Tesla Model 3 Gets Another Price Reduction

FEB 6 2019 BY STEVEN LOVEDAY 193

Tesla takes another $1,100 off all variants of its Model 3 sedan.

Not long ago, Tesla reduced its prices by $2,000 in an attempt to assist buyers after the U.S. federal tax credit entered its initial sunset phase. Since then, Model S and Model X pricing has changed yet again due to the elimination of 75D models and subsequent reorganization of trims with software-limited batteries (details here). However, as far as the Model 3 is concerned, it’s now $3,100 less than it was just over a month ago.

The Model 3 has a starting price of $42,900. This is for the Mid Range model. However, Tesla CEO Elon Musk tweeted that the car starts at “~$35k (after ~$8k of credits & fuel savings).”

As usual, some commentors on Twitter pointed out that they don’t really appreciate this style of displaying pricing. On the automaker’s website, pricing is shown with credits and fuel savings, as well as without.

When the Model 3 Mid Range first arrived, it was priced at $46,000. The price dropped recently to $44,000, and now it’s down to $42,900. Tesla is moving closer and closer to that $35,000 price point, and the base model has yet to arrive. In reply to a question on the above Twitter thread, Musk said Tesla is doing everything it can to get to the $35,000 base Model 3.

As for the rest of the Model 3 lineup, the Long Range Dual Motor is priced at $49,900 and the Performance model now comes in at $60,900.

TESLA MODEL 3

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2. Tesla Model 3 Range: 310 miles; 136/123 mpg-e. Still maintaining a long waiting list as production ramps up slowly, the new compact Tesla Model 3 sedan is a smaller and cheaper, but no less stylish, alternative, to the fledgling automaker’s popular Model S. This estimate is for a Model 3 with the “optional” (at $9,000) long-range battery, which is as of this writing still the only configuration available. The standard battery, which is expected to become available later in 2018, is estimated to run for 220 miles on a charge. Tesla Model 3 charge port (U.S.) Tesla Model 3 front seats Tesla Model 3 at Atascadero, CA Supercharging station (via Mark F!) Tesla Model 3 Tesla Model 3 The Tesla Model 3 is not hiding anymore! Tesla Model 3 (Image Credit: Tom Moloughney/InsideEVs) Tesla Model 3 Inside the Tesla Model 3 Tesla Model 3 rear seats Tesla Model 3 Road Trip arrives in Tallahassee Tesla Model 3 charges in Tallahassee, trunk open.

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193 Comments on "Tesla Model 3 Gets Another Price Reduction"

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The blanket arbitrary fuel savings equation is hopefully provided by Tesla, and listed on the savings calculator?

The “super hard grind” is hopefully coming to the Tesla Kettleman City SC Bistro!

Does the Tesla fuel savings calculator really need some more improvement, or just more detailed specifics?

https://forums.tesla.com/forum/forums/tesla-electric-estimator-lies-factor-2

That’s some terrible trolling. You specifically point out an arbitrary forum post from a year ago on the Tesla website forum wherein someone in Michigan said their electricity bill in January was $100 higher than they “expected” by plugging in warmer temperatures and an arbitrary speed into a calculator that doesn’t even exist on Tesla’s website anymore.

On top of that, the fuel savings equation isn’t even what the forum poster was complaining about.

On the positive side: These price cuts for a Calif. buyer figuring in the effect of sales tax (which is always on the before credit/rebate price) have actually reduced the price by $3,400. The price difference between the mid range RWD and the long range AWD ($7,000) now seems quite reasonable.

On the negative side; The inclusion of the tax credit in the price is annoying even though most all buyers will qualify for it. The inclusion of gasoline savings is really annoying because the miles driven, the price paid for electricity, and the price of gasoline all vary too much to make this useful. But even more annoying is the exclusion of the destination charge of $1,200 from the price (yes, I know this is a common practice) and the fact that you have to pay +/- $2,000 for non-black paint and $1000 for a non-black interior.

Nevertheless, and especially given the existence of the SC system for long trips, these are attractive vehicles if you want a sedan and they are in your price and insurance cost range.

Actually, I have found that because of it being the safest car ever tested, my Model 3 is cheaper to insure then both my Bolt and Volt.

The key fact here William is that the “S” initially was HORRIBLE in cold weather, as Newspaperman Broder found out during his early road trip. I had wondered whether Tesla improved the efficiency of the “S” in cold weather, – but apparently it has not happened yet. The link you gave showed Craig1965 buying an “S” in December, with his bills going up more than $100 per month in DTE territory, a relatively economically priced utility. The good thing for him is that, if he keeps his “S”, the usage should substantially drop by the springtime. Apparently there is nothing you can do in the cold – the relatively uninsulated battery will use electricity to keep itself warm, – and this illustrates why few have electric baseboard heat in their homes since it is so pricey. Now what I wonder – is how does this loss compare with the new model ‘3’? There have been ‘average’ 20-30 mile range usage over night – I only saw one case of a 100 mile drop overnight – but that must be in VERY cold weather and it can probably be dismissed that very few will ever see drops like this. For comparison… Read more »

The S has a heated batter pack, so yes, it will draw juice while plugged in, even if completely charged to the preset level (70%, 80%, 100%, whatever). However, when the car is not plugged in, and when it’s not running or warming up via the app, the battery heater is not operating, so the pack temp will slowly drop to ambient temperature.

The 3 does not have a heater, so it will draw less while plugged in and fully charged to the preset level.

Yes the default in the calculator is listed as 10k miles per year, 2.85/gal cost of premium fuel, and 13 cents/kwh for electricity. You can change the miles per year and the fuel cost and it updates the after savings amount shown. I wish you could update the electricity cost as I pay 5.7 cents/kwh on nights and weekends.

@ Joe,
Thanks for the insight, as my questions in the above post seemed to take on a “terrible trolling” tone.

My inquiry was inadvertently requesting some thoughtful answers, and not to throw shade on the welcome Elon Twitter post, of the latest Tesla M3 pricing discount.

Oops, my Bad and error on posting the above T forum link.

Into @Dante’s “Inferno” for T. Trolls Sheesh!

I have this feeling Musk for various reasons doesn’t really want the low range M3. And in the not so distant future the current mid range will actually be the new low range.

At $42,900, if you took out the PUP option they used to list at $5,000, that gets you down to $37,900. Pretty close to $35k. I could see the MR basically becoming the base version. Introducing a 220 mile range EV in 2019/2020 is making less sense.

But do you understand for Tesla the PUP option must cost under $2000, if they start to sell cars without it for $5000 less, it’s like discounting another $3000.

Why not, it as always the plan to sell lower priced cars. It’s perfectly feasible as long as there is still plenty of scope for cost reductions in the production process that clearly started with loads of problems and is no doubt still being optimized.

I’m not saying it’s not possible.
But let’s consider profits from the last quarter – $150m. Now for this quarter they started with $2000 discount, and now they added another $1100. What you want (I want cheaper cars too) it’s another $3000 discount on each car. That amounts to around $6000 lost in profit for each model 3.
Do you think Tesla can support that anytime soon without going back to losses?

On this point, I agree with you. This option is going to remain mandatory on Mid range, at least for the foreseeable future.

However, by the same token, today’s price drop does make the introduction of the $35k version seem more plausible, because if the smaller battery costs them $5k less, and they can save another $2k by doing it without the premium upgrade package, then you’re already very nearly there without having to squeeze margins at all.

$5k less for a slightly smaller battery is not realistic. Fewer cells will save $1500-2000 (less if you believe Musk). The new pack design and equipment will hopefully save another 500-1000.

So, that $2000 savings, plus another $1000 from pack design, brings cost down to $39.9k, get rid of $2k premium upgrades and you get down to $37.9k.
Let’s also get rid of autopilot hardware, that brings you down to just below $35k.

AP h/w only costs a few hundred. They won’t get rid of that, anyway. Fewer cells only save $1200 if you believe Musk’s $100/kWh.

$1000 savings on pack redesign is probably too optimistic. Savings would be almost all labor, since it doesn’t use exotic materials and they don’t buy a lot of pre-made parts. Musk said they have 7000 people at GF1. That probably includes Panasonic, but let’s say it’s all Tesla and a whopping 5000 of those do module and pack fabrication. That’s 1 person-week per pack, so you’d basically have to eliminate all 5000 to save $1000 per pack.

AP HW is several thousands. However, the goal for Tesla is full self drive so that HW is going to stay and be expanded in future versions. 35k USD version Model 3 will not come until next year where Tesla also start production at Giga 3 and Giga1 of vehicles and thereby realize more cost savings from scale of economics.

There’s no way in the world that they’ll drop AP hardware. It’s a key part of the USP for the vehicle, even if you’re not actually using AP. It also won’t save three grand to exclude that hardware. In fact, it would probably not save anything, as the extra costs of differentiating the production line would offset any savings made by not installing the hardware in some cars.

No AP

Just remove it on computer on cars that pass through the line. It seems you never been in a assembly plant

And that’s fair enough. Nevertheless, the point still holds even if you consider the smaller batter to save $2k in costs. The MR version is now $42.9k, so drop $2k for the battery and $2k for the PUP, and you’ve got a SR version that can be sold for $38.9 without sacrificing any margin.

Given that SR will sell in higher volumes, you can afford to sacrifice some margin on it in order to get the price down, so call it £38k. Seriously, that’s only three thousand off the target. It really doesn’t seem unrealistic to think that they can find those savings.

Steel roof

And 17 inch wheels and tires. Easy $300+ savings and possible range gain if they go slightly narrower.

And a steel roof will cost less then a glass one

You are assuming that Tesla has not managed to cut any costs.

I’m sure they are reducing costs. I doubt they’ve managed to reduce the costs around $3000. Obviously in Europe they will make more money and so even if they sell in the US losing money they can balance it. But demand for higher price model 3 will be lower in Europe.

fasterthanonecanimagine

They just cut the number of their workforce by 7%.

Apparently none in Model 3 production, though.

It’s about getting critical mass in production: sell the large numbers and unlock economies of scale that make the large numbers at lower prices profitable. So maybe lowering prices will cause a dip in profitability for now until cost drop further by both streamlining production and unlocking economies of scale due to higher demand.

I disagree, I don’t think the MR will replace the base version. For starters, the MR battery pack is just a modified LR pack, so unlikely to be as cost efficient as a dedicated SR design. Furthermore, 220 miles is enough for most people, especially with a good charging network.

I disagree slightly, for long distance travel you want the 310 mile version as it charges much more rapidly (50% faster), so driving long distances I would use it roughly in the 50 to 200 mile charge level to maximize charging rates, with the 220 mile max range car, it is much more difficult to use it in the lower end of the charge range as it is more like 35 miles to 150 miles. Also, in extreme cold 220 miles might be more like 130 miles, which might not be enough.

What proportion of Tesla customers do not live in a cold climate and don’t travel long distances with their car…my WAG is more than 50%.

My family went on a fantastic 8500 km road trip with our S last summer; when I say this to most people they look at me like I just told them I went to Mars in a rowboat.

Looking at https://teslike.com/range/ the MR has only 25 more miles of highway range than the SR. I don’t see the MR sticking around once the SR comes out.

I can see the elimination of the MR once SR is introduced. This will force the decision to fully upgrade. They’ll track the split and if enough upgrade good. If not, reintroduce the MR.

Well, it’s sort of interesting that Elon Musk called this an $35K Model 3 though not necessarily meaning “mission accomplished”. And it’s not, because many people were expecting a $35K minus $10K state and local incentives minus fuel savings car. Obviously that ship has sailed…

Do Not Read Between The Lines

In response to a reply of “Here’s to the $35k base price without credits. Eventually 🤙🏻”
he replied “We’re doing everything we can to get there. It’s a super hard grind.”

Tesla _needs_ to be able to produce the $35k version, because that will allow the volume and necessary margins on the various versions sold.

I don’t understand why people keep insisting that there’s some secret scheming and Tesla doesn’t plan to produce the SR.
220 miles EPA will be more than enough for most markets around the world (there are waiting lists in European countries for some short-to-mid-range BEVs!), and the price-point would put in the sweet spot for entry-level premium.

I agree that large volume means low prices, every automotive mega seller showed that pattern. I wouldn’t consider not producing the SR version a very bad idea though, maybe a further discounted MR version will do fine as an entry level offering if the scope for the sort of cost reductions needed for that $35K version isn’t really there. Maybe Tesla should avoid offering cars that have less range than some non premium competitors anyway.

However, the higher the ASP that rolls out of this process eventually the lower the volume will be but Model Y could pick up the slack.

I think Elon really thought his super-automated Robotic assembly line would make $35k as a selling price profitable back when he first thought out his numbers.

That didn’t pan out as he hoped, so now it has turned out be a considerable struggle.

He definitely wants to do it though, and I’m sure he continues to do all he can to get there. He really wants to accelerate the transition away from fossil fuels, it’s what drives him!

I do think Tesla investors need to be prepared for the fact they won’t see huge ongoing profits anytime soon. As long as the company can continue to survive they will see any future expansion in margins evaporate into reducing the sales price of the vehicles.

Exactly my assumption, as well. He quoted $35k with this automated juggernaut that subsequently failed. The overhead appears to be significantly more than planned, due to needing more humans on the line.

As a future buyer, and a stockholder (not much, but still), I would accept an apology from Musk about this, and have a starting price in the upper 30s, but the remaining reservation holders and Wall St. would not be so forgiving, so they have to have one, somehow, and relatively soon.

Of course he doesn’t, because it’s a money loser. He said himself if they released a $35k Model 3 right now, it’d kill the company.

That was several months ago. Hopefully in several more months they’ll be getting there.

He said that back in May. For reference, they shipped about 15,xxx of the $60,000+ cars in Q2. They were production constrained, so if they replaced those cars with ones where they cost $25,000 less per car, they would have lost roughly $400 million additional revenue in Q2. That is what Elon said (reading between the lines). The actual cost difference in building the 2 models is nowhere near the $25,000 price difference.

It’s not a money loser it you can negotiate better deals with vendors and suppliers

I believe you are right. They want to differentiate on range from the others. They also want to roll out V3 supercharging which the smaller battery may not support. I suspect they won’t release the standard range and eventually get the mid range down to close to $35k

IF they are having so much trouble getting a smaller battery pack down to $35k, I cannot imagine that the MR will get down to $35k anywhere near soon enough to satisfy the remaining reservation holders and Wall St.

Tesla must have the standard range M3, yet if they manage the MR to be priced below 40.000 USD maybe the standard range M3 will only serve to make people wanna buy a M3 and finish buying the MR. Kona EV had a 40kWh and a 64kWh option. Price difference was 3000 Euros in Europe. They sold very little of the first. Yet it is an excellent marketing strategy.

It’s funny how people almost insulted me when I was not being overly optimistic about Tesla sales in the US.
This is another clear indicator that Tesla is having a demand problem in the US. It’s good for consumers indeed, but Tesla is not decreasing the price because they are in love with costumers, with the small profits they are having it would be insane to lower the price if they could sell all the cars they are building at any price.

I was always very pessimistic about the $35k model 3 (and I was right once again), I now start to see it as a reality in a few months – even if Tesla sell it with losses.

It isn’t a demand “problem”, but more of the planned launch. You launch the high models first and switch to less premium models as your demand for high models starts to wane or saturate. Obviously they can’t sell 200,000 of the $60,000 cars every year in the US.

I suspect demand will be around 200,000 to 300,000 per year of the Model 3 in the US for now, but this could be higher or lower depending on pricing. Tesla will likely adjust pricing to get demand they want. Since the backlog is being met the average price will drop to maintain sales. My point is there is no problem with the demand, it is how they have been managing this roll out all along.

The cheapest Model 3 being delayed so long is in part as high margin cars still have demand, in part as they needed to reduce costs. This cost savings is being passed onto the consumer now… Also, people like me are tempted by the Model 3, but waiting for a Y…

While I agree the shift from the highest priced variants first to the lower priced variants is intentional, there have been consistent delays in releasing the promised $35k version. And those delays mean the hundreds of thousands of people who pre-ordered a Model 3 as long as 3 years ago may have to wait another year to actually get one. Waiting 3-4 years for a car between initial investment and delivery seems like an awfully long time.

Who in their right mind releases the $35K version when you sell every single 1 of the $44+ (Now $43K) version you can produce at a higher margin. You dont cut your profit simply to hit a price point for marketing purposes. How about they start producing 100 of the $35K version per month just to say they are available, but impossible, to get? Would that be a better play?

And when I say every single one I mean worldwide. Once the demand is below production worldwide then you introduce the SR version and then again when it drops again you introduce the SR version without PUP package.

The LR (w/PUP) model 3 demand was exhausted so they made the announcement that they’ll be shipping globally. They immediately started working on the previously unannounced mid range to fill in the US demand gap…Was reported last month that there were 3,000 Model 3s in the US for inventory with many people reportedly this month taking delivery a day or two after ordering online…Doesn’t sounds like every single one is sold…

That 3000 was for the final 2 days when Tesla was putting on a massive push to delivery as many on New Years eve as possible before the $7500 credit was cut in half. They couldnt deliver cars on Sunday in many states, including my state of Illinois, because of stupid laws that dont allow car sales on Sundays. They didnt end up with 3000 left at the stroked of midnight on 12/31/2018.

I also said globally. You dont cut the production of the most profitable models so you can produce less profitable models. That is just being smart. Let efficiency continue to get better as you sell every single one of the more profitable models you can produce. It is just common sense.

“They didnt end up with 3000 left at the stroked of midnight on 12/31/2018.”

True, it was actually 8000. 1010 we in transit to customers. The rest were unsold new inventory. This includes a few hundred showroom and test drive cars.

Saying demand is “exhausted” is misleading. The word implies they won’t sell any more. Demand is saturating for higher priced cars, meaning it might be hard to increase sales of those models, but they are still selling very well. This is the planned roll out of the Model 3. The demand is fine.

The mid range model is interesting, and think it means one of two things. Either they didn’t like the Model 3 LR RWD being their best car for long distance travel (better, or at least as good as 100D models), or the fact is US people think they need AWD. Everyone wants AWD, they don’t realize proper tires are the first thing you should change for winter or inclement weather, then worry about AWD if still necessary.

In the second case they were over-producing LR RWD models for US so switched to a cheaper lower range model. Given that LR model is available overseas, I think it is the second case. Europeans are likely to be more accepting of RWD at a price point very close to AWD.

Europeans are not going to be more accepting. Average car price in Europe and in the US it’s similar, but in Europe cars include a lot more taxes, so in reality for the makers in Europe there are cheaper cars.
Also Germany and France (big and rich countries) will be buying more cars of regional brands.
e-golf is one of the best selling EVs in Europe, Leaf sells a lot in Europe and Nissan has stronger presence in the US than in Europe. Both cars don’t sell that much in the US.
European cars are a bit different from the US, there’s no logical evidence that Europe will buy more and more expensive Teslas – I bet it’s going to be the other way around.

Europeans are more or less accepting of RWD? I said nothing else about Europeans and Tesla.

I’m sorry, I thought you were mentioning the model 3 when you wrote:
“Given that LR model is available overseas, I think it is the second case. Europeans are likely to be more accepting of RWD at a price point very close to AWD.”

But I stand corrected if the 2nd sentence wasn’t about the LR model (that I assumed was the model 3 LR).

“Was reported last month that there were 3,000 Model 3s in the US for inventory…”

If that was “reported” by the same idiot Tesla bashers who repeatedly claimed last year that there was a collapse in Model 3 demand based on some counts of cars in random temporary storage lots used by Tesla… then we can safely ignore those idiots.

Think of it as an intelligence test. If you’re paying attention to such nonsense… then you failed the test.

I don’t even care about parked cars in any lot. I agree with you, if people base their reasoning in parking lots they are probable idiots. 🙂

I get my numbers from Tesla, not “idiot bashers”.

155,662 – Total Model 3s produced through 12/31/18
147,819 – Total Model 3s delivered through 12/31/18
————-
7,843 – Model 3s in Finished Goods Inventory on 12/31/18
1,010 – Model 3s in transit to customers on 12/31/18
————-
6,833 – Unsold New Model 3s in inventory on 12/31/18

This includes a few hundred in showrooms and/or used for test drives.

You keep pretending these were all inventory cars for the US market as some sort of silly fake demand meme, but in reality Tesla was building up inventory for shipping overseas, filling up this parking lot within 5 business days of ending the quarter. Stop the fake demand meme madness.

https://insideevs.com/shipment-tesla-model-3-big-ship-europe/

https://d2t6ms4cjod3h9.cloudfront.net/wp-content/uploads/2019/01/111-4.jpg

Those cars were built in 2019. Check the VINs.

Yes. That why they can prevent the jumping of customers

Do Not Read Between The Lines

Average purchase cycle for new vehicle is 5-6 years. Average age of registered vehicles in the USA is over 11 years and going up.
There’s a lot of leeway in purchasing a car, and the longer you put off the purchase, the better off you’ll be.

Since there are still compliance leases available, if people get tired of waiting they can always look for a subsidized lease to tide them over.

My Prius is over 9 years old. Still running fine. I can wait for something I want.

How it’s not a demand problem?!!! Come on people…

Tesla profits were very low for the last quarter, and unlike many say, they didn’t improve efficiency from Q3 to Q4 – it was actually a bit worse (Q3 was $5300m costs for $6824m revenue and for Q4 was $5782m cost for $7225m revenue, 77% vs 80% – cars alone was 75% vs 74%). I’m sure they’ll improve with time, but did they improve $3100 in less than 2 months?!

If Tesla could sell (or any other) cars (or whatever) for more money they would do it, this is all about money.

Some are “worried” about Tesla offering 80 $200k cars (referral program), that’s $16m. $3100 x 62k cars it’s $192m – it would eat the entire Tesla profits from the last quarter!

Tesla is still shy from 7000 model 3s a month as far as I know and they are not releasing new cheaper versions, they are discounting current versions.

(Source – Tesla’s Q4 results report sheet)

7000 model 3 per week not month

Yeah, not there yet, but they expect to be there by the end of the year.

Shorts are well versed in Tesla numbers and how to spin them in a negative way.

Carpet bomb alert….

I’m sorry but you are silly – you don’t know if I’m a shorter or not. Your comment is, unlike mine, completely based on ignorance – why do you do that?!

No one think’s you’re a shorter. They have better things to do than spend all day posting comments on products they hate. It does beg the question why someone would spend their time the way you do.

I’m having fun, this is entertaining for me. Does that answers your question?
About people thinking about me being a shorter – did you just read the comment someone did?

Again I don’t hate any product, you are making the same mistake – assuming based on your ignorance.

Being entertained by going against the grain of a forum is the very definition of a troll, but why do you do that?

With boom in digital everything, these people got a voice, they think, nobody, and I mean nobody cared a decade ago. They somehow believe they are somehow smarter, they think they clued in on something the rest of us have not and the list goes on and on … if nobody responds to them, they will eventually stop … but that is like a pipe dream, because you always find someone who does.

I’m not going against anyone, do you see me going against someone?! Point me evidence of that.

I know this is a Tesla fan site, but that is more useful, it’s good to read others opinion, going to a forum where everybody agrees with me it would be irrelevant.
I’m very open minded about opinion different from mine. I’m not the one attacking others, I’m not the one being rude with others or even calling others shorters or longs, or stupid, or whatever. All my comments state my opinion and they are always polite and educated.
I also never downvote any comment from any one, unlike other are doing to mine just because they think that will affect me any how.

I’m more active today, because people were “meany” to me yesterday, and now it’s my turn. But I’m being meany with elevation and politeness.
And we should stop discussing personal issues – it’s irrelevant, against the point of this forum and annoying for other readers for sure.

What is with you fanboys??? Who is saying he hates Tesla? He’s providing his view on what would drive Tesla to lower there prices.

I was impressed with the Model 3 I checked out and have been an investor since very early on, but that doesn’t mean I just ignore the evidence and drink the Koolaid like some of the folks on the list…

The real question is: what is wrong with people who only ever have negative things to say about Tesla and literally define themselves as trolls “having fun, this is entertaining for me” by doing so.

Why am I troll for enjoying giving my opinion?!!!!
Why do you post here? Are you in suffering? Obviously this is entertaining for me, I don’t make any money doing this? Do you?

It’s a familiar pattern shorts carpetbombing comment sections like this in desperate attempts to support their position and I was already proven correct about the carpetbombing…

Sort of annoying, people carpetbombing comments section with anti-Tesla FUD, why do you do that?

Instead of complaining why don’t you spin the numbers the way you think it’s more correct?
Sincerely I appreciate all reasonable interpretations.
Go for it, let’s make the forum something interesting and not fill it will silly accusations, including stereotyping Russians ;).

Agh – here we go. I knew you were a Russian troll. You probably have oil interests and this forum just goes against the grain of everything you are invested in – come clean Alex – lol

“How it’s not a demand problem?!!! Come on people…”

Dude, is some troll farm paying you by the post to carpet bomb InsideEVs with Tesla hater posts?

Tesla is managing demand for the Model 3 just fine. Reducing the price is probably more of a reflection of Tesla’s falling costs than anything else. This is good news: Tesla is passing its savings along to car buyers! Only a Tesla basher would try to spin this as a bad thing.

“Tesla profits were very low for the last quarter…”

Maybe in the Bizarro Tesla Basher world you live in. Fortunately not it the real world, where profits were 78¢ a share.

No, I like to give my opinion, it’s just my opinion. Is this a free forum?
Did I make any accusation about anyone?
Was I rude to anyone?
Do you want to argue how much I win per comment or debate my reasoning?
Do you think profits for Tesla were big during the last quarters? Why?
Do you think they will increase profits for the next couple of quarter? Why?

Do you want to keep this discussion civilized or do you want to discuss my hate or love for Tesla and make silly accusation based on complete ignorance? – that is irrelevant but I’m open to discuss that, I enjoy a good polite discussion 🙂

“Tesla is managing demand for the Model 3 just fine. Reducing the price is probably more of a reflection of Tesla’s falling costs than anything else.”

LOL.

I’m a Tesla fanboy. The price drop is because the market is saturated and demand for $44,000+ Model 3s hasn’t just plateaued, it’s plummeting. Suggesting the price drop is due to “passing its savings along” is unlikely seeing as they are struggling to make a profit, and we were warned by Musk to “brace” for a bad Q1.

People who interpret facts different from you are not trolls. Just because they see something negative out of this data doesn’t mean they are a hater. I want to see the company succeed, but I interpret these recent price drops and low sales figures as a clear indication that they need to roll out a significantly more affordable trim as soon as possible.

With that said, I expect the tax credit will be extended retroactively, so anyone pulling the trigger on a Model 3 right now will probably get a nice deal in the end.

The reason why Tesla is advising that Q1 will be low or no profit is because they have a one-time cost for opening up new product pipelines that will be incurred in Q1.

Tesla will be effectively booking the expense of approx 1/3rd of the quarter’s production, where the sales won’t be booked until Q2, because it takes about a month on average to build up a lot full of cars, put them on a ship, ship them across the world, unload them, get them through customs, and prep for sale.

Future quarters won’t have this expense, because the number of unsold cars in the overseas pipeline at the end of the previous quarter will be similar in number as the current quarter.

Nix said: “Tesla will be effectively booking the expense of approx 1/3rd of the quarter’s production, where the sales won’t be booked until Q2. . .” Wrong again Nix. Take a basic Accounting 101 course, because you don’t know what you’re talking about. You’ll learn that the most fundamental accounting principle is matching revenue to expenses. In other words, you book the manufacturing expenses in the quarter that you recognize revenue from the sale of those goods, and not necessarily in the quarter that you paid or incurred those expenses. However, the cost of paying for those expense is reflected in the Statement of Cash Flows in the quarter that they are incurred. The cost of “1/3rd of the [first] quarter’s production” that is sold in the Q2 is NOT an Income Statement expense booked in Q1, and is instead booked as an asset on the Balance Sheet in Q1. More specifically, it is booked as Finished Goods Inventory on the balance sheet with zero effect on income or expense, because on the income statement the quarter’s ending inventory is subtracted from Cost of Goods Sold, removing it from the income/expense calculation for the quarter. + Beginning Inventory + Inventory… Read more »

He doesn’t know how a business is run. Typical 1st Q are your lost Q because of reduce sales and cost cutting measures to get a profit

They planned to sell $35k versions in 2017, but had to scrap that plan when they botched their manufacturing.

200-300k US is way too high at current price points. I think they can do 200k/year US with a $35k version, but it’s far from a sure thing.

There is crazy demand! If only the car were less expensive…

There’s a glut of over 4 million ICE cars sitting on dealer lots. January is always a slow time for car buying. Tesla cars are made to order so there’s no inventory. If Tesla reduced the price it’s because there passing on cost savings to customers while maintaining there profit margins.

Model 3 is less built to order. It’s why there is a limited number of options and variants. They build in batches. They had inventory to clear out in December.

What Tesla calls “inventory” includes demo models and service loaners. Tesla always tries to sell off as many of those it can at the end of every year.

Nothing new or different about that at all.

Right it’s built in batches of vehicles that were ordered.

They cleared out in December of every vehicle they could to maximize Tesla customers getting the full $7500 credit. They did that to benefit customers. They also took cars meant for people that couldnt take delivery before Dec 31 and sold them to other people. They took cars used for test drives, for loaners, everything they could to maximize customers getting the full credit. They could have been hardline and held cars that someone ordered but couldnt take delivery until the 1st week of January. Or said we need demo cars in showrooms to help sales, etc. etc. They didnt do that because Tesla wanted the as many customers as possible to get $3750 extra tax credit.

I disagree with your position here. It is extremely easy to paint a positive spin on this just as you have painted a negative one. Personally, I see this as fairly neutral news, with a positive edge. It replaces the referral code system, which means that it should be neutral in terms of margin and profitability. It is likely to increase sales, but dropping the referrals will have meant a decrease in sales, so it balances out. I think it probably balances in favour of more sales, so it is positive but overall it’s pretty neutral in reality. But there will be plenty of extreme positions like yours saying how great it is for Tesla or how terrible. Tesla seems to attract that kind of thing: as I’ve said before, the company has become something of a rorschach test, in that people see what they want to see in pretty much any piece of Tesla-related news. If you’re a Tesla fan then any news is spun as good news; if you’re a critic then it’s all bad news. So yes, I disagree with you: I don’t think that this news has any significant bearing on demand or profitability at all.… Read more »

^^^ 1000% this ^^^

Bad move by Tesla. Sends the wrong message. $2k reduction a few weeks ago, $1.1k reduction now, heck why not wait a few more weeks or months and see what the price is.
If they need incentive to move units in the US, they should use another lever – maybe leasing, maybe content reduction?

I would disagree. This sends all the right messages. When Tesla can they lower the price. This plays into their goal of getting EVs out on the road. It also once again helps position the premium spot of the S and X.

We know they are a young company in the auto world and as they learn and as their economies of scale increase they should pass on savings when they can.

I for one don’t care if they are profitable. As long as they can make enough to cover cost and pour the rest into R&D this share holder is thrilled.

The problem with multiple price reductions becomes – why buy it now, if there’s a decent chance it will be cheaper next month?

Also, if they are just making enough to cover costs, there is no money for R & D.

Do Not Read Between The Lines

They increased Supercharger pricing.
They removed the Referral program.
So, they’ve taken some money out of the car, and lowered the price, to try to mitigate the effects of the tax credit drop.

I don’t see it as either a good or bad sign.

I do care if Tesla is profitable; they have to be, to survive long-term. But I, too, am glad to see Tesla passing along part of its cost savings in building Model 3’s to its customers.

I think eventually the MR goes away. Or basically becomes the SR.

I think that the SR will end up being a software-limited MR, kind of like what they are currently doing with the S and X.

The net change to consumers is still a $650 increase in price from December (Tesla sees less, but with half the tax credit gone the consumer is paying more, so I would suspect demand to stay fairly flat.

I think you are wrong.
Many people anticipated their acquisition, in December they didn’t know the car would be about the same price in January, many were expecting the car to be more expensive.
Also there was a huge backlog, people were waiting for the car for 2 or more years.
Obviously as a positive factor there’s the big growth for EV market, but it will hardly compensate for the other 2 during 2019… I’m positive sure not in the first half of 2019 (compared with Q3 and Q4).

The backlog was pretty much gone by start of Q4, something like 80% new sales, so don’t see that there will be a drop from the backlog demand being filled.

How was it gone? It was like 250k for the US?…
But ok, let’s wait for February and Mars….

Last quarter I could order one and take delivery within days. If there is a 250k cars on pre-order list, they are probably for models not yet available (non Premium and Standard). The point is the demand is mostly from purchases that aren’t pre-orders, so there wasn’t much of a backlog in the levels of sales we were seeing 2H2018.

It is gone because more than 80% of the cars sold aren’t from reservation holders.

So, either lots of reservation holders are still waiting for the $35K version or they are overseas…

“The backlog was pretty much gone by start of Q4”

They delivered AWD/P backlog well into November.

MR with the full credit pulled demand forward from early 2019 into Q4 of 2018. Continuing US demand for current Model 3s is around 1500/week. Maybe a bit higher with the price cuts, but less than 2000/week.

How do you figure? With them shipping cars overseas now (15 to 20,000 units in transit all manufactured this year) you can’t pinpoint what US demand is.

Remember, Tesla monthly sales are meaningless as the transport cars first half of quarter and deliver second. I suspect just as with Model S/X the ratio might be 3x as many US deliveries in Mar as Jan. If so, that might be more like 3,000 cars per week in US, which would match Elon saying they will ship that many to rest of world if production is around 6,000 per week.

You can get a feel for US demand by watching wait times and other clues. I came up with 1500/week last year watching LR production after they satisfied pent-up demand, then doing the same for AWD/P in Q4.

They said they won’t do the stop/start overseas production cadence any more. It’s very inefficient, especially at higher volume. I think they’ll smooth it out a lot, but not entirely.

6500 was higher than I expected. Either US demand is marginally higher than I thought or the InsideEVs estimate is off. Maybe a bit of both.

Why not wait? Because if you wait you lose th3 $3,750 tax break.

“Bad move by Tesla. Sends the wrong message.”

If Ford ran a $1000-off sales incentive for the F150, would you call that a “bad move” and say it “sends the wrong message”? Somehow I doubt it.

Considering how rapidly Tesla’s sales are growing, year after year, they must be doing pretty well at managing their business without “advice” from serial Tesla detractors!

Chevy just did $6k off certain models. Must be a demand problem. Maybe they are in trouble……

If they did that, it’s a huge demand problem for those models. If those models were the ones that represent most of their sales volume they would be facing a big problem. What’s the doubt?

Yes, there is a demand problem. Those are likely last year’s models, so they need extra discounts to attract buyers. That is not a problem Tesla has since there is minimal inventory. I believe Tesla did something similar (smaller amounts) for test drive vehicles a while back. Same idea.

Yeah GM was losing money on there small cars. They madk it up by selling large pick ups to block heads where they earn $10,000 -$15,000 in profit.

“This is another clear indicator that Tesla is having a demand problem in the US.”

Really, dude? If there is a demand problem, then why isn’t Tesla offering leases on the Model 3, and why is Tesla still making the Premium Upgrade Package mandatory rather than optional?

Personally, I’m glad to see this clear evidence that Tesla’s costs for making the Model 3 are continuing to fall, and that Tesla is passing savings along to customers.

Tesla detractors and Tesla bashers will, as always, try to interpret or twist every change at Tesla into an indication of falling demand and/or a sign that Tesla is about to have a financial collapse. *Sigh*

Keep going Tesla!

The point of a public corporation is to maximize profits for the shareholders. It’s not to “pass savings along to customers”. That may be true in a private company, but not a public one.

I’d be surprised if Tesla pricing isn’t influenced by the influx of lower priced EVs from the big vehicle manufacturers (ex., VWAG) over the next couple years.

Pricing today because of VWAG bringing EVs in a couple of years? Not with Tesla’s flexibility. That doesn’t make sense unless they are trying to get people to buy cars now instead of waiting for the possible future availability of a decent low cost EV from a legacy manufacturer.

I think that’s the case. I believe they are trying to get people to buy cars now before they have some competition from lower-cost EVs from the legacy manufacturers.

I think it will be interesting to see what happens when consumers have many more EV options then they currently have. I’m not saying Tesla is going under, but they will certainly change their strategy if they have to deal with competition.

If you haven’t noticed, Elon doesn’t like to operate like a typical public company.

That is the fundamental flaw of current US practice, and arguably the most evil legacy of the Reagan Era. It not only gouges the customer, but it also translates into stagnant wages. Profit is not the “true product”, no matter what these shameless GOP 1%-ers say. The purpose of a business is to deliver a safe, reliable product, or a proper, above-board service. IF your product or service is truly superior, then the profits will come. That is Musk’s playbook.

Do Not Read Between The Lines

Supercharger price increase.
No referral program/benefits.

They’ve cut the price by cutting out non-production costs.
Neutral change.

Why is Tesla doing this? For the same reason any company does anything: They think it’s in their interest to do it. And that translates to: We’ll make more money (in the short run and/or long run) if we do this.

If there were no “demand problem”, then Tesla just gave away $1,100 to every M3 buyer for no reason whatsoever. That’s would be not just bad management, it would be insane. (Again, let me bust out my economist hat here: There’s this concept of consumer surplus, which is the bonus some customers get for buying something at a market price lower than they’d be willing to pay. Everyone who would have bought at the old price just got a $1,100 chunk of consumer surplus cash. Good for them, to be sure, but it comes out of Tesla’s bottom line.)

Everyone: Please stop trying to imagine that everything Tesla does is for some altruistic or mysterious or simply different reason. They’re a big corporation, and they behave like a big corporation. This is not a criticism, just simple reality.

Long term boosting demand could unlock further economies of scale that make up for a short term loss in profitability.

Great post Lou; very well said.

I think you’re absolutely right. I was curious to see how the Tesla fanboys could possibly spin this in a positive light. If they are supply constrained, they are not going to lower the price.

IMO, they should stick with the higher margin vehicles and let companies who are experienced at building a lot of cars (i.e., VW, Toyota, etc) produce cheaper cars with lower margins.

Do Not Read Between The Lines

They are trying to stick with higher margin vehicles. They’re trying to lower production costs so that they can get higher margin at the lower end of the premium market.

@Ron R said: “…IMO, they [Tesla] should stick with the higher margin vehicles and let companies who are experienced at building a lot of cars (i.e., VW, Toyota, etc) produce cheaper cars with lower margins.”
————-

Not happening.

That is not in Tesla’s secret plan:

“2009- The Secret Tesla Motors Master Plan (just between you and me):

“…The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model…” -source:
https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

While I guess that is possible, I think it’s highly unlikely. History will prove one of us is right.

So do you think Tesla is considering making a bottom-of-the-line EV (i.e., an EV Corolla or Fit)? I don’t believe that’s happening.

@Ron R said: “…So do you think Tesla is considering making a bottom-of-the-line EV (i.e., an EV Corolla or Fit)? I don’t believe that’s happening…”
————

Inside next 5 years Tesla will be taking market share from popular high volume ICE models:

Camry, Civic, Corolla, Accord, Explorer, Cherokee, Highlander, F-150, Silverado, Ram, etc…

They already are, from some of those.

Why don’t we wait until after winter before we leap to conclusions about demand? All automakers slump Jan-March.

This price drop is being framed as a direct replacement for the referral code system, from which the buyer was rewarded with six months of free supercharging.

Given that, I want to put my head up and say that for me, a lower price is much more of an incentive to buy than the free supercharging. Firstly because its an up-front cost reduction, which is always a good thing, and second because it would take me *years* to rack up enough supercharging to cost me as much as this price reduction would save me, if ever, because almost all of my charging would be done at home.

Agreed but it is funny how the psychological aspect of free supercharging did indeed motivate some. Most people would get about $100 out of that.

Supercharger access is more a matter of convenience, and an easing of range anxiety, than it ever was for the dollar value of the electricity you’d get from the Supercharger network. Well, except for the few selfish freeloaders misusing the Supercharger network for daily charging.

There were other perks if you had enough referrals…Someone dropped the ball and allowed someone to receive not one but TWO 2.0 Roadsters…

Tesla certainly does many things right, but that referral program was one of the few things that they forgot to think all the way through. Am surprised they didn’t stop it sooner than they did.

In theory, this is how the credit phaseout is supposed to work… the credit is to help manufacturers in the early days, then prices should correspondingly drop as the credit disappears. However in practice there are also tactical issues like credits benefiting laggards.

It will be the interesting to see if GM follows suit as their credit phases out…

I suspect the Bolt EV is a car designed to ride out the tax credit phaseout, and with it gone they will release new models with new pricing so they don’t have to mess with Bolt EV pricing.

I really hope you’re wrong about the Bolt disappearing with their tax incentives, but I have to admit I’ve had the exact same thought recently, and if I had to bet I’d wager it’s a goner.

That would be very bad news for everyone, including GM. They need to keep pushing their dealers to properly sell and support EVs, and the surest way to do that would be to push the Bolt with a price cut and (gasp!) advertising, not cancel the car.

I think they will have better EVs to replace the Bolt EV (I don’t think they will go EV-less). I think GM won’t want to cut the Bolt EV price by $7500 without agitating previous buyers, but if they release a new EV at a better price point it won’t matter so much.

Previous buyers almost all probably got the $7500 tax credit, so why would it agitate them to see GM reducing the price of the Bolt as the tax credit phases out? Would they rather see GM drop the car entirely rather than reduce its obviously too high price? Do they expect people to pay a much higher net cost to own than they paid? I doubt it.

The Bolt is a great little car … I don’t see why they would phase it out any time soon. It’ll just be due for a mid-cycle upgrade soon, along with price reductions as the tax credit phases out.

Far from being “agitated”, early buyers will be happy to see their used car values increase.

Do Not Read Between The Lines

It’ll go in a few years. It was just a credit stepping stone to whatever their future plans are. Seems to be moving towards the standard approach of luxury first and then bring it downwards.

Just like Tesla is doing!

And GM chose to drop the Volt as a result of tax credit phaseout and the fact that the Bolt alone covers their compliance credits just like Musk said.

Their next EV will be a Cadillac and attempt to compete with Tesla.

We’ve already seen how GM is handling the phaseout of the Federal tax credit. They have taken the Volt out of production. 🙁

how much is Europe price? 57000€?

Depends on the country…
In Germany, the Dual Motor 3 is the lowest model – its 55,400€
In France, the Dual Motor 3 is the lowest model – its 53,500€

I agree, I personally don’t like the “fuel savings” amounts advertised they way Tesla does it. Still have to pay for electricity, even though it may be a quarter or more of what gas/petrol costs. If one DCFC’s a lot , that can add up too.

It’s like they believe gas prices and electricity rates are the same across the country.

Bingo! Nothing blows up economics analyses quicker than bad assumptions — the old GIGO (garbage in, garbage out) concept.

If you take the price of the Premium Package off the Mid-Range Model 3… perhaps $3000 or $5000 – let’s call it $4000 – you get $38,900.

Which means one of three things…

1) Premium Package is going to become standard, and will go away as a concept. Heated seats, leather-like seats & appointments, cool stereo and a glass roof.

2) the Mid-Range IS IN FACT the Standard Range… they’re just working on ways to make it cheaper.

3) the Mid-Range will go away once the Standard Range is introduced. The price is too close for the amount of clutter it brings to the options list.

The PUP was once a mandatory $5000 option with its own radial button which you were unable to de-select…It’s now already bundled into the interior and the $5K price is no longer broken out…

Also, read this: https://insideevs.com/deep-dive-tesla-short-range-model-3-pack/

I thought it was only bundled in as now-standard equipment for the Performance Model 3. Are you saying it’s now standard for all Model 3’s? I don’t think that’s correct.

In this context, PUP refers to “premium upgrades pack” aka the premium interior, not the “performance upgrade pack” that used to be an upgrade for the performance model 3.

First of all, anyone that reserved a $35k TM3 should really ask themselves if they want to wait around and see what gets stripped off the car between $42,900 and $35k, when at least $3,750 in fed tax rebates still exist which will probably be gone by the time of the $35k version. So we are talking about like $4k net difference…. I could only imagine what an intentionally lower build quality and interior will be like… Trying to push Tesla to drop product quality and specs to hit a price point that plenty of other manufacturers are already at is kind of a fool’s errand in my opinion. The “plan” 3 years ago didn’t include a bunch of other reasonably priced 200+ mile range BEVs being on the market simultaneously. If anyone is still quibbling over $4k net diff over $35k promised at this point (~ 10% of msrp) when you are getting more range and decent options, perhaps there is something better to spend your money on. Go get a Prius Prime or Leaf ~23k (or lease, even better sometimes) and drive it for a couple years while you save up enough to buy what you really want.… Read more »

Good point. It’s at 39,250 now with credit. Hitting the 35k target without credit means pulling another 7900 out of the price, which could only be achieved with major decontenting and stripping. That version will not be pretty. Note Elon himself emphasizes how hard that will be to achieve.

If you really want a M3, now is probably the right time to do it. The extra 4,250 will provide a lot more content than the future 35k stripper.

Hmmm, I think you stepped rather far over the line from “Tesla agnostic” to “Tesla detractor”.

1. The Model S was designed to be a base $35k car. So it’s not, as you suggest, a matter of taking what’s available now and intentionally lowering the quality; it’s merely a matter of not including some options which Tesla is currently making mandatory to push its profit margin up.

2. The reason Tesla can’t currently make a profit on a base $35k Model 3 has very little if anything to do with the almost insignificant amount of competition from a few low-volume BEVs from other auto makers. The reason is mainly because Elon Musk envisioned substantial reductions in assembly costs by using touchless auto assembly lines running at high speed. Now that his unrealistic vision for that has been brought down to earth, Tesla has had to re-think how it’s going to achieve making a profit on a base $35k Model 3.

Do Not Read Between The Lines

I’m waiting because Tesla’s survival depends on the SR being available. I’m not prepared to place the bet on the MR. I was tempted when it was first announced.

I’m very disappointed that Elon is tweeting out “prices” for the Model 3 that include tax credits and/or other incentives. It used to be that Tesla (and Elon) were honest about prices for Tesla cars, and didn’t pull the same crap that other auto makers do, playing games with prices.

Today, I’m a rather unhappy Tesla fan. 🙁

Well technically or rather, creatively he did deliver on that $35K Model 3 today, though obviously not in a way people were expecting and I’m not saying that’s the end of it. It all does fit the picture of MR becoming the SR as some are speculating though. There may be limits to how affordable Tesla can actually make this car, maybe the MR version eventually ending up as a just below $40K entry level version would not be such a bad compromise.

A SR is coming. The pack is real not a vapor

Agreed, especially with the fuel savings. The price is the price you pay (or finance). Life cycle costs are one thing, but no other manufacturer implies the up front cost is lower for a hybrid vs an ICE version due to operating savings. And no bank would give you credit for that either.

Agreed. I think it’s a bad move which oozes desperation which certainly is not needed.

Just yesterday, I had to explain to a friend, that, no he does not have the money to buy model 3 … once I explained to him the “trick” …. They should just post the prices what they are and then they should put a link next to it, explaining what possible rebates and savings are perhaps available in area the person is from.

When ICE brand dealers run specials, is that desperation?

I greatly apppreciate that prices change. Its not for me to second guess why.

At this point, a Mid Range 3 with glass roof, premium interior and top equipment can benefit from California’s $2500 zero emissions credit also. Other states have various add-on discounts as well.

I can attest to the super joy I get from owning one. I’m happy for anyone getting a better deal than I did. Not complaining.

Just think what ICEmakers charge for 19th century tech they call “new”. $40,000 in today’s market gets you very little. A neighbor just bought an A4 Audi. I was stunned at what he paid! For less money, including tax break, I have a car that tops his in every way.

Any Model 3 that you can obtain for +/-$40,000 range is a pure bargain.

ICE brands are established, so they have no single point of failure like Tesla. If an ICE brand only sold 3 cars and its success was entirely hinged on mass production of a single model, and they drop prices of that model in an attempt to boost sales, it would probably be classified as desperation.

December is always a big month for EV sales, and January falls off a cliff, that is normal. Model 3 sales numbers of course are it’s own animal, since they had the crazy backlog of reservations. Given how December went with the cutting of the tax credit, it seems like the U.S. backlog is gone for M3s $45,000 and over. Tesla was able to deliver them very quickly to anyone that wanted them in December. I take that to mean that the only people still waiting are people wanting the $35,000 M3. It seems clear now, that if the $35,000 M3 ever comes, the tax credit will be completely gone. How many people are really still waiting for that? In December, you could have gotten a midrange M3 for $37,500 after rebate (less in some states). Are there really that many people waiting for lesser car for just a little less money? I don’t have a good sense for this, many of you follow this much more closely than I do. I just get the sense that unless Tesla can really hit that $35,000 magic mark, that they will find themselves in a more normal situation of just having ongoing… Read more »

I suspect very soon we’ll get a Standard Range with the Premium Upgrades Package for $39,900

Do Not Read Between The Lines

Earliest would be July. Got to milk those tax credits. There are upsells to be had.
But, given what they’ve done with Supercharger pricing and canceling the referral program, I don’t see any significant production efficiencies in the pricing. They might not get there.

Fantastic, i’ll be able to buy soon!!!

I would think that Tesla would have to drop the price incrementally. If they make to big of a price drop all at once then customers still waiting for delivery would cancel their current purchases and then buy at the new lower price. It seems to me that the price reductions will continue throughout 2019 to finally arrive at the $35,000 model. A price that will have very high demand.

I think it would be a good idea to limit the SR features so much that people to a large extent still opt for the MR. Eg. limit SR maxium supercharging to 90 kW, limit SR motor power or reduce resolution for the screen. Similarly introducing new features for MR and LR (eg. HUD) can help MR/LR sales to keep up.

You propose to make the car a lot less convenient so nobody wants it? Is that it?

Jean-François Morissette

What is interesting this time is that the price reduction is effective in Canada too (1500$CAD). The previous 2k$ wasn’t passed on (probably to absorb the exchange rate also).

I’ll say it: I hate the “including fuel savings” thing in the price. Show it as it really is. Who is to say the car will last 20, 30, or 40 years. How do you calculate the fuel savings over a period like that? It’s like here in Canada when airlines used to advertise prices without all the necessary taxes and fees. They were eventually banned from doing that.

Yes, I get it – EV “fueling” costs are going to be lower. But that largely depends on how much you drive, and the cost per kWh of electricity that you pay when you charge (assuming you are charging at home).

I agree, and no fuel savings if you’ve been driving an EV previously. I need a low payment and not slick salesman tricks!

Good to know that Tesla is willing to pass the reduction in battery cost to customers.
$42,900 for a car that goes 260 miles, carries 5 passengers with 15 cu. ft. of trunk space and few more in frunk is much better than the
$44,450 for BMW i3 that goes 153 miles, carries 4 passengers with with 15 cu. ft. of trunk space.

You will see these price reductions from any and all manufacturers that hit the 200k tax credit.

The credit it seems is effectively inflating the price of electrics.

All I need to see on Tesla’s website is the price of the car. I don’t need to see prices after the tax bonus, fuel savings or any other discounts unless they are given by Tesla. To show me those things is to insult my intelligence.