Comment by mbreese
21 hours ago
I get your point. But look at this from Tesla’s point of view. Why should they care? They will want to sell as many cars as possible. If they sell me a car, that’s just one sale. However, every marketing book will tell you that it’s easier to sell to an existing customer.
If my car (an asset) has more resale value, I’m more likely to sell it to buy a new one. They should be trying to protect my resale value — if they want me as a repeat customer. Even if I want to buy another Tesla, if my resale value isn’t high, I’d wait longer to buy a new one.
Or, what I’m leasing the car (reasonable for an EV and used to have better tax incentives)? If the end of lease value is low, I have to spend more on the depreciation over the lease. That makes my monthly payment higher. Instead, if the end of lease value is higher, I have a lower monthly payment and I’m more likely to buy the car.
Either way, Tesla was good at selling one car. They need to get better at selling the second or third one.
If Tesla is dropping the price of their cars, then that means you can buy a new car for less. It makes no sense to want to overpay for a consumable item at time t+1, regardless of what you paid at time t.
If cost(t) >> cost(t+1), then I'm not going to be able to afford to buy that new car. I'm going to be underwater on that deal. That also means that Tesla has one fewer possible sale. I'm not overpaying for a new car, which means that if Tesla would like to have more sales, they should try to keep their prices more constant.
Remember, this is from the Tesla point of view... and it's a long time-horizon perspective. It's a much easier decision from the customer's point of view.
(And there are other ways for companies to incentivize sales with discounts and promotions that don't obviously impact the "value" of the car).