Like Mercury, Tesla Pricing Is in Retrograde
August saw Tesla Motors slashing prices on practically everything that wasn’t the Model 3. The automaker has a history of endless shifting trims and pricing, and the most recent round of changes focused entirely on top-spec versions of the Model S and Model X. Earlier this month, base-model MSRPs received a haircut.
Assumedly, the automaker wants to move its existing inventory while production of the Model 3 progresses towards the coveted 500,000-units-per-year mark. Yet that ambitious goal is still miles away.
Tesla has been hesitant when it comes to providing sales figures and, while it has begun releasing delivery numbers on a quarterly basis, making monthly estimations is extremely difficult. The automaker said it hit its target of 47,000 units for the first half of 2017 but also referenced a “severe production shortfall” that hindered sales during the second quarter. It plans to make up the difference through the rest of the year and the pricing shift is likely to play a factor.
How much are you saving, exactly, if you buy a Tesla now?
The base price of the Model S 100D (with 100 kWh battery pack) is now $3,500 less, going from a starting point of $97,500 to $94,000. Meanwhile, the company’s flagship Model S P100D with Ludicrous Mode underwent a larger $5,000 price reduction. That leaves the top of the line model with a base price of $135,000.
The Model X underwent the same reductions, leaving the 100D with a starting price of $96,000 and $140,000 for the P100D. The Model X 75D also spent some time with the pricing gun, resulting in a decrease of $3,000.
“When we launched Model X 75D, it had a low gross margin. As we’ve achieved efficiencies, we are able to lower the price and pass along more value to our customers,” explained Tesla when it dropped the base trim’s MSRP near the start of August.
The reductions are reflected in Tesla’s online configuration for both vehicles and will apply to new buyers, as well as existing 100D/P100D buyers who have yet to take delivery, according to the automaker.
Teslarati alleges the subsequent pricing adjustments could represent improved efficiencies related to the production of the 100 kWh battery pack used in the 100D and P100D. It sounds like Tesla is “‘passing the savings on to you,” Teslarati claims. But that doesn’t entirely ring true, considering the automaker has yet to turn a profit and earnings forecasts don’t see the company leaving the red before 2019 — let alone the next quarter.
It’s also worth noting that Tesla’s quarterly summation includes vehicles added to its loaner fleets and Model Xs sent to showrooms for display. Tesla said these vehicles were “likely a factor in helping Model X net orders in Q2, which grew by over 20 percent both sequentially and as compared to Q2 2016.”
[Image: Tesla Motors]
Arthurk45 on Aug 31, 2017
Big problems for Tesla. Their Model 3 is pretty much a copy of their expensive Model S, which will kill Model S sales, and resales as well. The Model S still has the old style batteries, another problem. And now Cummins (the diesel people) have announced an electric tractor that will compete against Tesla's just announced tractor, but the Cummins can also have a diesel range extender, which means it can be used for long hauls as well. IT also has a very fast recharge rate. Welcome to free market competition, Mr Musk. Bye-bye 25% profit margins. Also, Tesla loses their tax breaks early next year, which means the BMW Series 3, which is about to go on sale, will have a VERY subtsantial price advantage - at least $7500 - and also comes with a worldwide dealer and service network. Tesla has had LOTS of problems with service - 50% of owners report multiple trips to the shop before the problem was fixed. And quality issues are present as well. Musk seems to have designed and built an electric vehicle which avoids many of the advantages of such a vehicle, namely simplicity and ease of repair. Electric is OK, but electronic is not good and Musk has stuffed his vehicles with electronic gizmos, which only Tesla shops can repair. Oh, goody - Tesla the propreitary, cash-grabbing monster. . Musk is a fool when it comes to vehicle design, especailly electric vehicle design.
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