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New Price Increases

Maybe this has already been discussed, but just noticed that the 21" wheels went up to $4,500 and the air suspension went from $1,500 to $2,250.

My wife and I were looking to buy our 2nd S but it looks like Tesla might be pricing us out of the market by increasing their prices. (:>(. I guess they are now getting serious about increasing their margins for the next quarters report. Love the car!

@rbgliny Why priced out?
Do you absolutely have to have air-suspension and 21" wheels?
I have the 19's and they are more than adequate, cost less and last longer. Standard suspension is also excellent. Have not heard one single complaint about it to date. Extended warranty? Also not essential, in my view. Options but not requirements for ownership.

That's why I bought a Signature series early on. After seeing how amazing the MS was after their first test-drives, I was thinking to myself... this car is a bargain!!!! Tesla could sell the P85+ for $350k, and still sell tens of thousands of them a year.

I'm sure the end result makes that much difference in Tesla's margin. These are options that not everyone gets. It might even hurts the margin if a lot of peoplr choose not to have them but I quess Tesla knows what they are doing.

Without some inside knowledge, it's tough to say whether this is a cost/supply-side issue (i.e., production and/or after-sales service of these items are costing more than expected) or if it's a demand-side issue (i.e., way more people are buying them than expected, so Tesla believes it underpriced them initially). My hunch is on the former, given Musk's overall attitude, but I have no clear idea.

Tesla knows what they're doing in a general sense, but I think they are just now finding out how much it really costs to manufacture and provide warranty service/repair to Model S. Hence, the price increases.

While I took issue with the unannounced price increase for the extended warranty, I see no problem with option price adjustments going forward. The warranty issue was a slap in the face to everyone including early adopters, while these car cost increases reward early adopters by reinforcing the value of the car going forward. It's not so much about dollars and sense, but principle. I think a lot of early adopters feel a civic responsibility promoting the success of this company and therefore make a somewhat risky investment. Others see the MS as great car, but are holding out for some small improvement before they buy or reassurance that the company will prevail. These "selfish" criteria are not the reason TSLA will succeed now and going forward. If TSLA needs to raise prices to ensure their margins or push some fence sitters, so be it. Better that than going under. If you didn't get the early bird discount, it's your own fault.

I absolutely agree that the P85+ is under-priced relative to comparable performance vehicles--can't wait to get mine.

I noticed that with the price increase on options, TM has waived and included the destination and government doc fees in the new car purchase price. Does it mean that new buyer would not pay the $990 delivery fees and $719 government fees (if in the state of California) anymore?

@bradslee@yahoo.com | JUNE 30, 2013: I noticed that with the price increase on options, TM has waived and included the destination and government doc fees in the new car purchase price.

It looks that way:
Model S P85+ Price

It looks like they increased the base price of the car by exactly $1,170 to cover the destination/doc fee inclusion.

The fee inclusion for delivery in that field is not new.

I paid $66520 for my limited 60 Model S , I stayed within my budget.
No 21, no air suspension, no twin chargers,no HPWC,no Perf Plus package,no extra paint.
and no ESP.
Love the car !

That's the beauty of this car - you can add only as much as you need or want! :)

Buy "Limited 60" you mean a 40, right?

What I find particularly bothersome is the amount of the price increases. The sheer amount of the price increases makes it feel like they were playing a game on the consumer. Getting people interested in the car, and then suddenly increasing the pricing. Last time I checked they didn't increase the European model pricing because that one is still new to that market.

The 21inch wheel/tire upgrade for example went from $3500 to $4500, but the pricing for the wheel/tire combo at the Tesla store are $5200. So that means that they are pricing the 19inch tire/wheels at $700 which in my honest opinion is way TOO low. The price increase on the 21's was almost 30%. That's just absolutely crazy, and in response I'm simply not buying that upgrade. I'll live with the 19s just fine, and its easy because the plus option was already ridiculously overpriced.

As to the car I'm still interested, but I think Tesla really needs to get things straightened out, and to have some stability in the pricing, and what comes with the Car. Sure part of this might be that I just happened to be looking at the car when all kinds of changes to pricing started to happen. To say it greatly unsettled me is a massive understatement.

I'm sure I'll buy the car in the next 6 months if they stop screwing with things in negative ways like drastically increasing the pricing on various options, or stripping a feature off the car. The Tesla won't save me a dime, and will l likely cost me more money because the Tesla will change my habits. It's going to give me excuses to go somewhere because the supercharging network is just plain awesome. Around where I live the supercharging network won't even be fully established for another 6-9 months, and if I really think about it the supercharging network is what sealed the deal of being interested in it.

@ S4WRXTTCS, it would appear the Model S is getting more expensive over time so you may want to jump in :) The air suspension went up $750, so I'm glad I locked myself in last week.

@AmpedRealtor - Nah, in my history I've made way too many irrational, in the moment car buying decisions. I love the fact that I actually have to order the Model S, and wait for it. This does wonders for making an informed non-passionate decision.

I'm going to hold to seeing how things play out in the next 6 months, and order it in time for Summer of 2014. I also want some of the options that are available on the European version. Those should come across pretty soon.

AR;
It seems many agree (P85/P85+ = bargains). Every report finds TM selling more of the high-end models than expected (%). Responsible, I think, for much of the healthy margin and profit growth.

@ Brian H - well they certainly got me. Oh what's another $1,500… or another $950… or another $12,000… LOL!

@S4WRXTTCS

"I love the fact that I actually have to order the Model S, and wait for it. This does wonders for making an informed non-passionate decision."

On the other hand, having too much time to think about it let's you incrementally add "just one more thing". When we put our reservation in, I remember debating between the 60 & 85, but by the time we finalized our order (almost a year later in our case), we ended up with a P85 with everything except the child seats in back. I'm just glad they hadn't come up with the P85+ yet back then, I'm sure that saved me a chunk of money, since I've certainly not displayed any resistance to Tesla temptation whatsoever.

@AmpedRealtor - They almost got me because they trick you into thinking you'll save money. When I calculated it the price differential per month for the P85 versus the S85KW was around $150. So I figured I'd save at least $150 per month with this car so why not get the P85? It's amazing how the mind can rationalize a decision. I couldn't figure out how to justify the extra $90 a month for a plus model.

The other thing that might be pushing people into higher end models is the fact that at least around here they won't even let you test drive the 60KW or 85KW models. I even called them up to ask me if there was a place around here that I could and they said no dice. I seem to remember other people on the forums being able to test drive 60's and 85's so why not around here?

The other issue is they are selling a ton of cars to specific areas, and so its not spread around the country. I'm curious about how high end car owners will feel about not having any exclusivity. I had more exclusivity in a Porsche Cayman than someone will have in a P85+ around here.

@bobinfia - So, so true. For me it really came down to initially being paralyzed in my decision of whether to go in cheap (a 60KW with a few options), or the P85 (the plus didn't have the seats necessary for high speed cornering). I'm sure its a nice option if $6500 means less to someone than $6500 means to me.

Had the timing been different I'm sure I eventually would have convinced myself the P85 was the only way to go.

But, now its looking like long term the S60KW will win because by that time the supercharging locations will be better known and so anxiety won't push me into the 1% use case.

S4WRXTTCS,

I don't think Tesla's business model currently is to match Porsche, et al. Yes, it would be cool if the P85's looked a bit more 'unique' than the S85's, 60's, and 40's, however, I am sure in the future Tesla will release a more expensive exotic model. Right now they have one assembly line running to make the MS, and a business model to sell as many MS's as possible.

But then again, where I live, even a Ferrari California is just average, and I currently see more of them than MS's. So go figure ;-)

@AmpedRealtor, Yes, its the "40kWh" range in the 60kWh battery ,since TESLA is not building
the 40kWh battery .

@TikiMan - What I was getting at was that what happened was really unique to Tesla. I've never seen any other car where the higher end model was so prevalent.

Usually a high price of a car had a lot to do with exclusivity. Whether its for status or just to separate someone from the heard. It's one thing to have a bunch of Ferrari California's in one area, and another thing for a junior guy to show up in a P85 right next to his bosses P85+. The boss guy isn't going to be too thrilled. My boss for example was strongly looking at the Fisker Karma, and I believe I successfully convinced him otherwise. There is nothing quite like pictures of burning cars to dissuade a person from buying the car.

I don't think its anywhere in Tesla's business model to cater to "exclusivity", nor should it be.

The Tesla business model should be like you said to get as many MS's as possible into peoples hands. People tend to be rather brand loyal (as a whole) so if you can get them to switch than its much easier to get them to stay.

Tesla has already set themselves up really well for profitability. The battery cost of goes down by a pretty significant percentage every year. Tesla will become more and more profitable every year as the battery cost goes down without ever having to raise prices. The only hiccup is going to be the disappearance of the $7500 uncle sam incentive, and some of the other incentives in other states disappearing.

I don't see Tesla significantly raising the price, and I don't see the P85's as a bargain. They do have competitors in the S60/S85, and Tesla knows this. That's why Tesla won't even let people like me test drive the S60/S85. No instead I'm told I have to test drive the P85, and then with sound mind and sound judgement I'm supposed to go with something slower without ever having a chance to drive it.

When I've searched around for a similar vehicle by which to compare the MS for pricing purposes, the closest thing I could find was the Maserati Quattroporte and the Porsche Panamera. By the time you option up those vehicles to match the performance of the P85+, you're spending significantly more than Tesla has been charging for a P85+. And that's withholding all value associated with the drivetrain.

Face it...Tesla is (ironic metaphor) firing on all cylinders right now. The stock is WAY up. Their recent news coverage is nearly all positive (even defeating two NADA-backed state bills). And the VINs being issued are beating (by my rough estimate) a 20K/year production rate. And, to top it all off, they're moving into the European market. Hell, if I was in the same boat, I'd probably raise prices, too, if only to cool demand a bit because Tesla simply doesn't have the capacity to meet it right now.

Someone showed his wife how much extra it cost to get a performance Euro sedan, and made the case the bump for the P85 was a steal, a real deal. She was then eager to get the most expensive model because it was so much less expensive than other companies' top-up models! Bargain.

@cfOH - The biggest problem is how one define performance? Do we only care about straight line acceleration? Or can we factor in how a car handles? As far as I can tell from reviews of the Panamera is even the base model one will easily out handle even the top of the line Tesla P85+, but the base mode will get killed by the Tesla S in the straights.

So if we go up to the Panamera GTS you start to get a little more competitive 0-60 time wise, and I'm pretty sure you don't want to go up again the Panamera GTS on the Nurburgring.

Of course the GTS is a little closer to $115K. If you haggle a bit I'm sure you could get a pretty similarly spec'd Panamera GTS for the $113K or so that Tesla wants. The biggest problem with this comparison is the GTS is all-wheel drive, and the P85+ is rear-wheel drive so its not really a fair comparison. Maybe a better comparison would be the BMW M5, but it actually might be cheaper that the $113K that Tesla wants.

Now keep in mind this was all before the $7500 tax break, and that's where the rub is. In my comparisons the Tesla P85 always ends up cheaper not because the car is cheaper. But, because the $7500 tax break, and the no-sales tax makes it cheaper. It's cheaper through government incentives.

What I do find really exciting is for ONCE people are actually buying an American made sports sedan, and even more exciting is the germans will start buying it.

I really can't wait to see what the Germans have to say about it after owning it for 6-12 months.

Only one data point: I've driven leased BMW 5 series for 10+ years (535d, 530d, Alpina D10, 528) and loved those rides. Though I haven't yet done a test drive of MS (next store is either 2 or 3.5 hours away), I'd not hesitate to switch to MS once I can (how do you say it in the US? I drank the coolaid? Brian, help!).
Once the press coverage switches into high gear in late summer, I expect a big interest in MS/MX; besides the simple reporting of Tesla-related news (e.g. recent battery swap, SCs), there are only a hand full of test drives by the media that I've found so far.
Also, leased company cars as part of compensation is widespread here.
My guess is that a lot of higher management people would like to get the MS then as well (who wouldn't).

(did I mention I'm from Germany :) )


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