Model X price cuts- yet again

[240vPlug]

They should have EAP standard on vehicles at that price point. I test drove an X with 879 miles on it tonight. It's a nice car but I'm not crazy about the yoke. That would have to be swapped with the round steering wheel for me.

If it were 85k I think that would make sense but at 97k to start no way...not worth it to me.

 

[fishy21]

They should have EAP standard on vehicles at that price point. I test drove an X with 879 miles on it tonight. It's a nice car but I'm not crazy about the yoke. That would have to be swapped with the round steering wheel for me.

If it were 85k I think that would make sense but at 97k to start no way...not worth it to me.

That seems to be the consensus. The car is not worth $97k to start.

I really want a X since it is the only 6+ seater EV out there… but I can’t justify the price.

 

[msm859]

And one of the biggest problems with the pricing on the X is the Y. With tax incentives the Y is less than 1/2 the price. The X is nicer...but not twice as nice.

 

[Richbot]

This math still isn't mathing

There are currently eleven (11) 2023 Model X's *in stock* at the St. Louis service center, alone. And we are a tiny market compared to most big metro areas. There are fifteen (15) in the Chicago metro.

They need to drop the price to about $25k above the top spec Model Y the way it used to be, or they're going to be using these cars as loaners and demos in perpetuity

The only thing I can think of is they're getting ready to stop making them entirely and so they're building up inventory in advance of just giving up on the Model X thanks to the high warranty costs and such, so they are confident scarcity will keep the price high? That's the only thing I can think of that makes any kind of sense at all.

 

[Genie]

This math still isn't mathing

There are currently eleven (11) 2023 Model X's *in stock* at the St. Louis service center, alone. And we are a tiny market compared to most big metro areas. There are fifteen (15) in the Chicago metro.

They need to drop the price to about $25k above the top spec Model Y the way it used to be, or they're going to be using these cars as loaners and demos in perpetuity

That prompted me to look at Seattle inventory- 50! new MX between SEA and PDX

 

[Richbot]

That prompted me to look at Seattle inventory- 50! new MX between SEA and PDX

Yikes

 

[Richbot]

Also, EV-CPO says *1152* cars currently in Tesla's new Model X inventory, in the US alone, 82 more in canada, 127 in Europe, and 0 in the rest of the world. That's like, not an insignificant chunk of annual production

Compare with only about 300 inventory Model S int he US. There are more Model X in inventory than 3 and Y *combined* in the US right now. Heck, there are more *new* model X's for sale in the US inventory right now, than all of Tesla's used inventory in the US, combined

Yikes.

 

[fishy21]

Man... those are all troubling numbers.

End of day, it seems like competition is catching up to Tesla. Explains the big drop in their stock this week.

 

[FLRifleman]

The way I see it, the Model X should cost less than a fully equipped F-150 Lightning Lariet trim, which provides around the same range with more capability/features. It certainly shouldn't be 2X the cost of a Model Y. Under 80k would be the sweet spot with the tax credit.

 

[holeydonut]

Also, EV-CPO says *1152* cars currently in Tesla's new Model X inventory, in the US alone, 82 more in canada, 127 in Europe, and 0 in the rest of the world. That's like, not an insignificant chunk of annual production

Compare with only about 300 inventory Model S int he US. There are more Model X in inventory than 3 and Y *combined* in the US right now. Heck, there are more *new* model X's for sale in the US inventory right now, than all of Tesla's used inventory in the US, combined

Yikes.

I think it depends on how many Model X's you think will be sold across the USA each year.

If you think it's 20,000, then 1,152 cars represents 21 days supply (1,152/20,000*365). That's not very much, and is nowhere near the disaster levels of inventory that I'm familiar with when a recession is slamming the auto industry.

For example, there are about 40,000 Escalades sold in the USA each year. Right now there are 1,249 either on someone's floorplan, enroute, or awaiting PDI (per GM's website search). The Cadillac dealers take advantage of this ~11 days channel supply to charge almost 30% "market price adjustments".

The nationwide days supply (edit: of all vehicles recently) per Cox is about 57 days.

I think Tesla and it's wildly successful direct to consumer model has kind of spoiled a lot of people in terms of what it used to be to manage supply chain. Yes, it's awesome to literally have a known end-user-customer identified for every vehicle that is end-assembled at the factory. But having 1,152 rather expensive Model X's floating around the USA isn't the level of terri-bad that would cause panic. Yet.

Just wait until days supply reaches 200+. That's when you start seeing a bunch of metal parked on abandoned airport runways and massive panic.

 

[Richbot]

They've already had one Q1 push and several price cuts and still have that many cars on the lot

I think the reason it looks so bad is they've never had this much inventory sitting there before, ever, and that's because they've always relied on a captive market and insatiable demand. Both the captive market and the insatiable demand appear to have evaporated, at least for Model X. They also just didn't change much, the cars are still being delivered with atrocious quality issues from time to time, body looks basically identical unless you're a nerd, and it's coming up on 8 years in production.

I would wager based on what's in inventory, it's especially rough for the 5-seat shoppers who now have literally a dozen electric crossovers on the market to choose from and the extra size and performance isn't worth spending twice as much money for more than a few thousand people - this is true for every other niche high-performance vehicle so it's no surprise it would be the case for this one. For instance, BMW doesn't sell 30,000 X7 M60's and Alpina XB7's a year, they plan to sell 25,000 40i's and 5,000 of the "fast" ones (the fast ones are still much slower than a base Model X, but whatever, that's the deal)

My humble suggestion: Model X (base) - aero wheels, two small permanent magnet motors, same battery or maybe a slightly smaller one to achieve ~350 miles of range with the same blazign fast charging speed, $70,000 before options. Shut up and take my money. I don't even need the seat coolers

 

[msm859]

I think it depends on how many Model X's you think will be sold across the USA each year.

If you think it's 20,000, then 1,152 cars represents 21 days supply (1,152/20,000*365). That's not very much, and is nowhere near the disaster levels of inventory that I'm familiar with when a recession is slamming the auto industry.

For example, there are about 40,000 Escalades sold in the USA each year. Right now there are 1,249 either on someone's floorplan, enroute, or awaiting PDI (per GM's website search). The Cadillac dealers take advantage of this ~11 days channel supply to charge almost 30% "market price adjustments".

The nationwide days supply (edit: of all vehicles recently) per Cox is about 57 days.

I think Tesla and it's wildly successful direct to consumer model has kind of spoiled a lot of people in terms of what it used to be to manage supply chain. Yes, it's awesome to literally have a known end-user-customer identified for every vehicle that is end-assembled at the factory. But having 1,152 rather expensive Model X's floating around the USA isn't the level of terri-bad that would cause panic. Yet.

Just wait until days supply reaches 200+. That's when you start seeing a bunch of metal parked on abandoned airport runways and massive panic.

That is all correct. However, also important is the trend vs historic. It appears to be a concern based on the frequent price adjustments. And it is also clear that a number of factors current and near future are adverse to increased sales. As to dropping the X and or S altogether, that would be a bad move. They need more diversity of products - not less.

 

[Richbot]

They also don't need Model X - they could make a stretched Y do 90% of the things X does for 10% of the cost of those stupid, stupid doors

 

[240vPlug]

How about this. Discount MX to79,990 so it qualifies for the federal EV tax credit. Making the effective price $72,490. That's a 19% price cut....less then what they cut off MY. I might buy at that price.

The trend with buildup of inventory is not good. Could Tesla be trying to shift some of the price cuts on M3 and MY to the higher prices vehicles? That might explain some of this.

 

[msm859]

They also don't need Model X - they could make a stretched Y do 90% of the things X does for 10% of the cost of those stupid, stupid doors

My wife really, really likes those doors.

 

[FLRifleman]

I think it depends on how many Model X's you think will be sold across the USA each year.

If you think it's 20,000, then 1,152 cars represents 21 days supply (1,152/20,000*365). That's not very much, and is nowhere near the disaster levels of inventory that I'm familiar with when a recession is slamming the auto industry.

For example, there are about 40,000 Escalades sold in the USA each year. Right now there are 1,249 either on someone's floorplan, enroute, or awaiting PDI (per GM's website search). The Cadillac dealers take advantage of this ~11 days channel supply to charge almost 30% "market price adjustments".

The nationwide days supply (edit: of all vehicles recently) per Cox is about 57 days.

I think Tesla and it's wildly successful direct to consumer model has kind of spoiled a lot of people in terms of what it used to be to manage supply chain. Yes, it's awesome to literally have a known end-user-customer identified for every vehicle that is end-assembled at the factory. But having 1,152 rather expensive Model X's floating around the USA isn't the level of terri-bad that would cause panic. Yet.

Just wait until days supply reaches 200+. That's when you start seeing a bunch of metal parked on abandoned airport runways and massive panic.

The difference in comparing Tesla's days supply verses other automakers, is that Tesla has no independent dealers. With other automakers, if a car is sitting on a dealer's lot, that inventory cost is paid by the dealer via the inventory finance charge. Completed inventory sitting unsold has a cost. In Tesla's case, they are absorbing all of that cost themselves. Therefore, they need to be extra diligent.

 

[Richbot]

Yuuup

No shell game with the local credit union for you, tesla

 

[holeydonut]

The difference in comparing Tesla's days supply verses other automakers, is that Tesla has no independent dealers. With other automakers, if a car is sitting on a dealer's lot, that inventory cost is paid by the dealer via the inventory finance charge. Completed inventory sitting unsold has a cost. In Tesla's case, they are absorbing all of that cost themselves. Therefore, they need to be extra diligent.

Yeah, your point is typically an item that dealerships use to rationalize why their existence is better than the manufacturer-direct model.

The franchises believe that their flooring lines, inventory carrying infrastructure, and dealer lots can buffer inventories better than the manufacturer could do on their own. So they have argued that when recessions happen, then the auto industry needs the independent dealers to survive. But then during the '08 financial crisis the federal money (TARP and others) had to show up anyway to prop everything up since it was all collapsing anyway. Go figure.

Personally, I think Tesla can come up with the ability to carry 1,152 Model X's (that's what, ~$100mm of assets?). Tesla has enough of its own cash for now to cover this without batting an eye. And if the number grows, there are specialty financial-warehouse lenders that will probably advance Tesla at least 90% at like Edit: 5% 8% (lol I forgot the Fed's rates have gone up a ton heh) interest. I don't think Tesla is worried since it seems they are fine just rapidly dropping price to flush inventory. As long as that playbook works, it seems the investors are happy too.

The dealers also argue their net pricing model is necessary to prevent what @GoVols! was describing as "crackhead" pricing decisions. At your local GM franchised showroom, the parent GM corp has accrued a lot of factory to dealer incentives to make available for each end-consumer sales transaction. Only the folks on the sales side know the incentives. So when a Jane Doe goes shopping for a vehicle, the sales team can manage the net pricing paid by Jane in a careful way to ensure they close the sale, but John Q Public never learns what Jane pays.

This obfuscation allows net pricing to be adjusted by region, time-period, or program (such as specific VINs) without the public being outraged that someone else got a "better deal". Since Tesla has only one singular transparent price for all units in all geographies, it means customers all know what each other are paying on a given day. And rapid-fire pricing actions can be perceived like what he called "crackhead" behavior. In reality, GM, Toyota, BMW, Ford, Nissan, Honda, etc have much more crackhead behaviors; the customers just don't know it because the public doesn't know the average net pricing.

 

[FLRifleman]

Yeah, your point is typically an item that dealerships use to rationalize why their existence is better than the manufacturer-direct model.

The franchises believe that their flooring lines, inventory carrying infrastructure, and dealer lots can buffer inventories better than the manufacturer could do on their own. So they have argued that when recessions happen, then the auto industry needs the independent dealers to survive. But then during the '08 financial crisis the federal money (TARP and others) had to show up anyway to prop everything up since it was all collapsing anyway. Go figure.

Personally, I think Tesla can come up with the ability to carry 1,152 Model X's (that's what, ~$100mm of assets?). Tesla has enough of its own cash for now to cover this without batting an eye. And if the number grows, there are specialty financial-warehouse lenders that will probably advance Tesla at least 90% at like Edit: 5% 8% (lol I forgot the Fed's rates have gone up a ton heh) interest. I don't think Tesla is worried since it seems they are fine just rapidly dropping price to flush inventory. As long as that playbook works, it seems the investors are happy too.

The dealers also argue their net pricing model is necessary to prevent what @GoVols! was describing as "crackhead" pricing decisions. At your local GM franchised showroom, the parent GM corp has accrued a lot of factory to dealer incentives to make available for each end-consumer sales transaction. Only the folks on the sales side know the incentives. So when a Jane Doe goes shopping for a vehicle, the sales team can manage the net pricing paid by Jane in a careful way to ensure they close the sale, but John Q Public never learns what Jane pays.

This obfuscation allows net pricing to be adjusted by region, time-period, or program (such as specific VINs) without the public being outraged that someone else got a "better deal". Since Tesla has only one singular transparent price for all units in all geographies, it means customers all know what each other are paying on a given day. And rapid-fire pricing actions can be perceived like what he called "crackhead" behavior. In reality, GM, Toyota, BMW, Ford, Nissan, Honda, etc have much more crackhead behaviors; the customers just don't know it because the public doesn't know the average net pricing.

In general, I like the direct model. I'm also perfectly fine with dealers as well, provided the price is fixed. However there are negatives, and the inventory effect is one (for the maker).

 

[bayareaever]

X (and S) pricing are going to be dropping significantly this year imo. Below $80k would make X qualify for tax credit (I think) so that would obviously unlock a ton of demand. The price ~ 4 years ago was in that range so there’s precedence.

Looking at inventory levels and the huge price spread between 3/Y, plus current interest rates make this trend fairly obvious.

I owned a refresh X for 6 months last year but traded it for a Y because the trade-in offer was very close to what I paid (good timing as the new X price dropped $10k two weeks later). The payment was just too high for me even though I paid the original (lowest) price for the refresh. The X would cost $10k more today than what I paid, even after recent price cuts.

They are both great cars but the X is obviously better, just not that much better.