Price cuts?

[DerekS]

What I don’t understand about Elon was his insane strategy to buy twitter.
He probably paid twice as much as it’s worth and in turn we have seen Tesla shares tank in the process - anyone could have predicted this outcome.
Not just that a lot of Tesla buyers seem to be liberal voters (could be wrong) but since Elon has taken over Twitter he has been trying to antagonise that demographic non stop for the last year or so.
I feel a lot of them are going to jump ship because they don’t want to be associated with such a toxic figure at the helm.

Can confirm.

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[xyeahtony]

What I don’t understand about Elon was his insane strategy to buy twitter.
He probably paid twice as much as it’s worth and in turn we have seen Tesla shares tank in the process - anyone could have predicted this outcome.
Not just that a lot of Tesla buyers seem to be liberal voters (could be wrong) but since Elon has taken over Twitter he has been trying to antagonise that demographic non stop for the last year or so.
I feel a lot of them are going to jump ship because they don’t want to be associated with such a toxic figure at the helm.

Can confirm. While making car purchasing choices based off a company's CEO is silly and factored little into this decision, i've owned Teslas only for the last 7 years and i'm jumping over because im at the point where im ready for something new/different. Fart noises are cool and all but i want an EV that doesn't taper its fast charging speed at 30% or 1 inch panel gaps.

While i doubt many Tesla owners will jump ship because of elon, many people who are considering EVs will simply not pick Tesla because of Elon, even if they objectively make good EVs.

 

[mrfish]

Well, things are not the same here in Switzerland. Back in November Porsche started offering “Currency equalization payments” as well as “money if you don’t take our low rate finance”. That amounted to 20k on a CT4 that I priced with our local dealer, more on higher models.

What that means for prices is that a new CT4 with mid option level is around the same price as a 2-3 year old 4S, which is economically not going to remain the same for long. Secondly, tracking the number of cars available on Comparis and their price trajectory shows more cars available and a lot of them being marked down after being on sale for long periods, some up to a year.

In the financial services industry here in Switzerland, bonuses are typically half last year’s, with many job cuts planned. So a certain amount of belt tightening will be expected. Demand will fall as nobody buys a new car if they think they will be fired.

Finally, increased competition on all fronts plus appliance-ization of cars; higher tech cars from Korea, better prices on Tesla, even the new Macan on the horizon will not make it easier to shift Taycans. Think the story of the Mercedes CLS where it bloomed briefly as a new body shape, then died.

All that said, don’t expect list price cuts, just dealer incentives behind the scenes like every other non-premium manufacturer.

 

[ben1]

I don't agree with all this negativity around Tesla.

I like my Taycan. But you have to give credit to Tesla too.

Elon's goal is to make EV's available for the mass. In huge quantities. It is logic that they lower the price to achieve this.
It is a good trend. More people will be able to enjoy an EV and it is better for the planet. Which will benefit all of us in the long run.

And Tesla's are still great cars from a technology point of view. A model 3 has more range with 40% less battery than a Taycan ! For half of the price !

 

[whitex]

Correct me if I'm wrong....i know you will

I assume Tesla price their cars differently to other manufacturers, as they seem to be more short term focused.

If supply chain is tight and demand is strong they will increase the price repeatedly in a short space of time (like last year).

Established manufacturers look at things longer term and have more established / stable (generally!!) supply chains and take a longer term view. Happy to turn down potential short term gain, for longer term stability.

In short, Tesla pricing seems far more dynamic than established manufacturers?

The exact same thing happens with established manufacturers, except you don't see it. For example Taycan. 2019, you could get a 4% under MSRP. Mid 2022, up to $30K ADM. Today, back to MSRP (even under for some MY22). If you really look at the actual prices of Taycan vs. say Model S, you will notice a lot of parity, with Taycans actually having sharper price changes due to more acute shortages than the Model S. Comparing MSRP to MSRP is not an accurate comparison between a direct sales manufacturer and dealer based one. You have to compare market price to market price, just that for a direct-sales manufacturer, market price = MSRP, while for dealer model market price = MSRP+(ADM or discount).

I know a guy in car sales. He's starting to see people who bought cars a year or two ago who are thinking of swapping, but they owe more than the car is worth, because they bought the cars with huge markups above MSRP. Apparently this happens in the low end as much as in the high end car, the markups were different of course (e.g. $3K on a @26K Toyota, $20K on a $100K Audi or $25K on a $125K Porsche).

So the only thing different with Tesla pricing is transparency.

 

[whitex]

I don’t get why there is so much noise about this. Teslas goal is to drive the transition to sustainable energy, so lowering prices helps that. If they have strong margins and is costing them less to build each car isn’t that better for everyone? Some are pissed that they bought before, but if the prices went up they would be happy. No one is ever happy. I am!

I’m just going to drive our EV and enjoy not using gas - not being able to refuel at home is sooooo annoying. Just had to do that with our loaner macan for a few weeks getting our update.

People are greedy and entitled. As you say, whenever Tesla dropped prices, they were demonstrating (literally) because they felt ripped off. However, whenever Tesla raised prices, I didn't see a single outraged customer demanding that Tesla take their check for the difference. Full disclosure, one of the Tesla's I bought dropped in price by $3K within 2 weeks of my delivery, honestly felt no emotional trauma about it whatsoever. I don't like overpaying for things, I will use coupons or discount codes or tax rebates wherever I can, but no, I did not for a second feel entitled to a $3K rebate on the car I just bought. I got the car I ordered for the price I agreed to pay for. Had the price dropped before I took delivery, I would have considered forgoing the deposit and re-order the car, or negotiate with Tesla to honor the new, lower price, but not because I am entitled to it, but because I have the option to let go of the current order and order a new one cheaper.

 

[whitex]

There’s noise because they’ve literally devalued tens of thousands (if not many more), of people cars, by a significant margin. It’s a poor show as a business for its customers. But not hugely surprising.

Same thing happened with Taycans, with all the dealer lowering their ADMs over the last 6 months, to 0 in a lot of cases. See what happened to used Taycan values. Is that a poor show as a business in your opinion?

 

[whitex]

Next step for Tesla could be to commercialize their charging stations to other EVs. They certainly wouldn't have much competition considering the problems EA is having providing reliable service and expanding their network.

Why? Their supercharging network is driving sales of Teslas. Maybe if they started charging other EV's whatever margin they make per Tesla just to get access to the network, but I doubt any manufacturer would pay for it. The only reason Tesla would allow other EV's on their network would be to get government incentives, but the way they are usually written that can be satisfied by providing a small number of CCS ports for new superchargers being built, which would give Tesla government grant towards building it.

If you're going to travel in an EV a lot in the USA/Canada, Tesla is hands down your best choice. You have all of Tesla supercharger network, and with the $250 CCS adapter you can also charge at any of the chargers other EV's can charge too. You cannot beat that for travel, even if CCS was as reliable as Tesla, which it's not today.

 

[whitex]

I’ve never seen Porsche cut prices. Every model year, there’s usually an increase. Have you ever seen Rolex backtrack their price hikes?

Taycan sales in 2022 were down compared to 2021, and some people think it’s because of demand. It’s not. The war in Ukraine significantly affected the Taycan’s supply chain, and Porsche suffered as a result. As I mentioned in the 200th post on my thread linked below, Q1-3 2022 for Taycan were incredibly dry in terms of allocations/cars. The demand was strong then and remains strong now.

If there’s a refresh for MY24, forget about a price cut or even a dealer discount. Demand will surge, the supply won’t be enough to satisfy, and the situation will continue. My $0.02.

I am personally really curious about how strong the Taycan demand truly is. With the shortages it's hard to gauge whether an extra 20K Taycan allocations for the US would clear out all the demand orders or not (especially that people will have demand orders at multiple dealers since dealers stopped trading allocations? I was on multiple wait lists for a Turbo CT for well over a year, and pretty much all of them remained under 10 people deep, most were under 5, the list just barely moved. If Porsche ever stops being production limited, we might see the actual demand. On the other hand, maybe it's more profitable for Porsche to never get to that point. If demand drops in the US, just lower the number of allocations to always keep people waiting.

 

[whitex]

The short answer is no, PAG won't lower prices in the US until they absolutely have no choice.

PAG does not have to adjust prices as often as Tesla. They have dealers who adjust the prices for them to follow the market. A dealer can sell the same Taycan Turbo S with a $10K discount, or $30K ADM, which is a $40K range, without PAG changing anything by a single penny. If all dealers were obligated to sell at MSRP, you'd see PAG changing prices a lot more often.

 

[whitex]

I think they might pause doing that in the US given another cost of money hike is coming. Or it will come in the form of a paper tiger that can be "discounted" away for a buyer. I can tell you that my local dealer has 6 Taycans for sale and has had them for months. An increase is not even close to in line with the market or demand for the brand.

A raise in pricing (again) while the world melts down feels a little like the fiddler fiddling while Rome burns.

Yep. I was on multiple waitlists for a Turbo CT for a year and half. I finally found an allocation at a dealer about as far from me as possible within the continental USA. I should be picking it up next month. HOWEVER, I recently came across a brand new 2022 Turbo S CT which they deale is listing 4% under MSRP! It's not exactly my spec, but surprisingly close - it might become my fallback should my dealer try to pull some last minute shenanigans trying to force 3rd party products or otherwise try to not honor the deal (which I don't expect, but as the old adage goes "expect the best, be prepared for the worst").

 

[whitex]

Not just that a lot of Tesla buyers seem to be liberal voters (could be wrong) but since Elon has taken over Twitter he has been trying to antagonise that demographic non stop for the last year or so.

Probably not as many as you think. Left primary base is the majority of people who don't even pay federal income tax (in 2021 that was 57% of all taxpayers, source). Those people are not a key demographic buying new Teslas. Most people start leaning right when they start making money, then some swing back to the left once they hit billionaire status. I am not saying most Tesla buyers are Trump fans (over 60% of Americans don't support either party today), but they are not die hard leftist who would refuse to buy a Tesla purely because of Elon's antics to-date.

Personally I think Elon is just learning a very expensive (to him) lesson. Let him, he can afford it.

 

[Donlam]

Why? Their supercharging network is driving sales of Teslas. Maybe if they started charging other EV's whatever margin they make per Tesla just to get access to the network, but I doubt any manufacturer would pay for it. The only reason Tesla would allow other EV's on their network would be to get government incentives, but the way they are usually written that can be satisfied by providing a small number of CCS ports for new superchargers being built, which would give Tesla government grant towards building it.

If you're going to travel in an EV a lot in the USA/Canada, Tesla is hands down your best choice. You have all of Tesla supercharger network, and with the $250 CCS adapter you can also charge at any of the chargers other EV's can charge too. You cannot beat that for travel, even if CCS was as reliable as Tesla, which it's not today.

When the anti-trust law kick in they should open up their super chargers. Tesla EV can charge in other chargers why the other EV could not charge in theirs? big question!

 

[whitex]

When the anti-trust law kick in they should open up their super chargers. Tesla EV can charge in other chargers why the other EV could not charge in theirs? big question!

Nothing illegal about that. No antitrust issues either, Tesla does not have anywhere near 80% market share for DC chargers, nor are they colluding, or any other antitrust violations. The other networks could, if they chose to do so, exclude Tesla customers. They won't, since they generate revenue from Tesla the same way as they do from a Porsche, a Chevy, or a Ford. Tesla on the other hand can use superchargers to drive customers to buy a Tesla. If you setup a charger in your driveway, you are free to allow only specific EV's to charge. Your charger, your rules.

 

[JerryLNK]

So what do you guys Think, after the large price cuts on the Tesla, Will Porsche also slash the prices on Taycans?

Tesla owners in the U.S. have not qualified for the EV tax credits because the manufacturer produced more than 200,000 EV's. The new U.S. law, the Inflation Reduction Act (a misleading name), lifted that to give preferential treatment to U.S. automakers, such as Tesla. However, because Tesla prices exceed the MSRP price cap in the new law, $80,000 for a sedan, Tesla is dropping prices so that buyers will qualify for up to $7,500 in tax credits. So, it's more about lowering price, allowing buyers to access the tax credit, and selling more cars in the long-run.

The new U.S. law beginning in 2023 does not permit buyers of cars made outside the U.S. access to the tax credits. For example, Taycan buyers. But, even so, Taycan's fall outside the MSRP cap.

Therefore, Porsche will not cut prices on the BEV's. Nor should they. Porsche enjoys a much more elevate market niche than Tesla. Tesla is the post-industrial Ford mass-producing cars for every household. That's not Porsche's DNA and frankly the reason why I own a Porsche. I own it because the decades of refining a world-leading sport racing car is felt every time I use my right foot to take a corner slightly over the recommended speed limit for that corner. If there was a Tesla in my rear-view before, then it is a distant dot now.

For more information on the new U.S. tax credit program: https://afdc.energy.gov/laws/409.

Happy miles to everyone!

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