July 11th, 2020 by Zachary Shahan
Tesla has dropped the price of the Model Y by a few thousand dollars, with the starting price now at $49,990*. Meanwhile, the Performance trim is down to $59,990 and has more features included by default as well as 11 miles more range.
$50,000 is a lot of money for a vehicle (unless you’re rich enough that it’s not), but what’s most notable with the Model Y is how much better it is than anything else in its class with regards to performance (both its 0–60 mph time or 0–30 mph time and its handling), infotainment (Tesla’s infotainment system is second to none, and it’s not even close), driver-assist features (Tesla Autopilot is second to none, and it’s not even close), and cost of operation.
This Model Y price drop provides an opportunity to get to something I haven’t done yet — cost of ownership analyses for the Model Y compared to its closest competitors (even though, as I noted above, there really are no close competitors on the market right now).
To start with, here’s a look at 5-year cost of ownership forecasts for the Tesla Model Y versus the Lexus RX:
As always, assumptions are a big deal in a cost of ownership analysis. People have widely different lifestyles and prices of several inputs vary by region. Furthermore, you may have a different estimate of what you expect in the next 5 years with regards to gas prices, your personal electricity/charging prices, the resale values of these SUVs, and maintenance costs. As always, I encourage you to steal my sheet (copy it) and put in the numbers that fit best for your life and your expectations about the future.
According to my best guess on some averages, the Tesla Model Y Long Range is absurdly cheaper than the Lexus RX and even the Model Y Performance is cheaper — despite having more cargo capacity, better acceleration, a better passenger experience, better infotainment, and greater safety. Why would anyone buy a new Lexus RX in 2020? I have no clue. Actually, I take that back — people still buy this and other models because of inertia. Most people have never sat in a Tesla. Most people have never driven a Tesla. Most people have never compared the specs and costs of a Tesla Model Y and a Lexus RX. They go back to Lexus because they’re familiar with Lexus. They have a notion in their heads about Lexus being a great brand that they acquired years ago, without the taste of Tesla to put it in context. Now, as for anyone who goes and test drives a Tesla Model Y and a Lexus RX and chooses a Lexus RX — that person, if they exist, baffles me.
As a final note, keep in mind that Tesla still isn’t selling the lowest cost version of the Model Y, the Model Y Standard Range Plus, which may start around $40,000 once available. Ooo, baby!
Standard Range+ — $38,000
Long Range — $47,000
Performance — $55,000
Standard Range+ — $40,000
Long Range — $50,000
Performance — $60,000
— Whole Mars Catalog (@WholeMarsBlog) July 11, 2020
*Interestingly, I think it’s worth noting finally that someone got a hold of CEO Elon Musk at some point and made him change his policy on pricing. He used to prefer rounding the price up or down to the closest thousand or at least even hundred, and noted at least once that he found pricing like this annoying. I agree — just make the price an even $50,000. Though, dropping $10 off the price somehow moves minds — everyone knows it, but it still works — and sometime back Tesla decided to play the game and do pricing like $49,990. Frankly, perhaps more than anything else, this makes me think that even Tesla gets concerned about demand to some degree. Dropping the price by $3,000 passes along the same implication.
Want to buy a Tesla Model 3, Y, S, or X? Feel free to use my referral code to get some free Supercharging miles with your purchase: https://ts.la/zachary63404. No pressure. You can also get a $250 discount on Tesla solar with that code.
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Billionaire Stronachs split their company to settle family feud – BNN
A family feud that tore apart one of Canada’s richest families has been settled by splitting the company that owns some of America’s most famous racetracks.
Frank Stronach and daughter Belinda Stronach said Thursday they have ended a long and public battle for control of the family business. Belinda will get control of the Stronach Group’s thoroughbred racing and gaming businesses, which include Santa Anita Park and Gulfstream Park, plus related real estate.
Frank Stronach and his wife, Elfriede Stronach, will get full ownership of a thoroughbred stallion and breeding business, including Stronach Stables, and farming operations in Florida, Kentucky and Ontario. They will no longer have any interest in Stronach Group.
In October 2018, Frank Stronach sued Belinda and others, including Stronach Group CEO Alon Ossip, for C$520 million (US$393 million), claiming mismanagement of the family fortune.
Belinda Stronach, a former politician who briefly ran Magna International Inc., rejected the claims of mismanagement. She said she was trying to prevent her father from pursuing “idiosyncratic and often unprofitable projects” that threatened the family fortune.
Neither Stronach has any current involvement with the operations of Aurora, Ontario-based Magna, Canada’s largest car-parts maker.
“I am pleased that my father will be able to focus on an agricultural business and related projects that are his passion. The settlement will allow The Stronach Group to continue building successful companies with quality jobs that contribute to the community,” Belinda Stronach said in a statement.
After a few years of working as a machinist in Austria, Frank Stronach arrived in Canada in the early 1950s with a few hundred dollars in his pocket and built Magna into a company with revenue of $28.7 billion and net income of U$1.1 billion by 2011 — the year he stepped down as chairman.
Stronachs settle family feud – CBC.ca
A high-profile feud among members of the Stronach family has been settled.
Under a settlement announced by The Stronach Group, control of the family fortune is basically split between two factions.
Former politician and business executive Belinda Stronach will remain chairwoman and president of The Stronach Group, with full control of its horse racing, gaming, real estate and related assets.
Her Austrian-born parents, Frank and Elfriede Stronach, will assume full ownership and control of a stallion and breeding business, all farm operations in North America and all European assets.
The family fortune was founded by Frank Stronach, who built the global Magna automotive manufacturing business — where Belinda worked for a time before entering federal politics.
Father and daughter issued a joint statement saying they were glad their disagreements had been settled.
Bank of Canada cuts benchmark mortgage rate for 3rd time in months – Global News
House-hunting Canadians saw their buying power increase this week as the benchmark five-year mortgage rate reported by the Bank of Canada fell for the third time this year, easing a key stress test faced by borrowers.
The central bank said the rate fell to 4.79 per cent, after decreasing to 4.94 per cent in May and to 5.04 per cent in March.
James Laird, the co-founder of Ratehub.ca and president of CanWise, said Thursday the lower rates will be a win for some.
“If you just barely couldn’t qualify (for a mortgage), you might now qualify for what you were looking for,” he said.
“It is a move that will allow you to qualify just a little more than you could before.”
Mortgage rates have been falling in recent weeks.
While most borrowers do not pay anything close to the benchmark posted rate for a mortgage, the rate is used when assessing borrowers as part of a financial stress test.
What you need to know before your deferring your mortgage payment
The check is meant to ensure homebuyers will be able to make their mortgage payments in the future if rates increase from the where they are today. The drop in the benchmark rate makes the test is easier.
According to Ratehub.ca’s mortgage affordability calculator, a family with an annual income of $100,000, a 10 per cent down payment and five-year fixed mortgage rate would have qualified for a home valued at $523,410 under the 4.94 per cent qualifying rate. Under the new rate, they can now afford $531,230.
Laird said the rate drop was hardly a surprise because when underlying rates have been dropping, eventually posted rates catch up.
Though the decrease will help many, he categorized it as “not a major change.”
“Anyone was qualifying for a mortgage no problem, they are unaffected,” he said.
“Anyone who was not close to qualifying, they are also not affected.”
© 2020 The Canadian Press
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