Why not drop price of Air instead of "Air Credit" on invoice?

[JoshG]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

 

[JGard18]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

Agreed. This also means my yearly excise tax is more because they base it on MSRP for new cars

 

[JoshG]

Agreed. This also means my yearly excise tax is more because they base it on MSRP for new cars

OMG you're right... i completely forgot that this is killing us on registration fees as well, especially here in CA.
Come on Lucid... help us out here!

 

[Halodde]

I'm guessing it looks better on the books. It sucks for the buyers but not the shareholders

 

[kopik]

I think removing credit or rebate is much easier and is more palatable for people than abruptly increasing the car price. I'm sure they want to keep that option available if demand increases...

 

[JoshG]

I think removing credit or rebate is much easier and is more palatable for people than abruptly increasing the car price. I'm sure they want to keep that option available if demand increases...

Yeah... Tesla doesn't seem bothered by this. Have you seen the people who chart the MSRP changes Tesla has made over the past few years? Bounces all over the place, sometimes up then down then up again in the span of 2 weeks.

 

[Leftlane]

Would also hurt residuals if they just lower the price versus offering “credits”.

 

[jbed]

Would also hurt residuals if they just lower the price versus offering “credits”.

This - Net net makes leases cheaper by paying down the capitalized cost but keeping residual higher.

 

[kopik]

Yeah... Tesla doesn't seem bothered by this. Have you seen the people who chart the MSRP changes Tesla has made over the past few years? Bounces all over the place, sometimes up then down then up again in the span of 2 weeks.

Yep, Tesla's CEO is well known for always making the right and rational decisions...

 

[Spaceiscoolright]

Yep, Tesla's CEO is well known for always making the right and rational decisions...

This made me chuckle

 

[illopp00]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

This will kill resale when you drop MSRP (much more of an issue for their leasing and customers), and its common practice to discount instead of changing market price. I don't think the insurance argument is valid since there is no data that it is significantly more expensive to insure than other cars in its class and price range.

 

[Batteryman]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

I expect once Lucid gets fully established and EV's rule the world, they don't want to be seen as increasing the price. And you always feel good when you buy something " on sale ". It helps keep the luxury vibe.

 

[JoshG]

This will kill resale when you drop MSRP (much more of an issue for their leasing and customers), and its common practice to discount instead of changing market price. I don't think the insurance argument is valid since there is no data that it is significantly more expensive to insure than other cars in its class and price range.

The insurance (and registration) issues are definitely valid... doesn't matter if it's higher or lower than some other car, it's true that insurance is definitely higher on a given Lucid car with MSRP=$100k but sold with a $20k discount than it is on a $80k MSRP car.
Not sure what the difference is on the resale side... if the car is available at $80k when new (via either pricing method), then wouldn't the resale value of used or lease-end cars end up roughly the same?

 

[borski]

Not sure what the difference is on the resale side... if the car is available at $80k when new (via either pricing method), then wouldn't the resale value of used or lease-end cars end up roughly the same?

No. Because discounts are seen as temporary, resale value is usually off the MSRP, but of course subject to the market.

I sold my Mazda and Kia at a premium, above what it *should* have been worth, because the market demanded it. But if I buy a car at 25k with a 35k MSRP, I can absolutely still sell it for 27k a year later if the discounts are gone, as long as the *current* price of a new car is 35k again.

It’s all about the difference from the new buy price *at the time you sell it*, which is why dropping the MSRP would be a negative for resale (since it would be hard to raise again without upsetting people).

Your point about reg and insurance is also valid though. Two sides of the same coin, and yeah, pros/cons.

 

[illopp00]

Right but a $100K car discounted to $80K is still a $100K car to fix and insure and replace. Your body shop costs are not going down because you got a 'deal' at the right time of the year.

 

[JoshG]

Right but a $100K car discounted to $80K is still a $100K car to fix and insure and replace. Your body shop costs are not going down because you got a 'deal' at the right time of the year.

No idea what point you’re making here. I’m not asking for lower body shop pricing. Im saying that they could choose to call these things discounts or they could adjust the pricing. We all know they aren’t ever going to price the current Air back to the supposed msrp since they have plenty of inventory and need to move cars. Maybe the price will be higher after the NACS and gravity-like interior comes. But for now, the msrp is just not realistic and they’d sell almost none without the current “incentives”.

They could keep the adjustment as a supposed “discount” or they could lower the msrp on the current year Air. They make the same money either way but customers will pay less on insurance and registration and therefore everyone can show that Lucid Air TCO has been coming down. That’s a good thing for everyone.

 

[Pragmatic]

No difference on insurance. Payout is replacement cost not acquisition cost (yes first year maybe higher, but not after that). Not sure how states with "value"based fees operate, since I don't live in one.

 

[illopp00]

Well Tesla just raised the price of Model S refresh 5K and they aren't selling any of them either. The prices are going up due to tariffs on components. So not raising price at this point is the same thing as cutting price before tariffs.

 

[californiaboy935]

No idea what point you’re making here. I’m not asking for lower body shop pricing. Im saying that they could choose to call these things discounts or they could adjust the pricing. We all know they aren’t ever going to price the current Air back to the supposed msrp since they have plenty of inventory and need to move cars. Maybe the price will be higher after the NACS and gravity-like interior comes. But for now, the msrp is just not realistic and they’d sell almost none without the current “incentives”.

They could keep the adjustment as a supposed “discount” or they could lower the msrp on the current year Air. They make the same money either way but customers will pay less on insurance and registration and therefore everyone can show that Lucid Air TCO has been coming down. That’s a good thing for everyone.

Such a weird perspective. I don’t understand why you’d want the MSRP to go down. Like many EV’s the residual value of Lucid’s is not great, from when I purchased my vehicles the MSRP has gone down which severely hurt the resale value.

Insurance cost for a luxury car will be high. The Pure base model is still a Luxury vehicle, most americas cannot afford a 70k+ vehicle…

Contrary to your contention, Lucid is selling a ton of Air’s - both here and abroad. This seems like a save a penny (on your insurance bill) over a pound. (Residual, secondary market)

Additionally-
Lucid has an incentive to keep the secondary market healthy so its customers can move out of older model Air’s on trade. Without having to put to much money in or roll over loan balance.

My two cents.

 

[illopp00]

Yeah I am confused about why not change insurance. My Honda Cr-V is worth 1/6th of my Lucid and yet its insurance is 2/3 the cost. MSRP isn't a factor in the insurance cost from what I see.