Marianne Simmons, a self-professed “Tesla fan girl,” bought her second electric vehicle from the company in September: a white, high-performance Model Y worth more than $77,000. Then the company the boy price on Thursday and he realized he could have bought the same car today for $13,000 less.
“I feel cheated. I feel like I got taken advantage of as a consumer,” said Simmons, 32, a web designer in Naples, Florida. “In no time, I have spent $13,306. This is a big reduction that affects many people who have just bought a car.
That’s the reality facing the owners of Tesla Inc. cars after the company cut the price of its vehicles by as much as 20%, part of a push from Chief Executive Officer Elon Musk to increase sales volume in the face of waning demand. For existing customers, the resale value of the vehicles they own will take a hit with the drop in prices of new models.
“For anyone who owns it it’s a kick in the teeth,” said Ivan Drury, director of insights for research website Edmunds.com. “Anyone who bought a Tesla recently will feel an immediate effect wishing they had leased it.”
Drury said the new car price cuts will hit used cars immediately and prices will drop even further. New-car buyers want that new-car smell, he said, so pre-owned prices can drop further.
It’s an old problem in the auto business: Consumers buy a car only to see a rebate advertised days later that could save them several thousand dollars. This season is different because dealer discounts are often limited-time sales and Tesla’s cuts are larger than the average rebate.
In fairness, Simmons and other Tesla fans aren’t the only car buyers who will see their resale values fall. Used model prices fell 15% in December, while new ones hit a record average of nearly $50,000, according to researcher Cox Automotive.
Tesla’s price cuts are the biggest among new car sellers. Its more expensive models took the biggest hit. Prices for the base Model Y dropped 20% to start at $53,000, the performance edition of the car Simmons bought fell 19%. The larger Model S sedan’s Plaid edition has been cut by 14%.
Austin Flack, a television producer in Los Angeles, said he listed his 2018 Model 3 with the Full Self-Driving Beta software package for around $51,000 in December, but dropped the price to $36,000 as Tesla unloaded the incentives near the end of the year. He said he would probably have to cut the price again to $30,000.
Jack Bradham, a cloud services developer in Charlotte, North Carolina, said he was upset that the black Model Y long-range edition car he bought in December was downgraded.
Bradham, 46, said in a phone interview that he ordered the car last year and said he had to wait until January to get it. Then he got a call on December 10 from Tesla sales saying he would get a car around Christmas. He said he was excited for the early delivery and agreed to buy the $69,000 EV.
Now, he said, he should have waited because he might get the discount if he delivers in January; the same car now costs $12,000 less.
Bradham said he gets that sometimes people miss out on a sale, but it’s the extent of the price drop that bothers him, along with the lack of communication from the company.
“There is no contact. I called them and tweeted, no response. “
Andrew Checketts, from Santa Barbara, California, said he took delivery of a seven-seat Model Y in early December after Tesla “slammed” him with text messages promoting a $3,750 discount at the time. If he had waited another month, he could have bought the car for less.
“I have solar scheduled to be installed soon. Really struggling to give Tesla my money and can’t even look at the car this morning,” Checketts said in an email. He said he was already driving instead he has a Prius now.
Tesla’s price has ups and downs last year. The company raised prices were up 3% to 5% in March when semiconductor shortages caused production cuts in the auto industry and automakers and dealers alike were getting top dollar for all vehicles.
The company then cut prices in December at $7,500 in the US, leading analysts to believe that demand for its EVs has softened and added to a share loss that has continued for much of the past year. Tesla shares fell 69% throughout 2022.
Tesla also cut prices in the US and China last year. In an audio chat with Twitter on December 22, Musk suggested again that he would lower prices further to prevent economic hardship. “Do you want to increase unit volume, in which case you have to adjust prices downward,” he said.
Bradham, the cloud services developer, said he hopes Tesla will give new buyers some kind of break, such as free charging. Simmons said the company should offer the Full Self Driving feature for free.
However, Tesla owners have little choice.
“I will never buy a Tesla again,” Simmons said. “That says a lot for me. I’m a big Tesla fan girl. I’d go with a competitor like Lucid or Rivian.
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