Tesla adjusts prices for Model Y and Model 3, again
Tesla
Tesla has been changing its vehicle prices in the United States to maintain its profit margins while making its vehicles more accessible to buyers. It recently announced further changes, marking the third price adjustment to some cars this year alone, and we are only in February.
Tax Credit Changes
The Model Y is now eligible for the $7,500 US tax credit, thanks to the Internal Revenue Service's latest update of electric vehicles eligible for the program. The tax credit is now available on all Model Y variants, resulting in a price hike for the Model Y Long Range and Performance trims. However, the automaker has also lowered the price of the entry-level Model 3, making it more affordable for buyers.
Price Changes for Model Y
The Model Y Long Range saw a $1,500 increase from $53,490 to $54,990. Meanwhile, the Model Y Performance variant also experienced a price increase of $1,000, going from $56,990 to $57,990. This move is the third time that the Model Y has undergone a price change in the past month, with Tesla having originally decreased the price across its lineup in early January.
Price Changes for Model 3
The entry-level Model 3 Rear-Wheel Drive variant experienced a $500 price decrease, going from $43,990 to $43,490. However, there has been no change to the price of the Model 3 Performance, which remains at $53,990.
While this seems erratic to some, consumers should remember the days before Tesla when the price of vehicles was a mystery. Remember the days of buying from legacy brands inside a dealership with a salesperson who had to run the numbers past his manager? The cost of cars was changing daily or hourly, and the public wasn't aware.
Tesla Has Room to Adjust
An infographic courtesy of the Visual Capitalist made the rounds on Twitter, showing Tesla's healthy profit margin. Using Reuters and 2022 third-quarter information, Tesla's net profit for a vehicle is $9,574, while Ford is losing $762 per EV sold. The numbers show that Tesla has a lot of room to make further price adjustments if dictated by the market.
Based on Q3 2022 data, Tesla has a healthy profit margin, allowing them to make large adjustments to prices
Visual Capitalist
Tesla's recent price changes are helping with its profit per vehicle while also making its cars more accessible to a broader range of consumers. Despite the slight price increases for the Model Y, it remains eligible for the US tax credit, making it an attractive option for those looking for an electric vehicle. Meanwhile, the lower price for the Model 3 Rear-Wheel Drive makes it a more affordable option for those looking to switch to an electric car.
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Tesla’s plan to brand its autonomous network of taxicabs has found an interesting little snag. The US Patent and Trademark Office (USPTO) has issued a “nonfinal office action” regarding Tesla’s application to trademark the term “Robotaxi” specifically in connection with autonomous electric vehicles.
This is an initial refusal by USPTO’s examining attorney and is very particular for autonomous electric automobiles. A separate trademark application by Tesla for the term “Robotaxi” as it relates to its upcoming autonomous ride-hailing service is still under examination and has not yet received a similar rebuttal.
Understanding the Refusal
A “nonfinal office action” means the USPTO has found potential issues with the trademark application, as stated, which prevents its immediate approval and subsequent granting to Tesla. Tesla now has a three-month period to file its counterarguments and address the USPTO's concerns.
If Tesla’s response satisfies the examiner, the trademark could be granted.
While the exact content of the office action isn’t detailed in the initial report, such refusals for terms like “Robotaxi” often occur if the USPTO considers the term “merely descriptive” or “generic” for the goods in question. In this particular context, “Robotaxi” could refer to any autonomous taxi vehicle.
Trademark law generally prevents the exclusive registration of terms that competitors would need to use to describe their own similar products. For a term to be trademarked, it typically needs to be distinctive and act as a brand identifier rather than just a descriptive name of the product’s class or type.
Separate Application for Ride-Hailing
Tesla still has a distinct, separate, and still pending application to register “Robotaxi” as a trademark for “transportation services, namely, autonomous ride-hailing services.” The criteria for trademarking a service can differ from those on trademarks for goods, and it’s possible Tesla may have more success securing the name for the service itself, which would allow them to brand the network as “Tesla Robotaxi.”
Why This Matters
Securing a trademark grants exclusive rights to use a brand name in conjunction with specific goods or services. This helps prevent customer confusion and to protect the brand identity.
If the refusal for the vehicle trademark becomes final, Tesla may be limited in its ability to exclusively name a good (specific vehicle) the “Tesla Robotaxi.” Other manufacturers could also potentially use “robotaxi” descriptively for their own autonomous taxi vehicles.
The ability to trademark “Robotaxi” for the ride-hailing service is arguably more critical for Tesla, as they’re working to establish a unique brand for their autonomous transportation network, which kicks off in Austin next month.
The USPTO’s office action won’t hinder Tesla’s ability to develop or deploy its own vehicles in June - instead, it’ll just impact how Tesla can brand the app and their vehicles, which could cause some last-minute delays if they have to rebrand.
Cybercab and Robovan/Robobus Trademarks
While Tesla is facing challenges with the broader Robotaxi term for vehicles, the company is also seeking to trademark “Cybercab,” “Robovan,” and “Robobus.” Securing a less descriptive name for the vehicle itself often has a higher chance of success with USPTO, as it is far more distinctive than a more general term like “robotaxi.”
Why Didn’t Tesla Do This Years Ago?
Tesla may have waited too long to file a trademark for the term “Robotaxi.” While the company has been discussing a self-driving fleet since 2016, the concept of autonomous taxis has gained a lot more traction in recent years — and competitors like Uber have also begun using the term.
We suspect there was some strategic timing behind these filings. Earlier versions of FSD — particularly those prior to V12 — may have lacked the progress needed to support Tesla’s robotaxi ambitions. Filing for a trademark that isn’t actively in use or about to be used can make it harder to defend or retain.
Moreover, while the idea of autonomous vehicles has been around for years, a clearer public understanding of Tesla’s specific plans has only emerged over the past 18 months. Filing too early can trigger speculation long before the company is ready to reveal details.
Ultimately, whether Tesla secures the rights to “Robotaxi” remains uncertain — but trademarks like “Cybercab” and “Robovan” seem much more likely to stick.
One of Tesla’s greatest weaknesses, as it has quickly become one of the world’s most ubiquitous cars on the planet has always been service. Escalating issues to managers and sometimes even reaching a Tesla Service employee can be a total coin flip, depending on your Service Center.
Tesla is continuing its push to integrate AI across its customer support channels in an effort to improve customer service. According to Raj Jegannathan, Tesla’s VP for IT, AI Infrastructure, Apps, Infosecurity, and Vehicle Service Operations (that’s a lot), Tesla is launching a pilot program for a new AI designed to improve customer interactions with Service.
Tesla Service’s new AI Agent detects comms delays, monitors sentiment, & auto-escalates to leaders. Starts tomorrow at 10 pilot locations. In 2 weeks, type “Escalate” in ‘message center’ to reach managers. Guardrails in place to prevent abuse. We’ll keep improving!
At 10 pilot service locations, this new AI agent will begin working behind the scenes at Tesla Service, to help with customer communications. It will provide three key features:
Detect Communications Delays: The AI will actively monitor service interactions to identify potential delays in communication or progress. These are often a key pain point for customers who reach out to Tesla Service and don’t receive a response for several days, as Service has nothing new to add. The AI can now step in and let the customer know Tesla is still waiting on parts or something else.
Monitor Customer Sentiment: By monitoring the tone and content of the messages between the customer and Service agents, Tesla will be able to identify situations where a customer might be dissatisfied or facing difficulties.
Auto-Escalate: If either a communications delay or negative sentiment is detected, the AI can automatically escalate issues to human managers for review. This helps to address problems before customers need to seek escalation themselves or become upset about an issue.
Customer Escalation Requests
Alongside the new AI tool, Tesla is also introducing a more direct way for customers to get higher-level attention. According to Tesla, within the next two weeks, customers can simply type “Escalate” in order to have their issue routed directly to management.
Raj’s team is currently working on implementing guardrails to prevent abuse, but this will soon make its way to improving Tesla’s service offerings. We’re glad to see Tesla taking steps to identify and correct deficiencies in the process - it has always been a sore tooth for Tesla in the last few years.
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