Tesla announced this week: “Yes, we will be announcing a Model S price increase in the near future."
While the mainstream press seems to think that the only aspect of EVs worth writing about is their high initial cost, and other manufacturers are trying creative ways to get prices down (such as Nissan, which has introduced more attractive lease terms for the LEAF, and will soon be producing a lower-priced model), the Standard Bearer of Silicon Valley plans to increase prices for its Model S luxury sedan.
Tesla announced this week: “Yes, we will be announcing a Model S price increase in the near future. However…the price increase will not apply to anyone with an existing reservation prior to the effective date of the price increase and who also configures their car and finalizes their order within a fair, predefined timeframe.” The company will announce full details of the price increase “in the next two to three weeks.”
Jay Cole of InsideEVs opined that Tesla is raising prices because it needs to improve its profit margins, and points out that every Model S produced so far has been a top-of-the-line 85 kWh model, which means that the company is moving the high-margin units today at the expense of having to sell lower-margin “standard” models next year, “stealing from the future for the benefit of today.”
Is this a desperate move by a company that’s rapidly burning through its pile of cash? Is Tesla shooting itself in the spare tire? Nah, probably not. Cole also notes that the company did the same thing with the Roadster, raising the price several times as it realized the car was more expensive to produce than anticipated. And let’s not forget that Model S is a luxury product, aimed at those who want to be seen to be (and have) green. High rollers with 60 or 70 large to spend on a ride aren’t likely to balk at another 5 or 10 (although they might start looking closer at a Fisker Karma).