Tesla owners slam Elon Musk after slashing car prices by thousands of dollars: ‘I feel cheated’

Marianne Simmons, a self-proclaimed “Tesla fan,” bought her second electric car from the company in September: a white, high-performance Model Y for more than $77,000. Then the company dropped prices on Thursday, and he realized he could buy the same car today for $13,000 less.

“I feel cheated. I feel like I’m used as a consumer,” said Simmons, 32, a web designer in Naples, Florida. “Right now I have $13,306. This is such a big discount that it will affect a lot of people who have just bought a vehicle.”

That’s the reality facing owners of Tesla Inc cars after the company slashed the price of its cars by up to 20%, part of Chief Executive Elon Musk’s bid to boost sales amid sluggish demand. For existing customers, the resale value of their pre-owned vehicles will be affected along with the lower prices of new models.

“It’s a kick in the teeth for any existing owner,” said Ivan Drury, director of insights at research website Edmunds.com. “Anyone who has recently bought a Tesla will feel an immediate impact on their desire to lease it.”

New-car price cuts will hit used cars immediately, Drury said, and could drive down values ​​even further. New-car buyers want that new-car smell, he said, so used-car prices may drop more.

It’s an age-old problem in the auto business: Consumers buy a car only to see a discount announced a few days later that saves them a few thousand dollars. This time is different because dealer discounts are often limited-time sales, and Tesla’s discounts are bigger than the typical discount.

To be fair, Simmons and other Tesla fans aren’t the only car buyers to see resale values ​​drop. Used-car prices fell 15% in December, while new ones hit a record average of nearly $50,000, according to researcher Cox Automotive.

Tesla’s price cuts were the biggest among new car dealers. Its more expensive models took the biggest hit. Model Y base prices are down 20% to start at $53,000, while the performance edition of the car Simmons bought is down 19%. Plaid output of the larger Model S sedan is down 14%.

Austin Flack, a television producer in Los Angeles, said he listed a 2018 Model 3 with the Full Self-Driving Beta software package for about $51,000 in December, but dropped that price to $36,000 near the end of the year because Tesla canceled incentives. He said he would likely have to drop the price back down to $30,000.

Jack Bradham, a cloud services developer in Charlotte, North Carolina, said he was worried about the devaluation of the black Model Y long-range vehicle he bought in December.

Bradham, 46, said in a phone interview that he ordered the car late last year and had to wait until January to receive it. Then he got a call from Tesla sales on Dec. 10 saying he could buy a car before Christmas. He said he was excited for the early delivery and agreed to buy a $69,000 EV.

Now, he said, he had to wait because he could get a discount if he delivered in January; the same car is now $12,000 cheaper.

Bradham said he understands that people sometimes miss a sale, but what worries him is the size of the price cut and the lack of communication with the company.

“There is no one to contact. I called, I wrote a tweet, but there was no answer.”

Andrew Checketts of Santa Barbara, Calif., said he took delivery of a seven-seat Model Y in early December after Tesla “hounded” him with text messages offering a $3,750 discount. If he had waited a month, he could have bought the car cheaper.

“I have planned to install solar energy soon. I’m really having a hard time paying Tesla more and I can’t even look at the car this morning,” Checketts said in an email. Instead, he said he was driving a Prius today.

Tesla’s prices have been up and down in the past year. The company raised prices from 3% to 5% in March, when a semiconductor shortage caused production cuts in the auto industry and automakers and dealers both fetched top dollar across all vehicles.

The company then cut US prices by $7,500 in December, leading analysts to believe demand for its EVs was softening and adding to the stock rout seen for most of last year. Tesla shares are down 69% through 2022.

Tesla also cut prices in the US and China at the end of last year. In a tweet on December 22, Musk hinted that he would cut prices further to avoid further economic headwinds. “If you want to increase unit volume, you have to adjust prices downward,” he said.

Bradham, a developer of cloud services, said he hopes Tesla will give end-buyers some kind of break, such as free charging. Simmons said the company should offer Full Self Driving for free.

Still, Tesla owners have little recourse.

“I would never buy a Tesla again,” Simmons said. “That says a lot to me. I was a big Tesla fan. I’d go with a competitor like Lucid or Rivian.”

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