Tesla’s surprise $6 410 price cut sparks a rant from one devotee
Laurence Blau, 78, woke up on Tuesday morning to a frustrating figure: $6 410.That’s the dollar amount that Tesla had lopped off the list price of a fully loaded performance edition of the Model 3 sedan the night before. Blau, who paid $68 400 for the car less than three weeks earlier, called it a ''bitter pill to swallow.''
“It shakes my faith,” the three-time Tesla owner said in a phone interview.
Blau, a corporate real estate broker in Paramus, New Jersey, is, of course, just one customer. And he isn’t necessarily even swearing off buying Teslas. But his grievance underscores a broader dissatisfaction among the Elon Musk faithful with the dizzying string of changes - both hikes and cuts - to the prices of Teslas.
They’ve come one after another in recent months, a reflection of the internal confusion within the company over how to navigate through shrinking US incentives, aging model lines and pressure to boost deliveries without compromising profit.
Soon after Tesla cleaved the cost of the Model 3 late on Monday, an owner on one of the company’s online forums started a thread with a tongue-in-cheek initial post: “Let the whining begin!”
Musk has fielded many complaints personally - and publicly - on Twitter. Much like Tesla has wavered with its pricing, he’s oscillated from adamant, to apologetic, to apathetic, to argumentative. And for the chief executive officer of a company that’s sought to revolutionise car-buying, he’s offered up a perhaps unlikely excuse: Hey, other automakers are doing this, too.
Other automakers change prices constantly & substantially by varying rebates & discounts according to negotiating strength of buyer. Tesla is transparent & consistent.— Elon Musk (@elonmusk) April 12, 2019
Other automakers change prices constantly & substantially by varying rebates & discounts according to negotiating strength of buyer. Tesla is transparent & consistent.
And Musk’s claim that Tesla has been “transparent and consistent” runs counter to some of the company’s closest followers. The usually pro-Tesla blog Electrek wrote late Monday that Tesla’s “chaotic” pricing strategy had become “kind of a running joke.”
Tesla’s 2019 price changes timeline
- January 2: Cuts prices of all models by $2 000 to partially offset shrinking US federal tax credit
- February 5: Trims cost of the Model 3 by $1 100
- February 28: Announces plan to close stores and fire workers in order to offer a $35 000 version of the Model 3
- March 10: Backtracks on store-closing plan, plans an average 3% price hike
- April 11: Pulls $35 000 version of the Model 3 off the online ordering menu as part of a series of price changes across the lineup
- May 14: Increases prices of the Model 3 by $400
- May 21: Cuts base price of the Model S and X by $3 000 and $2 000, respectively
- July 15: Drops price of the Model 3, discontinues standard-range version of the Model S and X
Tesla kicked off the year with an across-the-lineup price cut to partially offset the US tax credit for its cars halving to $3 750.
Representatives for the company didn’t respond to questions about the latest price change for the Model 3, which one analyst said was linked to the federal incentive dropping again to $1,875 as of July 1.
The price swings may also reflect Musk’s struggle to manage through the Model 3 seeming to cannibalize demand from the older and pricier Model S and X. While analysts fear this could be crimping profit margins, Tesla’s move to stop offering a cheaper, standard-range version of the vehicles could counter any such trend.
For Blau, even when factoring in the smaller tax credit, he would have saved about $4 500 had he waited to buy a loaded Model 3 now instead of late last month.
When he visited his hometown showroom Tuesday morning to demand a refund, a store representative offered him a free wall charger. Blau declined.
“I got very upset,” he said. “My complaints fell on deaf ears.”