gotten around to figuring out all the details with the base price and options. If they haven't, I'm sure they're very close (within a week or two). Otherwise, Tesla may be trying to hold back information to reduce the effect on Model-S sales and/or trickle information out every week or two to maximize publicity.

I'm sure they have a large to-do list and they're releasing information in a logical fashion (e.g. Sig info before regular production info)

Sharad | 7 september 2015

I am with richpandolfi. Or maybe it is just a matter of me having different expectations. I don't believe that releasing the pricing and options a week or so before launch helps them. If anything else, it is goes beyond reach of some with bookings (like me) it is just going to result in mass cancellations.

vandacca | 7 september 2015

I'll admit that Tesla does things very differently from other manufacturers, sometimes to the point where it makes no sense. I'm sure they have their reasons, which we may never find out.

However, if their actions results in mass cancellations, you can bet they'll quickly address that issue.

sking229 | 8 september 2015

According to Wall Street Journal last week, Model X will be around $132k, beyond the base price for Porche 911. I was hoping for a base price of near $70k. I could go another $10k or so to get into Model X, but not another $50k. Please, Tesla, tell me the WSJ got it wrong!

DTsea | 8 september 2015

WSJ got it wrong.

132k was for fully loaded car.

georgehawley.fl.us | 8 september 2015

S90D with power rear hatch = $93,500

Comparably equipped X with 3rd row of seats ($3,500) + Elon's $5,000 = $102,000 plus delivery and tax,

DTsea | 8 september 2015

Base S70D is $75k. So, expect Model X to start at about $80k.

ernie | 8 september 2015

The more you understand and know about a particular industry the less credence you put in what you read or see on the internet or TV. So much is half baked or sheer bologna.

georgehawley.fl.us | 8 september 2015

@ernie: It must be difficult to be so knowledgeable. I know nothing, according to @Red Sage. I can't even spell baloney correctly.:-))

ernie | 8 september 2015

@geopresidentforlife.etc... Baloney...has a different meaning than bologna...and purists would argue that the meat should be spelled bologna...and pronounced as boloan-ya after the Italian city where the sausage originated. I intended the "baked" and "bologna" to be different than baloney and purposefully selected the "road less traveled". I have the grey [gray] hair to prove I have been around the block a few years. I spent the first 35 years of my life in different portions of the meat industry hence my choice. No one wants to know what REALLY goes into the meat product unless it is kosher.

However, this is a forum where we are serious and hopefully fun-loving while we wait for the car of our dreams. I am optimistic that this car will meet or exceed my expectations and those of my wife who sometimes wonders if I am out of my mind spending time on this forum.

georgehawley.fl.us | 9 september 2015

This is a common misconception on the part of reservation-holding spouses. One is not out of one's mind here. One is merely amiably distracted while enduring the Tesla wait. Hence, the idiotic grin while reading humorous posts. The price of the MX is not so humorous to me but, then, it's not a KIA...

georgehawley.fl.us | 9 september 2015

Reservation holders' spouses...

ernie | 9 september 2015

We sometimes have to listen to our spouse's grouses.

michelcub | 9 september 2015

I think that base price of model s and x will be lowered due to the use of more robots and economies of scale.

Remnant | 10 september 2015

How's pricing for the Founders' Edition (FE)?

Is an FE vehicle identifiable in any way?

Can one expect a better deal on a CPO FE?

NumberOne | 10 september 2015

Since we are guessing here, FEs are only available used, but new, they probably cost as much as a sig with all options. Chances are that you are better off buying a new standard 90 with all the options you want (even if considering CPO). FE is unlikely to cost less than a Sig unless of course you win the ability to purchase one at the base price as per the promotion that ends next month.

superloud | 12 september 2015

I know it's kind of splitting hairs. But I'm wondering how the model S referral program factors into all this?

Elon said the X will start 5k above the S. But, I think it's probably safe to say there's not a single person buying a model S today without the referral discount. There are even people in Virginia getting the full $2k discount.

So what happens when the referral program ends? It's probably going to be roughly around the time model X pricing is revealed. Is the price of an S really going to go back *up* by up to $2k? That would seem kinda crazy. It's really hard to jack a price back up without giving something in return.

So here's my crazy idea.
Maybe the referral goes away (for now at least). The price of an S 70D goes up to $75k (base). But tesla makes autopilot standard on the S and X. Then the X starts at $80k keeping the $5k difference. The absolute minimum out the door price of an S goes up a bit, but buyers feel like they are getting more value for the price. And Tesla is putting all the self drive hardware in their cars anyway, this ensures they always get paid for it.

grant10k | 12 september 2015

I'd think that giving away autopilot is a bit of an F-you to people who paid for it. Especially people who paid for it and don't even have it yet.

My alternate crazy idea is if the referral program is working, keep doing it. They removed the 10 referral limit a little while ago, so one could presume that they're not in any hurry to shut the program down.

superloud | 12 september 2015

I don't think giving away autopilot would be an f-you cuz they wouldn't be giving it away. They'd be including it, while bumping up the price (from tesla's point of view) by $2k.
People often get upset when they dork with their prices. I'm sure lots of people got upset who bought an S right before the referral program started. That was a $2k slap in the face to some people.

It's true they could just keep the referrals going. But it seems problematic to me. They call it a "referral program", when really, I couldn't see them allowing referral discounts on the model X (does anyone disagree??). That could just be perceived as lame. Because a potential buyer could be like, I have this friend, they sold me on your products, but the S isn't a right fit for me while the X is...why is it that you're only willing to kick us back $2k if I buy an S??

In other words, it seems, in my opinion, that the model S has effectively dropped in price by $2k. In my mind, a S 70D starts at $73k.

So if an X starts at $5k above the S (per Arlin's quote). Then either the X base price is $78k, or else the X base price is $80k and they *do* allow referral discounts on the X (not sure what they'd do about people currently on the wait list, they'd have to give all of us $2k off as a sort of self-referral).

Or, they have another idea - which is where my prediction came in.
My thinking is, tesla pays to put all the auto drive hardware into every car. That costs I assume < $2500 since that's what the option costs. But, they only get paid for that if someone orders the feature.

So they could leave auto drive as an option, and make $2500 every time someone buys it.
Or, they add $2000 to the price (by eliminating the referral), and they get $2000 from everyone for the feature.

As long as less than 80% of people these days are ordering auto pilot, then tesla would come out ahead with this kind of deal. And even if exactly 80% of people do order auto pilot, I'd argue that there's still a benefit to tesla in the sense that this approach just promotes more uniformity in the installed base of cars. Probably just more people using auto pilot will improve the whole auto pilot experience and R&D as a whole so it's probably in Teslas best interests to have everyone auto pilot capable.

Anyway, it's total speculation. But to me it seems like a good enough idea that I felt it was worth sharing. And no matter what it will be interesting to see how the referral discount plays into the price gap between S and X.

grant10k | 12 september 2015

Even if everyone who wants a Tesla gets $2000 off (which I think is quite a stretch), the reason for the discount is so that the referrers advertise for Tesla without Tesla having to pay for advertising (in the traditional sense). By only paying $2000 per car (and really, I think the majority is $1000) they are effectively spending zero dollars until they get a sale, making it a 100% ROI, way better percentage than you'd get with any other advertising medium. Call it catalyzed word of mouth. Or sales employees that you don't pay until they produce results (which is why the normal referral deal is illegal in Ohio and Virginia).

I disagree with your statement that they wouldn't allow discounts on the Model X. Why wouldn't they? There might be an edge case with the current signature buyers though. They might get a touch boned.

As for including autopilot... Well, for starters, it's completely unrelated to the referral program, except that the prices might be similar when you use the weirdified version just for Virginians.

Having the hardware already built in means nothing. Many lower-end computer processors are just the higher end ones with features disabled, the Model S 40kWh battery is just the 60kWh with a software limit, pretty much all computer software with more than 2 versions. It's hardly unprecedented. You charge more to unlock features that go well above the base model, even if the hardware is built-in.

I'd expect they would leave out the autopilot hardware if they could, but they really want those safety features standard, so they have to leave it in.

If the autopilot hardware had been out for a while, I might be less inclined to disagree with you. You frequently see old amazing premium type features being standardized in later models. The slap in the face in this case is that people have paid for autopilot, and haven't received autopilot. I mean, just imagine you paid $2,500 for autopilot and then a year later, they announce that not only do you finally get what you paid for, but they're giving it to everyone else for free. I'd be super pissed.

They might be able to include autopilot standard eventually, but they will have to wait a year, minimum. At least wait the amount of time that the people who paid for autopilot had to wait.

superloud | 12 september 2015

For sure, the odds that I'm right are slim. I mean, I'm just throwing an idea out there because we seem to have time to kill before this is made clear for us.

But, I disagree with some of your points. Autopilot isn't *just* a software switch. The base tesla just has auto emergency braking. So there's at least steering motors in there, and the whole system that provides force feedback to the steering wheel which is wasted hardware if the buyer never enabled auto drive. Maybe the cost of the extra hardware is trivial? I dunno, I figure it's not totally trivial.

I do get what you're saying about people having paid for a feature a year ago and it looking really bad to just start throwing it in free. But, my point is it wouldn't really be free. It would take the place of the referral discount. So it would depend how you want to look at it. Someone who bought an S in Virginia before the referral program could be griping today because their smart air suspension could have been almost free. It's really a shell game and all depends how you look at it.

Anyway, I'm beating it to death now.

Back to the real point I guess.
It will be interesting if the S to X price gap is more like 7k depending on what they do with the referral program.

And if they extend the program to the X, I'd sure as heck want my $2k (or give me $1k and allow me to designate a current owner to give $1k to)

vandacca | 13 september 2015

Just wanted to add that there is a very specific purpose to the referral program. It's to keep Model-S sales alive prior to the Model-X coming out. There is no reason to apply this program to the Model-X, since they can't ramp up quick enough to get through their backlog until sometime late 2016. They don't need any more Model-X reservations right now, only Model-S sales.

grant10k | 13 september 2015

@vandacca

Yeah, that's a good point.

I hope, though, that they continue the referral program anyway. There's some reasons to keep doing it even with the current backlog. Main one being that it might be bad to turn on and off the referral program (if they plan to keep doing it, and I hope they do). You want people to use your referrer code, but now you're disincentivized to advertise until they start the referrer program back up. Now your motivation is actually to tell people to hold off for a while. This is especially true for someone who eventually wants a free Powerwall for 5 referrals, but can't make 5 quick sales. "If they keep turning off the referral program, why even try?".

Second reason is that a sale is a sale, even tacked on the the far end of a 12 month backlog.

georgehawley.fl.us | 14 september 2015

Hmm. When is a sale not a sale? If I offer a referral discount on Model X orders now, that would only apply to people with reservations, since they won't be accepting ordinary orders for a while. With 20,000-30,000 reservations in hand, that would be like giving away $40,000,000 to $60,000,000 for no reason. As a shareholder, I would object.

eric.zucker | 14 september 2015

Tesla sales apparently cost about 2k$ per car, this would be same or more with ModelX. If we as customers advocate for the company and bring new business, we de facto help expand their sales network with the most efficient advertising: word of mouth. Plus free demos. This offloads their sales people, they need less inventory tied up in the Tesla stores.

Model X sales so far cost more as we've been hitting the email and phone lines of Tesla trying to squeeze information out of them.

Making a win-win situation out of this is very logical.

grant10k | 14 september 2015

It would be $20,000,000 to $60,000,000 because the referrer does not get a check for $1,000, so they can't use it except on Tesla stuff, which doesn't cost them nearly what they're charging.

That's also assuming 100% of sales use the referral, which isn't the case. I don't know what the real percentage is, or even how to go about estimating it, but I know that someone is going to hit 'buy' without spending the time to look for code from the referral program that they may not have even heard of.

They also aren't giving away this money, they just aren't collecting the 'full' amount. How do we know the price of the car isn't inflated by $1,000? It might only cost them $4,000 more than the Model S, and they bumped it up to $5,000 expecting that everyone would use the referral code.

Further, the discount only applies when you pay for the car but you give them the reservation money immediately. This means that they get a $5,000 loan for every reservation tacked on to the end of the list. The extra referral sales might outweigh the fact that fewer people are paying the 'suckers' price.

I could go on, but in general I think the current system where a ton of people are out selling Telsa cars for a fraction of the normal car commission rate is such a bargain that Tesla might not want to screw it up by being all weird about it when the system isn't 100% fully in their favor. You don't want your cheap commission sales staff telling people the X sucks just because they can only get their commission on the S.

mcphee | 14 september 2015

Given that the standard reservation deposit was $5,000, it sure is a coincidence that the extra cost of the larger body complexity worked out at $5,000 too...at least they spent my deposit making the product better.

ian t.wa.us | 14 september 2015

Model S reservations were $5000 as well. There goes that theory mcphee.

superloud | 14 september 2015

@grant
You think there are people out there NOT using the referral?
Wow, ok maybe the number's not 100%. Maybe there are people who just don't care about price at all.
But I can't imagine anyone who's buying a tesla and doesn't know about the referral program.

It just seems like the type of person buying a tesla is probably in touch enough to know this. I also think probably most tesla buyers now know at least another tesla owner. In fact, it's my personal belief that probably a lot of referrING credits get passed back to the buyer under the table. If it were me, there's no way I'd want to take $1k because I forwarded a link to a friend/family member. I'd for sure just pay them back $1k. This is especially true because as I understand, you can just get one of those referral links from Virginia that are floating around and in that case the buyer just gets the full $2k anyway. There are even really nice folks on craigslist right now offering to pay the buyer the whole $1k and they're offering that to total strangers.

grant10k | 14 september 2015

@superloud, Yes, I do. I don't know what the real percentage is, and I don't know how to go about finding what it is besides either asking Tesla or following around a delivery truck and asking the new owners what they paid.

My gut feeling is that it's somewhere between "most" and "almost all".

On a side note, you can't really pass the money back to the buyer. The referrer's $1,000 isn't real money, but they could buy the buyer something like a beach towel, I guess.

All this is sort of beside the point, I guess. However many people are using a referral code who weren't actually referred by word-of-mouth are clearly worth the expenditure of running the program (based on the fact that they expended it past the 10 limit). Whoever they got the referral code from is probably advertising it (so that's free advertising), and they've turned a lot of "Oh, this thing. How much? Eh, I don't like to talk about it" into "Oh, yeah, it's great. Hey, you know I can save you $1,000 if you want one, here let me send you a link to the store page".

So by effectively 'reducing' the price of the car by 1%-2% they get a free worldwide marketing campaign, targeted directly to the groups of people who would buy this sort of car. You can't pay advertising that well at twice the price. Paid employees would cost them 10 times that amount.

superloud | 14 september 2015

@grant, well, the referrer's credit kind of isn't real money but really it probably is. As I understand you can use it for virtually anything. I'd totally just pay my friend $1k and just let the $1k credit sit on my account till I found a good time to use it. For example, extending the warranty on my car, there's $4k right there I'm almost surely gonna spend anyway. Or the yearly services (admittedly I'm not necessarily sold on those). If I somehow racked up many thousands in referrer credits, then sure, I'd probably tell people not to use my link.

grant10k | 15 september 2015

My point is that they don't write you a check for $1,000 that you can go spend on potato chips and video games. You can only spend it on Tesla service and merchandise which costs Tesla a fraction of what they charge for.

My rough estimate is that the $1,000 they give the referrer only ends up costing them $100 in labor.

You could look at it another way and say that if you were going to spend X dollars on service anyway, that money was going to them anyway, so now you have an additional $1,000 to spend on chips and salsa. Thing is though, by earmarking that money, it can't leave their ecosystem so they're never in a position where they're sending money to someone who would have spent the money at BMW instead.

They also don't have to send out any money, because it shows up as a credit. They keep the money until you're ready to spend it, which means they get a free loan until they have to pay the employee who did the work on your car.

mcphee | 15 september 2015

good point ian t, it must just be a coincidence.

superloud | 15 september 2015

For sure, I think I mostly agree with you there. It's smart to give the referrer a credit so that money comes back to Teslas pocket eventually.

I don't really agree with you that Teslas profit margins are 900/1000=90%

I mean, maybe there are certain things that are really bad value, and you might be wise to not spend your credit on those. Like, it probably wouldn't be wise to drop your $1k on buying 2 hundred $5 air fresheners from the checkout aisle. But I highly doubt a $600 yearly service costs tesla a mere $60. One would think (hope!) that parts and labor on that is a bit more than that. Didn't Elon actually say third goal wasn't to make money on service but rather break even?

If you're lucky enough to be in the market for another tesla, you could put the credit toward that. And I'm sure the margins on the vehicle are not 90%. So it all really depends what you spend your credit on. And if you were for *sure* gonna spend that $1k at tesla anyway and spend it in the exact same way, in other words, this $1k isn't burning a hole in your pocket to be spent foolishly, then I think in the end it does feel pretty much like cash.

I keep using the example of buying the extended warranty because to me that seems like a fair enough value, that it's something I'd for sure drop $4k on anyway

grant10k | 15 september 2015

I figured an inspection would take two hours, and the guy doing it would be paid $30/hr. I didn't factor in any replacement parts or keeping the lights on at the service location.

I definitely didn't try to figure Tesla's cost for your $4k warranty on purpose because I had no idea how to estimate that. It could cost them $0 or $40,000 depending on if they screwed up building your car in the first place (Like, if it needed a new battery).

But yeah, there are plenty of circumstances where it feels like cash. Enough, obviously, where some people are willing to spend for-realsies cash to boost their referral code numbers (I suspect to get a free powerwall).

You definitely can't spend it on a BMW though. It's still a good deal for everyone, but because of that no-BMWs limitation, Tesla is never seeing any referral dollars leave their business. For you, who'd have spend the money anyway, it doesn't really matter much, but not everyone would have bought the extended warranty.