[ASAP]

The massive Tesla price drop is truly something interesting.

The Model 3 performance drops to below 55K and now can also qualify for the $7.5K tax incentive...

If I just bought a Tesla I'd be fuming... apparently used Carmax inventory went on a firesale as well with over 65% of the inventory selling in days.

With Tesla's high profit margins... curious to see what this means... I think this is a good move on Elon's part... one that we haven't seen in a long time. I would however be furious if I just bought one .

[ASAP]

Originally Posted by Efthreeoh

And that's the problem with a direct-to-customer sales manufacturer. With no dealership in the middle, when the manufacturer reduces the direct-price-to-the-customer, people who bought the same product a few weeks before get pissed because of the volume of dollars involved. The legacy dealership model allow the manufacturer to adjust pricing indirectly through incentives at the dealership level.

Right but arguably that's the fairest setup as everyone gets screwed equally.

With the dealership model, some guy may pay 6k under msrp and another 3k over msrp.... that then becomes selective screwing limited on your area. This is allows massive taking advantage of customers in large / hot markets or on special vehicles.

Think about it this way... if Porsche was selling vehicles this way... would we ever see a $100K over msrp Gt3?

[ASAP]

Originally Posted by Efthreeoh

Outside of the rare case of specialty, limited production vehicles, the dealership model is better for the consumer. Multiple dealers in a market compete against each other and keep prices competitive for on-the-lot models. People get all wadded up when a pandemic hits and severely limits inventories, which forces pricing to not be as elastic, but the dealership model still supports competitive pricing by reigning in ADMs. You have to look at the entire spectrum of the market, not just a GT3. There's no mechanism that prevents Porsche under a direct sales model to not charge $100K more for the GT3.

I am trying my best to understand how any of this truly differs in a dealership model... the manufacturer tomorrow can drop and / or raise the msrp as they see fit. It then just comes down to how much of a bath or profit each dealer wants to pursue. If Porsche raises the Msrp by $100K... that's the new price, they are the manufacturer... but that's absolutely no different to how things would work today.

The only difference is 1 person makes the decision in direct sales which again is the absolute fairest way as opposed to 1000s.

[ASAP]

Originally Posted by Efthreeoh

You are looking at the dealership model too simply. There is a complex business relationship between the dealership and the manufacturer. The MSRP is just that, the suggested retail price, which has no bearing on the price the dealership buys the vehicle for from the manufacturer and sells it to the customer. The price adjustment off from MSRP, whether up or down, is made in the middle at the dealership level, so the visibility of the price change is not on the manufacturer, but rather on the dealer. In the dealership model the manufacturer does not adjust down the MSRP (number) it offers rebates and incentives, which is just code for selling the vehicle to the dealer at a lower price that the customer does not see because he is not privy to the business relationship between the dealer and the manufacturer.

When the manufacturer is selling direct to the customer, the customer is privy to the business relationship because it is his relationship directly with the manufacturer. So, when Tesla drops its price to the customer by $5,000, the customer who just bought prior to the price reduction gets pissed because he deems it as unfair. With a dealer involved, the perception is the customer who paid less at the dealer simply got a better deal since the MSRP did not change. The retail price of a Tesla is not a manufacturer suggested retail price (MSRP) it just simply the Manufacturer's Retail Price (MRP).

The dealership model even when in an environment of ADM, competition between dealerships on who sells the model at the lowest ADM is good for the consumer. Without the dealership, Porsche can just sell the GT3 for $100,000 more than what it previously offered as MSRP. In that case there is no competition on price, which is bad for the consumer.

Fundamentally none of this changes anything to the customer... as in who he is dealing with. It sounds like the arguement being made here is that Variability in price is more fair than a fixed price... i am arguing against that... it works just like the legal system with the variability, you either got a good high priced lawyer or you didn't.

There is nothing currently preventing BMW dealers to massively discount any cars... in fact, this is normal and 6-10% discounts come and go as needed. I bought my x3 3 months ago and paid msrp... now some are getting 8% off... who do I complain to? Well I can't really complain to anyone... To a customer, whether it happens at the mrsp or dealer level, it makes 0 difference... the big difference is uniformity in price which the Tesla model helps. In fact, up until this point, Tesla resale value has been higher than most brands because a random guy won't go to a random dealer and get a huge discount on a new one.

As far as ADMs... well, would you prefer your markup go to a dealer (middle man that offers no value) or the manufacturer that built your sweet 911 and can build many others? Again, I know my answer...

[chris719]

Originally Posted by Efthreeoh

Outside of the rare case of specialty, limited production vehicles, the dealership model is better for the consumer.

No way. Perhaps it is worse for the most savvy customer, but on the whole it will greatly benefit people when dealerships are gone.

[GrussGott]

Originally Posted by Efthreeoh

And that's the problem with a direct-to-customer sales manufacturer. With no dealership in the middle, when the manufacturer reduces the direct-price-to-the-customer, people who bought the same product a few weeks before get pissed because of the volume of dollars involved. The legacy dealership model allow the manufacturer to adjust pricing indirectly through incentives at the dealership level.

I think this is a HUGELY critical point that gets very little of the attention it deserves!

A great example of this is cable TV channel affiliate fees that ESPN more/less invented in the 80s:

As a cable channel I'm limited to ad sales with no access to the sweet sweet pot of subscriber fees the cable companies like Comcast get ... unless I charge the cable company a subscriber fee to carry my channel!

And why shouldn't I because what's the downside? The cable company will have to pass along my fee to all the paying suckers, I mean subscribers, and who are those consumers going to be pissed at? Me, ESPN? Fuck no, the average consumer doesn't understand any of this crap! They're gonna be pissed at Comcast!

So if I'm ESPN I just keep jacking up my profits via affiliate fees and let Comcast handle the

Efthreeoh I think you nailed it here: dealerships insulate automakers from consumers and this protects their profits & reputation while, in general, keeping prices down.

BUT. That's only going to be fully true for a high supply market ... and we might not get back to that ... but we might!

--- Ramble ---
because I find it hard to believe that eventually dealership a isn't going to decide he'll keep just a few extras around for those impulse buyers ... and then dealer b keeps just a few more than dealer a and and and we're back to normal. But we'll see ...

Originally Posted by chris719

No way. Perhaps it is worse for the most savvy customer, but on the whole it will greatly benefit people when dealerships are gone.

Originally Posted by Efthreeoh

Outside of the rare case of specialty, limited production vehicles, the dealership model is better for the consumer.

I think we gotta break down what it is dealerships do:

(1.) New car showrooming, test drives, etc
(2.) New car sales & sales support, i.e., configs
(3.) New car warranty service
(4.) Used car showrooming & sales
(5.) Used car service

At this point I should mention that I've special ordered every car I've bought for the last 15 years (~8), all BMWs, and 95% of them I worked directly with BMWNA on (zero dealership engagement except as a pass-through), but mostly I worked 1-on-1 with a BMWNA employee. My point being, I fucking hate dealerships.

That said, the last car I bought, Nov '21, was my first non-ED in a long while and overall it was a great experience and I was pretty shocked, but I also think it was unique to that dealer & that time and not typical.

ANNnnnyyYYYway, what I'm trying to say is:

(1. & 2.) DTC new car showrooming, sales & sales-support
To Efthreeoh's point, automakers aren't going to like dealing with customers
And customers still need a place to showroom & order config ... Lincoln is leading the way in way with its Arizona boutique, but that's still being done in coordination with a local dealer!

(3.) New car warranty service
Tesla's service is so horrible Musk had to publicly comment & address it this past year and they're volumes are sub-2M globally! Do we really think auto makers are going to build these capabilities or will they continue outsourcing to dealerships? HINT: rhetorical question.

(4. & 5.) Used car sales & service
Tesla will not be able to continue ignoring this (including giving mechanics access to software) and auto makers generally don't want this any more than Rolex wants to sell pre-owned watches (no, their new program doesn't actually see your buddy's watch for him) AND this is dealerships biggest cash cow.
-----------

So, the TLDR is, I suspect automakers will start getting more involved with new car sales process (including ordering & build updates!) - and this is especially true with software OTA updates! - but I doubt dealerships are going anywhere for a lot of good reasons.

[ASAP]

Originally Posted by Efthreeoh

Then why is social media all in an uproar that Tesla dropped its Manufacturer's Retail Price?

Your lawyer analogy makes no sense; the same model car offers the same performance and has the same features regardless of where you buy it and what price you paid. Lawyer performance is variable and not related to price; you can pay a high-price lawyer and he can fail to win your case or negotiate a good contract for you.

If you don't think price competition between dealers is good for the consumer, then I can't help you here. This is common knowledge; most people understand paying less for the same product is... better.

Social media moans about everything... so i disregard it... Tesla gets a ton more attention as a manufacturer so of course it will be more in people's eyes.

Here is the deal-

I am looking to buy a car... I call up the manufacturer, pay a price and the transaction ends. My neighbor a week later wants to the same... he gets the exact same deal.... my other friend 5 states away, does the exact same thing 6 months later, same story.

1 year after that Tesla reduces MSRP... All of our values go down equally irrelevant of what we paid. This keeps a fair and balanced market. This price reducation is a major rarity that so far has happened only once and probably will not happen again (it actually probably happened to get people into that 55k msrp tax credit again so some could argue this was a legal move as well). Who are the people that are screwed here? Only individuals that just purchased a car and missed on the deal (just like they would be in a dealership model). The used car market takes an identical hit and everything is controlled.

Now, I am looking to buy a BMW. I bought my car at 5k off... my friend paid over msrp... my other friend couldn't get an allocation in his area and yet another friend paid sticker... and then another friend bought one at msrp but got charged a bunch of add ons. 1 year passes, BMW is now offering 2-3k incentives and all dealers are discounting between 6-10%. We also all got screwed just in different ways... anyone that paid msrp or over got screwed at random levels... the one off wiser consumer that got lucky and bought below msrp because he knew bob the owner and already purchased a few cars, made out the best but is technically also screwed because the current discounts are greater.
Option 1 is completely democratized... Option 2 has so many variables that no one can really tell what is going on.

In option 1 used resale values got hit evenly on a once in a 10 year decision... Option 2 resale values are getting pummelled and will continue to get pummelled irrelevant of what you really paid every time BMW does this. I know what I prefer without all of the dicking around... Only dealers would want option 2.

I am guessing that you guys are part of the group that think the alcohol 3 tier system on the USA is also a good thing lol. That was also meant to protect the consumer lol.

[Burrcold]

Off topic but where has that BG3....guy been? He usually has a lot to say about Tesla and EVs in general lol

[Socal_R8]

Originally Posted by Efthreeoh

I think his cars are ugly and people no longer want to be seen in them. I don't think Tesla can afford to redesign the product AND build additional manufacturing infrastructure AND invest in driver aids.

meanwhile Tesla just took over BMW as the number one luxury brand in sales in the US and it's not even close....beauty is in the eye of the beholder


I used to be closed minded about them, but then I test drove a few of them and started looking into them a bit more seriously and now with the new prices...
I might be ordering one of the Model Y's

and never spending $300 in gas to take the Sea Doo's out to the river and back ever again is pretty appealing


with the right wheels and stance you make them pretty good looking

[G80indy]

Originally Posted by SoCal_NSX

meanwhile Tesla just took over BMW as the number one luxury brand in sales in the US and it's not even close....beauty is in the eye of the beholder


I used to be closed minded about them, but then I test drove a few of them and started looking into them a bit more seriously and now with the new prices...
I might be ordering one of the Model Y's

and never spending $300 in gas to take the Sea Doo's out to the river and back ever again is pretty appealing


with the right wheels and stance you make them pretty good looking

Are the SeaDoos electric too? 😉

[x622]

Originally Posted by SoCal_NSX

meanwhile Tesla just took over BMW as the number one luxury brand in sales in the US and it's not even close....beauty is in the eye of the beholder


I used to be closed minded about them, but then I test drove a few of them and started looking into them a bit more seriously and now with the new prices...
I might be ordering one of the Model Y's

and never spending $300 in gas to take the Sea Doo's out to the river and back ever again is pretty appealing


with the right wheels and stance you make them pretty good looking

Tesla is a luxury brand now?

[Housekeeping]

I adore my Model S Plaid, it’s a blast to drive, not a creak inside and a damn nice place to spend time. Just smoked a new M5 Comp the other day too. I’m a BMW loyalist and currently have three M car, two M5s and a ‘17 X5M. If I had to buy one car today, I’d not even consider an ICE, given me another Tesla. Tech is insane and blows anything else on the market away. Don’t all be haters…

[Socal_R8]

Originally Posted by x622

Tesla is a luxury brand now?

when the cheapest model you offer is $44K and also sell $130K SUV , yeah you are considered a luxury brand


https://electrek.co/2023/01/11/tesla...auto-brand-us/

[Socal_R8]

Originally Posted by G80indy

Are the SeaDoos electric too? 😉

no, that's why it would be nice to not spend so much $$$ on gas just taking them to and from the lakes, ocean or especially the Colorado River which is about 250 miles away...there is a company that is making electric ones tho

My 2021 Rubicon gets about 10mpg towing them

[Socal_R8]

Originally Posted by Efthreeoh

Then why is social media all in an uproar that Tesla dropped its Manufacturer's Retail Price?

Your lawyer analogy makes no sense; the same model car offers the same performance and has the same features regardless of where you buy it and what price you paid. Lawyer performance is variable and not related to price; you can pay a high-price lawyer and he can fail to win your case or negotiate a good contract for you.

If you don't think price competition between dealers is good for the consumer, then I can't help you here. This is common knowledge; most people understand paying less for the same product is... better.

makes no sense ....Tesla simply cut out the dealer and the bullshitt games they play from ADM nonsense, to the lame side sticker crap that dealers stick uneducated buyers with like etched windows, paint protection and nitros filled tires.....you don't get any of that nonsense with Tesla. You order on line with no games and no surprise fees....the easiest car buying experience you can have.
Order your car and choose where you want to pick it up...it doesn't get any simpler or fair than that.

[Socal_R8]

Originally Posted by Efthreeoh

If a person goes in uneducated that's on them, not the dealer.

so it's ok for them to take advantage of little old ladies or young people or other uneducated people who have no clue how those sleazy ass dealers work?

Manufacturers are also being ripped off by them with ridiculous ADM charges

a lot of car companies could learn a thing or two from how Tesla sells their cars and some have already announced they will be adopting many of their online methods

[StradaRedlands]

Originally Posted by SoCal_NSX

makes no sense ....Tesla simply cut out the dealer and the bullshitt games they play from ADM nonsense, to the lame side sticker crap that dealers stick uneducated buyers with like etched windows, paint protection and nitros filled tires.....you don't get any of that nonsense with Tesla. You order on line with no games and no surprise fees....the easiest car buying experience you can have.
Order your car and choose where you want to pick it up...it doesn't get any simpler or fair than that.

Tesla basically had an ADM cooked into their pricing. That's why their price went up so much. Now that it is becoming less of a seller's market and dealers are getting rid of ADM, so is Tesla. The people complaining are the ones that bought with the ADM, and now they're blaming the company instead of themselves.

[Socal_R8]

Originally Posted by StradaRedlands

Tesla basically had an ADM cooked into their pricing. That's why their price went up so much. Now that it is becoming less of a seller's market and dealers are getting rid of ADM, so is Tesla. The people complaining are the ones that bought with the ADM, and now they're blaming the company instead of themselves.

exactly....Tesla figured out a way to cut out the middleman, and pocket the ADM for themselves when the supply vs demand is in their favor.

[eluded]

Wondering how a lot of people feel right now that the Teslas they purchased are now 10–20k dollars cheaper

[GrussGott]

Originally Posted by Efthreeoh

If a person goes in uneducated that's on them, not the dealer.

Originally Posted by SoCal_NSX

so it's ok for them to take advantage of little old ladies or young people or other uneducated people who have no clue how those sleazy ass dealers work?

"little old ladies or young people or other uneducated people " who buy Chevy Sparks, Toyota Corollas, Kia Rios, etc aren't gonna whip out their phones and order one.

There are plenty of no-haggle dealers and if you & your neighbor both want the same BMW price then go to one and pay the same no-haggle price and Bob's Your Uncle.

So why don't you always do that?

Because your fear is I got a lower price than you, and now you're a sucker paying your no-haggle price!

What Tesla has done is simply institutionalized sucker-dom: now you're all suckers. But, hey, if everyone gets screwed then I guess you don't feel as bad about it?

The point is, no-haggle is available today but it's not popular because you're pissed I got a better deal than you, and you'd feel better if next time I get the same shitty price as you.

TRY THIS THOUGHT EXPERIMENT
Tomorrow Tesla announces 200 new dealers; you can still order MSRP from Tesla or buy from a dealer where you may get a better deal.

Do you & your neighbor:

(a.) Just keep paying MSRP from Tesla because middleman & stuff, or

(b.) Try to haggle for below MSRP with a dealer?

RESULT
you answered b because you're not a moron, but also have a large capacity to lie to yourself about this.

[KRS_SN]

Originally Posted by SoCal_NSX

makes no sense ....Tesla simply cut out the dealer and the bullshitt games they play from ADM nonsense, to the lame side sticker crap that dealers stick uneducated buyers with like etched windows, paint protection and nitros filled tires.....you don't get any of that nonsense with Tesla. You order on line with no games and no surprise fees....the easiest car buying experience you can have.
Order your car and choose where you want to pick it up...it doesn't get any simpler or fair than that.

You do get full driving functionality for a fat fee that is not ready. You do get performance brakes being substituted with painted covers, cameras disappearing from spec sheets etc.

I think I'd like a dealership model because they serve a range of needs. Need a 3 yr old car need a 1 month old car need a car on a certain monthly service the car take 5he car back if sny faults etc etc. Most of all I usually buy ex demos outright and run them for a few years and the discounts are great thanks to the dealership.

And describing tesla as a 'luxury product' just indicates that the barometer for what is luxury has fallen.

[KRS_SN]

Some seriously disgruntled folk...I do feel sorry for them

www.thisismoney.co.ukhttps://www.thisismoney.co.uk/money/cars/article-11640289/Tesla-price-cut-Owners-say-duped
One of these Tesla owners is Sean Creighton, who told us: 'I was pushed to take early delivery of my Model Y Performance on 23 December. The offer of 10,000 kilometres [6,214 miles] of free supercharging being another enticement.

'I am enormously disappointed that after just three weeks of ownership the price has reduced by £7,000.'

Mr Creighton adds that his car arrived without parking sensors despite opting to have them on his Model Y when it was ordered.

Tesla announced in October 2022 an update across the range that would see the removal of ultrasonic sensors on both Model 3 and Model Y vehicles. These help to power both the automated parking system as well as the Autopilot assisted driving features.

Tesla promised a software update that would provide distance alerts using just the camera software, though this still remains unavailable today.

Mr Creighton said: 'The update to use the cameras - called Tesla Vision - has not happened.

'I paid for full autonomous self-driving and quite a number of the features with it do not work. That's not what I expect from a car I paid £76,000 for!

'After just three weeks I have lost all faith in Tesla as a brand.

'I can only think that Tesla doesn't care about past customers ever buying again.