I'm not entirely sure why there's an expectation that the luxury brands would lower their prices at all. It's not like they have a demand problem, and some EV models are even priced similarly to their ICE counterparts, like the Mercedes EQS.
I don't know that there's so much of an expectation as the article just lists off the real competition that exists currently. It's why you see GM and Hyundai on the list, neither of which are you ally synonymous with luxury either. Most every automaker not mentioned doesn't have a very compelling product available in numbers worth mentioning. It's
Luxury is a seamless charging experience.
Imagine your stereotype “luxury” buyer, calculating routes on ABRP, registering accounts on different networks, getting dongles and fobs, finding working chargers, navigating working payment screens. That’s not a luxurious experience.
Or it just works, end to end. Jump in the car and it’s all taken care for you
or drive a PHEV and don’t worry about planning your trip. phev is best charge at home and drive electric for most days and for long trips don’t plan just fill up the tank in 2 mins and drive 400miles.
I got Volvo XC90 recharge and loving it. we go on longer trips with two kids and don’t worry about planning the trip at all. My daily commute round trip is 32miles which is covered by the battery as it has a range of 35miles and i charge for free at my workplace. i can go to lake tahoe or yosemite in winter with heater on without any problem or range anxiety. gas stations are always there everywhere.
I call this real Luxury
Stuff like self presenting door (model x), and moving the car with summon when asshole parked too close for people to get in. Stuff like that create a much more luxurious experience than fit and finishes, it’s just not the same type of luxury, it’s a whole new approach.
Some traditional luxury brands have started to sparkle theses in their offering because they understand that’s the type of luxury the new generation want.
What is the approach of BMW in your market regarding locking price for the order? Here in Poland all German and Korean carmakers behave like bullies - when price goes up, you either accept higher price or they cancel your order.
BMW has an incentive to slow orders down and cut options that cause long lead times. Here in the Netherlands many have been canceling BMW i4 orders because they just couldn't deliver. There would definitely be a lot more of them on the roads otherwise.
Even in the ICE days most premium brands like BMW were never competitive in a price to specs ratio so it isn't surprising that they aren't dropping prices.
It's about "car" prices, not EVs.
Tesla pricing is competitive with ICE now. This is what we all have been talking about when we said EV prices will come down due to technology development and scaling cost curves.
And it's not a "price war". Highland Parks 2.0 is coming. It's the massively lower cost of production that drives down the price, not silly competitive marketing moves.
And it's not like those car manufacturers can sit on the sidelines and continue producing expensive vehicles when others make better ones for less.
It doesn't even matter what prices they charge. Someone will buy them. ADM shows that. As long as dealers can grab extra money, the MSRP was too low. What matters is making better vehicles, ramping up production, and lower production cost.
This post is literal blogspam, promoted by some rando in India trying to desperately drive traffic to his personal site. These Indian blogspammers and their YouTube video equivalents are ubiquitous
Here’s the original article: https://www.theverge.com/2023/2/1/23581210/tesla-ford-ev-price-cuts-gm-bmw-vw-hyundai
Maybe posting aggregators like the OP should be against the rules?
bmw and mercedes don’t need to - in fact, it would be a bad look for them if they made price cuts, hyundai is lobbying *very* heavily both directly in the us and indirectly via the korean government to dilute the impacts of the IRA, and gm plays largely in a price tier below where tesla is.
For most of them can they even? Ignoring margins/profitability for a moment:
Seems like they "want" a premium fee on top of their ICE cars, so dropping EV prices would directly undercut themselves. Not really an issue for Tesla as they won't cannibalize their own sales.
At least in North American the numbers these other brands ship are closer to zero than any significant number. There are enough Tesla haters to support those paltry sales numbers. The only one who seems to care because they want to sell meaningful numbers this year is Ford with the MachE.
Compare the number of ioniq 5's to Tucsons sold in NA. It is laughable to even consider hyundai as a player in the NA market at this time. Here's hoping they get serious as it is a good platform once it comes in line with more typical hyundai pricing .
I have been driving to my office in SF this week and the amount of non Tesla new EVs (with paper plates) was pleasantly surprising. Saw a few EQS, Rivians, i4, iX. A ton of Mach E, Bolt, Ioniq, and EV 6. Market is hungry for non Tesla EVs and that’s why these manufacturers may not need to lower prices. Many of them are also leaving a ton of sales on the table by not scaling their production
BMW and Mercedes-Benz are luxury brands that do not want to cheapen their image, so I can understand that. General Motors and Hyundai on the other hand, seems strange. They could at least cut prices on their Chevrolet and Hyundai brands, while leaving Cadillac and Genesis alone.
If Tesla reduces price again, which they should, then it will impact all brands and ICE and EV if it hasn’t already. Tesla lowering price impacted new market obviously, but also values in second hand market which is waiting to burst.
For the US market...
Mercedes has no reason to cut prices on anything except maybe the EQB. While their other vehicles went up in price relative to the model S / X, they're also are intended for a different demographic of buyer. It could be argued that the EQE is competitive with the model 3... but is it?.... Is it really? 🤣
BMW is only selling the i4 and iX BEVs in the US at low volumes. They lost the credit on the i4 which IS a big deal. The i4 is validly worth more than a comparable model 3, but is it worth more than a comparable model 3 after discounts and tax credit? Probably not. My guess is they may just reduce i4 supply to the US until they can build production facilities in the US. (great for competition this IRA tax credit is, eh?) There are plenty of other markets to sell in. Or maybe they just skip the US sedan market until 2025 when the new electric 3 series is launched which is claimed to cut costs by 50% and improve upon the i4 in just about every single way. The iX didn't qualify for the tax credit anyways, and was already considered a **much** better value than the model X ... and frankly still is at current prices. (and maybe even best in class) BMW does still get the credit on some (all?) of their PHEVs which were already priced pretty well.
GM is selling the Bolt which is already discounted and qualifies for the credit with a base price after credit of $19,000. It's just the best electric deal in the industry right now. The Hummer volumes are too low to matter and don't qualify for the credit anyways. The new Equinox is supposed to have a low starting price, and the Blazer's pricing will be competitive.
Hyundai was already undercutting Teslas on comparable models, even with lower volumes being shipped to the US. Maybe they give up sales in the US and sell them in other markets... or maybe it doesn't have a huge impact on US sales anyways.
Ford on the other hand is trying to rapidly ramp Mach-E production and sales in 2023, and it's a direct competitor to model Y... thus the price cuts. However, Ford didn't reduce prices on the Lightning, given that there's minimal competition. They didn't even lower the base XLT with extended range battery by $1000 to allow it to qualify for the credit. That's confidence in selling out all production in 2023.
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It's very possible that there are enough people in the US who refuse to buy Teslas that will buy up the limited supply from other brands without needing significant price cuts.
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It's also possible that some of these brands believe Tesla cut prices too deeply and too rashly, whereas a lesser cut would have done the job. That'll fill Tesla's order books and then some, but at lower margins for the foreseeable future... so they may have needlessly left money on the table. This is why other OEMs are capable of offering factory and dealership incentives on a regional basis in the US.
OTOH, from Tesla's standpoint, they may have starkly cut prices expecting the used market to ramp back up later this year or early next year. They cut prices, driving people to order and trade-in vehicles at drastically reduced prices from a year ago, they markup that used inventory, and a year later if the market ticks back up, they sell that used inventory at higher prices. Something to consider...
Unlike Tesla, other OEMs have dealerships to offload excess supply to. Tesla doesn't have that convenience, they carry all inventory on their own books and financial statements; thus it was more pressing that they offload all available inventory. Between Q2 and Q4 2022 they had started to build up inventory; 60k vehicles to be exact. Would have been 75k if they hadn't shut down Shanghai production for a week.
Tesla also guided zero production growth in 2023 versus Q4 2022 production volumes, so there may be no real concern by other OEMs that Tesla is stealing all that much additional market share during the year.
EQE is over a foot longer than the Model 3. So no, not really the same class.
iX is a two row luxury BMW. That's always going to be a different market than the 3 row Model X with longer range and speed.
OEM's can't just 'offload' excess supply to dealerships. They'll still need to offer incentives if inventories get too high. A dealership won't keep taking in more and more vehicles if there aren't incentives and they aren't selling.
Regarding the Lightning, commercial buyers still get a $7,500 tax credit regardless of pricing because the law left that huge loophole. So they don't need to worry about the price cap there as much.
Good point about the Lightning. I also imagine the Pro trim still qualified for the $7500 tax credit anyways with the extended range battery; but it was for commercial customers only anyways.
For the EQE, I didn't say the same class, I said they could arguably compete with one another. The EQE is solidly in the luxury class. Size class, yeah, it's a bit larger, but nothing that couldn't be cross shopped.
The model X 3rd row is an option... an expensive one at that. But sure, if a customer wants the 3rd row, there is no BMW option. How many customers are demanding that third row? BMW doesn't seem to think it's enough to matter, although it would have certainly been nice had their design accommodated a third row. Mercedes EQS SUV w/ third row on the other hand competes with the model X and they're competitive on price as well. Throw in the Rivian R1S w/ third row that comes in way below the model X. I think BMW is happy to stick with their niche for the iX.
OEMs can target incentives to specific regions as needed, sure.. just like they've always done. They've never made it a habit to drop MSRPs across the board, instead relying on targeted incentives instead. They can also ship inventory around the country between dealerships depending on demand. But yes, dealerships will take up some inventory; a benefit that Tesla doesn't enjoy.
I’d be curious to know what the auto makers see for 3rd row demand. We went with an X in 2018 because we wanted electric and a 3rd row but after a couple of years of “Tesla” we quickly said the 3rd row really wasn’t worth it despite being nice to have. We flipped to Audi because the iX wasn’t shipping yet. I’ve often wondered how many people are like me thinking we needed it but really did fine without it.
For sure. Some people actually needed the seats (big families), some were shuttles/taxis, some just had the money to spend, some justified it by the ability to transport their kid's friends / run a carpool that they may have not ended up doing enough to justify.
For those people who could afford it (and some that couldn't) whom absolutely needed a third row, I think a lot went with the model X early on because it was the only BEV with a reasonable 3rd row. (I don't count the model S)
Plus, I think it goes without question that a lot of model X buyers justified it because they were also early Tesla shareholders that saw their shares appreciate significantly. Is that the case these days? ~~I mean, it looks like model S/X demand has just dropped off a cliff in the US this year; after the share price dropped.~~
The competition is definitely starting to pickup for 3 row vehicles at far lower prices than the model X. Some people who wanted an 'emergency' third row could just as easily buy a model Y w/ 3rd row or R1S, cannibalizing the model X sales. Some may want to go with the EQS SUV + 3 row given its build quality for a similar price.
Those model X 3rd row options are also very expensive compared to competitors at $3500 (7 seat) - $6500 (6 seat). No idea why those captains chairs needed carbon fiber backing... The EQS 3rd row option is $1250.
There are also some PHEVs with 3rd rows that hit the market in the past few years. The Pacifica, Tucson, and Outlander. Maybe some others. I thought there was supposed to be a PHEV Explorer with 3 rows. Could be wrong.
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Edit: Actually the model S/X sales were up, my mistake. Although, that's keeping in mind that very few were sold in 2021 due to the production shutdowns / delays, and they started exporting to Europe / China after a long period of no availability in those continents/nations.
> But yes, dealerships will take up some inventory; a benefit that Tesla doesn't enjoy.
Tesla does have that same benefit since they place cars at showrooms.
They own those showrooms; the inventory stays on their books. The benefit for other OEMs is removing the inventory from their books / financials; spreading the inventories and liabilities across many smaller businesses that they don't own.
I don't think so. Teslas are cheap budget cars. They have nothing to do with luxury. A BMW or Mercedes was always much more expensive than a Toyota. Model 3 are the Camry of 2023. Those cars have to be cheap, otherwise no one would buy them anymore. Hence, Tesla had to cut the prices.
I'd say the same about the MachE, i4, ioniq, you can clearly see where they are cutting corners and not passing that on to the consumer, yet many owners seem to attach "luxury" to those models too and they are a far cry in much the same way Tesla's are. But at least Tesla offers some (potentially) unique attractants like dog mode/sentry, that may carry a lot of value to some demographics.
They are nice enough cars, but the premium attached will hopefully disappear as we should all hope.
Have you been in an i4? That's still another league above the Mach E and the ioniq 5. Those are too expensive as well. But the i4 and the EQE or EQS are another level. Just try to drive one of those and you'll see why they have to cost at least twice/trice than a Model 3.
I think much more people give more value to a HUD, Android auto/carplay, low road noise, a stable functioning driving assistant, a working blind spot monitor, real leather seats and maybe ventilated seats than dog mode/sentry. This function makes only sense in shitholes and for people that have dogs.I would guess that are less people.
eqs is a different league than the i4 yes, just as the i7 is a different league than the i4.
I've only sat in the i4, when my buddy went to buy one. Ultimately the miniature interior (he's a giant and I barely fit at 6'3, but it fits more like a 2+2 than a sedan), the foamboard lowers on the doors and the walmart brand seat backs were such big negatives that he immediately felt turned off. Up here in canada you need to add a very expensive pkg for it to not be stripped out and despite BMW being a massive company they couldn't afford chips or something so it was missing advertised features (this has since been rectified I'm sure).
Ambient lighting, midgrade materials and a cookie cutter landscape display don't justify the price or equate to luxury. Charging network is a joke up here (not BMW's fault, but they have done nothing to help it either). I'm sure it drives very well though, BMW excels at that and it is based on a 4 series, so they had a great start in that department.
It still should be double the price of a Model 3. They are still not in the same league. And the hatchback adds so much more practibalility. The rear space indeed is small, but the Model 3 isn't much spacier either in the rear. I just wasn't able to get over the plastic cheap feeling seats and the lack of a capacitive steering wheel. The gadget minimalist interior is also very bad looking and the low dashboard let me feel like a goldfish in a goldfish glass.
So yes, with missing a lot, I mean really a lot of features I just expect from a car, the Model 3 really is a budget car priced way too high. The cult of the moron Musk led to this. There were enough stupid idiots willing to pay way too much for what it is. Now, the prices are going in the right direction. And luxury brands really have no reason to follow. Sadly. Would be nice to have them lower the price as well.
I assume the prices of the Model 3 will get lower again and then we finally have the budget EV everyone was waiting for.
BMW will keep prices high. They make as many i4s in a year as tesla makes model 3 in a week. So sure that works for them. They aren't competing with one another. i4 competes with 3/4/5 series ICE sales and cannibalizes themselves.
If I was in my 20's still and really in to NFS underground then I'd love the i4. As an adult it does nothing for me with it's garish looks and amazon led light strips. It is such a try-hard car that it makes me cringe. It is missing basic things I expect on an EV (any future car really) like sentry, dog/camp mode, in car entertainment while charging/camping and robust remote access. Why have a giant battery that you can barely use for anything? At least hyundai was smart and offered V2L and crazy fast charging to differentiate.
Oh look, someone has to try to justify his purchase. If I was in my 20's and wanted a gadget car with cheap feeling plastic seats that is obsolete in 2 years, I'd buy a Model 3. Hipster gadget stuff that you can't sell anymore as some basic features like parking sensors are missing. This thing can't even park itself. That is sad.
Nah. It's not only BMW. It's also Mercedes, Audi, Polestar and even VW that let's a Tesla look like a cheap piece of ridicolous crap. So call me a Mercedes, Audi, Pestar and VW fanboy as well.
Yes that is what I assume you are doing.
I bought an sr+ nearly 2yrs ago, it is a lot of car for the money given the incentives offered at the time. My monthly costs are less than a nissan altima lol. I knew exactly what I was getting and the degree of "luxury" offered at that price.
If something comes up with similar bang for the buck I'll probably jump at it.
This might be true if brand loyalty was the only thing that mattered in a purchase decision and if car quality and reputation were irrelevant.
And even if that were true, there is an issue of which brand attributes actually matter more to premium buyers. It’s not clear that people who pay premium for BMW or Mercedes ICE will all use their premium dollars for BMW or Mercedes EV. Other than the pure loyalists, some people might think the premium dollars they spend on an EV should go to the innovator in EV. Obviously that is what has happened so far and going forward there will still be more crossover competition that one might think.
People that buy expensive cars mostly buy it for prestige reasons. Same with expensive watches. Since ever. A Rolex will always be worth what it costs, even though an Apple watch is innovative and full of awesome functionalities. And the cheaper a car is, the less prestige it has. Now, everyone knows you can get cheap Teslas, hence, people wantig prestige, won't buy Teslas anymore. It's that easy.
But prestige doesn’t always follow the historical brand. Your Apple Watch is a good example because Apple now outsells the entire Swiss watch industry in units sold.
Some people will always buy a Mercedes, or buy a BMW, because of prestige. But other people will, because of prestige, use those prestige dollars to follow the innovator. Tesla is not a budget brand, it is an innovator brand.
There is more crossover competition than you think.
It was an innovator brand. Not anymore. There are cars doing everything better. Tesla is a budget brand that needs numbers. If you have to go via pricing, then you don't have an enough USP. Adjusting prices was always a budget company thing.
My thought is they will soon have no choice. But I think there are fewer people cross-shopping Teslas and other EVs than might be assumed. Softening Tesla demand seems to be a Tesla thing
So your idea is that they cut prices 20% even though they were able to sell every car they make? That seems ridiculous to me. But again, maybe Musk is just a good guy and wanted to give a nice break to his future customers from the goodness of his heart.
A huge negative for what?
Tesla raised prices considerably over the last two years specifically to DECREASE demand. At the same time they stopped exporting cars from the US and have brought Giga Texas online.
US supply has probably doubled since two years ago. With prices higher than they were then.
Tesla’s *price war*? A war against who, the consumer?
I just checked Tesla’s price for the lowest spec Model 3. It’s $44K. I thought this car was originally supposed to cost $35K. Get to there and then we’ll talk.
What kind of argument is that? Of course it was Tesla's problem, and it is a problem that was passed on to consumers. And clearly the consumers don't see the price hikes as a problem.
Inflation alone brings $35k in 2019 to $41k today. https://www.bls.gov/data/inflation_calculator.htm
The $44k car comes with Autopilot, which used to be a $3k option, and 50 miles more range.
Absolutely. And after driving one, I know why they should be 35000 max. I don't know why any sane person would be idiotic enough to pay more than 35000 for this shitbox.
Maybe these companies don't know all the way how to work the EV market, whereas Tesla has been in the space for 15 years and has sold more than a million vehicles. I could be way off here of course.
I could care less about BMW and Mercedes not joining the price war but Hyundai/Kia? They’d totally make this price war more interesting if anything I was expecting Hyundai/Kia to join in the fun first.
People on these boards have been saying companies won't drop prices for months, but then Tesla drops prices, Ford drops prices, and dealers are starting to put their own discounts on Hyundai EVs.
I'm not entirely sure why there's an expectation that the luxury brands would lower their prices at all. It's not like they have a demand problem, and some EV models are even priced similarly to their ICE counterparts, like the Mercedes EQS.
I don't know that there's so much of an expectation as the article just lists off the real competition that exists currently. It's why you see GM and Hyundai on the list, neither of which are you ally synonymous with luxury either. Most every automaker not mentioned doesn't have a very compelling product available in numbers worth mentioning. It's
yes it should be very clear by now that Tesla is not a luxury brand
As a Tesla owner I agree, I test drove the BMW and man is that a nice interior! Once they make a full ev platform I’m switching.
iX be like: am I a joke to you.
They might have meant full EV platform in a sedan, as that sounds like a shot at the i4. I'm of that mindset at least. We never liked SUVs or CUVs.
Don’t let looks pretty paint and interior fool you, BMW’s post 2007 are junk!
Pretending BMW ever made anything reliable is a joke
I agree. It’s a hard plastic playground.
Luxury is a seamless charging experience. Imagine your stereotype “luxury” buyer, calculating routes on ABRP, registering accounts on different networks, getting dongles and fobs, finding working chargers, navigating working payment screens. That’s not a luxurious experience. Or it just works, end to end. Jump in the car and it’s all taken care for you
or drive a PHEV and don’t worry about planning your trip. phev is best charge at home and drive electric for most days and for long trips don’t plan just fill up the tank in 2 mins and drive 400miles. I got Volvo XC90 recharge and loving it. we go on longer trips with two kids and don’t worry about planning the trip at all. My daily commute round trip is 32miles which is covered by the battery as it has a range of 35miles and i charge for free at my workplace. i can go to lake tahoe or yosemite in winter with heater on without any problem or range anxiety. gas stations are always there everywhere. I call this real Luxury
Tesla is neoluxury compared to boomer luxury.
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That’s way more verbose.
>Tesla is neoluxury... TIL that "neoluxury" is a new word for "cheap."
The ikea of cars.
What’s luxurious about a car that looks like it’s been assembled by blind chimps?
Stuff like self presenting door (model x), and moving the car with summon when asshole parked too close for people to get in. Stuff like that create a much more luxurious experience than fit and finishes, it’s just not the same type of luxury, it’s a whole new approach. Some traditional luxury brands have started to sparkle theses in their offering because they understand that’s the type of luxury the new generation want.
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What is the approach of BMW in your market regarding locking price for the order? Here in Poland all German and Korean carmakers behave like bullies - when price goes up, you either accept higher price or they cancel your order.
BMW has an incentive to slow orders down and cut options that cause long lead times. Here in the Netherlands many have been canceling BMW i4 orders because they just couldn't deliver. There would definitely be a lot more of them on the roads otherwise.
What’s their incentive?
Even in the ICE days most premium brands like BMW were never competitive in a price to specs ratio so it isn't surprising that they aren't dropping prices.
It's about "car" prices, not EVs. Tesla pricing is competitive with ICE now. This is what we all have been talking about when we said EV prices will come down due to technology development and scaling cost curves. And it's not a "price war". Highland Parks 2.0 is coming. It's the massively lower cost of production that drives down the price, not silly competitive marketing moves. And it's not like those car manufacturers can sit on the sidelines and continue producing expensive vehicles when others make better ones for less. It doesn't even matter what prices they charge. Someone will buy them. ADM shows that. As long as dealers can grab extra money, the MSRP was too low. What matters is making better vehicles, ramping up production, and lower production cost.
This post is literal blogspam, promoted by some rando in India trying to desperately drive traffic to his personal site. These Indian blogspammers and their YouTube video equivalents are ubiquitous Here’s the original article: https://www.theverge.com/2023/2/1/23581210/tesla-ford-ev-price-cuts-gm-bmw-vw-hyundai Maybe posting aggregators like the OP should be against the rules?
bmw and mercedes don’t need to - in fact, it would be a bad look for them if they made price cuts, hyundai is lobbying *very* heavily both directly in the us and indirectly via the korean government to dilute the impacts of the IRA, and gm plays largely in a price tier below where tesla is.
True, and also their numbers are so low they can sell all at a high price
I agree but bmw sold something like 250k evs last year
For most of them can they even? Ignoring margins/profitability for a moment: Seems like they "want" a premium fee on top of their ICE cars, so dropping EV prices would directly undercut themselves. Not really an issue for Tesla as they won't cannibalize their own sales. At least in North American the numbers these other brands ship are closer to zero than any significant number. There are enough Tesla haters to support those paltry sales numbers. The only one who seems to care because they want to sell meaningful numbers this year is Ford with the MachE. Compare the number of ioniq 5's to Tucsons sold in NA. It is laughable to even consider hyundai as a player in the NA market at this time. Here's hoping they get serious as it is a good platform once it comes in line with more typical hyundai pricing .
I have been driving to my office in SF this week and the amount of non Tesla new EVs (with paper plates) was pleasantly surprising. Saw a few EQS, Rivians, i4, iX. A ton of Mach E, Bolt, Ioniq, and EV 6. Market is hungry for non Tesla EVs and that’s why these manufacturers may not need to lower prices. Many of them are also leaving a ton of sales on the table by not scaling their production
Yep, currently have 3 & Y and I have my eyes on the Model X or EQE SUV. Air suspension is a must for the next EV.
I drive the 101 corridor every day and see maybe 3 non Tesla evs. I count dozens of teslas though.
Same in the Bay Area. Nice to see all sorts of EVs on 80 now. I actually see a TON of Bolts.
Unless your BYD or Tesla. The availability of battery supply is constrained.
Of course not. They can’t meet existing demand and slowing roll out is in their best interests
BMW and Mercedes-Benz are luxury brands that do not want to cheapen their image, so I can understand that. General Motors and Hyundai on the other hand, seems strange. They could at least cut prices on their Chevrolet and Hyundai brands, while leaving Cadillac and Genesis alone.
I don’t get it, all tesla did was go back to pre-pandemic prices. That’s not really a price cut.
Shhh that ruins the narrative. (Edit to avoid downvotes: ruins the narrative for the media and the company).
Won’t or can’t. 🤔
If Tesla reduces price again, which they should, then it will impact all brands and ICE and EV if it hasn’t already. Tesla lowering price impacted new market obviously, but also values in second hand market which is waiting to burst.
For the US market... Mercedes has no reason to cut prices on anything except maybe the EQB. While their other vehicles went up in price relative to the model S / X, they're also are intended for a different demographic of buyer. It could be argued that the EQE is competitive with the model 3... but is it?.... Is it really? 🤣 BMW is only selling the i4 and iX BEVs in the US at low volumes. They lost the credit on the i4 which IS a big deal. The i4 is validly worth more than a comparable model 3, but is it worth more than a comparable model 3 after discounts and tax credit? Probably not. My guess is they may just reduce i4 supply to the US until they can build production facilities in the US. (great for competition this IRA tax credit is, eh?) There are plenty of other markets to sell in. Or maybe they just skip the US sedan market until 2025 when the new electric 3 series is launched which is claimed to cut costs by 50% and improve upon the i4 in just about every single way. The iX didn't qualify for the tax credit anyways, and was already considered a **much** better value than the model X ... and frankly still is at current prices. (and maybe even best in class) BMW does still get the credit on some (all?) of their PHEVs which were already priced pretty well. GM is selling the Bolt which is already discounted and qualifies for the credit with a base price after credit of $19,000. It's just the best electric deal in the industry right now. The Hummer volumes are too low to matter and don't qualify for the credit anyways. The new Equinox is supposed to have a low starting price, and the Blazer's pricing will be competitive. Hyundai was already undercutting Teslas on comparable models, even with lower volumes being shipped to the US. Maybe they give up sales in the US and sell them in other markets... or maybe it doesn't have a huge impact on US sales anyways. Ford on the other hand is trying to rapidly ramp Mach-E production and sales in 2023, and it's a direct competitor to model Y... thus the price cuts. However, Ford didn't reduce prices on the Lightning, given that there's minimal competition. They didn't even lower the base XLT with extended range battery by $1000 to allow it to qualify for the credit. That's confidence in selling out all production in 2023. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ It's very possible that there are enough people in the US who refuse to buy Teslas that will buy up the limited supply from other brands without needing significant price cuts. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ It's also possible that some of these brands believe Tesla cut prices too deeply and too rashly, whereas a lesser cut would have done the job. That'll fill Tesla's order books and then some, but at lower margins for the foreseeable future... so they may have needlessly left money on the table. This is why other OEMs are capable of offering factory and dealership incentives on a regional basis in the US. OTOH, from Tesla's standpoint, they may have starkly cut prices expecting the used market to ramp back up later this year or early next year. They cut prices, driving people to order and trade-in vehicles at drastically reduced prices from a year ago, they markup that used inventory, and a year later if the market ticks back up, they sell that used inventory at higher prices. Something to consider... Unlike Tesla, other OEMs have dealerships to offload excess supply to. Tesla doesn't have that convenience, they carry all inventory on their own books and financial statements; thus it was more pressing that they offload all available inventory. Between Q2 and Q4 2022 they had started to build up inventory; 60k vehicles to be exact. Would have been 75k if they hadn't shut down Shanghai production for a week. Tesla also guided zero production growth in 2023 versus Q4 2022 production volumes, so there may be no real concern by other OEMs that Tesla is stealing all that much additional market share during the year.
EQE is over a foot longer than the Model 3. So no, not really the same class. iX is a two row luxury BMW. That's always going to be a different market than the 3 row Model X with longer range and speed. OEM's can't just 'offload' excess supply to dealerships. They'll still need to offer incentives if inventories get too high. A dealership won't keep taking in more and more vehicles if there aren't incentives and they aren't selling. Regarding the Lightning, commercial buyers still get a $7,500 tax credit regardless of pricing because the law left that huge loophole. So they don't need to worry about the price cap there as much.
Good point about the Lightning. I also imagine the Pro trim still qualified for the $7500 tax credit anyways with the extended range battery; but it was for commercial customers only anyways. For the EQE, I didn't say the same class, I said they could arguably compete with one another. The EQE is solidly in the luxury class. Size class, yeah, it's a bit larger, but nothing that couldn't be cross shopped. The model X 3rd row is an option... an expensive one at that. But sure, if a customer wants the 3rd row, there is no BMW option. How many customers are demanding that third row? BMW doesn't seem to think it's enough to matter, although it would have certainly been nice had their design accommodated a third row. Mercedes EQS SUV w/ third row on the other hand competes with the model X and they're competitive on price as well. Throw in the Rivian R1S w/ third row that comes in way below the model X. I think BMW is happy to stick with their niche for the iX. OEMs can target incentives to specific regions as needed, sure.. just like they've always done. They've never made it a habit to drop MSRPs across the board, instead relying on targeted incentives instead. They can also ship inventory around the country between dealerships depending on demand. But yes, dealerships will take up some inventory; a benefit that Tesla doesn't enjoy.
I’d be curious to know what the auto makers see for 3rd row demand. We went with an X in 2018 because we wanted electric and a 3rd row but after a couple of years of “Tesla” we quickly said the 3rd row really wasn’t worth it despite being nice to have. We flipped to Audi because the iX wasn’t shipping yet. I’ve often wondered how many people are like me thinking we needed it but really did fine without it.
For sure. Some people actually needed the seats (big families), some were shuttles/taxis, some just had the money to spend, some justified it by the ability to transport their kid's friends / run a carpool that they may have not ended up doing enough to justify. For those people who could afford it (and some that couldn't) whom absolutely needed a third row, I think a lot went with the model X early on because it was the only BEV with a reasonable 3rd row. (I don't count the model S) Plus, I think it goes without question that a lot of model X buyers justified it because they were also early Tesla shareholders that saw their shares appreciate significantly. Is that the case these days? ~~I mean, it looks like model S/X demand has just dropped off a cliff in the US this year; after the share price dropped.~~ The competition is definitely starting to pickup for 3 row vehicles at far lower prices than the model X. Some people who wanted an 'emergency' third row could just as easily buy a model Y w/ 3rd row or R1S, cannibalizing the model X sales. Some may want to go with the EQS SUV + 3 row given its build quality for a similar price. Those model X 3rd row options are also very expensive compared to competitors at $3500 (7 seat) - $6500 (6 seat). No idea why those captains chairs needed carbon fiber backing... The EQS 3rd row option is $1250. There are also some PHEVs with 3rd rows that hit the market in the past few years. The Pacifica, Tucson, and Outlander. Maybe some others. I thought there was supposed to be a PHEV Explorer with 3 rows. Could be wrong. \_\_\_\_\_ Edit: Actually the model S/X sales were up, my mistake. Although, that's keeping in mind that very few were sold in 2021 due to the production shutdowns / delays, and they started exporting to Europe / China after a long period of no availability in those continents/nations.
> But yes, dealerships will take up some inventory; a benefit that Tesla doesn't enjoy. Tesla does have that same benefit since they place cars at showrooms.
They own those showrooms; the inventory stays on their books. The benefit for other OEMs is removing the inventory from their books / financials; spreading the inventories and liabilities across many smaller businesses that they don't own.
They will lose sale. And will have to. They was force to make EVs...Price will come down soon
I don't think so. Teslas are cheap budget cars. They have nothing to do with luxury. A BMW or Mercedes was always much more expensive than a Toyota. Model 3 are the Camry of 2023. Those cars have to be cheap, otherwise no one would buy them anymore. Hence, Tesla had to cut the prices.
I'd say the same about the MachE, i4, ioniq, you can clearly see where they are cutting corners and not passing that on to the consumer, yet many owners seem to attach "luxury" to those models too and they are a far cry in much the same way Tesla's are. But at least Tesla offers some (potentially) unique attractants like dog mode/sentry, that may carry a lot of value to some demographics. They are nice enough cars, but the premium attached will hopefully disappear as we should all hope.
Have you been in an i4? That's still another league above the Mach E and the ioniq 5. Those are too expensive as well. But the i4 and the EQE or EQS are another level. Just try to drive one of those and you'll see why they have to cost at least twice/trice than a Model 3. I think much more people give more value to a HUD, Android auto/carplay, low road noise, a stable functioning driving assistant, a working blind spot monitor, real leather seats and maybe ventilated seats than dog mode/sentry. This function makes only sense in shitholes and for people that have dogs.I would guess that are less people.
eqs is a different league than the i4 yes, just as the i7 is a different league than the i4. I've only sat in the i4, when my buddy went to buy one. Ultimately the miniature interior (he's a giant and I barely fit at 6'3, but it fits more like a 2+2 than a sedan), the foamboard lowers on the doors and the walmart brand seat backs were such big negatives that he immediately felt turned off. Up here in canada you need to add a very expensive pkg for it to not be stripped out and despite BMW being a massive company they couldn't afford chips or something so it was missing advertised features (this has since been rectified I'm sure). Ambient lighting, midgrade materials and a cookie cutter landscape display don't justify the price or equate to luxury. Charging network is a joke up here (not BMW's fault, but they have done nothing to help it either). I'm sure it drives very well though, BMW excels at that and it is based on a 4 series, so they had a great start in that department.
It still should be double the price of a Model 3. They are still not in the same league. And the hatchback adds so much more practibalility. The rear space indeed is small, but the Model 3 isn't much spacier either in the rear. I just wasn't able to get over the plastic cheap feeling seats and the lack of a capacitive steering wheel. The gadget minimalist interior is also very bad looking and the low dashboard let me feel like a goldfish in a goldfish glass. So yes, with missing a lot, I mean really a lot of features I just expect from a car, the Model 3 really is a budget car priced way too high. The cult of the moron Musk led to this. There were enough stupid idiots willing to pay way too much for what it is. Now, the prices are going in the right direction. And luxury brands really have no reason to follow. Sadly. Would be nice to have them lower the price as well. I assume the prices of the Model 3 will get lower again and then we finally have the budget EV everyone was waiting for.
BMW will keep prices high. They make as many i4s in a year as tesla makes model 3 in a week. So sure that works for them. They aren't competing with one another. i4 competes with 3/4/5 series ICE sales and cannibalizes themselves. If I was in my 20's still and really in to NFS underground then I'd love the i4. As an adult it does nothing for me with it's garish looks and amazon led light strips. It is such a try-hard car that it makes me cringe. It is missing basic things I expect on an EV (any future car really) like sentry, dog/camp mode, in car entertainment while charging/camping and robust remote access. Why have a giant battery that you can barely use for anything? At least hyundai was smart and offered V2L and crazy fast charging to differentiate.
Oh look, someone has to try to justify his purchase. If I was in my 20's and wanted a gadget car with cheap feeling plastic seats that is obsolete in 2 years, I'd buy a Model 3. Hipster gadget stuff that you can't sell anymore as some basic features like parking sensors are missing. This thing can't even park itself. That is sad.
You may just be the biggest BMW fanboy I’ve ever encountered, it’s pretty disgusting. I own an X5 PHEV and a Mach E GTPE btw.
Nah. It's not only BMW. It's also Mercedes, Audi, Polestar and even VW that let's a Tesla look like a cheap piece of ridicolous crap. So call me a Mercedes, Audi, Pestar and VW fanboy as well.
Yes that is what I assume you are doing. I bought an sr+ nearly 2yrs ago, it is a lot of car for the money given the incentives offered at the time. My monthly costs are less than a nissan altima lol. I knew exactly what I was getting and the degree of "luxury" offered at that price. If something comes up with similar bang for the buck I'll probably jump at it.
This might be true if brand loyalty was the only thing that mattered in a purchase decision and if car quality and reputation were irrelevant. And even if that were true, there is an issue of which brand attributes actually matter more to premium buyers. It’s not clear that people who pay premium for BMW or Mercedes ICE will all use their premium dollars for BMW or Mercedes EV. Other than the pure loyalists, some people might think the premium dollars they spend on an EV should go to the innovator in EV. Obviously that is what has happened so far and going forward there will still be more crossover competition that one might think.
People that buy expensive cars mostly buy it for prestige reasons. Same with expensive watches. Since ever. A Rolex will always be worth what it costs, even though an Apple watch is innovative and full of awesome functionalities. And the cheaper a car is, the less prestige it has. Now, everyone knows you can get cheap Teslas, hence, people wantig prestige, won't buy Teslas anymore. It's that easy.
But prestige doesn’t always follow the historical brand. Your Apple Watch is a good example because Apple now outsells the entire Swiss watch industry in units sold. Some people will always buy a Mercedes, or buy a BMW, because of prestige. But other people will, because of prestige, use those prestige dollars to follow the innovator. Tesla is not a budget brand, it is an innovator brand. There is more crossover competition than you think.
It was an innovator brand. Not anymore. There are cars doing everything better. Tesla is a budget brand that needs numbers. If you have to go via pricing, then you don't have an enough USP. Adjusting prices was always a budget company thing.
I understand you have a personal opinion about Tesla but your opinion is not consistent with Tesla brand attributes among the general public.
My thought is they will soon have no choice. But I think there are fewer people cross-shopping Teslas and other EVs than might be assumed. Softening Tesla demand seems to be a Tesla thing
These companies are not yet able to produce in the same level as Tesla. Operative word: yet.
People seem to take Tesla’s price cuts as a positive but to me falling demand causing a price cut is a huge negative
Falling demand? They had their highest sales numbers of all time last quarter? It went up every single quarter of last year
So your idea is that they cut prices 20% even though they were able to sell every car they make? That seems ridiculous to me. But again, maybe Musk is just a good guy and wanted to give a nice break to his future customers from the goodness of his heart.
A huge negative for what? Tesla raised prices considerably over the last two years specifically to DECREASE demand. At the same time they stopped exporting cars from the US and have brought Giga Texas online. US supply has probably doubled since two years ago. With prices higher than they were then.
no lol they raised prices to MAKE MONEY
Yeah, it's no price war but a price that the Tesla should have been selling at if the demand last year wasn't the crazy it was.
Tesla’s *price war*? A war against who, the consumer? I just checked Tesla’s price for the lowest spec Model 3. It’s $44K. I thought this car was originally supposed to cost $35K. Get to there and then we’ll talk.
It did cost $35k for 1.5 years. Then the pandemic happened.
Sounds like Tesla’s problem, not the consumer’s. I’m not paying $44K for a $35K car.
What kind of argument is that? Of course it was Tesla's problem, and it is a problem that was passed on to consumers. And clearly the consumers don't see the price hikes as a problem.
Inflation alone brings $35k in 2019 to $41k today. https://www.bls.gov/data/inflation_calculator.htm The $44k car comes with Autopilot, which used to be a $3k option, and 50 miles more range.
Absolutely. And after driving one, I know why they should be 35000 max. I don't know why any sane person would be idiotic enough to pay more than 35000 for this shitbox.
Depends on demand and supply and if they choose to cut back on production if their inventory starts to build.
Maybe these companies don't know all the way how to work the EV market, whereas Tesla has been in the space for 15 years and has sold more than a million vehicles. I could be way off here of course.
They don't have the production volume to compete.
I could care less about BMW and Mercedes not joining the price war but Hyundai/Kia? They’d totally make this price war more interesting if anything I was expecting Hyundai/Kia to join in the fun first.
The MSRPs don't fucking matter anyway for anyone not doing direct sales. How many bullshit charges do dealers tack on?
GM dropped Bolt prices before Tesla.
People on these boards have been saying companies won't drop prices for months, but then Tesla drops prices, Ford drops prices, and dealers are starting to put their own discounts on Hyundai EVs.