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Did Tesla lose any sales with the price increases?

I have been waiting to pull the trigger but like many, was waiting for the parking sensors and a few other things. This morning I felt like someone slapped me in the face because everything I wanted went up in price in a very significant way. It made a huge change for me personally. $1,500 for a pano roof seemed reasonable - now $2,500. I like XM radio and for $950, that was basically ok. Now $2,500 to get XM? $650 more to not get that piano black interior finish? Decent tires? "That will be another $1,000 please!". The list goes on and on... This may be the straw that broke the camel's back for me. I want a MS, but this is just getting too rich for my blood. If I get a stripped down car it's expensive and I have stripped down car. If I get what I want, it's the car I want but now for a grossly inflated price. I think I may be forgetting about the MS permanently as a result. It's the reason I never bought a BMW: Every little extra you want is not reasonably priced....it's grossly overpriced. I wonder if anyone else was as turned off by this new cost structure as I am right now?

I wonder if Tesla would offer a one-week grace period how many people would place an order immediately versus with the new pricing.

Sadly, I'd stick with today's pricing. I like the parking sensors and my wife doesn't want leather in our vehicle. If I don't get the stereo or the panoramic roof (was on the fence on both of them) I actually come out a little ahead with a la carte pricing.

I understand your frustration, but even with the price increase it is not a "grossly inflated price".

Frankly the car is still a bargain.

To compare it to anything else on the road is difficult, and futile.
The MS is a superior car in every way.

Driving one on a daily basis you soon find a waning attraction to anything else on the road.

I was at a dinner party on Friday, the guest of honor drives, among other cars, an Aston DBS and a Mercedes SLS. All he wanted to talk about was the MS and how great it was. His wife went for a test drive with us and green lighted ordering one. He is thrilled.

I guarantee that after owning the car for six months his "super cars" will be gathering dust.

I am sad to say that I cancelled an order today I had on hold waiting for the new options. The price increase, $5650 for my configuration, pushes me over what I am willing to spend. I rolled the dice waiting for the new options and lost.

I don't really like how this was handled. I had to make a decision last week to confirm or not without having all the information I needed to make that decision.

I'm not a huge fan of how this was handled, either, but I understand why they didn't want to broadly announce (for people like us who wait for the new stuff to come out.)

I am likely going to cancel my current build and then bend over for the wallet biopsy. My wife also really wants the parking sensors.

@ stvt - How far along were you in the ordering process? If you had reserved, did the pricing in your order change? Were you assigned a delivery specialist? I'm just wondering if you could reach out to Tesla and ask them to honor the previous pricing?

I thought I read in another thread that some customers received emails from Tesla warning that orders had to be finalized (or something to that effect) prior to August 1st, otherwise they would be subject to future price changes. I vaguely remember someone writing about that. If true, that's a pretty clear sign of impending price increases.

Sr. DS reached to me today in response to my inquiry last week about parking sensors. They said my vehicle is early in production and I could get any of the new options, subject to today's vehicle pricing. Since I was really only interested in the parking sensors and fog lights - both of which could probably be retrofitted for less than the additional $8,500 overall vehicle cost - I opted to keep my order the same. She was able to sneak my CF spoiler back onto my order after confirming that all spoilers being attached to vehicles are the new design. I'm okay with the look if it increases the value of the vehicle, in my case it won't add any cost because it was included in the P upgrade. Woot!

@ napacab
You said, "Frankly the car is still a bargain.

To compare it to anything else on the road is difficult, and futile.
The MS is a superior car in every way."

I respectfully disagree. The MS is NOT a superior car in every way, it is superior in the way it looks, the novel 17" display and the fact that it is an all electric car. Can you think of anything else that makes it so "superior"? Certainly not the interior fit and finish, for example. I got into my Lexus 2013 GS450h after an MS test drive and it was not even in the same league even though they both cost the same. Unfortunately, the latest thing it is superior at is commanding a superior price which I think is quickly becoming unjustified. Let's be honest and objective for a moment: if you put an all electric drive-train in any $100k car, would it not meet or exceed the expectations you have from MS??

@stvt Sorry dude.. I don't believe you had an order in.. if you had, you would know that you could stick with the old pricing and your old configuration.. you only get hit with the new pricing if opt for new features. (smells like troll in here)

@unclegeek Reread my post. Order on hold. I received an email 2 weeks ago saying I had until Aug 1 to confirm or be subject to new unknown pricing. I wanted one of new options and decided to wait.

Your troll detector needs recalibration :-)

Based on stvt's posts in other threads, I really don't think they're trolling.

I'm in a somewhat similar position and put my order in on 7/31 after hearing rumors of the options and increased pricing. I called and got confirmation that I can either keep my old configuration and pricing or if I want any new options (i.e. parking sensors) I'm subject to the new pricing just like everyone else. At least I have the choice to make and another week and a half to decide just how badly I really want those sensors...

@stvt.. T.D. calibration has been re-certified.. my bad. I didn't know if you put an order on hold past the original lock-down date that you lose the ability to freeze your pricing. My DS indicated I could put mine on hold but didn't say what the drawbacks were.. as it is, mine is scheduled for commit on Tuesday so I still can lock my original config at the old prices or opt for new features and jump on the new price bandwagon. Apologies extended.

I can see the frustration as the price runs up, but I have to say a few percentage point increase does not sound all that abusive. I also find it hard to believe that a few thousand dollars really changes the math on a +$100k car. If this purchase was based on math I don't think the old price is defensible. This is about a high performance extremely high quality, amazingly engineered, just plain cool car that we are all thrilled to own and show off. That it is electric makes it an unbelievable story that allow us to have our cake and eat it too. For me at least, the price was a non-issue, at least at the margins. Double the cost I would not be buying. Half the cost and it couldn't be so amazing, today. A couple percent one way or the other, irrelevant.

TM will probably lose some sales from the price increase as all companies do when they raise the price of any commodity. However, I suspect they have figured these loses into their calculations with the result being an increase in net revenue.

There have been several price increases over the last year. Some come with improvements/upgrades while others have been merely to keep the company profitable.

I have been fortunate to own several cars at/near the cost of an MS. I feel it is a value for the money and better for the environment than our ICE vehicles.

It will not meet everyone's price point or expectations. For those of you hanging in their with the price increases you will end up with a great vehicle and in 3-6 months see you got it for a relatively good price when the next round of price increases comes along.

The other issue is that now that there are so many options it's going to make people want to check them out at the stores.

For example, I have never ridden in a non-performance car without the sunroof and with textile seats. So now before placing my 100K order I'd like to see what I'm getting rather than show up at the Service Center to pick up my brand new car and see this flimsy plastic dashboard and go "What on Earth have I done!!!!!!"

People are going to want to hear the stereo again if it's been revamped. They're going to want to see the new aero wheels. Ride on the new lower-resistance tires.

And all of these options won't be available at all Service Centers so it's going to take time. And time is not what Tesla needs right now. They need orders.

@mayowt

I'm not sure why you think the increase is only a "few percentage points". For some like me, the difference is 8%. That is not a trivial increase in 24 hours time...especially on a $100k+ car.

If I were to order the car I got in June today, it would be around a 9% price increase. That is more than a "few." However, you can still get a pretty nice car at the old price. It just won't have some of the interior touches that the rest of us got for free. New customers that come Tesla won't know about the price increases, and probably won't care. It is the few people on the forum that were on the fence waiting that have been upset by the change. Those of us that already have cars, just saw our resale values go up close to 10%.

An 8K difference on a 72 month loan is another $111 per month + interest.

That's around $30 a week which is two 12-packs of Fat Tire. So if you ordered yesterday you could have had three Fat Tires each and every day for the next six years.

Not insignificant!

@icecold
Enjoy your Lexus.

The beauty of having several choices of automobile manufactures is that no one will be forcing you to purchase any one brand. You are free to make your decision based on a cost benefit analysis.

However, I cant help but refute your assertion that the MS is only superior in the way it looks and in the 17" display.
You are right, the car looks great.
And the 17" display is an improvement compared to any other infotainment system (like the POS iDrive in my wife's X5).
Being all electric is wonderful, too, but that alone does not make it superior.
Our business owns a fleet of vehicles that includes the Nissan Leaf, they too are all electric, but are in no way a superior car.
I consider Nissans effort a novelty and INFERIOR to many ICE cars, even comparable economy cars.

The design and engineering teams at Tesla created an automobile that truly IS superior.

The Model S is superior in the way it DRIVES.

Nothing else is even close.

For grins today I will probably dust off the new 911 that I bought last year.
It has been driven maybe 1000 miles since my MS was delivered.
This is not a coincidence.

The 911 is the culmination of 50 years of superb engineering by Germany's best.
They have improved this car incrementally each of the last 50 years.
It is a glorious car, and Porsche has garnered a "few" awards for their efforts.
Even so, it is nowhere near as fun to drive as Tesla's "second" effort.
I commend the team at Tesla and am in awe of that they have created in such a short amount of time.

To think that adding an electric power train to an existing platform would create something comparable to the MS is ridiculous.

Its not that simple.

@napacab: agree wholeheartedly. This car is more than just the sum of various stats.

My post on the increase was I tended to say the same about the value. It is also more than a math based exercise for value. Value is subjective for many of us and my point was simy that I do t think even 10% materially changes that for the majority of buyers. And that seems to be the price elasticity calculation that tesla has done. I suspect they got it right. @Tommyboy, at this point orders are not the problem. Any good business is going to focus on finding that point that balances supply and demand and the backlog would indicate they don't have it right yet. If they overshoot, things will adjust again.

@napacab

As I said before (and I genuinely mean it), I respect your opinion but disagree. I drove the MS twice and on different roads, both the P85 and 60, with active suspension and without. I am not as knowledgeable as current owners and you are obviously/rightfully enamored with it. But the handling in my GS450h with active suspension is as good or better than the MS. The interior fit and finish is world's better in the Lexus. The Lexus also has a heads-up display, "hold" button for when sitting at a light, ventilated seats, lane-departure warning, adaptive cruise control, night vision and a few other bells and whistles. It also has the second largest screen in the industry (after the MS). Try driving a GS: it is an extremely fun and engaging car to drive. It is not your father's Lexus. It also is not bad looking either.

Anyhow, I'm not saying I don't want a MS or that it's not a great car, but if you put a an all-electric drive in my GS, it would be a superior car (in my humble opinion). And, incidentally, the fully loaded GS hybrid is still about $30k less than the fully loaded non-P 85. I am not poo-pooing the MS, by the way. I want one badly! I am just very disenchanted by what just happened here with the pricing and I don't feel that it's justified.

I understand that putting more options would make sense to be able to charge more for each one. On the other hand another way to look at it, is that most manufacturers over time include more things into a package for the same price as a way of continuing to entice buyers / of get people to upgrade to the new model. In this case they have broken up things that were previously included in the previous package, in addtion to several new options and charged more for most things. It seems manufacturers can always make a choice to have higher volume or higher margins. In this case it seems that their choice was clear to go for the maximum margins.

I have been riding out my current lease waiting to put my order in. This hasn't changed my plans. (I'll have to really think if I wan't that carbon fiber spoiler or interior now though.)

@icecold, I suppose you're right that if they could make the GS all-electric that it might be as good as a Model S. The thing is, they aren't able to do that now, it doesn't seem like they'll be able to do it anytime soon, and if they could the car would be much more expensive than it is now. No question other luxury cars have more bells and whistles, but the Tesla battery pack and drivetrain are what make the Model S incomparable.

Not to get into a whole off-topic subject here but my wife and I test drove everything out there the past three months.

We just hated the Lexus LS460 mainly because of lag in producing power. I've never seen my wife just stop a test drive in the middle and say "this isn't for me and I wouldn't purchase one". The sales rep asked her why and she said the accelerator pedal is mushy and there is a delay in producing power. We stopped and I took over and she was totally right.

The Audi A8L was beautiful inside and the seats were awesome. We had a 30 minute test drive and an hour inside the car going through the systems. The gas mileage wasn't great and there were literally like 4 cars to choose from in Southern California so we would have to custom order and wait three months. Options were expensive. Very expensive and the car we wanted was over $120K.

The BMW750Li was our favorite of the bunch. Pretty great throttle response time, comfy inside, lots of bells and whistles (the large, heavy front doors will stay fixed no matter where you leave them - even on an incline) and was priced at around $105K the way we wanted it. We were within a day of ordering one when we decided to test drive the Tesla.

Yeah, the interior wasn't that great. Seats weren't that comfortable. Interior storage space was minimal. But then we drove it. We could not beleive the acceleration! It knocked us back. My kid and I were in the backseat when my wife drove and we were laughing and my wife was having so much fun. She hit 72mph on a 45mph UPHILL road when we all yelled at her to dial it back a bit! Had there been a cop waiting on the other side we were dead meat. We both thought about that test drive for days after and agreed that was the only car that was FUN. That we loved to drive. That we WANTED to drive.

So that's Tesla for us. Ok, it's 5K more now. Still the same car.

@Mike C
You are absolutely right about everything you said. My original argument though was that the MS in not "superior in every way" and that it's superiority rests mostly with the all-electric drive-train plus it is a very nice performing car. My frustration has been with the fact that they essentially jacked up the price 10% overnight without really adding any new innovations or anything superior to other luxury cars. I am mostly venting ;)

@ TommyBoy
Thanks for the story, it was funny to read. I will point out that the LS460 is a completely different class of car though and can't be compared to an MS. You take your CEO to the airport in the LS and your buddy for a joy ride in the MS.

+1 napacab

For those regretting the price increase on options, you are always free to get another car, of course.

You can cancel your order. Problem is where are you going to go to get anything comparable to THIS car. Only Tesla makes a Model S, and there is no other car like it. The engineering and design in this car is revolutionary, and unique. Model S creates its own category of performance electric car: the drive and responsiveness are unlike any gasoline powered car. Also the maintenance and fueling costs will be much less over 10 years. (That is the real "hidden" cost of all gas cars. Plus, it's gas.)

The price for a base model 60 or 85kWh is virtually the same, while the P85 now has a reduced price in its new base config.

Only the options have changed and prices have increased substantially for some of them.

The car itself is still within reach to the same people willing to reach for it. Remember that, even without being fully loaded up with all the options, the Model S is still a wonderful car to own and to drive. Even a base model, configured with no added options, is truly a revolutionary automobile with unique and superior safety, handling, and response characteristics.

There are still many gas cars to chose from, and most of them are cheaper. But they don't have what Model S has, that is the long and the short of it.

Price increase on options is not going to reduce sales much, if at all, imho. Might reduce sales of the options themselves, at least for awhile, but somehow I think it wont be long before this is the "new normal."

In some ways, this was quite an effective price raise, because it left the base prices essentially intact, gave the buyer more options, and the company more profit margin.

@icecold - interesting, my CEO just turned in his Jag and went w/ the MS as his daily driver. Believe his quote is "in 20 years every car will be like this". Not sure I buy into the buddy argument, but am fine with to each his own.

+1 napacab

Icecold, it is abundantly clear from your comments that you would be better buying a Lexus, I hope you enjoy it. I disagree with many things you have posted, however the one I will pick you up on is the objection to $2,500 for the Pano, $1,500 for the Pano was an absolutely staggering low price for that item.

+1 napacab and imherkimer

Where were price increases announced? I've not seen them .. and the web site pretty much hides the prices .. and a google search of recent Tesla news does not show them .. hmmm.


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