Tesla to raise prices on Model S
Buyers will soon shell out more for the luxury electric vehicle, just as Roadster buyers did in 2009.
Riding high off its 2013 Car of the Year awards from Motor Trend, Yahoo and Automobile Magazine, luxury electric-vehicle maker Tesla is raising the price tag on its Model S. The details of the price increase won't be released for a few weeks. But so far Tesla has announced that orders placed before the increase won't be affected.
The current starting price for the Model S, $57,400, puts it on par with the likes of the BMW 5-Series. Buyers are eligible for a $7,500 federal tax credit.
One pricing tactic Tesla intends to use as part of the impending increase is to charge for amenities that currently come standard. The automaker did the same thing in 2009, realizing its profit estimates were off, when it raised the base price of its Roadster by $17,000. Many customers who had already placed deposits were forced to pay more.
"There will be a few 'options package' changes as part of the price increase (meaning some things that are currently considered standard equipment may become part of an optional package going forward)," a recent press release read. What those are remains to be seen.
Skeptics are questioning whether the automaker's price bump might be motivated by concerns over hitting its goal of producing 20,000 vehicles next year with 25 percent gross margins. "[A] move to raise prices could spur concerns that ... production or supplier problems have inflated costs enough that higher prices are required to hit desired margins," writes Eric Savitz of Forbes.
The car, which gets the gasoline equivalent of 90 mpg highway, was the first ever to receive a unanimous vote from Motor Trend's panel of judges. Reviewers have fawned over its engineering, design and aesthetics -- specifically its ability to pass as a luxury vehicle rather than an electric one.
Meanwhile, Nissan recently announced a price cut for the Leaf in Japan -- a new entry model with fewer standard features and wheel covers, which is expected to be offered in the U.S. The cheapest Leaf here sells for $35,200.
The fact that Leaf sales are down 16 percent so far this year may partly account for the price dip. The new Leaf will cost 11 percent less in Japan and have a 15 percent longer range.
[Sources: PC Magazine, Forbes, Los Angeles Times]
Let me give everyone some perspective before we go off the deep end. I see a lot of haters out here.
1) This is the first Model S price increace in 3 years. It's $2500 on a base car of about 50K, or 5%. For comparison, if this was pack of gum for a buck, three years later the price went up to 1.05. That's about half the rate of inflation over the three year period. Included with the price increace, all cars now are upgraded to 12 way heated power seats. About a $1,000 option. (most car dealers change their prices annualy. This is pretty fair)
2) Tesla is NOT taking government money. Telsa has a government loan which it is on track to pay back with interest. This will be net income for the taxpayers.
3) Tesla has cars sold out one year in advance. Demand is NOT a problem. They will have no problem selling at their projected levels. It's a great car, read the press.
4) Tesla is NOT an expensive car over it's life. Purcahse a performanc car with 18 MPG for 45K. Over it's life span of 200,000 miles it will consume over 45K of gasolene. 90K total investment. A 60K Tesla will spend less than 8K in gas for a much lower total cost of ownership.
5) Finaly, Tesla would love for you to own one of your cars, but Tesla can't sell you one. Go check out one of their stores. No dealers in cheap suits asking "what's in gonna take to get you in this car today?" They have folks there that can answer your questions, take you for a test drive, but they can't sell you a car, period. If you want to buy one, you do it on-line from home, or you can borrow their computer there. But that's it. No price gouging, adviserial negotiation, dealing with the closer, and F&I guys that try to sell you floor mats and undercoating. None of the car ripoff you get from a dealer network.
Sincerly, A Happy Tesla Owner
I hope they don't sell any cars, because I don't want my tax dollars spent to help the rich who can afford to buy them. If this seems counter to the standard Oblabla mantra of tax the rich...well IT IS!
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