Prediction that other EV manufacturers will react to Tesla price cuts

That is not a fact at all.

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Well said. I truly believe everyone here who said the supply chain is still an issue and that’s a fact no less. However, market and customer won’t really care about your problem and they will simply ask: how Tesla is able to deliever the car within a month while that stupid Ford Mach E makes people wait 8+ months (and more expensive as we see now).
I also heard a lot in the past year where those executives explained to people that ordering a car at or more than MSRP and waiting months to get it is the new norm. Now it’s very safe to say go fix your problem or GTFO.
Good move Tesla.

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I think almost all the Tesla models are ugly, the interior is sorta whack and the overall experience from purchase through maintenance is subpar for the money. I appreciate what Musk did as a forward thinker to get EVs out there in the public eye, but I also always knew he was a complete kook. Sending Teslas into space, “Pedo Guy” comments and the topper of all - Twitter. Quod erat demonstrandum.

I am a big fan of Space X and Starlink, but I hope he bows out of Tesla and the grownups take over at some point. Price cut decision is just more of the same: “We did it because I said so…”

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Do you find the 7 seater practical? Will 2 grown adults be able to sit there for more than a 10 minute drive?

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I wanted to get a Bolt EUV (in Illinois), which is slightly larger than Bolt EV. Dealer asked me for $4K over the MSRP, pre order will be $3K for MSRP with no delivery date. Checked with another dealer in IL, same reply.

The total before taxes is $42K for EUV Premier, I can purchase a nice M3 for that price. Same thing happened when I was looking for a Palisade. I wish there is enough disruption to force other manufacturers to sell directly to consumers

I see so many Teslas around me, want to look for a different EV but the dealer markup drives me away. Rather pay a little more to Tesla than pay market adjustment to dealer

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When did Porsche or Ferrari slash their prices 20% bc of a demand problem? You guys framing this as a positive is hilarious. Its supply and demand and they just don’t have much demand

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Very much so. I am 5’7” and I have been able to ride back there in a pinch for a few hours if need be. Granted it is tight.

I picked up 5 adults from the Sarasota airport and drove with all of their luggage packed right between the frunk and the trunk and sub trunk down to Marco island and barely made it work. It was a small miracle.

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You may not have seen it but the downturn after the subprime crisis did see some highline/bespoke brands offering loads of trunk cash (often in excess of $50,000 per unit) for struggling dealers.

Ed Bolian actually discusses it in some of his earlier videos.

My experience was very different.
I just paid 20k for a loaded Bolt LT once 7500 tax credit taken into account. Admittedly, lucky timing. 3 months from order to delivery, no dealer markup and good incentives.

I believe the Bolt is essentially what the M3 was supposed to be - a people’s EV. Fine to use as a daily driver or second car, nothing fancy, but good enough.

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Only the models that directly compete w tesla will see price cuts. so obviously think bolt, mustang, all of the korean models, audi/porsche/vw, bmw & MB. I dont think rivian will have to cut prices, for example. lucid, on the other hand, will.

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That was a global economic crisis. No other OEM is slashing prices 10-20% overnight. I don’t think comparable. Face it folks, there are demand problems.

Wait, so now we’re not in a global economic crisis? All the inflation deniers keep insisting we are.

Hold Up Now GIF by ABC Network

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Things aren’t great but not nearly as bad as then relatively. Do you see other OEMs of expensive cars doing similar to tesla? I don’t.

I just watched this 15 minute YT video by Doug DeMuro regarding Tesla’s price drop.

You can skip to the 2:50 time marker to hear about Doug’s 4 reasons for the price drop. In summary:

  1. The Elon factor - no need to go into details about this.
  2. The rise in interest rates - TL;DR, Tesla’s customer base, which includes mortgage brokers, realtors, tech workers, and younger folks, have been disproportionately affected by this. Lots of economic uncertainty in the tech, mortgage and finance industries.
  3. Disappearance of the wait list - no inventory shortage and hence no opportunity for folks to flip their Teslas. This has also had an impact on the used car market.
  4. Increased competition - Tesla cars have not had a major redesign in years. For example, the model S is more than 10 years old. Tesla is no longer the leader when it comes to EV range, performance, cutting edge technology. .

One other factor that was not mentioned in the video (feel free to read some of the comments in the video) is the $7,500 EV tax credit for 2023.

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Heh. They broke Dougie! I knew he should have stayed in Philly!

No one knows for the certain the calculus behind the Tesla price drop but this is my belief:

  1. The overall car market is dropping due to the economy, interest rates, job instability, etc. For most manufacturers, the dealers control pricing and you are clearly seeing shifts from ADMs to discounts off MSRP. For Tesla, only Tesla can control pricing. So they had to adjust pricing to the changing economy.
  2. Musk and Twitter have created some distractors but I don’t think this is a major factor. For most people, it’s all comes down to $$$ and the value proposition.
  3. Tesla production capacity has skyrocketed in the past year and is expected to continue growing at a rapid pace. With Fremont, Shanghai, Berlin, Reno and Austin online and ramping, their production is expected to increase 2x-3x over the next few years. Even if demand stayed constant, you would still need to decrease prices in order to balance the massive increase in supply.
  4. If the EV tax credit wasn’t an issue, Tesla would likely have dropped the Y pricing by a lesser amount. This is evidenced by the smaller drop in pricing for the 3, X and S. Assume that without the tax credit, they would have dropped the Y from $66k to $59k. Then they did the math that if they drop another $7k, they get the benefit of the $7500 tax credit. (basically a discount hack for Tesla)
  5. I believe Tesla also factored in the impact to market share the price drop would have. It is well documented that Tesla’s margins are much higher than EVs from other OEMs. Those other OEMs are already not prioritizing growing EV sales as it would hurt their overall earnings. While their competition will not go away, the price drop might slow down their efforts.

I can understand the negative optics of such a price drop but I actually believe it may have been the right move (I own Tesla stock but I’m definitely not a fanboy) given the economy, their production increase, and the IRA tax credits. Time will tell.

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I think another factor in Tesla’s recent price cuts is the Section 45 tax credit, which allowed all of Tesla’s competitors to get tax credits. The conventional wisdom was that Tesla would benefit from the new tax credits, since it makes its cars in North America, and many of its competitors do not. However, with the unexpected decision to allow Section 45 credits on all EVs, the new tax credits may end up being a negative to Tesla, especially since Tesla historically has leased a very small percentage of its cars compared to its competitors.

Plus, I suspect Tesla may be trying to kill off potential competitors such as Lucid and Fisker.

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I just want to see more vehicles meet the tax credit requirement with regards to the MSRP as stated by the IRS:

In addition, the vehicle’s manufacturer suggested retail price (MSRP) can’t exceed:

  • $80,000 for vans, sport utility vehicles and pickup trucks
  • $55,000 for other vehicles
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Then tell the auto manufacturers to stop pricing GD cars and trucks at housing price levels. It’s a vehicle, not something you were going to live in for 30 years.

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If they keep increasing the MSRP, dealers can then turn around and offer huge discounts to make it look like we (consumers) are getting a deal.

I am being sarcastic, btw.