Tesla cuts prices as Model 3 deliveries narrowly miss estimates • Hacker News Board

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#11

Post by BrentOzar » Wed, Jan 02, 2019, 5:40 PM UTC

andrewtbham wrote: post #7

This actually a price increase because of a loss of the federal tax credit... the title is bogus and should be changed imho. "Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000." http://ir.te…

> This actually a price increase because of a loss of the federal tax credit... the title is bogus and should be changed imho.

The ceiling in the title refers to a ceiling of what customers are willing to pay. Tesla apparently believes customers won't pay the full price without incentives, so they're cutting the price they charge you.

While it's an increase in the sense that the government stopped making it cheaper for you to buy a Tesla, it's still a decrease for Tesla as a company, and that's what has investors nervous. (Rightfully or not is another story.)

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#12

Post by mikestew » Wed, Jan 02, 2019, 5:40 PM UTC

hinkley wrote: post #2

The second line in the article: > Prices cut by $2,000 to partially offset shrinking tax credit. At that cost range I don’t know if I could ever know my customer well enough that I would be confident that a 3% price break would get more sales but what do I know. Also, this feels more like PR. What fraction of the cost of a Tesla is the battery pack? Weren’t those supposed to be getting cheaper due to all of the autom…

At that cost range I don’t know if I could ever know my customer well enough that I would be confident that a 3% price break would get more sales but what do I know.

Would I have purchased a Nissan Leaf eight years ago had it not been for the $7500 federal tax credit? Damned right, I would have. But since we're buying one anyway, I'm not turning down free money. My point is, I wonder if there ought to be a moratorium on tax credits for the first two years. The early adopters are going to buy one regardless, save the tax credits for those that are on the fence two years down the road. Of course the gaping hole in this plan is something, something Osborne Computers (in two years, it might not be better, but it'll be cheaper).

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#13

Post by Operyl » Wed, Jan 02, 2019, 5:40 PM UTC

izacus wrote: post #9

andrewtbham wrote: post #7

This actually a price increase because of a loss of the federal tax credit... the title is bogus and should be changed imho. "Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000." http://ir.te…

In what way is it a price increase, why did Tesla count tax credits when advertising price in the first place? Isn't that dishonest, since the cars price tag was higher and the government gave them money?

It was pretty obviously stated on their quoting tools, imho.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#14

Post by Retric » Wed, Jan 02, 2019, 5:41 PM UTC

izacus wrote: post #9

andrewtbham wrote: post #7

This actually a price increase because of a loss of the federal tax credit... the title is bogus and should be changed imho. "Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000." http://ir.te…

In what way is it a price increase, why did Tesla count tax credits when advertising price in the first place? Isn't that dishonest, since the cars price tag was higher and the government gave them money?

Government did not give Tesla the money.

Tesla also makes the actual amount you need to pay very clear before you buy a car. Their website is closer to the Cable companies landing pages that don’t include all the fees, before showing you the actual price at checkout.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#15

Post by saagarjha » Wed, Jan 02, 2019, 5:41 PM UTC

pkaye wrote: post #5

Another thing is the pre 2017 car-pool stickers for electric cars are expiring in the bay area. The newer stickers have income caps of $150k (single filing) or $300k (joint filing). I wonder what the impact will be on Tesla? The first change helps them but the second hurts them.

Wait, what? I was not aware of this. I guess driving in the carpool lane today was not a great idea…

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#16

Post by qroshan » Wed, Jan 02, 2019, 5:42 PM UTC

MBCook wrote: post #8

qroshan wrote: post #3

Tesla is definitely hitting the demand ceiling. It's a good thing Musk isn't producing 10000 M3 per week. The current rate of ~4500 per week is enough to meet demand. In fact, expect continuous price drops from Tesla as it struggles to drum up enthusiasm

I’m not pro-Tesla, I think they’re horribly mismanaged, but let’s be real. The Model 3 is selling well, and ONLY in the US. Even if they hit peak demand they can just start selling to Europe and China (planned for later this year) and they’ll have plenty of new customers.

It's called Pent up Demand.

US is the richest and most car friendly nation of the world. There aren't many countries in the world who can afford a $50,000 car especially when there are poor charging infrastructure.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#17

Post by Pica_soO » Wed, Jan 02, 2019, 5:42 PM UTC

wnorris wrote: post #4

The production and delivery numbers they came out with were very good and higher than most had expected. These numbers will allow them another profitable Q4 likely higher than their Q3 numbers. The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs. The reaction looks like a big overreaction as the…

Or maybe, just maybe, besides an awesome CEO, its just another company, who lootboxed the investors and they are trying to wake up.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#18

Post by jpollock » Wed, Jan 02, 2019, 5:43 PM UTC

izacus wrote: post #9

andrewtbham wrote: post #7

This actually a price increase because of a loss of the federal tax credit... the title is bogus and should be changed imho. "Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000." http://ir.te…

In what way is it a price increase, why did Tesla count tax credits when advertising price in the first place? Isn't that dishonest, since the cars price tag was higher and the government gave them money?

The purchaser factors the tax credit in, so the removal of the credit will have the same effect as an increase in price.

The salesman will _definitely_ make the purchaser aware of the credit, in the same way that a mortgage broker makes you aware of the tax benefit on mortgage interest (in the US).

That doesn't make them dishonest.

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#19

Post by mavhc » Wed, Jan 02, 2019, 5:44 PM UTC

qroshan wrote: post #3

Tesla is definitely hitting the demand ceiling. It's a good thing Musk isn't producing 10000 M3 per week. The current rate of ~4500 per week is enough to meet demand. In fact, expect continuous price drops from Tesla as it struggles to drum up enthusiasm

They're not even really selling outside North America yet, so that's silly. Of course there's a ceiling of expensive cars, they're selling more of them than anyone else, right?

Re: Tesla cuts prices as Model 3 deliveries narrowly miss estimates

#20

Post by tw04 » Wed, Jan 02, 2019, 5:44 PM UTC

pkaye wrote: post #5

Another thing is the pre 2017 car-pool stickers for electric cars are expiring in the bay area. The newer stickers have income caps of $150k (single filing) or $300k (joint filing). I wonder what the impact will be on Tesla? The first change helps them but the second hurts them.

Did they give any justification for the change? It makes absolutely no sense to me why you'd put an income cap on that - don't you wan to encourage EVERYONE to burn less fossil fuels, REGARDLESS of income?