Tesla Price Reductions

avann

Hi,
So Tesla have recently cut the price of their Model S and Model X by a lot - over £40,000 on some models.
Where does that leave the poor consumers that took delivery of their new car a few weeks ago. For example a Model X P100D was over £140,000 but is now under £100,000 new.

1. The value of that car is now significantly less, even though it cost £140,000. Probably about half that as a guess. Any residual value on the finance will be massively out.
2. If on finance, there will now be a massive gap should the car get written off. Please don't say get Gap Insurance as that's not the point and may not have been necessary before the price cuts.
3. Tesla have clearly overcharged that customer and must have been overcharging for some time if they can afford that sort of price cut.

Is there any aspect of the law that might protect a consumer in that position? Or is it simply immoral but legal so a case of hard luck?

Thanks,
Avann

forgotmyname

Cars currently sold have to have a ton of optional extras fitted otherwise they wouldnt make them. They need the money from all those extras.

The cheaper car will be the basic one they promised in the first place.

Where will it leave current owners, the same as any other car buyer where a new model came out or where the specs changed.

Buy your poor spec car for 35k and in a few years buyers will have the choice of a basic car or one with lots of extras.

Not overcharging but only building high spec cars with lots of optional extras to recoup money it spent on building everything for a new car pruduction.

avann

No change in spec and our car is not a basic one. The exact same car with no spec change is now over £40k cheaper. Check out the headlines in the news.
They've not changed specs or brought out a new version of the Model X, it's the exact same car.

BoGoF

To answer your question......tough luck

Aylesbury_Duck

So this is a personal situation rather than a general one?

Where does that leave the consumer? In the same place every one of us has been at some point, where the price of the item we've recently bought has been slashed after we bought it, be it a shirt, a car or a house. The value to us as consumers hasn't changed, the price has. If you were happy to spend what you spent on the car, you must have considered it worth it to you at the time. That hasn't changed. If residual/resale value is important then one could argue it was risky to buy a type of car that is relatively unique and therefore at the mercy of swings in price.

forgotmyname

Headlines in the news attracts readers, the truth is optional.

Try buying a base spec Model 3 and see how far down the list you will be if it allows you to buy one that is.

Add 20k of (optional)* extras and you can jump the queue over everyone that wants a base spec.

Model X dropped 8k or not 40k. Maybe better options are coming into the mainstream and they realise its now old hat and needs an update.

If your old car looks identical to the new one with zero differences how many will swap? Some buyers only choose the new car because it looks different to the old one. How can you win the car park shiny new car contest if the car looks identical to the last one?


* compulsory.

Seek the truth not the headlines.

Car_54

avann wrote: »

Hi,
So Tesla have recently cut the price of their Model S and Model X by a lot - over £40,000 on some models.
Where does that leave the poor consumers that took delivery of their new car a few weeks ago. For example a Model X P100D was over £140,000 but is now under £100,000 new.

1. The value of that car is now significantly less, even though it cost £140,000. Probably about half that as a guess. Any residual value on the finance will be massively out.
2. If on finance, there will now be a massive gap should the car get written off. Please don't say get Gap Insurance as that's not the point and may not have been necessary before the price cuts.
3. Tesla have clearly overcharged that customer and must have been overcharging for some time if they can afford that sort of price cut.

Is there any aspect of the law that might protect a consumer in that position? Or is it simply immoral but legal so a case of hard luck?

Thanks,
Avann

This seems to be an example of what used to be called "price-skimming".



The seller of an inovative product knows that there will be a number of "early adopters" who will be willing to pay a premium price, and so help to recoup his development costs. The early adopter usually goes into this with his eyes open - he may want to gain a business advantage, or impress the neighbours, or whatever.



When the seller has exhausted that market segment, he lowers the price and so benefits from increased volume. Repeat as necessary.


Nothing illegal, nor indeed immoral, about that.

DrEskimo

It's odd in that this happens with all car models. When first released discounts are low, but as the model ages discounts increase, until it's just about to be replaced where discounts are maximised.

There are two things that make Telsa unique here though:

1/ They don't offer discounts at all. The price you see is the price you pay, which is great for residual values. The problem is there will always be a cliff edge effect if they ever do want to lower prices....

Fact is, many people who bought the early models of any car (and indeed late models and weren't good at haggling...) will find they pay more than those that buy later in the cycle. It's just not obvious as everyone is paying a different price behind the scenes....

In fact it's why I prefer Tesla's business model...

2/ AFAIK there is not impending revamp of the MS/MX? This does make the price cut somewhat arbitrary, but I guess that's just another area where Tesla is unique...

I would be annoyed too, but unfortunately it's just the way it is. You are presumably not looking to sell anytime soon so I would just ignore it and enjoy it.

Of course if depreciation was such a worry you would never touch new cars with a 100ft barge pole....

debtdebt

Would you have liked them to honour the new price if it had gone up?

You agreed the purchase of a product at a certain price. You have paid that price and received/due to receive the product.

It is neither illegal nor immoral.

Herzlos

I know they are reducing the price on orders in the system, but you might be able to try your luck if you literally just purchased in the last few weeks.

Finance companies will be upset; they're going to lose a fortune on gfv.

Angus_Og

Car_54 wrote: »

The seller of an inovative product knows that there will be a number of "early adopters" who will be willing to pay a premium price, and so help to recoup his development costs.

A bit like the folk who are paying an absolute fortune to be on the first public space flights.

What will the price be in 5 or 10 years time?

(Assuming they haven't killed too many!!)