Must-Read: Ben Thompson: Tesla Model X Pricing Revealed, Consumer Reports and the Tesla P85D

Must-Read: Ben Thompson: Tesla Model X Pricing Revealed, Consumer Reports and the Tesla P85D: “Stepping back, when have new things ever not been expensive?…

…Back in 1900 cars were hand-made and cost $1,000, while a horse was only $70. It hardly followed that cars were doomed, or that those building them ought to have f—ed themselves. Moreover, this $132,000 crossover, and the other high-priced Tesla’s that have come before it, are absolutely necessary for the Model 3, and for multiple reasons: –From a technical perspective, every model to date has moved Tesla down the learning curve from the perspective of actually making cars, making batteries, and making software. The importance of this process–and the exponential gains that result–cannot be overstated. –From a financial perspective, the high-priced models sold to-date have helped in two ways: most obviously unit profits can go straight into R&D for future models, but also impressive sales, enthusiastic customers, and rapturous reviews support Tesla’s stock, further issuances of which have been used to pay for launching first the Model S and now the Model X. –Relatedly, and most importantly, from a product perspective, by not prioritizing low prices Tesla has been able to focus on selling a superior experience. This is a big reason why recent low oil prices haven’t put a damper on Tesla’s sales: Tesla’s customers aren’t buying electric vehicles to save on gas! Musk explained this himself in 2006 in a blog post called The Secret Tesla Motors Master Plan (just between you and me)…

September 4, 2015

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