After a couple chaotic weeks of price and option changes from Tesla, another one went into effect today. This time, it was about the recently-unveiled Model Y, which received a $1,000 price increase across the vehicle line.
CEO Elon Musk also announced on twitter that prices on inventory cars will increase ~3% after the end of this quarter, to keep them in line with the recent price increase (which was really just a partial reversal of last month’s price drop).
When the Model Y was unveiled, we were treated to a slide with prices of the various option configurations that would be available when the car comes out. Tesla also started taking orders the night of the unveil. On Tesla’s website, these same prices were listed for the available configurations. As of now, the “standard range” pack is not available on Tesla’s “design your car” site, but the other configurations are. With today’s changes, all three available configurations (Long Range, Long Range AWD, and Performance) are $1k more expensive than the prices shown at the unveiling event.
The prices listed on the website are now $48k, $52k and $61k for the LR, LR AWD and Performance models respectively. Customers who have already put down a deposit are still seeing the old price on their order summary page, though. We do not have confirmation from Tesla whether they will keep the original prices for those who have already put down a deposit or not, but it looks promising for those faithful who jumped to place an early order.
Notably, this car has not been released yet and will not be out for at least another year and a half. It’s difficult for companies to predict pricing so far ahead of time, and if this is the only change that happens to Model Y prices before the car is released, then there’s really not a whole lot to worry about.
In addition to the Model Y price changes, a small bump was announced to bring inventory car pricing back in line with new car pricing. Tesla will raise prices of inventory cars by ~3% at midnight on April 2. This times up well with the end of the quarter for Tesla (March 31), but gives customers one more day, the entirety of April 1st (until midnight), to make an order. So if you’re thinking about a Tesla inventory car, then take note.
Neither of these changes are particularly consequential on their own, but there has been a lot of tweaking recently, leaving fans more sensitive to them.
After he announced the ~3% bump in prices for inventory cars, Musk was questioned about all the price changes recently (a question we at Electrek have also had), and responded thusly:
Every car company is constantly changing prices, but nobody cares
— Elon Musk (@elonmusk) March 24, 2019
This is true, when dealerships are taken into account. While it’s rare for manufacturers to change the MSRP of a car without changing option configurations or model years, it is very common for dealerships to change prices. Manufacturers can also offer incentives to dealers to move certain car models, so the effect for the customer is that prices do change a lot.
Since Tesla doesn’t sell through traditional dealerships, if they want to change the price of their cars then they have to do it themselves. Which then subjects them to everyone posting an article (hi!) or tweeting about it whenever a change happens. They can’t hide behind dealerships like all the other manufacturers do.
A problem with Musk’s defense of this practice is that Tesla, all along, has billed itself as a different kind of company. One of the primary reasons to drop the dealership model was to get away from the constant pricing changes which leave some consumers feeling jilted, as if they didn’t get as good of a deal as someone else did.
This concept was communicated in a companywide email by Musk in 2016. In that email he said: “The acid test is that if you can’t explain to a customer who paid full price why another customer didn’t without being embarrassed, then it is not right. We either win in a way that is fair and right or we lose with our honor intact and accept the consequences.”
This email was recently brought up to Musk on twitter in response to recent Autopilot pricing changes:
I completely understand that car prices fluctuate but FSD is not a full product yet and Tesla is rewarding those who did NOT support them by buying EAP and upgrading them to FSD for the same price that we paid for a EAP. Does this pass the acid test? pic.twitter.com/rUqiGkUVUF
— Marc Benton (@marc_benton) March 12, 2019
After reading his own words, Musk relented and admitted that it was a mistake to do so much price-changing.
To be clear, this Model Y change isn’t too big of a deal, again, because the car isn’t out yet. Neither is the inventory pricing a very big deal, 3% isn’t a whole lot and pricing varies on inventory cars anyway (either used or “new” cars which have been floor or test drive models). Fluctuations are expected when buying any used or floor model product.
But if Tesla is going to bill itself as a different kind of company, with a different sales model, where customers can be confident they don’t need to worry about haggling or timing their purchases correctly to get the best bang for their buck, then they need to do better than trying to rationalize this practice by saying “well, everyone else does it.” You’re not everyone else, you’re Tesla. You can be better than everyone else – after all, you make better cars than everyone else – so why not do so?
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