Tesla drops prices on X/S $20k. All colors free. Bye bye resale

[Unclepaul]

If you buy a car at a higher price and have an insurance covered accident, you will get less for your car than you paid for it, but also pay less for the replacement vehicle. The Delta will be similar as if there was no price cut.
Same thing happens when you trade in your Tesla for another Tesla.

If prices go up, then you most likely will recieve more for your last car, and pay more for your new car.

Biggest issue for Tesla is whether to charge more for their cars , and get more profit from each car, or charge less and make more profit from volume and scale.
When batteries are in short supply, it makes more sense for them to charge higher prices, but when components become cheaper and more available, they will probably switch to a higher volume/lower profit per car strategy.

 

[terranx]

An easy claim to make when you scope the argument to MSRP - an artificial distinction. Plenty of other cars transacted for roughly equivalent discounts on a percentage basis over the same period.

It’s also worth noting you can only get to “$50k” in reductions if you conveniently ignore the $20k in price increases that happened at the beginning of the bubble to paint the desired picture. And the Plaid was brand new when it came out for $120k in 2021, so of course was riding the hype wave at the beginning. Even without Covid bubbles, history tells us the price was always gonna come down lower than that as production ramped up and hype wore off. Just ask all those people who paid $160k for a P100D.


Again - if you’re blaming Tesla for selling cars at prices people will actually pay, you aren’t being honest with yourself.

The MSRP change is what ****ed everyone’s resale. Had it just been “market adjustments” without changing the actual MSRP, the resale wouldn’t be impacted nearly as much. But Tesla knew had they been more transparent about that, they would have had a harder time conning their customers.

 

[ucmndd]

The MSRP change is what ****ed everyone’s resale. Had it just been “market adjustments” without changing the actual MSRP, the resale wouldn’t be impacted nearly as much.

What evidence do you have to support this claim?

You’re basically suggesting the entire used car market is fooled by opaque dealer pricing games and that people have no idea what cars are actually transacting for and what they’re worth because of an arbitrary number on a window sticker.

That’s just plain magical thinking.

 

[sorka]

An easy claim to make when you scope the argument to MSRP - an artificial distinction. Plenty of other cars transacted for roughly equivalent discounts on a percentage basis over the same period.

It’s also worth noting you can only get to “$50k” in reductions if you conveniently ignore the $20k in price increases that happened at the beginning of the bubble to paint the desired picture. And the Plaid was brand new when it came out for $120k in 2021, so of course was riding the hype wave at the beginning. Even without Covid bubbles, history tells us the price was always gonna come down lower than that as production ramped up and hype wore off. Just ask all those people who paid $160k for a P100D.


Again - if you’re blaming Tesla for selling cars at prices people will actually pay, you aren’t being honest with yourself.

Yup. My MXP was $118K in early January 2022. The new base price just 2 months later was $138K and stayed that way for almost a year. I was long into pursuing a buyback before the price started dropping again. Thank goodness the repurchase was based on what I paid and not the new $110K price price by the time the buyback finished. Then it dropped another $20K. Bullet dodged.

 

[sorka]

I stand by my claim that no other manufacturer has dropped their MSRP by $50k over such a short period of time.

That's because Tesla sells direct and doesn't negotiate pricing. There's no middle man to hide transparency on pricing like you have with the dealer model. On the back end, Tesla also moves 10x faster than everyone else making many changes within a model year and constantly changing suppliers and pricing.

But I agree that from a customer perspective, having your brand new Tesla lose half it's value in a year sucks, but that also happened to the other EV brands. Was Tesla the first mover on pricing? Yes, but everyone else followed with similar percentage decreases even if those weren't fully baked into the advertised MSRPs.

 

[NeuroRad]

There’s no sense in being upset about the price swings anymore. I’m taking it as a lesson on free market dynamics. Tesla took full advantage of the situation.

 

[terranx]

What evidence do you have to support this claim?

You’re basically suggesting the entire used car market is fooled by opaque dealer pricing games and that people have no idea what cars are actually transacting for and what they’re worth because of an arbitrary number on a window sticker.

That’s just plain magical thinking.

The evidence is other cars' resale values not dropping as drastically.

 

[ucmndd]

The evidence is other cars' resale values not dropping as drastically.

So, the evidence you made up but have nothing to back it up with? Got it.

 

[Leftlane22]

Taycan and Lucid are getting absolutely hammered on resale. Lucid definitely lowered prices on new ones to move inventory.

 

[ucmndd]

Taycan and Lucid are getting absolutely hammered on resale. Lucid definitely lowered prices on new ones to move inventory.

Along with every other EV that someone bought in 2021 or 2022 for way over MSRP, but apparently that didn’t actually happen because only the MSRP matters for resale and depreciation , right?

 

[Leftlane22]

What point are you even arguing? Most EVs sold for MSRP, which went up, down and sideways from the manufacturer. I guess you think there is zero correlation between new pricing and used pricing?

 

[ucmndd]

What point are you even arguing? Most EVs sold for MSRP, which went up, down and sideways from the manufacturer. I guess you think there is zero correlation between new pricing and used pricing?

Nah dawg, I’m with you. I was being facetious.

Others in this thread are arguing that Tesla was a complete outlier and voluntarily dropped prices to sell cars for way less than necessary just to screw customers that bought at the top of the bubble.

My point is that’s absurd and the people mad at Tesla are mad at the wrong party.

 

[Leftlane22]

Gotcha - I’m easily confused.

 

[CapeOne]

At least with a dealer you know you’re getting fleeced. They could have done what they do for inventory discounts and have a different selling price compared to the MSRP. But that would have made it to obvious to customers that they were getting taken for a ride.

Yes, Tesla could've been more transparent about the price increases by showing "market add-ons" instead of changing (increasing) the MSRP. Of course, the price increases were well reported on various auto/news websites and Tesla forums like this one.

The MSRP change is what ****ed everyone’s resale. Had it just been “market adjustments” without changing the actual MSRP, the resale wouldn’t be impacted nearly as much. But Tesla knew had they been more transparent about that, they would have had a harder time conning their customers.

The relevant resale for buyers is the price they paid versus used value. It doesn't matter if the price paid was an increased/changed MSRP or one with "market adjustments."

Car #1 = $75,000 MSRP + $20,000 dealer market adjustment = $95,000 price paid
Car #2 = $75,000 MSRP increased to $95,000 MSRP = $95,000 price paid.
If each car's resale value is $60,000, the loss to the buyer is the same.

 

[Unclepaul]

Similar thing in the Corvette World. Year or so ago, people were paying a $10-$20,000 dealer applied market adjustment over MSRP. Now you can get a new C8 Vette for closer to invoice. The marketplace can change rapidly.

 

[racerx2005]

I paid, should I say overpaid, 89.9k with Ultra Red included + optional 21’s for my 2023 MSP (October build) knowing that I would sell it, if I’m lucky, for 30k or less after 4 years or so. I paid outright, so saved a little avoiding financing, and wouldn’t waste my money on FSD to begin with.

The Model S Plaid should’ve been 70-75k tops and the Long Range 55-60k respectively.

 

[ill_smo_q]

I paid, should I say overpaid, 89.9k with Ultra Red included + optional 21’s for my 2023 MSP (October build) knowing that I would sell it, if I’m lucky, for 30k or less after 4 years or so. I paid outright, so saved a little avoiding financing, and wouldn’t waste my money on FSD to begin with.

The Model S Plaid should’ve been 70-75k tops and the Long Range 55-60k respectively.

Agree to disagree, the plaid is not a 75k car, in any stretch of the imagination, at 90k its a deal given its technology and performance. If you are the same Racer X making utube videos and being called ‘sensitive’ on Hellcat forums, then we have similar car tastes, and If both the d170 and tesla plaid were limited production cars, the Plaid would be the one I would want if I had to pick one. $90k for what the Plaid can do its a bargain. I’m going to go for the $20k up charge on Ceramic brakes and wheels and then not only beat my D170 at the strip 9 out of 10 times, but also not need a damn parachute to slow it down because the brakes are subpar. Oh and the tesla battery wont blow as easily as the demon motor apparently.

 

[sorka]

Yes, Tesla could've been more transparent about the price increases by showing "market add-ons" instead of changing (increasing) the MSRP. Of course, the price increases were well reported on various auto/news websites and Tesla forums like this one.





The relevant resale for buyers is the price they paid versus used value. It doesn't matter if the price paid was an increased/changed MSRP or one with "market adjustments."

Car #1 = $75,000 MSRP + $20,000 dealer market adjustment = $95,000 price paid
Car #2 = $75,000 MSRP increased to $95,000 MSRP = $95,000 price paid.
If each car's resale value is $60,000, the loss to the buyer is the same.

They're not quite the same. A dealer markup has a temporary expectation. Dealer markups typically occur on new models where demand is temporarily higher. The demand usually falls and the markups are eliminated. Because of this, those looking for slightly used examples will still lookup the MSRP as the reference and if the used prices are too high, we'll wait or look elsewhere.

MSRPs aren't usually dropped once raised so the expectation is that the value of a used car won't drop faster than normal depreciation.

Also, markups are highly regionally dependent. For example, when I was shopping for a new C5 in 2001, dealer markups in the Bay Area ranged from $10 to $20K. The lowest markup I found anywhere in the Bay Area was $10K above MSRP. But Serra Chevrolet in Alabama was not only NOT charging a markup, but they were already discounting and I got a 1SC Pewter, with polish wheels allocation for $5K under MSRP. The car was delivered directly from the factory to the dealer of my choice, Fremont Chevrolet. I chose this dealer in the Bay Area because they had the highest markup and I wanted to rub it in the salesman's face when I went to pick it up after paying the service department the $189 PDI fee for having it delivered to a dealer other than the one I ordered it from.

 

[sorka]

I paid, should I say overpaid, 89.9k with Ultra Red included + optional 21’s for my 2023 MSP (October build) knowing that I would sell it, if I’m lucky, for 30k or less after 4 years or so. I paid outright, so saved a little avoiding financing, and wouldn’t waste my money on FSD to begin with.

The Model S Plaid should’ve been 70-75k tops and the Long Range 55-60k respectively.

Both of those prices are well below what it costs Tesla to make the LR and Plaid. But I agree with you sort of. I think they should both be $0. Tesla is crazy not to just give them away for free

 

[aerodyne]

I paid, should I say overpaid, 89.9k with Ultra Red included + optional 21’s for my 2023 MSP (October build)

Some overpaid even more than you. For that matter some overpaid more than me. What was a P90DL back in the day?

The Model S Plaid should’ve been 70-75k tops and the Long Range 55-60k respectively.

69420 would have been a good compromise