The Truth About Cars » Pricing Analysis http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 07 Aug 2014 16:57:35 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Pricing Analysis http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Tesla Model S Pricing Analysis http://www.thetruthaboutcars.com/2011/12/tesla-model-s-pricing-analysis/ http://www.thetruthaboutcars.com/2011/12/tesla-model-s-pricing-analysis/#comments Thu, 22 Dec 2011 20:46:38 +0000 http://www.thetruthaboutcars.com/?p=423322 Tesla released the finalized features and pricing for the Model S sedan this week, with deliveries of the most expensive variants to begin in “mid-2012,” the others to follow by the end of next year. More than a few people who thought they were going to be able to buy a “premium electric sedan” for […]

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Tesla released the finalized features and pricing for the Model S sedan this week, with deliveries of the most expensive variants to begin in “mid-2012,” the others to follow by the end of next year. More than a few people who thought they were going to be able to buy a “premium electric sedan” for $50,000 seem miffed by the final pricing. Yes, there will eventually be a $50,000 car (after a $7,500 tax credit). But it won’t have full motor power, leather, nav, or the ability to use fast-charging stations. Tick off all the boxes, and the Model S pushes double the hyped number. But, let’s face it, these guys have to turn a profit and must pay at least as much for parts as the big established car companies, on top of that big expensive battery pack. So does the announced pricing seem reasonable?

First off, a caveat. Tesla released “full features and pricing,” but a few holes remain. The car has eight airbags, but what are the two beyond the typical six? Front knee airbags, rear side airbags, or counting each side curtain airbag as two (front and rear)? Does the base car have a leather-wrapped steering wheel or an auto-dimming inside rearview mirror? Are the external mirrors heated? Is obstacle detection standard, optional, or simply not available? None of these are pricey enough features to make a big difference in the following analysis, but be aware that the omissions, if they’re on the car, might be worth a few hundred dollars.

The big jumps from $50,000 are due to the optional battery packs. Three packs will eventually be available. The base car will have a 40 kWh battery pack good for a 160-mile range and a zero-to-sixty time of 6.5 seconds. How is acceleration affected? The electric motor appears to be a powerful 300 kW / 402 BHP unit in all cars, but only the highest capacity battery pack is capable of outputting enough energy per second to fully power it. The figures for the other two packs: 60 kWh / 230 miles / 5.9 seconds and 85 kWh / 300 miles / 5.6 seconds. With the largest pack another bottleneck is encountered. Step up to a “Performance” model, with the 85 kWh battery pack and a high-performance inverter, and the zero-to-sixty sprint drops to 4.4 seconds. One implication: with an electric car, it’s not enough to know the peak power output of the motor. The battery pack and inverter are also critical parts of the equation, and these aren’t always capable of providing the motor with sufficient energy.

To put the sizes of these battery packs in perspective, the Chevrolet Volt has a 16 kWH pack, while that in the Nissan LEAF is 24 kWh. So the increments between packs are as large as the entire pack in these smaller cars. And the lithium-ion pack in the new Prius Plug-in Hybrid? A mere 4.4 kWh, for which Toyota charges about $5,400 extra. Using Toyota’s math, even if we ignore the cost of the standard Prius’s 1.3 kWh NiMH battery pack (or at least assume it’s offset by the cost of a charging system), Tesla would charge about $24,500 to go from the 40 kWh to 60 Kwh and about $30,700 to go from 60 kWh to 85 kWh. Instead, they’re charging a mere $10,000 for each bump. So either Toyota is making a bundle, Tesla is losing one, or Tesla knows something about lithium-ion battery packs that Toyota does not. They certainly can’t be faulted for their battery pack pricing as much as it bumps the price of the car.

And that high-performance inverter? Another $10,000, plus an additional $5,000 to cover mandatory additional standard equipment (leather interior, air suspension, and 21-inch wheels) that costs $6,500 to add to the regular car. So the “quicker than a 911” Model S starts at $85,000.

Optional even on this top model: $750 metallic paint, $1,500 panoramic sunroof, $3,750 Tech Package (nav, rearview camera, xenon lights, power liftgate, passive entry, Homelink), $950 580-watt 7.1 audio system, and $1,500 for a kids-only rear-facing third row. Oh, and if you want a parcel shelf to hide your cargo (like the one standard in a Hyundai Accent) that’ll be another $250. Two further options ($1,500 for a second on-board charger, $1,200 for a high power wall connector to feed it) enable quicker battery charging. Include all of the listed items on the Performance model and you’re at $96,400. Of these options, the $3,750 price for the Tech Package seems to have prospective owners most in a tizzy, as the price seems a little high given the contents, at least some of which they thought would be standard.

Disregarded here, but certainly not elsewhere: the first 1,000 cars will be “Signature” models with a unique red exterior and white leather interior. These start at $87,900, a few thousand higher than a similarly equipped regular production Model S. [Ed: Residual value speculators, start your engines]

So, how does the non-intro car’s pricing compare to the Infiniti M35h I had last week, which has a 1.4 kWh battery pack? Add metallic paint, leather, and sunroof to the Tesla, to minimally match the M’s standard equipment, and it actually comes in nearly a grand lower, $53,650 vs. S54,595. But the Infiniti includes additional standard features. Adjust for these using TrueDelta’s car price comparison tool (where additional models can also be compared), and the Infiniti ends up with a $1,455 price advantage. Load the cars up further, adding nav and the high-end audio systems, and the Tesla comes out better, $57,600 vs. $61,745. A $2,850 adjustment for the Infiniti’s additional features leaves the Tesla with a $1,295 feature-adjusted price advantage. Coincidence that they’re so close? Probably not.

But the Infiniti with a combined power output of 360 horsepower gets to sixty in about 5.5 seconds. So it’s as quick as the standard Model S with the 85 kWh battery pack. Add this pack–also the only one that will be available initially–and the Tesla comes in about $20,000 above the Infiniti.

So, for equivalent range and performance in the Tesla (or if you’re getting one of the first cars) you’re going to spend quite a bit more. How you evaluate this depends on whether you tend to see the glass as half full or half empty. Does Tesla deserve congratulations for doing a surprisingly good job of absorbing the cost of the standard 40 kWh battery pack ($20,000 even at their “bargain” prices) and charging much less than Toyota per kWh for the larger packs? Or should they be taken to task for not delivering the capability of the 85 kWh car at the price of the 40 kWh car?

I’m personally inclined towards the former view. But then this is a purely intellectual exercise for me: I haven’t plunked down $5,000 to get in line for one. If I had, then I might be upset to not be getting the car I expected for the price I expected to pay, even if it always did seem too good to be true.

Michael Karesh operates TrueDelta.com, an online provider of car reliability and real-world fuel economy information.

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Pricing Analysis: 2012 Toyota Camry http://www.thetruthaboutcars.com/2011/09/pricing-analysis-2012-toyota-camry/ http://www.thetruthaboutcars.com/2011/09/pricing-analysis-2012-toyota-camry/#comments Tue, 20 Sep 2011 20:35:15 +0000 http://www.thetruthaboutcars.com/?p=411978 At the launch event for the 2012 Toyota Camry, the presenting executive noted price reductions of up to $2,000. Quite often such reductions are accomplished by deleting previously standard features. Case in point: the 2012 Volkswagen Passat, where we found that once you adjust for feature differences a $7,180 price drop shrunk to a much […]

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At the launch event for the 2012 Toyota Camry, the presenting executive noted price reductions of up to $2,000. Quite often such reductions are accomplished by deleting previously standard features. Case in point: the 2012 Volkswagen Passat, where we found that once you adjust for feature differences a $7,180 price drop shrunk to a much smaller, if still substantial, $2,400. So with the redesigned Camry I withheld commenting on the price reduction until I could run the car through TrueDelta’s car price comparison tool.

The results are much more interesting than I expected (cars with automatic transmission):

MSRP FeatureAdjust Adj. MSRP Diff.
2011 Camry Base 22005 22005
2012 Camry L 22715 -175 22540 +535
2011 Camry LE 23460 23460
2012 Camry LE 23260 -225 23035 -425
2011 Camry SE 24725 24725
2012 Camry SE 23760 -825 22935 -1790
2011 Camry SE V6 27400 27400
2012 Camry SE V6 27400 -2975 24425 -2975
2011 Camry XLE 26725 26725
2012 Camry XLE 24725 +615 25340 -1385
2011 Camry XLE V6 30605 30605
2012 Camry XLE V6 30605 -2060 28545 -2060
2011 Camry Hybrid 27810 27810
2012 Camry Hybrid 26660 -160 26500 -1360

In every case but the XLE, the feature adjustment is actually in the 2012s favor, widening rather than narrowing its price advantage. So the price decrease is real…with one notable exception: the price of the cheapest Camry actually went up. In fact, the size of the decrease varies considerably by trim level and powertrain.

To highlight the pattern, let’s compare trim levels:

MSRP Feature Adjust Adj. MSRP Diff.
2012 Camry L 22715 22715
2012 Camry LE 23260 -725 22535 -180
2012 Camry SE 23760 -2175 21585 -1130
2012 Camry SE V6 27400 -4325 23075 +360
2012 Camry XLE 25485 -3380 22105 -610
2012 Camry XLE V6 30605 -7205 23400 +685
2012 Camry Hybrid 26660 -1300 25360 +2645

So the LE is a slightly better value than the L, but the difference between the two “garden variety” Camrys isn’t large enough to matter. At the other end of the spectrum, the Hybrid has come down $1,360 compared to last year, leaving it (only?) about $2,600 more than the equivalent conventionally-powered car. The XLE and especially the XLE V6 follow a value-pricing scheme, essentially providing a $600 discount for checking off all of the boxes. Ford commonly does this. The Germans, on the other hand, typically go in the other direction, making the base car the best value then charging big bucks for options.

The big surprise is the SE, where Toyota appears to have lifted a page from the Mercedes-Benz playbook. For the past few years Mercedes has been providing a free sport package on the C-Class. More recently they’ve done the same with the E-Class. On other models the “AMG” body kit, wheels, and suspension can cost thousands of dollars. On these models it’s free. Why? Because Mercedes want to change their image from stodgy to sporty.

Similarly, Toyota charges $500 more for the SE than the LE, but fits it with about $1,500 in additional features. Opt for the V6, and they go even further, piling on standard features far more than they bump the price. The 2012 has the same base price as the 2011, but includes nearly $3,000 in additional standard features, most notably the new Entune system which includes nav. So while the 2012 SE V6 lists for $4,685 more than the 2012 L, all but $360 of this price difference is accounted for by its additional features. Not included in this calculation: the SE V6’s more powerful engine, larger whees, stickier tires, and sport suspension. Would you pay $360 to go from a 179-horsepower four-cylinder engine and 16-inch wheels shod with grip-free tires to a 268-horsepower V6 and 18-inch wheels shod with performance rubber? A stupid question, isn’t it?

Given the effective $3,000 price cut, it’s no surprise that the SE V6 also compares very favorably with competitors (all with leather, nav, and sunroof):

MSRP Feature Adjust Adj. MSRP Diff.
Camry SE V6 30260 30260
Mazda6 s Grand Touring 32365 +2110 34475 +4215
VW Passat V6 SEL Premium 33720 +410 34130 +3870
Honda Accord EX-L 32600 +1125 33725 +3465
Nissan Altima 3.5 SR 32470 +425 32895 +2635
Ford Fusion Sport 33135 -775 32360 +2325
Hyudai Sonata Limited 2.0T 31055 +375 31430 +1170
Dodge Avenger R/T 28035 +1175 29210 -1050

Only the Ford includes more stuff than the feature-laden Camry—notice the often sizable feature adjustments. So the Camry has both a lower sticker price and more features. Wonder why the Mazda6 doesn’t sell better? Now you know at least part of the reason. The “reduced price” Passat might now be in the hunt, but it’s also near the top of the range. Toyota has even managed to significantly outdo the aggressive Koreans. Only the lame duck Dodge manages to undercut the new Camry. And if you compare invoices rather than sticker prices, even it ends up about $200 more. (Toyota dealers enjoy wider margins than most, so all of the above comparisons would shift even further in the Camry’s favor if we compared invoice prices.)

Apparently Toyota is sick of hearing about how boring Camrys are to look at and drive. To counteract this, they want fewer LEs and more SEs on the road, and they’re subsidizing the price of the latter to make this happen. If the styling and suspension of the SE simply aren’t your thing, they’d prefer that you opt for the Hybrid. Dead set on the L or LE? Toyota will still sell you a driving appliance, but they’re easily the worst values in the bunch.

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