3% Price increase across the board

[SoCalGuy]

Btw does anyone know (I read the other threads) if paying the $2+3K for FSD guarantees HW3 upgrade when available?

Also, I find it hard to believe they’d raise the upgrade prices without giving notice since Elon talked about early April being able to add these features in the mobile app....

 

[Knightshade]

Right, but with Tesla at least I know what I'm getting when I pull the trigger.

Well...unless it's Tesla promising if you buy now it's cheaper than it will be later for EAP/FSD.... or unless it's Tesla promising they're done with the price changes after this one, and then announcing a 3% price increase a week later....or any promise involving a timeline... (Chademo support for the Model 3, advanced summon, etc)

 

[Eno Deb]

So, to recap:

Dec 10, 2018: Tesla is launching a new retail offensive with a focus on malls
Feb 28, 2019: Tesla changes entire sales strategy, makes sales online-only, closes stores
Mar 11, 2019: Tesla reverses course, will leave most stores open and raise prices slightly

Sigh. If only their management was half as capable as their engineers ...

 

[Knightshade]

I'm more thinking someone realized that most people aren't going to buy a car without a test drive.

But closing the stores had nothing to do with ending test drives.

The service centers could do those- they already HAVE loaners for service use anyway, and they're not closing. (allegedly they are adding more of them though they've done precious little of it despite a year now claiming expanding service was their NUMBER ONE priority)

 

[pilotSteve]

This latest announcement concerns me in another way. The notice itself seems poorly thought out. For example:

To be clear, all sales worldwide will still be done online, in that potential Tesla owners coming in to stores will simply be shown how to order a Tesla on their phone in a few minutes. ... Stores will also carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately.

So, are they selling at the stores, or not?

yes

 

[MXWing]

Also, multiple studies have been done over the years and they find a very small correlation between service and tip amount. Tipping is not a driver of quality of service, according to all the data we have. Tipping is, however, a good indicator of the attractiveness, gender, and race of the server.

This is worth a listen for those who care: Should Tipping Be Banned? - Freakonomics

There are more data since that aired in 2016 as well.

As an Economics practioner I assure you that no study was needed to prove this.

Tip culture is garbage and I hope it ends.

Trivia: In Asia, tipping is not for good service. Good service is the norm, not the exception. Tipping however implies you are looking for more beyond the service provided.

My wife told me when I went to pay extra lol.

 

[jgs]

Btw does anyone know (I read the other threads) if paying the $2+3K for FSD guarantees HW3 upgrade when available?

If it's not on a contract, it's not guaranteed, no matter what anyone tells you. (And this legal advice is worth what you paid for it, too.)

I'm more thinking someone realized that most people aren't going to buy a car without a test drive. The 7 day return policy is great and all, but it's a very rare person who's going to setup a loan for tens off thousands of dollars just to test drive car.

Right? Even though as I previously noted, it's no skin off me whether they close the stores or leave them open, the fact that this wasn't blatantly obvious to management does suggest they're smoking too much of their own Kool-Aid. (And for that matter if, as some have suggested, they always planned to keep offering test drives at service centers, the sensible thing would have been to have said so clearly up front, instead of never saying so and leaving it to tea-leaf readers to make up that 'fact'.)

Oh well. The bad thing about Tesla is they do monumentally stupid stuff. The good thing about Tesla is that unlike many other companies that do monumentally stupid stuff and then dig in and double down, they're generally not too proud to reverse themselves.

As an Economics practioner I assure you that no study was needed to prove this.

I take it you are not one of those economists who insists on Economics being classed as a science. Kudos.

Tipping however implies you are looking for more beyond the service provided.

Oh. Oh! That explains so much! Thanks for the valuable insight. I am retroactively embarrassed.

 

[Runt8]

But closing the stores had nothing to do with ending test drives.

The service centers could do those- they already HAVE loaners for service use anyway, and they're not closing. (allegedly they are adding more of them though they've done precious little of it despite a year now claiming expanding service was their NUMBER ONE priority)

Closing the stores resulted in test drives not being easily available. I'd call it an unintended side affect but it doesn't take a genius to figure it out.

I can imagine the meeting that resulted in the decision: "Hey, we can save 3% if we close all of our stores and make all sales online. People hate dealerships, there's no downside. Just give people 7 days to return it if they don't like it."

Unfortunately, this doesn't work out too well when buying it necessitates a large loan and changes to insurance. So in reality only people who are already pretty sure they want a Tesla will end up buying one. That makes it difficult to expand your user base.

I can't imagine making the service centers even more busy than they are now is a great solution. I spent some time trying to figure out how to deal with test drives without having stores. I came up with 3 possibilities:

1. Use the service centers (bad idea with the amount of traffic they are already dealing with).
2. Facilitate test drives with current owners, with appropriate waivers and some sort of reward system in place for the owners. Interesting to contemplate but probably too many issues to make work well.
3. Make test drives work similar to mobile service - have a test drive fleet that could be parked and charged at a service center (or other leased location that would probably be much cheaper than leasing prime shopping real estate) and allow potential buyers to schedule a time and location for a test drive. This seems like the only workable solution - cheaper than keeping the stores open, but still allows Tesla to control the interactions with the potential buyer.

 

[Austindude]

I'm more thinking someone realized that most people aren't going to buy a car without a test drive. The 7 day return policy is great and all, but it's a very rare person who's going to setup a loan for tens off thousands of dollars just to test drive car.

I'd like to know this as well. For $2k, it's right in the range of what I would consider an impulse buy - get it just in case something cool comes out in the future. If that goes up even $500 (which I realize is much more than 3%) then I probably would just not buy it.

I'm wondering about a similar issue, not any 3% increase on the $2K FSD upgrade for existing EAP owners but rather any timeline after which they will no longer honor the $2K price. While no expiration has been stated that really doesn't mean much. I suspect that getting $2K in this quarter from maybe a 100K vehicles without actually having to deliver anything or incurring any costs is a really good deal for Tesla. That should certainly help the bottom line for the quarter and offset any short term losses on the base model 3. Once they have reeled us in however they may decide they can go back to the original upgrade pricing, especially if they announce delivery of HW3. I'll most likely take them up on this offer because I'm betting it will get me HW3 at some point in the near future but I realize this is a gamble.

 

[dmurphy]

Well...unless it's Tesla promising if you buy now it's cheaper than it will be later for EAP/FSD.... or unless it's Tesla promising they're done with the price changes after this one, and then announcing a 3% price increase a week later....or any promise involving a timeline... (Chademo support for the Model 3, advanced summon, etc)

My point being, you get exactly what’s in the vehicle at that point in time. Trading on future features is a fool’s errand.

So now we’re going to get upset at a price drop (ie FSD costs less?)

And they never said no price changes. As I recall the tweet (do you seriously take Twitter as official statements?) said no more price drops in the near term. That’s not the same as an increase.

And again - if you’re buying a car on futures, you’ve chosen the wrong purchase ....

What’s in the car today is all you should expect. Anything else is a nice upside.

 

[more863-also]

My point being, you get exactly what’s in the vehicle at that point in time. Trading on future features is a fool’s errand.

So now we’re going to get upset at a price drop (ie FSD costs less?)

And they never said no price changes. As I recall the tweet (do you seriously take Twitter as official statements?) said no more price drops in the near term. That’s not the same as an increase.

And again - if you’re buying a car on futures, you’ve chosen the wrong purchase ....

What’s in the car today is all you should expect. Anything else is a nice upside.

Exactly, anyone expecting a single new feature from promising FSD is a fool, agreed. Since as you said, what's in the car today is all you should expect.

 

[Tiger]

It’s like these decisions were made without looking at the data or something.

I believe it is quite the opposite. I bet it was something along the lines, like, "How can we get people symphatetic to a dramatic inevitable price drop?" "I don't know, how about, we drop them a lot, we can also drop the referral program, and then when people start complaining about their property being diluted, we crank the price back up, a little bit."

 

[MXWing]

take it you are not one of those economists who insists on Economics being classed as a science. Kudos.

When I said it wasn’t a “science” I found myself blocked by some members and one challenged me if I had beyond entry level community college education in the field.

It is a social science, but not a classical science. Supply/demand, utility curves, game theory - all of them are generally “true”.

Though because it’s only “generally true” we can’t call it science even though I had to study and apply classical science like calculus and statistics as part of my studies. It also relies on too many contrived scenarios which fixes variables when real life economics has zero fixed variables. Prisoners dilemma is a classical problem that proves my points.

Now to relate this to Tesla, I am dumbfounded by their moves and find it hard to rationalize why they do what they do.

There is no way I can explain their method to madness until I see some Q1 and Q2 numbers!

 

[Knightshade]

My point being, you get exactly what’s in the vehicle at that point in time. Trading on future features is a fool’s errand.

Then why is Tesla selling people features that aren't in the vehicle at time of sale? If there's no intention to deliver them that's fraud. If there IS intention then it's a legit pre-order for something to be delivered in the future, and should be considered in that light.

So now we’re going to get upset at a price drop (ie FSD costs less?)

When the product in question still has not been delivered to the higher priced pre-orders? Yes, of course we are.

As pointed out, literally nobody else in any industry pulls crap like that.

You pre-order anything else, and the price drops before delivery of the thing you ordered, you get the lower price either by the company directly refunding the difference, or simply by cancelling and re-ordering.

Except with Tesla.

And they never said no price changes. As I recall the tweet (do you seriously take Twitter as official statements?)

The SEC certainly does. Courts as well.

Why don't you?

said no more price drops in the near term.

No such phrase as near term or anything like it appears, so nope you don't recall correctly.

 

[Knightshade]

Exactly, anyone expecting a single new feature from promising FSD is a fool, agreed. Since as you said, what's in the car today is all you should expect.

So Tesla was engaging in fraud by offering FSD for sale by your own words it appears since you don't think anyone should have expected them to deliver a product they explicitly sold for future delivery.... weird.

 

[Knightshade]

Closing the stores resulted in test drives not being easily available. I'd call it an unintended side affect but it doesn't take a genius to figure it out....

I can't imagine making the service centers even more busy than they are now is a great solution. I spent some time trying to figure out how to deal with test drives without having stores. I came up with 3 possibilities:

1. Use the service centers (bad idea with the amount of traffic they are already dealing with).

I can't speak to how things were set up in other states... but here, the sales office was literally like 1000 yards from the service center.

The SC had a ton more space, for both cars and people.... the sales area was tiny in comparison.

So moving test drives to the SC would've been incredibly trivial.

Like, literally just the time to move a few cars down the block, and give the 1 or 2 folks transferring to the service center a small desk.

Doesn't seem to require a genius to do any of that.

 

[dmurphy]

When the product in question still has not been delivered to the higher priced pre-orders? Yes, of course we are.

FSD is now defined as Navigate on Autopilot, Autopark and Summon, plus some additional features to be added later. There was no feature definition when you signed up for it - just a nebulous "Features TBD".
You have those 3 features now.
You didn't when you bought the car.
So I'd say you did get something delivered.

As pointed out, literally nobody else in any industry pulls crap like that.

You pre-order anything else, and the price drops before delivery of the thing you ordered, you get the lower price either by the company directly refunding the difference, or simply by cancelling and re-ordering.

Except with Tesla.

Again, you've already been delivered the items above. Now, it'd be fair to argue that those features don't define FSD, but that's what Tesla is defining it as... I understand feeling upset about paying a few grand for something so nebulous and then not liking the actual definition once the company decides it's time to define it .... but that said, those are the risks when you hand over money for something so loosely defined.

The SEC certainly does. Courts as well.

Why don't you?

Because Twitter is a bunch of bullsh**, that's why. It's a cesspool of garbage.

No such phrase as near term or anything like it appears, so nope you don't recall correctly.

So can you copy it verbatim then please? I admitted I may not recall the entire sentence correctly. Would appreciate seeing what exactly was said - again, Twitter is a wasteland in my book so it's lost in the annals of time in my book ...

 

[bro1999]

Right, but with Tesla at least I know what I'm getting when I pull the trigger. I can make a decision - is this the right dollars-to-product for me, or not? That's up front, straightforward and I can either execute, or not. It's not a protracted game; it is what it is at that moment. I'm not going to the dealership wondering "What's this going to cost me when we're done beating each other up?"

I don't have to go into the dealership, "negotiate", argue, threaten to walk out, play 4-square games and waste hours upon hours of my life before I even get to talk to the F&I guy. And then deal with that baloney.

The only time the Tesla model is bad is when you don't think you got the "deal of the year" - but it's absolutely transparent. The price you see on the website is what you'll pay. Now, it may be a different price next week/month/year - but it's still transparent. Once you click the "buy now" button, that's that - you've committed to that price being The One for you.

If that price doesn't make you happy, don't click the button... but once you've clicked, that's your price. They made an offer, you accepted it. Point blank.

You can easily replicate the Tesla purchasing experience at any regular car dealership. Walk in, yell "I WANT TO BUY A CAR AND I'LL PAY MSRP!". You'll be guaranteed to be treated like a king.

 

[Knightshade]

FSD is now defined as Navigate on Autopilot, Autopark and Summon, plus some additional features to be added later. There was no feature definition when you signed up for it - just a nebulous "Features TBD".

That's utterly false.

if you're gonna make stuff up you might wanna check there's not photographic evidence it's untrue.

You have those 3 features now.
You didn't when you bought the car.
So I'd say you did get something delivered.

Then you would, again, be factually wrong.

Because those features were part of the EAP package I purchased (also described in the picture attached). They have nothing to do with my purchase of FSD, for which I've received nothing.

It's illegal to sell a person something, and then totally redefine what that is later before delivery without offering a refund when the change is made. (that, too, is fraud)


I can't take your money to sell you a Playstation 4, and then glue a #4 on a PS3 and keep your money. See again- fraud..

Again, you've already been delivered the items above. Now, it'd be fair to argue that those features don't define FSD, but that's what Tesla is defining it as

Not when I bought it, no, they didn't.

So they can either refund what I paid if they can't deliver what they promised, or they can deliver what they promised when I bought it.

 

[dmurphy]

That's utterly false.

if you're gonna make stuff up you might wanna check there's not photographic evidence it's untrue.

So where in that screenshot does it say "Navigate on Autopilot", "Autopark", or "Summon"?

I'll wait.