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Tesla’s Latest Advertisement Leaves Out Destination & Order Fees In Its Pricing

In its latest advertisement, Tesla includes the federal tax incentive in its pricing information but fails to mention the company's $1,390 Destination Fee and $250 Order Fee.

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In its latest round of direct-marketing advertisements e-mailed directly to prospective buyers, Tesla hopes to highlight its low, low prices. The company sent out a new email advertisement just before Father’s Day that focused on the prices of its Model 3 and Model Y. However, customers will pay more for their Tesla than the company indicates in its ad.

Related Story: Check Out Tesla's "Life With Model 3" Advertisement Clips Made By Its Primarily Male Owners

The advert, shown below as a screenshot, does not mention anywhere that the cost to the consumer includes Tesla’s mandatory Destination fee of $1,390 or its $250 Order Fee. You can view the pricing for the Model 3 or the Model Y yourself using the company’s online configurator. Select Cash, and the price breakdown will include the Destination fee. Before state and federal incentives (for which a buyer may or may not qualify) the price of the new Model 3 is $41,880. That’s about 40% more than a similarly-sized Elantra Hybrid Blue. However, Tesla opts to highlight a price of $32,740.

Related Story: Do Tesla’s Direct Marketing Advertisements Feel Odd To You?

The $32,740 price includes the federal tax incentive. By our calculations, more than half of American taxpayers are excluded from that incentive. Tesla was careful to mention the possible cost reductions to its manufacturer’s suggested retail price, saying, "See a tax professional for personal eligibility." However, the advertisement does not mention that the manufacturer also adds the $1,390 fee. We even clicked "Privacy and Legal" at the advert's bottom to check. There is no fine print and no small icon suggesting the other fees paid directly to Tesla by the consumer.

Image of Tesla advertisement

Tesla’s Model Y is also included in the advertisement. Tesla says that inclusive of the federal tax incentive less than half of tax filers qualify for, the price is just $39,990. However, when we visited Tesla’s configuration page, the pricing shown is meaningfully higher. The base vehicle has a price of $47,740. Then Tesla adds its $1,390 Destination fee plus another $250 Order Fee. Thus, the true starting price of the Model Y is $49,380.

Tesla has a compelling package of great products, the world’s best charging network, and a unique ownership experience. It is odd to us that Tesla tries so hard to emphasize (exaggerate?) its low, low starting price, to the point of leaving as much as $1,640 of the consumer cost out of its advertisements.

Tell us in the comments below if you think Tesla should have more transparent consumer costs in its advertising.

Image of Tesla dealership by John Goreham. Screenshot of Tesla advertisement was taken from email sent to the author.

John Goreham is an experienced New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can follow John on Twitter, and TikTok @ToknCars, and view his credentials at Linkedin

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Comments

Mark Day (not verified)    June 20, 2023 - 3:49PM

Thanks for the insightful Tesla pricing info. It's a great relief not being in the market for a Tesla, or any of the "computers on wheels", aka new vehicles, putting the computer "driving skills" before the human driver skills.

Kelly (not verified)    June 20, 2023 - 6:58PM

Yes. I agree. As a new customer myself, they completely left the $1390 fee off of all paperwork, too. The $250 order fee does not go towards the purchase price either, it is just an add on.

Mark (not verified)    June 24, 2023 - 1:20AM

Every new vehicle sold in the United States has a destination fee. Most dealerships add a "processing fee" around $500. Not sure why this is a story, but I did click on it, so I guess I understand.