Tesla Model S Price Dropping To $69,420 — Joke, No Joke
Tesla [NASDAQ:TSLA] CEO Elon Musk just announced on Twitter that the price of the Tesla Model S will drop to $69,420 tonight. If that number doesn’t stand out to you, great, you survived the 1990s, 2000s, and 2010s in a world I didn’t know existed! If the number does ring a bell, you know why. I’ll just briefly touch on the numerical significance before getting to the matter of the car itself and how it fits into the market.
The pop-culture reasons have nothing to do with Tesla except that Elon said a couple of years ago that he was considering taking Tesla private at $420/share, if shareholders agreed. Somehow, he got fined $20 million and Tesla got fined $20 million for that, and I don’t want to return at length to that topic, but I personally think the situation was that he had to choose between 1) settling with the SEC as he and Tesla did or 2) fighting the case for months and having Tesla smeared daily in the media with the insinuation that the whole Tesla empire would come tumbling down. While he chose the more sensible route, I believe he hated settling, despises the SEC for forcing $40 million out of Tesla and himself, and still holds a grudge about that. (I imagine I would, and I don’t hold grudges easily at all.) Also, given that Elon is sort of used to fighting hard battles and winning, I imagine the “alpha male” side of his psyche can’t drop the fact that he had to settle and essentially has the battle still simmering in the background. So, $420 references are a way to continue throwing jabs. I may be wrong on all or most of that — or none of it. In any case, though, I think we know who had the last laugh, even if the SEC did siphon off $40 million for a tweet.
As a final note on the number games, the Tesla community seems a bit split on whether to keep going with these. Some people absolutely love it every time there’s a $420 (or 69) reference, while others think it’s played out and time to move on. Here are two funny tweets (I like them both) presenting both cases:
Please stop. pic.twitter.com/0mENa8NFTd
— @jason (@Jason) October 14, 2020
— jordan (@AstroJordy) October 14, 2020
Regarding the pricing, the Model S is currently $71,990, and this is after a recent price cut. So, $69,420 is bringing the Model S into more competitive pricing territory for those looking for a large electric premium-class sedan. Some think it’s a response to the Lucid Air or some other competitors. I don’t know, but I don’t think that really matters. The Tesla Model S wins across all sorts of specs if you want the highest performance, highest tech electric sedan.
The main problem with Model S demand — assuming there is a demand issue that relates to the cost drop, and that it’s not just dropping in price because Tesla has lowered production costs — is the Model 3. I’ve owned both vehicles (a 2015 Model S and now a 2019 Model 3). The Model S has a few advantages, but so does the Model 3. I much prefer the Model 3. Some of the reasons for my preference are: 1) better touchscreen orientation (much better for watching Netflix, YouTube, or Hulu or playing games in the Tesla Arcade), 2) smaller size on the road (the Model S is a landboat, and I — like many others — don’t like driving or parking such large vehicles), 3) minimalist dash, 4) more mature design feels more seamlessly integrated throughout the car.
But some people do want more space, don’t mind the large size, prefer a hatch over a trunk, and want a more exclusive vehicle. In those cases, my presumption is that most buyers then go for the Model X. I would. If I had enough money, I’d have a Model X and a Model 3, and I’d use them for different trips depending on the nature of the trip. If money was no matter but I could only have one, I’m not actually sure which I’d choose, but I wouldn’t choose the Model S.
Comparing to other vehicles on the market or coming to market, I’m not really sure what people would be cross-shopping. The most referenced competitor is the Lucid Air. It does indeed have some of the most comparable specs and pricing. However, I feel like there are massive differences when you think about what customers want beyond the basics that define a high-performance premium-class electric sedan. Someone wanting something new, exclusive, and fresh would likely choose an Air. If you want to be a bit riskier than others and have the reputation that comes from being an early adopter, the Air looks like the top option in coming years. However, if you want to buy from the clear, established market leader and get it’s top-of-the-line product, you get a Model S. If you want the security, convenience, and ease of the Tesla Supercharger network, certain software updates if anything comes up, and the practically mass-market prestige and head-nod that now comes with the Tesla brand, the Model S is the way to go. Perhaps there are people torn between those options. I don’t know. But I am hesitant to think that’s the reason Tesla is dropping its Model S base price.
I actually met a man at a Supercharger recently who said he had an order in for a Lucid Air. He quickly noted the Model S he was driving was his wife’s, but also noted that he was mostly the one who drove it. He didn’t express any enthusiasm about that, and I was left wondering a few things, but there wasn’t much opportunity to chat. Did she want it just because she wanted the hottest electric car on the market, but then preferred to not drive and was concerned about driving and charging it for some reason? Was he more drawn to the Lucid Air because it was new and exclusive, the design somehow appealed to him more, or he didn’t like Elon Musk for some reason? Who knows? But, while this will presumably become an elderly household with both a Tesla and a Lucid, it didn’t seem like the man was having any trouble deciding which car he wanted, and there was no sign the woman would want to switch from the Tesla to the Lucid.
What are your thoughts on this matter? Or do you not even care much about this high-end portion of the electric vehicle market now that we have much more affordable, high-spec models out like the Tesla Model 3, Tesla Model Y, Volkswagen ID.3, and Volkswagen ID.4?
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