The Tesla Model S Long Range carries a sticker price of $89,990, plus a $1,200 delivery charge. Just two days ago, it cost $5,000 less. Just 30 days ago, it cost $10,000 less.
Last October, the Model S had a price tag of $69,420. In ten months, the asking price of the least expensive version of the Model S has gone up by the cost of a Nissan Leaf (after tax incentives).
What is going on here?
Tesla doesn’t operate a public relations department to field questions from reporters, so we’re left guessing.
Two truths are worth pointing out.
Mid-Stream Price Increases are Normal for Tesla
First, Tesla operates differently than other automakers. While traditional car builders change their cars (and their prices) mostly between model years, Tesla makes improvements to its products on the fly and doesn’t recognize model years. Mid-stream price changes are perfectly normal for Tesla.
Demand for Teslas remains strong (the company set a new sales record in the second quarter). Prices for most cars are going up. And a worldwide microchip shortage has left most automakers with supply chain challenges. It’s not surprising that Tesla’s prices have increased under those conditions.
Second, while the cost is significantly higher than it was less than a year ago, it’s still competitive with its rivals’ prices.
This Price is Not Out of Line With Rivals
The Model S is a car that can do nearly everything. It’s white-knuckle-fast with comfortable seating for four adults and enough luggage space, between the front and rear trunks, for everything they could need. It has sleek good looks and an elegant, minimalist cabin. And there’s social cachet attached to owning one in some parts of the country.
Cars like that are rare. It’s not in a class of one, but the Model S sits in a classroom with mostly empty seats. The few cars that can make similar claims cost about the same. The 2022 Audi e-tron GT is in that category. It starts at $99,900. The 2021 Porsche Taycan is actually a relative bargain, with an MSRP of $82,700 (and it’s easy to push a Taycan into six figures almost by mistake – Porsche is famous for its exhaustive list of pricey options).
Wildly capable electric sedans are a relatively new phenomenon, and the market is still figuring out exactly what people are willing to pay for them. Stacked up next to what rivals ask, Tesla’s new price doesn’t seem irregular.
Wait Times as Big an Issue as Price
Buying a Tesla in this climate requires not just cash but patience. New delivery times on the automaker’s website show that a buyer ordering a Model S Long Range today can expect to receive it next April.
