Tesla Owners Are Incredibly Unhappy About Recently-Announced Discounts

Tesla Discount Topshot
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It’s shaping up to be a suboptimal year to own a Tesla, unless you’re buying one now. First came accelerated depreciation, which Kevin Williams did a great job detailing. Used Teslas suddenly went cheap, possibly because the CEO is a rather divisive figure, although it might also have something to do with the stock tanking. Then a bomb dropped that could exacerbate this condition – Tesla slashed prices to the point of sneaking into federal EV tax rebate territory on a couple models. Check out Matt Hardigree’s article for more details on these price cuts. Propping up an artificially-inflated stock like Tesla’s requires perpetual growth, so massive price reductions should open up Tesla to a new audience. The downside, of course, is very unfortunate results for current owners who paid higher prices for their electric machines.

A quick glance at social media shows many Tesla owners complaining about depreciation, and we’ve rounded up some of those sentiments.

Tesla discount complaint

Of course, not every Tesla owner is upset about the discounts. Some see it as a great opportunity to grow the brand, like this guy here.

tesla discounts reaction

These Tesla markdowns remind me of when Chevrolet announced deep MSRP discounts on 2023 Bolt EV and Bolt EUV models, although Chevrolet Bolt owners seem to have reacted to the 2023 Bolt’s lower MSRP a bit less harshly than many Tesla owners are taking these price cuts.

Chevrolet Bolt Discount 4

Chevrolet Bolt Discount 3

Chevrolet Bolt Discount 1

Chevrolet Bolt Discount 2

So why do a bunch of Bolt owners seem to be taking the 2023 discount in stride while the general sentiment of Tesla owners towards recent discounts is hostile? Well, Tesla is a bit of a unique case regarding the customers it attracts and the financial decisions those customers make.

Let’s start with the customers Tesla attracts. S&P Global crunched the numbers on Tesla conquests from October 2021 through September 2022 and here’s what the firm found. BMW owners accounted for 6.7 percent of Tesla conquests, followed by Mercedes owners at 6.2 percent and Audi owners at 4.4 percent. That’s roughly 17.3 percent of owners new to the Tesla brand that should’ve been used to rapid depreciation. Worryingly though, a large number of Tesla conquests aren’t coming out of cars with high depreciation. Toyota and Honda owners made up 28.6 percent of Tesla conquests during that period, so I wouldn’t be surprised to hear that Tesla owners coming out of mainstream ICE cars weren’t expecting such depreciation.

0x0 Tesla Model 3 01

Such a dramatic drop in value could see some owners going from positive equity to negative equity overnight — a rather dramatic shift considering how Teslas appear to be stretch purchases for many. Marketwatch reported that Tesla owners took out the longest loans of any car brand’s owners during the first 10 months of 2021. This drop in value also comes off the back of numerous price hikes through 2021 and 2022, so like with most dips, those who got in early are likely better off than anyone who came in at the peak.

In addition to every owner, every dealer with Tesla-heavy inventory is left holding the bag. Eventually, they’ll have to take losses in order to shift units bought at the top of the market, digging into the bottom line. The whole situation is just a shit sandwich for everyone involved, and it could result in very real consequences.

0x0 Model3 16

So, let’s recap. On the plus side, Tesla’s discounts may bring more people into the EV fold by making new EVs with access to a reliable DC fast charging network more affordable. On the other hand, Tesla’s discounts will leave some owners underwater on their loans and kick dealers who bought high in the teeth. Perhaps overarching all else though, these Tesla discounts could be a sign that incentives are returning to the new car market. We’ll see in a few months whether this is a leading indicator or just a fluke.

(Photo credits: Tesla, Tesla Owners Worldwide, chevybolt.org)

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112 thoughts on “Tesla Owners Are Incredibly Unhappy About Recently-Announced Discounts”

  2. This day has been coming since the second Tesla rolled off the assembly line. As long as an EV was a status symbol, Tesla could command a premium when new, and retained value as they were attractive to used car buyers seeking status but who couldn’t quite swing a loan on a new one. The lack of styling changes helped here – was your Tesla an old one or brand new? Only your loan officer knew for sure

    Now with so many made and sold, there are plenty of Teslas available both new and used and so the novelty and status are wearing off.

    “You got a Tesla? Big deal. My uncle Louie got one parked outside his mobile home.”

    Additionally there now a rapidly increasing number of viable competitors in the marketplace.

    This combination of circumstances guaranteed that demand, and consequently prices would fall. Tesla can also easily afford to drop prices as development costs are paid off and so are the factories. They can now shift from a low-volume high-profit-per-unit model to a high-volume-low-profit-per unit model.

    This pattern is nothing new – someone above mentioned how the Model T pricing followed this path.

    Perhaps amore relatable example is the PT Cruiser – would you ever believe that there was a time that dealers were putting “additional dealer markups” on freaking PT Cruisers?

    https://www.orlandosentinel.com/news/os-xpm-2000-04-27-0004260470-story.html

    1. I remember those days! My dad was trying to get me to buy one and “put it away” because they were going to “go for some bucks” down the road. Maybe one day that will be true, but I’m rather glad I did not go that route and instead put my money into a boring old 401K and some low-end rental property.

  4. I am a bit disappointed. When it said who is buying Tesla’s i expected a percentage on how many clueless fedora wearing soul patch growing self involved Bros not percentage of buyers who switched.

  5. Well normal times, normal cars, at the end of the model year everyone knew wait til then markdowns best price you are gonna get. So Tesla hasnt changed at years end since they started building cars. So finally model end after a decade yeah price drop. Maybe buying a car off the internet not a good idea.

  7. Cars aren’t investments? ….well damn my current car appraised at 250k that cost a tic over 5k new wasn’t an investment?! Damn….I need to unload this pile ASAP! Maybe trade for a Tesla….

    2. Appraised or sold at? Two very different things. Also how long have you had it? Assuming 40 years like another poster mentioned, let’s do some math. Your initial investment to current appraisal at 40 years is a 9.82% interest rate. How much did it cost to maintain and store? What was the interest rate on the additional space you bought to store it in? Or maybe it was a monthly storage rental? Pretty soon your ROI is nowhere near what you would have had investing in an S&P 500 fund. Cars are not investments, except by luck.

    3. Okay now that you’ve posted this at least twice, are you going to tell us about this magical car that you bought for $5k and can now presumably sell for $250k?

  9. Next you’ll tell me stocks can drop in price, and the prices on necessities and interest rates can go up. It’s as if there were some sort of marketplace where the value of things changes with supply and demand or something.

  11. Well, the Model S has been in production for nearly 11 years now, and everyone knows, Ford famously made the Model T cheaper every year of it’s 19 year run through amortization of tooling and development costs and expanding economies of scale, so Tesla really ought to be in that position now.

    2. Financing a car is fine if you can get a reasonable interest rate and you have a sizable downpayment…be it in cash, a trade in, etc. That way you can get out of it if need be and if the market goes bananas you aren’t suddenly underwater.

      …I have a feeling that the sort of individuals who would finance a Tesla are probably not in that position. Oh well. They’re problem, not mine. I’m not the one who stretched myself financially to clout chase.

    3. If you have a decent down payment, keep the finance terms well within the useful life of the vehicle and the interest rate is less than inflation there is nothing wrong with financing a vehicle.

      I can’t speak for the current situation since the economy is unsettled, but there has been a 0%-2% interest rate finance plan available at the dealer on my last few cars. It makes more sense to pay that later with ‘cheaper’ money as inflation happens.

  13. Laughs from Chevy Bolt seat.

    1st the recall, which meant an EV with decent performance/space/range was worth the same(or less) as compliance EVs with half the range(e-Golf, Kia Soul)
    Then the MY 2022/2023 price reductions, which meant less of a bump, if any from the used car market shortages, and still the same(or less) as compliance EVs with half the range.

    Cars, especially daily driver mass produced, are not an investment, if you get lucky maybe you break even, if not, depreciation is part of the cost of ownership.

  14. Compounding the price cut, I can think of at least two other factors. The 3 year leases on Teslas bought during the ‘tent years’ of horrific quality control are coming up, and those customers now have oodles of choices from companies with deep experience in making… cars. Additionally, contrasting modern driver aid packages against Autopilot isn’t a slam dunk for AP anymore, which takes a lot of the value-prop out of the equation.

    Oh, and the CEO is vocally trending, shall we say, to the starboard; and it’s not like his image was in a good place to begin with. This is the same guy who put a model in a silver bodysuit and called it a robot; hacked, spied, and hired private investigators to retaliate against a whistleblower, and dug a tunnel under a single building in Vegas and hasn’t done another one since. At some point we have to stop thinking visionary and start thinking some combination of luck and cocaine.

  16. It’s as if people did zero research on a giant purchase. Now reality happened and they’re mad they couldn’t stay in their fantasy bubble any more.

    There were tons of articles about Tesla jacking prices because their demand far outstripped their manufacturing capacity. That’s high school level economics stuff. Tons of articles about demand causing inflation in the middle of the pandemic as well. And finally tons of articles about how supply chains easing resulted in inventory once again causing prices to stabilize or decrease.

    Go have the Elon-bot make a whaaamburger and French cries serenaded by the world’s tiniest violin.

  17. This is likely little consolation to those who feel they were wronged by the price cut, but if you felt good about your purchase in the past, then you should continue to feel good about it now.

    Let’s say it’s the long ago time of December 2022, and you are car shopping. You land on a Tesla and decide to pull the trigger. When you signed the check (or set up the financing… whatever), you’re implicitly saying: “I am comfortable with the value that I am getting for the money.” Otherwise, you wouldn’t make the deal, right? Fast forward to today, and it’s still the same car… and Tesla isn’t asking you for *more* money, so nothing about your deal has changed. You were fine with it then, you should be fine with it now, too. Other people are now being charged a different amount, but that doesn’t affect you — you’re not them.

    I understand that the feeling sucks. We all want to get the best deal we possibly can. But life’s too short to dwell on what-ifs.

    3. You are making good points. And to be fair to the disgruntled owners, I think (anecdotally, based on looking around me) that a lot of Model 3/Y owners are younger people for which this might have been a first brand-new car ever; so no experience with the good old first year depreciation. To them I say: “Welcome to the club!”

      However, price drop or not, used Teslas are still depreciating a lot less than average.

    1. Hey jblues none of that you are getting really close to hurting the feelings of idiots who blunder through life blindly and expect the rest of the world to take care of them.
      Helicopter parents totally screwing up their kids for life.

  19. I frequently use the following on another site to describe the current situation at Twitter:

    “The clusterfuck continues unabated.”

    I feel like it’s beginning to apply to Tesla too. Constant price changes do not project a sense of stability which I believe is something people want from the manufacturer of their first or second largest purchase.

  20. In a few years, those cars will be $6995 at a buy-here-pay-here lot, with batteries that only charge to 60% capacity and a bunch of dead pixels in one corner of the screen anyway. It’s a car. It depreciates the moment you buy it and goes downhill from there. What, did they think a Tesla would somehow be magically immune?

    1. To be fair, a janky Tesla for $6995 would be a hell of a deal. Even with 60% battery capacity, you would still have a 150+ mile range. Worn out Teslas are going to be great budget-friendly commuter cars.

      1. I am not sure that Teslas will deteriorate gradually, like ICE cars do. I think it’s more like the life cycle of a phone or a computer:
        -100% functionality
        -99% functionality
        -90% functionality
        -brick

        1. I’m not sure I agree with that. First generation Leafs seem to be degrading rather than bricking. Catastrophic battery and drive unit failures are rare. Plus, in 15 years, there will be a lot of wrecked or otherwise junked Teslas to scavenge parts from.

          1. Uhhuh. Sure.

            https://www.youtube.com/watch?v=1PWlkAZCojg
            Nothing like paying thousands of dollars to get Supercharging turned back on and they just turn it off again anyways.

            And yeah, this is a company I want to have permanent irrevocable root access to the car which cannot be disabled or disconnected.
            https://tiremeetsroad.com/2021/03/18/tesla-allegedly-remotely-unlocks-model-3-owners-car-uses-smart-summon-to-help-repo-agent/

            And oh yeah. I’m sure they’re going to ensure cars which literally require working cellular signal to run at all will work when the cellular network they depend on sunsets.

        3. I don’t agree that’s the life cycle of computers or phones anymore. Both have way longer life cycles than companies selling them would like to admit. My 2016 iPhone SE that I’m no longer using, because my cell phone provider replaced it with the 2020 a couple of years ago, is still in excellent shape. Battery is at 85% factory charge, it’s fast and I shit you not, sometimes I miss it because of the form factor and the fact that the battery actually lasts longer than the one in the 2020 whose battery health is at 95% (that’s what bigger screens tend to do).

          My work laptop is a 2009 MacBook Pro that I’ve upgraded and repaired extensively over the years. It handles processor-heavy tasks just fine and even video editing (rendering times are out of this world, of course), only thing I can’t really do with it is play recent games. The CD/DVD drive is gone, and there’s some power management issues, so functionality is certainly below 90% these days (but hey, I ran the OS via USB in an external drive for quite a while, while I tried to figure out what was wrong with the HDD flat cable, before giving up and going for a drive in place of the dead CD/DVD drive, and it was still usable). I can guarantee it’s still pretty useful and will get fixed rather than replaced for as long as it’s possible.

          I’d argue the same thing can be true with EVs, with some key differences: cars are a bigger expense (I refrain from calling cars investments) than phones or computers, so there’s more incentive to fix things. Most people won’t be looking for the new EV model the minute it comes out because it’s fashionable. You’ll see more and more specialised shops – eventually the niche will be ICE mechanics – and you’ll have owners learning how to fix these things themselves just like you’ve had all these years with ICEs (only EVs will likely be simpler to fix, with less mechanics to break and more electronic modules to just swap out). Batteries are still a big problem, sure, but I suspect we’ll realise that given the potential for a longer lifespan of EVs, it will make sense to replace dead batteries, especially if battery tech improves and retrofitting is taken into account. We drop transmissions and engines in ICEs all the time and swap them out with used ones from totalled cars like it’s no biggie, it’s not that hard to make a parallel with swapping out dead batteries with slightly used ones.

          1. I used a 2010 MBP everyday until last fall. Everything works fine…except the battery which was down to like an hour of time away from an outlet. Replacement batteries all have not so great reviews, so I never pulled the trigger on one.

            Of course a replacement battery for that laptop was like $90 (on a $2000 when new computer), compared to the price of a battery for a Tesla Model 3, which is apparently at least $10k (on a $50-60k vehicle). The Tesla battery is a much more bitter pill to swallow compared to the price of the “device” it is in.

  21. I understand why Tesla owners are annoyed that their vehicles are worth less (I would be annoyed if I were in their position), but I don’t have any sympathy for them. Cars are NOT investments. The rate of depreciation changes, but cars always depreciate. If your car losing 15% of value is a major financial crisis, you can’t afford the car you bought. I don’t even want to hear about negative equity in a Tesla. If being underwater on a Tesla is even a consideration, you should have bought a used Hyundai. A Tesla is a luxury item and not a necessity.

    1. Cars aren’t investments? ….well damn my current car appraised at 250k that cost a tic over 5k new wasn’t an investment?! Damn….I need to unload this pile ASAP! Maybe trade for a Tesla….

      1. New cars aren’t an investment, although there are rare exceptions. Based on your car’s new price, I’m assuming it’s at least 40 years old. Classic cars can be an investment. My own classic that I bought for $4k 20 years ago is currently valued at $63k.

        I’m still not calling that an investment though, because I’m not selling it.

        1. Even with classic/collector cars that could legitimately be considered “investments” you still have to factor in the cost of maintenance, repairs, insurance, storage, etc. Once all costs are factored in, I doubt there are many vehicles that deliver a return anywhere near that of an S&P 500 index fund. I see classic/collector car appreciation as a nice bonus (and maybe an excuse to buy a vehicle) and not a return on an investment.

          1. Like anything, there are probably a few people who buy at the right spot and see a ridiculous return. Watching the Barrett Jackson or Mecum auctions on TV, they’ll always mention “you could buy a Hemi Cuda for $500 in 1985” or something like that.

            I know someone who grabbed a 4th gen Supra TT right before they blasted off. He is probably pretty happy with it, but didn’t buy it as an “investment”.

            But just like stocks, most people are probably late to hop on the train of a collector car bandwagon and see an amazing return.

    2. How do you think the leaders at CarMax and Carvana feel about now. Hundreds of cars they are upside down on in 1 night. Almost makes me feel bad, almost.

    3. Exactly. Buy a car to drive. Remember that investments can lose money as well as gain it. Now, I can predict the return on my car. I paid $8500 for it in 2016, and when it’s time to sell it, it’ll be worth $250 (adjust for inflation) from the junkyard. After 6 1/2 years, the overall cost has been $0.60/mile ($0.35 if you exclude purchase price), or a bit more as sometimes I forget to log insurance payments.

      Investment? Nah, those are with my broker.

  22. Alternate headline: “Tesla Owners Respond Like a Bunch of Tesla Owners in Response to Big Price Cut”.

    This isn’t Costco. You aren’t entitled to a price adjustment if you bought in the last 30 days. You were plenty happy to pay whatever price for your car. Sometimes you win, sometimes you lose…. deal with it.

    1. Yeah, I mean, does anyone think of buying a car as an investment? Even if you did, the entire point of “investment” is that you take a risk, and if you are lucky, you earn money from it. If you are unlucky (or unwise), you lose money.

  23. Am I the only one out here chuckling to himself? Nice work Elon. You took a halo product and moved into ‘I don’t want to be seen driving this car” territory in a few months. Reminds me of Hummer.

    1. The word you are looking for is “schadenfreude.” And yes, I have been experiencing a lot of schadenfreude with the recent occurrences at Tesla and Twitter.

      He’s still a billionaire, though. I’d trade all the schadenfreude in the world for a billion dollars.

  24. It feels like these posters have only experienced the car market for the last 2 years or so.

    “My brand new car dropped 10% in value overnight!” Yeah? It’s weird you took delivery of it overnight, but that sounds normal.

    Unless something unexpected happens in the guidance released in March, these prices probably go down as another bit of Tesla lore and get jacked back up to more normal levels after the rebate window closes. Whether that will have a further chilling effect on buyers is another matter.

      1. Or their meme stocks. Or their crypto. Or their tulip bulbs.

        LOTS of people out there have never really lived outside of an easy money, expansionary economy. Even for those of us who have, it’s been a long time. Doubly so with the weirdness of 2020-21.

          1. Google says you’re right. Learned something new today.

            And developed a great new way to make people end pointless stories. Nobody is going to keep talking to the guy that just randomly yanked a flower our of the ground and started gnawing on its bulb without breaking eye contact.

        3. Suckers. I cashed out my retirement savings back in September and dumped it all into pumpkins, demand for those things was growing exponentially all through October. Haven’t checked the market since 10/31, but I have to assume the trend’s been continuing

        4. Tulipmania is a great book on the Tulip Bubble. I’ll admit it sat for quite awhile after it was given to me, but it turned out to be a fun read. I had no idea there was so much skullduggery in horticulture! Dyeing bulbs, painting individual flowers, betrayals-even murders. It’s known as the first futures market, and serves as a great cautionary tale. The South Sea Bubble is fun too.

          I learned from those: I invest in shitboxes. At least I know what I gots.

    2. Its because people are accustomed to not thinking of Tesla as a durable goods manufacturing company and instead putting into its own special category that defies all categorization and direct comparisons with any competitor. No, they’re a car company, they make cars, welcome to how the car market works. You lose value as soon as you drive off the dealer’s forecourt, that’s how it works, that’s how it always works. A brand new car is not an investment, there are some vintage models that are, but, even then, not as many as people often assume

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