Tesla Price Reductions

gzoom

avann wrote: »

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?

You haven't been following Tesla for long have you?

Here is Model S pricing from 2015.



I paid £71k for our Model X in 2016, same car config today is still £89k after the 'price drop'. The current cars do have 50 miles more range, but it's not worth nearly £20k extra.

For the last 12 months Tesla have been whacking prices up, the S/X were never worth anything close to £130k, even at £100k the S/X are hitting their price limits, I certainly wouldn't have paid £100k for ours.

Tesla have done the classic price up and than slash to make consumers feel like they are getting a deal. Last Q3/4 of 2018 I doubt Tesla sold much more than 100 P100D S/X at £130k, and those who did buy am sure can afford the drop in deprecation.

The other side of the discount news, is Tesla have dropped the price of Autopilot and Full Self Driving for current owners, from £10,800 to £4900. I've actually just ordered the discounted Full Self Driving option for £4900. Looking at the Tesla website if I was order our exact car now, Model X, in white, 6 seater with white interior and Full Self driving the bill would be a cool £97k, versus my total spend of £76k.

So what consumer law do you think Tesla has broken?

gzoom

Given some of the posts on this thread about Tesla, I thought I save everyone the trouble and post a Forbes article than was published the same day Tesla announced the $35k Model 3 was ready for order.

In summary:

• Tesla about to run out of cash - Which has been the apparent problem since Tesla sold their first car in 2009.
• Tesla will loss all their customers once the competition arrives - Again the same problem for Tesla that has been predicted since 2009.
• There is no demand for EVs - The very existence of Tesla suggest otherwise
• Tesla WILL run out of cash and probably be sold to another car company - Again I think this has been 'predicted' every year Tesla has existed.

https://www.forbes.com/sites/doronlevin/2019/03/03/are-we-watching-the-nine-lives-of-tesla-and-elon-musk-finally-run-out/#504c0c7f78b1

As some one who's owned a Tesla for 2 years and done 30K miles I just have to smile when I see these articles. Our X is the best car I have ever owned or driven and far exceeds my exceptions of what a family car can/should do. In my experience companies that make products consumers enjoy rarely fail. Tesla have gone from producing hand made cars in 2009 to now having a car which may well become the best selling car in the US this year.

Like it or not Tesla is here to stay, and EVs are too. But I look forwards to the next article predicting how Tesla will fail by the end of this year .

fred990

It's all a con and no better with the self appointed 'ultimate driving machine'!
M5C at £105k.
'Do you have a p/x'.
'No'.
'Do you need to arrange finance/can we help/pcp'.
'No'.
'When could you complete the deal'
'Now, but I'm not paying the same as somebody borrowing'
They were happy to take £78K......overpriced at all?

AnotherJoe

Pension_Geek wrote: »

I was thinking about the resale value of a Tesla as one went by me on the motorway a few weeks ago. How long is the battery guaranteed for? Can they be replaced fairly cheaply? Given a new car depreciates fairly quickly, it seems Teslas could too!

There are Teslas with 400,000 miles on the clock and battery still well above 90% initial capacity.
I dont know what teh battery guarantee is, but batteries should not be a concern, indeed they arent on most EV's, its really only the early Leafs that seem to suffer with much degradation.

However, nothing on a Tesla is replaced cheaply unless under warranty. I wouldnt get one without warranty.

Tesla's (until last weeks price cut ! ) had the lowest deprecation among cars of their class - lesson being, get one on PCP or PCH to take advantage of the low deprecation (low depreciation translates to low lease rates) and insulate yourself from price cuts. Because even if you buy a non tesla, lets say you buy a Kona instead of a Model 3, well when Tesla cut a few £k off the price that also devalues the Kona, why would you buy a car with worse acceleration, no SuperCharger network etc , that costs more than the 3. My current EV (not a Tesla) is on lease and the next one (wont be a Tesla) will be also.

DrEskimo

AnotherJoe wrote: »

There are Teslas with 400,000 miles on the clock and battery still well above 90% initial capacity.
I dont know what teh battery guarantee is, but batteries should not be a concern, indeed they arent on most EV's, its really only the early Leafs that seem to suffer with much degradation.

However, nothing on a Tesla is replaced cheaply unless under warranty. I wouldnt get one without warranty.

Tesla's (until last weeks price cut ! ) had the lowest deprecation among cars of their class - lesson being, get one on PCP or PCH to take advantage of the low deprecation (low depreciation translates to low lease rates) and insulate yourself from price cuts. Because even if you buy a non tesla, lets say you buy a Kona instead of a Model 3, well when Tesla cut a few £k off the price that also devalues the Kona, why would you buy a car with worse acceleration, no SuperCharger network etc , that costs more than the 3. My current EV (not a Tesla) is on lease and the next one (wont be a Tesla) will be also.

Protection from depreciation using PCP is not free though. It costs the buyer in the form of interest. On average continually paying large amounts of interest over the 4/5 decades you need to have a car will far outweigh the risk of large unexpected depreciation.

Buying used and spreading the cost of depreciation over several years will always be the most cost effective means of minimising the impact of depreciation. Even when factoring extended warranties/extra maintenance or out of warranty repairs.

Mercdriver

gzoom wrote: »

You haven't been following Tesla for long have you?

Here is Model S pricing from 2015.



I paid £71k for our Model X in 2016, same car config today is still £89k after the 'price drop'. The current cars do have 50 miles more range, but it's not worth nearly £20k extra.

For the last 12 months Tesla have been whacking prices up, the S/X were never worth anything close to £130k, even at £100k the S/X are hitting their price limits, I certainly wouldn't have paid £100k for ours.

Tesla have done the classic price up and than slash to make consumers feel like they are getting a deal. Last Q3/4 of 2018 I doubt Tesla sold much more than 100 P100D S/X at £130k, and those who did buy am sure can afford the drop in deprecation.

The other side of the discount news, is Tesla have dropped the price of Autopilot and Full Self Driving for current owners, from £10,800 to £4900. I've actually just ordered the discounted Full Self Driving option for £4900. Looking at the Tesla website if I was order our exact car now, Model X, in white, 6 seater with white interior and Full Self driving the bill would be a cool £97k, versus my total spend of £76k.

So what consumer law do you think Tesla has broken?

So you paid £4900 for a feature you cannot use legally in this country.

I have some beans I can sell you. They are quite special. Is your name Jack, by any chance?

gzoom

Mercdriver wrote: »

So you paid £4900 for a feature you cannot use legally in this country.

I have some beans I can sell you. They are quite special. Is your name Jack, by any chance?

Thanks for your useful comment, been an adult I can choose how I spent my money.

No I dont need any beans no matter how special, I bought some from ASDA last week so dont need any more .

motorguy

fred990 wrote: »

It's all a con and no better with the self appointed 'ultimate driving machine'!
M5C at £105k.
'Do you have a p/x'.
'No'.
'Do you need to arrange finance/can we help/pcp'.
'No'.
'When could you complete the deal'
'Now, but I'm not paying the same as somebody borrowing'
They were happy to take £78K......overpriced at all?

Completely different. Tesla have went for the inflated prices, no discounts approach. So you either paid list or didnt get the car. Now they've whacked £40,000 off that.

With BMW their list prices have been laughable for at least 10 years, with 20%+ being available on hard to shift cars.

What i find more shocking about these top end BMW's / Mercs etc is the absolutely off a cliff depreciation.

A 3 year old M5 will have a trade price of around £28K. :eek:

https://www.autotrader.co.uk/classified/advert/201809110373881?model=M5&radius=1500&year-from=2016&postcode=bt622hb&sort=price-asc&advertising-location=at_cars&maximum-mileage=35000&make=BMW&onesearchad=Used&onesearchad=Nearly%20New&onesearchad=New&page=1

And its not like it stops there. Low miles 6 year old ones will have an £18K - £19K trade value.

https://www.autotrader.co.uk/classified/advert/201901234200714?year-from=2013&radius=1500&model=M5&sort=price-asc&onesearchad=Used&onesearchad=Nearly%20New&onesearchad=New&postcode=bt622hb&maximum-mileage=50000&advertising-location=at_cars&make=BMW&page=1

Along with associated running costs of £1,000 servicing, £1,000 for a set of tyres, £1,200 to extend the warranty each year, sub 20mpg fuel consumption....

If someone were to spend that discounted £78K on one they'll be looking at close to £20,000 a year in depreciation and running costs over the first three years.

Cant think of many cars that would be worse than that TBH at that price point

AnotherJoe

DrEskimo wrote: »

Protection from depreciation using PCP is not free though. It costs the buyer in the form of interest. On average continually paying large amounts of interest over the 4/5 decades you need to have a car will far outweigh the risk of large unexpected depreciation.

Buying used and spreading the cost of depreciation over several years will always be the most cost effective means of minimising the impact of depreciation. Even when factoring extended warranties/extra maintenance or out of warranty repairs.

Good points.

DrEskimo

AnotherJoe wrote: »

Good points.

Here is a back of the envelope calculation on PCP vs cash buyer taking into account the potentially large hit on residual value.

Using figures from Telsa's website, a fully loaded MX comes in at £102,700.
On a 48months PCP, with 10k miles the GFV is £50,323, so 49% (very strong....).

If we take these and apply them to the pre-price rise Tesla, at £140,000, then the GFV would have been £68,600 over 48months.

At 5.4% APR with £11k deposit, the 47 monthly payments would be ~£1,700. Total interest ~£22k.

The cash buyer would have spent £140k, but the residual has dropped from £68,600, to now being £50,323. They have lost £18,277 in unexpected depreciation.

The PCP has been protected from this depreciation by having that GFV, but they have spent ~£22k in interest.

So even in this very extreme case of sudden unexpected deprecation on the highest cost Tesla, the cash buyer is still around £3/4k better off for not using finance.

There may be an argument that the PCP buyer could invest his ~£130k and make some back in the form of opportunity costs, but then we are dealing with a very short time frame and a large sum of money, so any low risk investment strategies would be low reward. Balanced against the £1,700 surplus the cash buyer has, it would probably just about go in favour of the PCP buyer, but not by large amounts.

But I maintain that hindsight is a great thing. For every 1 car you buy using PCP where there is a sudden loss of value, there will be 9 times where you would have paid a considerable sum in interest.