Is it worth getting an EV?

Grumpy_chap

Herzlos said:

I'm guessing the price reduction in Teslas is somehow related to the collapsing share priced as the world watches Musk screw up Twitter so badly.

Are these price reductions really any different from any other automotive manufacturer?

In 2020, demand across the board fell and there were some very attractive discounts on all sorts of cars.
Then supply chain issues arose, aligned with high demand, car prices went up and discounts ceased.
Now, manufacturing capacity is being recovered and demand is falling (cost of living crisis), so there is the perfect storm.

Most legacy manufacturers are keeping the list price high but introducing offers and discounts. 
So, in the past week, I saw the Skoda Scala with £1.5k discount plus £1.5k finance incentive.  That is not as wonderful as the price in 2020 when demand was really supressed, but is a massively better place (for the consumer) than the summer 2022 position.
Legacy manufacturers are not discounting EV's.

Tesla only have EV's, so can't pile discounts into the ICE ranges only.
Tesla are also being totally upfront and open about the price change so no smoke-and-mirrors that comes with the legacy manufacturer offers & discounts approach resulting in different prices for different customers on the same day while every Tesla customer on the same day seems to be paying the same.

JKenH

Grumpy_chap said:

Herzlos said:

I'm guessing the price reduction in Teslas is somehow related to the collapsing share priced as the world watches Musk screw up Twitter so badly.

Tesla are also being totally upfront and open about the price change so no smoke-and-mirrors that comes with the legacy manufacturer offers & discounts approach resulting in different prices for different customers on the same day while every Tesla customer on the same day seems to be paying the same.

But maybe £6k less the next day. Ouch, if you fell for the free supercharger miles carrot. I don’t see that as being totally upfront. As the customer says - “duped”

Edit: story linked https://www.businessinsider.com/tesla-buyer-feels-duped-after-missing-out-13000-price-cut-2023-1

Grumpy_chap

JKenH said:

But maybe £6k less the next day. Ouch, 

Is it that "ouch" really?
Until last week TM3 LR was £59k, today £51k, reduction £8k or 13%.

When I looked December, the Skoda Scala was £20k no discounts.  This week I have seen £20k with £3k discounts (£1.5k discount and £1.5k incentive), that's 15%.  

Both are very similar.  The difference is, Tesla simply reduced the price, whereas Skoda kept the price the same and offers a "deal", no doubt with the hope some customers may still pay full price or not achieve the full £3k reduction.  I also don't know whether the £3k reduction is the maximum saving available.

JKenH

Grumpy_chap said:

JKenH said:

But maybe £6k less the next day. Ouch, 

Is it that "ouch" really?
Until last week TM3 LR was £59k, today £51k, reduction £8k or 13%.

When I looked December, the Skoda Scala was £20k no discounts.  This week I have seen £20k with £3k discounts (£1.5k discount and £1.5k incentive), that's 15%.  

Both are very similar.  The difference is, Tesla simply reduced the price, whereas Skoda kept the price the same and offers a "deal", no doubt with the hope some customers may still pay full price or not achieve the full £3k reduction.  I also don't know whether the £3k reduction is the maximum saving available.

Skoda offering a £3k discount or incentive to a private buyer isn’t going to undermine residual values like a £8k cut in list price. That £3k discount could probably have been negotiated anyway and a fleet buyer would already been getting it, if not more. The car you bought yesterday hasn’t suddenly dropped massively in value because you got a good month end deal. It’s used value doesn’t depend on what you paid for it. The trade would probably have given you £15k for it whatever you paid.

I got a £9k discount on a new Mercedes a few years back. It was available because the marketplace said the list price was too high. A year or two earlier I would have paid more but the market gradually adjusted the price to a sustainable level. 

With Tesla there is no negotiation - you can’t walk out the showroom and go to another dealer or get a reduced price on Carwow. Everyone (apparently) pays the same. Tesla, not the marketplace, controls the pricing of new cars. Cutting £8k off the list price immediately impacts all the private buyers and businesses who bought the car the day before. Residual values are slashed at a stroke. 

This is what Fleet News says: 

“However, it has also introduced an element of disorderly marketing for Tesla, which is never good news for residual values, and it will be interesting to see the reactions of both leasing companies and the pricing guides in the next few days."

There is also the matter of businesses that have just bought Teslas or have them on order at previous prices.

Hollick adds: "The differences between the new and the old prices are substantial and a move of this kind does unavoidably create ill-feeling. The company would do well to introduce some kind of redress.”

https://www.fleetnews.co.uk/news/latest-fleet-news/electric-fleet-news/2023/01/13/tesla-cuts-prices-in-europe-by-up-7-000

Edit: further trade press comment

THE popularity of of Tesla as a fleet choice has taken a huge knock as the company slashed the price of its Model 3 and Model Y in a move that could send already falling used prices into tailspin.

https://businessmotoring.co.uk/tesla-price-drop-will-hit-residual-values/

Martyn1981

Grumpy_chap said:

JKenH said:

But maybe £6k less the next day. Ouch, 

Is it that "ouch" really?
Until last week TM3 LR was £59k, today £51k, reduction £8k or 13%.

When I looked December, the Skoda Scala was £20k no discounts.  This week I have seen £20k with £3k discounts (£1.5k discount and £1.5k incentive), that's 15%.  

Both are very similar.  The difference is, Tesla simply reduced the price, whereas Skoda kept the price the same and offers a "deal", no doubt with the hope some customers may still pay full price or not achieve the full £3k reduction.  I also don't know whether the £3k reduction is the maximum saving available.

And also Tesla offer the same price to everyone, including large fleet purchases. Think of the way some ICE prices would tumble when the cheap fleet sales (say for rental firms) would hit the auctions a year or so later.

Grumpy_chap

Is it any less fair that person A could buy a Tesla in December and person B can buy the same car in January for £8k less than person C buying a £20k hatch for £20k in January while person D buys the same hatch on the same day but more experienced negotiator at £17k?

In fact, it could be said that the £20k hatch sold at £20k is exploiting the vulnerable / trustworthy where with the Tesla approach, it is purely timing.

The £20k hatch depreciates immediately to £15k because everybody knows nobody pays list.  How many Tesla's were actually sold at the December surge pricing?  There were some amazing lease deals (business only) on TMY that clearly did not reflect the extent of the surge prices.

JKenH

Grumpy_chap said:

Is it any less fair that person A could buy a Tesla in December and person B can buy the same car in January for £8k less than person C buying a £20k hatch for £20k in January while person D buys the same hatch on the same day but more experienced negotiator at £17k?

In fact, it could be said that the £20k hatch sold at £20k is exploiting the vulnerable / trustworthy where with the Tesla approach, it is purely timing.

The £20k hatch depreciates immediately to £15k because everybody knows nobody pays list.  How many Tesla's were actually sold at the December surge pricing?  There were some amazing lease deals (business only) on TMY that clearly did not reflect the extent of the surge prices.

Is it fair that person A and B can afford a Tesla while C and D might not be able to, or that people buying cars on SalSac schemes pay less than someone retired buying the same car. There are lots of things in life people find unfair. 

I only made the point about Tesla’s business practice of offering free miles to induce year end sales before cutting prices because you suggested other manufacturers used “smoke and mirrors” while Tesla was “totally upfront”. 

If you feel OEMs are worse than Tesla, that’s fine. I can offer my point of view as well. We don’t have to agree. 

Grumpy_chap

The real question in the way Tesla have moved their pricing will be to see how this impacts other manufacturers - both EV and ICE (including hybrid) models.
I guess that is going to be a case of "watch this space".

ontheroad1970

A Danish colleague of mine has just bought a used Y and the previous owner had maxed it out on extras.  On registration of change of ownership most extras disappear and you have to pay for them all over again.

Herzlos

ontheroad1970 said:

A Danish colleague of mine has just bought a used Y and the previous owner had maxed it out on extras.  On registration of change of ownership most extras disappear and you have to pay for them all over again.

Welcome to car features as a service. Unless buyers push back hard on this, it'll be the norm in another few years. BMW is doing it as well, though in their defense anything paid for up front remains permanently so it's more a case of being able to buy a feature for £400 or £10/month.