Thoughts on Another Tesla Model 3 Price Drop This Year?

mboy on 08/07/2024 - 13:18
Last edited 08/07/2024 - 13:32

I'm in the market to buy a new Tesla Model 3 LR. As many of you know, Tesla have dropped the price of its Model 3 LR three times this year (see this chart for price snapshots over the last 5 years) as a result of increased competition, particularly from Chinese EV makers entering the Australian market.

I wouldn't say I need a new car urgently, but my current car is 20+ year old BMW and is starting to show its age. I feel like the longer I wait, the greater the chance I'll be up for some expensive mechanical repairs.

But I also don't want to buy a new Tesla and have the price drop $3k a week after it's delivered - and I feel fairly strongly that another price drop is inevitable because the turnaround times for the Model 3's are all 1-2 months (same as a few months ago), which says to me they're still overstocked.

I was expecting a price drop to happen on the 1st July (due to the same happening in previous years), and I would have put in an order, but that didn't happen so now I'm playing the waiting game. A family friend of mine is in the exact same boat. Curious to hear everyone's thoughts; is another price drop coming this year?

And a few quick notes in a attempt to weed out some inevitable anti-Tesla commenters (this is Ozb after all):

  • I'm not a Tesla fanboy; I've never owned one and I'd never even been in one up until 3 weeks ago. I've test driven 4 EV mid-range sedans in the last 3 weeks and carefully considered their differences. The BYD Seal value proposition is slightly better compared to the Model 3, but I found the test drive disappointing. I test drove the Seal and Model 3 on the same day about 2 hours apart and I felt like the difference was night and day. Happy to elaborate if anyone cares.
  • I actually (horror of horrors) like the look of the Tesla minimalist interior.
  • I'm not thrilled about the absence of a heads up display and gear stalk. I will say I went into the test drive very confident that they would deal breakers, but I ended up adjusting quickly and completely forgot about them during what was an otherwise beautiful drive.
Automotive Car Electric Vehicle Tesla Inc

Comments

  • randomusername2017 on 08/07/2024 - 13:36
    +1

    Happy to elaborate

    Will you change username to m3boy when you purchase?

    • mboy on 08/07/2024 - 13:41

      Nah

  • Drakesy on 08/07/2024 - 13:38

    Is the pope catholic?

    • mboy on 08/07/2024 - 13:48
      +2

      I suppose I'm not wondering whether the pope is catholic or not, but rather whether he's going to be much more immediately catholic in say, the next 4-6 weeks.

      • Drakesy on 08/07/2024 - 13:52
        +2

        I'd say around 12 weeks given the quick fire nature of the recent decreases. Also the AUD is getting progressively stronger by the day.

  • rambutann on 08/07/2024 - 13:40
    +6

    EV's will continue to decrease in price. There's plenty of competition that is yet to enter the Australian market, and EV's are already sold for significantly less in other markets (e.g. China).

    You'll be waiting a while before EV's start to plateau in price. I wouldn't let the decreasing price turn you off buying one..

    Do some math on a novated lease - you'll realize its silly not to get one on a novated lease..
    For my situation I calculated I was better off with a brand new EV on a novated lease over buying a $30k ICE SUV over a 5 year period.
    Everyone's situation is different though.

    For context, I have a Polestar 2. I would have purchased a Model Y if it had more range and a driver display.

    • mboy on 08/07/2024 - 13:46
      +1

      Great reply, thanks. Don't worry, I've crunched the numbers on a Novated Lease so extensively that my own excel analysis almost rivals @changyang1230's "EV Novated Lease Calculator". And I definitely agree, the savings are significant and this is a very large part of why I'm going EV.

      Even over a period of just 2 years, I'll end up in an approx. $17k better position compared to if I pay cash upfront for the same EV (Tesla Model 3 LR). And that figure also takes into account the impact on my home loan offset over 2 years, which makes up about $7k of that figure. If I go for a longer term, the savings are greater, but I want to hedge my bets as far as being stuck with the same employer and not having to deal with the headache of moving the lease across to a new employer.

      • rambutann on 08/07/2024 - 14:26
        +1

        Yeah I certainly went full yolo on a 5 year lease.. you can always commit to a 2 year then renew the lease.
        I figure my next job will be in a similar size business who would have a similar appetite to take on a random novated lease bill once a fortnight - but if I was at a larger organization I would have gone a shorter period.

        • freefall101 on 08/07/2024 - 18:47

          I'm doing the switch over at the moment, my former and current employer both support the same lease company but it's still a nightmare - presumably being end of financial year isn't helping but I've been in the new job 3 weeks now and no action.

          Worst part is that I organised my insurance through said lease provider, they can't even tell me if my insurance or loan repayments are being made, because it's different departments to close off the old lease and start up a new one (they can't just transfer it).

      • Hellcrusher3304 on 08/07/2024 - 14:34

        Where can I find this "EV Novated Lease Calculator"?

      • changyang1230 on 08/07/2024 - 20:16
        +4

        Thanks for the plug - glad to see people find it helpful.

        https://www.reddit.com/r/AusFinance/s/VHJ25VpNKu

        While every novated lease company would have their own version of novated lease calculator, vast majority of them are biased and play a bit of mathematical tricks by using weasel language such as “tax saved” while trying to divert your attention away from other aspects where they are rorting you.

        In other words, a lot of the generic figures of “saving” you see on those website is “saving compared to if you had a 12% car loan” or something to similar effect - which is not a valid comparator as the honest comparator is cash or a car loan with much lower interest rate.

        My spreadsheet clears up these intentional misdirections by calculating the NET effect by presenting cash flow, asset and liability, and allows one to compare NL vs cash from offset vs car loan, and then comparing between getting a new car vs keeping old car. It’s independent and free (with optional tips to replenish my coffee stocks).

        Other additional features not found in generic websites are impact on government subsidy and super guarantee. These also help you decide the overall value of novated lease should you consider it.

      • vasya on 09/07/2024 - 13:48

        what financing interest you used to get the $17k advantage?

  • [Deactivated] on 08/07/2024 - 13:50
    +1

    If you can't aford a Tesla today, just wait a month. Even if you can afford it, just wait.

  • Zoop on 08/07/2024 - 13:54

    The LR is at a pricing sweet spot right now.
    If anything, the price would go up.

    • mboy on 08/07/2024 - 13:56

      Hmmm.. I've been wondering this myself. It's not outside the realm of possibility, but the supply seems to be quite high. The turnaround for the LR's is 1-2 months, which is equal to the quickest it's ever been AFAIK..

      • Zoop on 08/07/2024 - 15:48
        +2

        You're not wrong - its interesting times ahead for sure.

        I'm a middle adopter - I bought in Aug 2021. So I had a decent price drop (from May that year), but also, I got the older Intel processor.
        The newest Model 3 comes with the following improvements (non exhaustive list):

        AMD Ryzen processor
        Better screen (seems like higher resolution, and sharper display overall)
        2 boot motors (mine only has one, and 1/2 the time it just beeps twice and fails to open! - might put in a service call for that)
        Double glazed glass all around
        Doors seem to close with a satisfying thunk, and even without using much force, the weight of the door closing on itself securely latches each time.

        The above improvements are important to me - but not important enough for me to want to fork out an almost $25k changeover cost. More like $35k changeover cost if I trade it in.

  • pharkurnell on 08/07/2024 - 13:57
    +1

    But I also don't want to buy a new Tesla and have the price drop $3k a week after it's delivered

    That is guaranteed.. no matter what the new price is. No matter what car you buy

    • mboy on 08/07/2024 - 13:58

      Sure, but I meant the "new car drive-away price". I thought that was implied by the talk about price drops.

      • pharkurnell on 08/07/2024 - 14:08
        +1

        If the supply and demand stay as it is, its bound to drop more with more ship loads on the way.

  • Downvoter on 08/07/2024 - 14:44
    -3

    Model 3? Gross

  • MITM on 08/07/2024 - 15:17
    +1

    Towards the end of this qtr ?

  • coffeeinmyveins on 08/07/2024 - 15:34
    +1

    But I also don't want to buy a new Tesla and have the price drop $3k a week after it's delivered

    Ok…..the same argument could be made about buying a mobile phone. in which case you'd never own one?

    What tangible impact would it have on your life if the car did drop by $3k, or even $5k, after you bought it vs waiting for that to happen?

    I actually (horror of horrors) like the look of the Tesla minimalist interior.

    come back to me when you have reversed or changed the air con in a few months

    • mboy on 08/07/2024 - 15:49
      +1

      Ok…..the same argument could be made about buying a mobile phone. in which case you'd never own one?

      You're not wrong insofar as a car costing under $2000 would mean I wouldn't be worrying about this (or not anywhere near as much).

      What tangible impact would it have on your life if the car did drop by $3k, or even $5k, after you bought it vs waiting for that to happen?

      I suppose I'd be kicking myself for not having waited a bit longer when I already had an inkling it might drop again soon.

      come back to me when you have reversed or changed the air con in a few months

      Can you elaborate on the air con part? Are there known AC issues, or are you talking about the absence of physical buttons?

      • Zoop on 08/07/2024 - 16:40
        +2

        Not sure if this is what coffeeinmyveins is referring to, but this is my take on the AC in the Model 3 - the musty smell is a constant bugbear of mine.
        Have a look at this - it describes the issue perfectly. https://www.youtube.com/watch?v=vQxP6PaSmLc

        I don't believe that they've resolved it or improved it in any way on the new version.
        I've removed the plastic shroud so water doesn't funnel into the air filter anymore - so its a non issue for me - but most people don't want to have to fiddle with their car like that.

        • Drakesy on 08/07/2024 - 17:53

          Bahah, jesus that's a big oversight.

          Good get.

          Still want one though.

        • mboy on 08/07/2024 - 20:54

          That's a great video, and good to know. So before you removed the funnel, you were having this issue?

          • Zoop on 09/07/2024 - 05:42
            +1

            @mboy: Constantly.
            Car’s always in the elements as I don’t have a garage.
            It’s less of a problem if you’re mostly parked undercover.
            Google ‘Tesla aircon musty’ or ‘Tesla bad smell’

  • Euphemistic on 08/07/2024 - 16:09
    +3

    So youre betting on price drop vs mechanical failure? Id say youve got fairly equal chance of you're current vehcie costing $3k vs tesla dropping prices by the same.

    Buy it now. Waiting for the next big update/price drop is a never ending cycle.

  • JimmyF on 08/07/2024 - 18:34

    But I also don't want to buy a new Tesla and have the price drop $3k a week after it's delivered - and I feel fairly strongly that another price drop is inevitable because the turnaround times for the Model 3's are all 1-2 months (same as a few months ago), which says to me they're still overstocked.

    Ok, so wait….. But what if you are wrong and the price goes up?

    Also its $3k, who cares, its a car. Its going to near worthless after 10 years anyhow.

  • Pradakuma on 08/07/2024 - 18:51
    +2

    two factors
    1) Tesla increased price recently in the states (USA)
    2) Chinese car with tariff will impact the final price for consumer in the end

  • ATTS on 08/07/2024 - 20:01

    Curious what reasons u pick the tesla vs byd seal?
    Also why not buy used?

    "
    Happy to elaborate if anyone cares."

    • mboy on 08/07/2024 - 22:23
      +4

      Curious what reasons u pick the tesla vs byd seal?

      First of all, let me say the BYD Seal was by no means bad and it didn't feel cheaply made, like I had read from some faceless internet people (even a few here on Ozb). For me, it just didn't impress the same way the Model 3 did:

      • The brakes on the BYD were way too oversensitive / grabby. I had to make a very conscious effort to lightly tap the brakes to avoid being jerked forward. When I mentioned this to the BYD lady who rode along on the test drive, she changed the brake sensitivity to 'Comfort', but surprisingly it didn't seem like it made any difference at all. Meanwhile, the Tesla's brakes felt very natural and handling felt sportier and more responsive; it was just a much more enjoyable drive overall.

      • The suspension on the BYD was floaty but also felt a bit odd, like the car was slightly swaying left and right over uneven road. This one's hard to explain, but it was an even bigger bugbear for me because the BYD dealership was very close to my house and therefore I was travelling down roads I had driven down hundreds of times before with multiple vehicles and never felt that sensation. The suspension on the Tesla felt much more comfortable by comparison.

      • I was really impressed with the software on the Tesla. I got a kick out of just exploring the UI while I was parked. It felt intuitive and easy to navigate and the 360 cameras did a great job of showing the car's surroundings. The BYD's software wasn't terrible, but it certainly didn't impress in the same way.

      Also why not buy used?

      Honestly, no good reason. Maybe I should test drive a few older Model 3's and see if they impress in the same way before I buy new.

      • ATTS on 09/07/2024 - 08:28

        I see thanks for sharing!

  • drewbytes on 09/07/2024 - 07:13

    I can't see the price being reduced much further, if it is it will only be small amounts. Don't forget, at various times over the past few years Tesla has also raised prices. I think now is a great time to buy an LR, they are fantastic value at the moment. I have a 22 3LR that I bought at a low point, then the price went up considerably a couple of times in 22, and is now down below what I paid by about $6,700 (if you include 19" wheels).

  • Tigerstu on 09/07/2024 - 08:30
    +3

    I kinda think if you're planning on keeping the car for 10+ years (as you did with your BMW) the depreciation and risk of a price drop this year is not really an issue.

    We recently upgraded 2 Hyundai Ioniqs (2020) to 2 Model 3s. Got the 2023 LR discounted when tesla were selling off all they old models. Both are on novated leases (did self managed lease) and we plan on keeping them for a long time. So haven't been bothered by the recent price drops.

    • vasya on 09/07/2024 - 14:06

      How do you arrange a self managed lease? Does it depend on your employer support ?

      • Tigerstu on 09/07/2024 - 14:19

        Yes, depends on the contract your employer has with whatever lease companies. I'm with health in Tas, only contract it with Maxxia (AVOID) but we can arrange a self managed lease through them. I arranged finance and everything through NLA who did everything, even email templates to maxxia with set up instructions.

        • vasya on 09/07/2024 - 15:01

          OK thanks.
          What interest you got with your financing?

        • changyang1230 on 09/07/2024 - 15:38

          I always find it fascinating that Australia's middleman industry is such that another middleman can act as the middle-middleman between you and the middleman such that in the end there's still some cream left for you, the middleman and the middle-middleman.

    • cloudy on 09/07/2024 - 18:53

      I kinda think if you're planning on keeping the car for 10+ years (as you did with your BMW) the depreciation and risk of a price drop this year is not really an issue.

      care to explain this???

      • Tigerstu on 09/07/2024 - 19:30

        Buying a new car is not an investment, it's a purchase. I fully understand many people only want to own a car for a limited time, and then sell for a percentage of purchase return. For others, buying a car and keeping it for long term is the goal. I decided when I purchased my recent car, that it was worry the purchase price, I'll keep it for 10+ years, and then no expectations on selling it second hand and having a return. My expectation is I get nothing for it.

        • cloudy on 09/07/2024 - 21:40

          Yeah, i see this self justification all the time. I can fully understand the phycology.

          The way i see it is pretty analytical, and if you have an reasonable expectation of price drops, is it reasonable to wait?

          I think its easily yes.

          Say you expect it to drop 3k soon. In 10 years time at current interest rates that worth around $4500, or even more with your longer 10+ period. Instead you expect it to be worth zero.

          Now, i don't buy a car with a view of it being an investment, but I think it's wrong to write it off and say it's not worth saving a few grand

  • MELso on 09/07/2024 - 12:59

    I'm in pretty much the same boat @mboy.

    I have a 14 year old French luxury car that, while it hasn't had any significant issues to date (other than a DPF failure about 4 years ago), is getting to the point where seals and plastics may start wearing out, leading to reliability problems, and where insurance premiums for comprehensive insurance are taking off (as pretty much any accident will see it written off).

    I'm contemplating a Model 3 as a replacement (in part because I feel it's almost rude to turn down the middle class welfare that is the FBT-exemption on novated leases of EVs). However, I've decided to hold fire for now because I want to see what the Model Y 'Juniper' update brings as a hatchback is more practical.

    There is a risk that Tesla will increase prices in the meantime, but it appears small because, unlike the US and Europe (where tariffs are being imposed on Chinese EVs), Australia is a prime target for Chinese EVs so I'm expecting prices to keep falling as Tesla has to compete. Further, Tesla's production processes appear to be getting more efficient (so much so that if media reports are to be believed, there's a glut developing).

    The bigger potential risk is a change of Government in the next year, because I couldn't see the Coalition sticking with the FBT exemption, so it may go earlier than the mooted 2027 review.

    • mboy on 09/07/2024 - 13:08

      The bigger potential risk is a change of Government in the next year, because I couldn't see the Coalition sticking with the FBT exemption, so it may go earlier than the mooted 2027 review.

      Well now you've given me something else to worry about, because if the FBT exemption is removed early then the whole Novated Lease plan explodes in my face. You think that's a real possibility? Have the coalition or anyone in the party indicated that they might want to do this?

      • Tigerstu on 09/07/2024 - 14:17
        +2

        Once you're on the novated lease, you should be FBT exempt for the length of the lease. As long as you commence it before any changes to legislation. So shouldn't be an issue

      • changyang1230 on 09/07/2024 - 14:18
        +2

        I think any lease that has already started will simply be grandfathered, instead of people being forced to start paying FBT for their pre-existing leases. Similar to what's happening to all the leases for PHEV that is started but will go beyond April 2025 till the end.

        • MELso on 09/07/2024 - 16:14
          +1

          Yes - to apply FBT to existing leases would be to have a much broader chilling effect beyond EVs as no-one could make any investment with certainty about its tax treatment.

          But should there be a change of government, I doubt any new leases would be FBT-exempt beyond a certain date (just like PHEVs and their 1 April 2025 cut-off). I'd expect a 1-2 month grace time though due to the substantial cost involved in buying a new car rather than a budget night announcement. Still, it's a good reason to act sooner rather than later.

      • mboy on 09/07/2024 - 15:15

        Good to know, thanks!

  • Aerith-Waifu on 13/07/2024 - 02:01

    does tesla have any kind of referral at the moment?

  • MELso on 13/07/2024 - 08:30
    +1

    They've just launched a long range RWD model in the US slotting in between the standard RWD and long range AWD. Hopefully it makes it here for a decent price…

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