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Just months after it began shipping the Model S, Tesla (TSLA +1.4%) says it plans to raise the...

Just months after it began shipping the Model S, Tesla (TSLA +1.4%) says it plans to raise the price of the luxury electric sedan, and might also make some features that now come standard part of optional packages. The Model S, which has a starting price of $49.9K, has received solid reviews.
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Comments (10)
  • wigit5
    , contributor
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    Seems strange to both raise the price and make standard features into options... feels like a double whammy to any future potential buyers. Guess early adopters win in this case.
    21 Nov 2012, 11:01 AM Reply Like
  • Jgroves1945
    , contributor
    Comments (7) | Send Message
     
    I don't think it's a given that they will both raise the base price and pull some current items that are currently bundled in option packages out into separately charged for items. They might also make some items standard that are currently listed as options. Bottom line is that everyone just needs to chill until we see the final details. Meanwhile I anxiously await my new blue performance S next month!
    21 Nov 2012, 11:06 AM Reply Like
  • robert99
    , contributor
    Comments (348) | Send Message
     
    It only seems strange if you don't understand supply and demand. The demand for the car that is greater than TSLA can supply, so instead of compromising quality for the sake of further ramping supply, they are going to raise prices. Making standard features into options is also a price raise, albeit an indirect one.
    21 Nov 2012, 11:15 AM Reply Like
  • wigit5
    , contributor
    Comments (4118) | Send Message
     
    @robert99
    Demand 'appears' high due to low supply, and most of that demand is in the form of a refundable deposit meaning those are not actual sales.

     

    I'm not inferring they would compromise quality I find it strange that a niche product that they want to be mainstream would possibly raise prices in 2 areas on an already expensive luxury product that the company is dependent upon for success. It also leads me to believe that they may be worried about margins and making the advanced payments the Gov wants from them.

     

    I love the Model S, and hope TSLA success I still think this is an odd move. And like others suggested this isn't concrete yet TSLA is only considering.
    21 Nov 2012, 11:50 AM Reply Like
  • Randy Carlson
    , contributor
    Comments (1596) | Send Message
     
    Let's wait and see just what these price increases / equipment adjustments amount to.

     

    Equipment level adjustments in particular may have more to do with customer feedback and/or supply chain than any effort to adjust price. If, for instance, there is some feature that has proven difficult / expensive / time consuming in manufacturing (e.g. Holds up the line); or has proven to be relatively unpopular, it would be reasonable to make that feature optional, at higher cost. Just speculating here, but there are three different roof configurations - openable sun roof, all glass fixed roof and painted, body color roof - perhaps they will reduce this to two choices and/or make one of the fixed glass or painted roof options added cost.

     

    As for any overall price increase, this looks like a situation where they have a new product that is so successful they need to hire more people to "hold the door closed" lest the customers over-run their ability to deliver. Right now there is something like a 6 - 9 month weight between ordering and expected delivery. This isn't going to be a good situation long term, and having ramped up their sales effort by opening more stores, as well as facing an avalanche of rave reviews, "order generation" may be on track to exceed their capacity to produce Model S.

     

    Oh what a problem to have... Maybe the Government will step in and guarantee another big loan so Tesla can get another factory up and running right away. This is the problem when Government gets involved with "winners and losers". The losers lose and the winners win. Either way it just leads to more problems. Had we just stuck with horses and buggies, this would never have happened!
    21 Nov 2012, 11:40 AM Reply Like
  • TikiManProd
    , contributor
    Comments (126) | Send Message
     
    After owning one for just a few days now, I would have gladly paid $200k for this car, as it is FAR more superior than exotic cars that cost well over $350k.
    21 Nov 2012, 12:36 PM Reply Like
  • NervousCat
    , contributor
    Comments (26) | Send Message
     
    First impressions from Consumer Reports on the Model S was positive as well.

     

    http://bit.ly/Um5Ure
    21 Nov 2012, 01:12 PM Reply Like
  • jkaness
    , contributor
    Comments (68) | Send Message
     
    Demand exceeding supply? Wouldn't Chevy love to have this "problem" with the Volt?
    21 Nov 2012, 03:07 PM Reply Like
  • JRP3
    , contributor
    Comments (8072) | Send Message
     
    With the backlog Tesla has this is basically announcing a price increase for the 2014 model, not that unusual.
    22 Nov 2012, 09:00 AM Reply Like
  • fredforster
    , contributor
    Comments (2) | Send Message
     
    Sounds like a great way to help lock in current reservations and make them more real--a price increase sounds like a great idea with limited production available and great reviews. The laws of supply and demand ALWAYS work.
    23 Nov 2012, 03:14 PM Reply Like
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