Tesla Motors’ website (in most markets, anyway) now shows the price of a new Model S as the actual cost minus $10,000 in ‘saved fuel costs.’ There has been some backlash (since it’s not the sticker price) but the new system will apparently be sticking around, despite the public debate and criticism. Our source on this claim? CEO & Product Architect Elon Musk.
Musk recently revealed via Twitter that, while there was some internal debate at the company about its approach to advertising, it is sticking with this system since “most” owners have in fact saved at least $10,000 dollars in fuel costs over a 5-year period (the normal length of ownership of a new car).
We debated this, but there really is $10k gas saved by most owners over 5 yrs (avg ownership period). Since it's true, we are sticking w it.
— Elon Musk (@elonmusk) April 11, 2015
It should probably be noted here that fuel costs vary widely based on where you live — someone living in Boston isn’t going to “save” the same amount of money via the use of an electric car as someone living in Norway. Of course, how much a person drives is also a big factor in the savings. There are actually several assumptions that go into determining how much is saved by driving electric.
This brings us to another point worth making — these “saved” costs only apply to those switching to one of Tesla’s offerings from a conventional vehicle, rather than from an electric vehicle from a different manufacturer. Those switching from a Nissan Leaf, for instance, aren’t going to be seeing $10,000 in saved fuel costs — they were already using an electric car. While most new Tesla owners are switching from a gasmobile, there are many who are “upgrading” from another electric car.
In a discussion topic on the Tesla Motors Club forum about this recent tweet (tip of the hat to “Law&Disorder“), there were some other interesting points made. There were a lot of comments describing the advertising choice as “sleazy,” and, humorously, comparing it to that used by the car dealerships that Tesla has had so many legal battles with.
Something else worth noting (tip of the hat to “Seesaw”): interestingly, Tesla doesn’t use this advertising approach in Australia — thanks to (relatively) strong consumer protection laws on the books in the country. Hmmm. Too bad we don’t have those over here.
Personally, I think that Tesla would be better off advertising the actual price — rather than the manipulated one that includes “saved” fuel costs. It can still clearly indicate the “estimated” fuel savings somewhere on the webpage as well, without the risk of deceiving consumers.
What do you think? Pro or nay on the current Tesla website pricing approach?
Image Credit: Tesla Motors
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