

Tesla Announces Model S Price Increase - jread

November 28, 2012<p>Dear xxxxx,<p>We will be announcing a price increase for Model S in the next few days.<p>This is our first price increase since the introduction of Model S and it is very important that we implement this in a way that recognizes those who already have a Model S reservation. This price increase will not apply to anyone with an existing reservation... as long as they finalize their order within a reasonable, predefined timeframe after receiving their "Invitation to Configure."<p>You will likely receive your invitation to configure between now and the end of January depending upon when you made your reservation. If you configure your car and finalize your order within four weeks after receiving your invitation, you will not be subject to the price increase.<p>Customers most often want to know if they will be invited to configure in the order in which they placed their reservation. The answer is 100% yes. However, we are finding that some customers finalize their order quickly while others take longer to complete their design and submit final paperwork. As a result, those invited later with "higher" sequence numbers are moving ahead of those with "lower" sequence numbers on a weekly basis.<p>To be fair, we fill all open production slots with the lowest sequence number reservations that have finalized their order. We need to do this in order to fill all production slots each week. This means the sooner you finalize your order, the sooner your Model S will be headed your way.<p>Keep an eye out for your Invitation to Configure your Model S!
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dane
A looming price increase should help convert reservations into sales, swiftly,
while simultaneous rewarding early adopters. I wonder how much of an increase
it is, and how long before it drops back?

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sounds
I'm not sure Tesla needs to drop the price back at all. I recall many iPhone
buyers who were upset when Apple reduced the iPhone price.

If Tesla's costs to make each Model S go up, they can't avoid raising their
prices.

It'd be nice if they were dropping prices, but I assume only a new model of
Tesla would feature a lower price.

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dane
The early adopters are already "ahead" (pricing wise) on this decision for
now, and most new car buyers seem to accept gradual depreciation as a fact of
life. I also don't think Tesla could unveil a radical price cut like the
iPhone scenario (~30%) without some serious red ink and damaging their price
anchor against German luxury cars.

I'd assumed costs gradually decreasing over time - especially in the
(currently) very expensive battery technology. I'd guess they'd want to pass
these savings on to increase market share as quickly as possible, rather than
try and squeeze some extra margin by maintaining prices.

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evanx
i understand there is a limited supply? And huge demand, following hugely
positive reviews and publicity. So by "supply and demand" economics they can,
and should, increase the price irrespective of their costs. Actually i would
expect their costs to decrease as mass production increases.

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debacle
Is there any chance this is a production driven cost increase versus a demand
driven increase?

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jread
Just received this email, hasn't been posted to their website yet.

