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I've owned my 40 since June, and have put 6000+ miles on the odometer. I was tempted to upgrade to a 60 and SC, but the price/value ratio doesn't make sense for me. The 40 works very well for my needs in the Seattle area.
Note to TM: $2000-$3000 would be a fair price for a 60+SC upgrade. $12000+ is ridiculous.
Note to TM: $2000-$3000 would be a fair price for a 60+SC upgrade. $12000+ is ridiculous.
I believe the point was that most of us that bought a 40 are happy with it and would most likely drive our gas car for long trips or rent a car rather than pay 13,000 for the rare times that we would need the extra range. It would have to be quite a bit cheaper to even consider it and obviously at this point it doesn't cost Tesla anything as the hardware is already there.
I see this from a different perspective. To me, the 40 owners really got a "gift" from Tesla in that they received a much larger capacity battery and better performance without paying for it. Tesla may have lost money on every one they sold as a result so to ask people who were fortunate enough to get one (assuming they could live with the range limitations) to pay to get the full benefit of the free upgrade seems entirely reasonable. I think some people see this as Tesla pushes a button and makes $10000-$12000, but I see it as Tesla pushes a button and turns a loss leader into a profitable sale. The irony is that if Tesla had simply cancelled the orders for the 40 and told people who had ordered they would need to order a 60, it would have created a different PR issue, but not necessarily a worse one when you look at the loss they took as a result of doing the 60 with software limitation for the same money. I am certain that if Tesla gets the opportunity to buy back the 40's they sold they will upgrade them so they can recoup that loss. I would wager a month's pay that you will not see a preowned 40 for sale by Tesla even though I am sure they will likely get some back on trade.
As a 40 owner who may eventually upgrade, I think that $2-3k is definitely not a fair price at this point in time. However, I also agree that most of us 40's will never pay full price given that many of us have already made that decision three times and have declined:
1. At time of configuration,
2. When Tesla e-mailed us that the 40 kWh battery would not be produced, and
3. About a month after delivery when Tesla e-mailed us to say we could still get the upgrade at original cost ($10k battery + $2k SC) instead of the post-delivery $11k battery + $2.5k SC.
There may be a few 40s that realize now that they need the extra range and decide to upgrade, but I would imagine most of us thoroughly thought through our decision (again, multiple times) and are extremely satisfied with our purchase and range.
Tesla should definitely not want to disappoint the people who paid full price for their 60 kWh cars; however, as time goes on, the price to upgrade should decrease since the remaining useful life of the car, and therefore, the remaining time the upgrades are beneficial decrease accordingly. Plus, from an economic standpoint, Tesla has already paid the extra cost for the batteries in the 40 kWh cars, so they have a wasting asset (which would be pure profit now) that will only decrease in value with time. Bottom line is that the longer I own the car, the less time I will get to benefit from the extra battery capacity, so the less I will be willing to pay for the upgrade. For supercharger access, my thoughts are similar on decreasing value over time; however, there are some offsetting value drivers there (e.g. increasing value as more superchargers are added to the system), so I would expect this upgrade price to decrease much slower (and likely stay at full price while they are building out the supercharger system).
In my specific case, the supercharger access would be mildly useful to me now, but I don't really need any additional range, so paying $13.5k just for supercharger access makes no sense to me. I'm not sure what I would be willing to pay for an upgrade right now; however, I know it's not original full price for the battery capacity upgrade. If I could pay for supercharger access without the battery capacity upgrade, I would have no problems paying full price for that, but Tesla does not allow supercharger access without battery capacity upgrade first.
1. At time of configuration,
2. When Tesla e-mailed us that the 40 kWh battery would not be produced, and
3. About a month after delivery when Tesla e-mailed us to say we could still get the upgrade at original cost ($10k battery + $2k SC) instead of the post-delivery $11k battery + $2.5k SC.
There may be a few 40s that realize now that they need the extra range and decide to upgrade, but I would imagine most of us thoroughly thought through our decision (again, multiple times) and are extremely satisfied with our purchase and range.
Tesla should definitely not want to disappoint the people who paid full price for their 60 kWh cars; however, as time goes on, the price to upgrade should decrease since the remaining useful life of the car, and therefore, the remaining time the upgrades are beneficial decrease accordingly. Plus, from an economic standpoint, Tesla has already paid the extra cost for the batteries in the 40 kWh cars, so they have a wasting asset (which would be pure profit now) that will only decrease in value with time. Bottom line is that the longer I own the car, the less time I will get to benefit from the extra battery capacity, so the less I will be willing to pay for the upgrade. For supercharger access, my thoughts are similar on decreasing value over time; however, there are some offsetting value drivers there (e.g. increasing value as more superchargers are added to the system), so I would expect this upgrade price to decrease much slower (and likely stay at full price while they are building out the supercharger system).
In my specific case, the supercharger access would be mildly useful to me now, but I don't really need any additional range, so paying $13.5k just for supercharger access makes no sense to me. I'm not sure what I would be willing to pay for an upgrade right now; however, I know it's not original full price for the battery capacity upgrade. If I could pay for supercharger access without the battery capacity upgrade, I would have no problems paying full price for that, but Tesla does not allow supercharger access without battery capacity upgrade first.
I agree with many statements made here. Especially Longhorn's. I would love the supercharger access of my 40 without having to fork over the huge upgrade expense. Just one or two superchargers in my area are all I need access to in order to gain that little extra distance from home. I'd even be willing to pay more than the $2500 just to have the SC access. It's "pure profit" for Tesla to open that kind of access for us. Yes, I know the original 40's weren't supposed to get that feature in the first place. But they made the business decision to "give" us the software limited 60s which are capable. What's a little more incentive to put more $$ in their pocket from an already loyal customer?
CarlK
Active Member
While I agree 40 owners don't entitle to upgrade discount I think it could be a good business for Tesla to reduce the upgrade cost to $6000~8000 to induce owners to upgrade. Fairness is never a goal for any business but profit is. These are what Tesla has already spent to produce why not getting some extra earnings out of it?
NigelM
Recovering Member
Ven Rala
Member
I upgraded to 60 (before production) when they notified me the '40' would not be made. I have been very happy with my decision since I have used a supercharger on several occasions and have used my 200 mile range to the max in a couple of out of town trips.
Financially it doesn't make sense to pay $12000 extra for a few extra trips, but if all I cared about was it making financial sense, I would have bought a Nissan Leaf. I like having access to the superchargers and am looking forward to planning some weekend trips using some of the new superchargers opening on the east coast.
Financially it doesn't make sense to pay $12000 extra for a few extra trips, but if all I cared about was it making financial sense, I would have bought a Nissan Leaf. I like having access to the superchargers and am looking forward to planning some weekend trips using some of the new superchargers opening on the east coast.
I see your point, but I respectfully disagree. To offer the upgrade at a significant discount would be a slap in the face to 60 kWh purchasers. If you consider than less than 4% of buyers signed up for the 40 (and I would guess that was out of approx 10k orders, so 400 or so cars, please correct me if my assumption of 40 production is wrong) you are talking about a PR nightmare with a ton of customers who bought the 60 to pocket maybe $150k to $200k since I still bet only a small percentage of those 40 owners would ante up at even a $6000 upgrade price. To me it makes much more sense to wait until either the original owners of those cars trade up at Tesla, meaning a quick $10k resale value increase for Tesla after they remove the software limitation, or let those 40 kWh owners sell to someone other than Tesla where they have no obligation to feel pressured to offer such a discount. If you are going to give away something in the form of a discount, it would more likely to be either to early investors (Signature owners) or your top end customers who paid for all of the bells and whistles since they are the ones who put more profit in your corporate pocket.
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Not sure if "pure profit" is correct, since I have read Tesla takes a $2000 charge against every car they offer with SC capability enabled since they have to amortize the cost of all of the real estate, infrastructure, maintenance, and electricity costs for all of those SC stations that are built and going to be built. The more cars on the road that can use SC, the more likely they are to have to expand them to prevent lines at peak times or on heavily traveled routes. Also, if they allow a 40 kWh owner to pay $2000-$2500 for SC access without doing the software limitation removal , what is to stop a 40 kWh owner from then suing Tesla for not putting the SC's close enough to each other to allow them to use them the way a 60 kWh owner can? The first time a 40 kWh owner who has paid for SC access gets stranded because the next SC in their route is beyond the limited range of their car, they will be screaming for Tesla to either build more SC's to close the gap or remove the software limitation for free so they can utilize the SC network that they paid $2000-$2500 for. There is a reason they are aiming for the Gen III car to have at least a 200 mile range and its more than just the psychological barrier to ownership from current ICE drivers. The SC network (which I assume may not be free for Gen III owners) will be a huge benefit in the sales process to get many Hybrid, ICE or blended (fisker, volt,etc.) owners to switch to a pure electric.
I have 6000 miles on my 40. I have never had the need to charge any place but at home. I have no plans to make any road trips with this car. The forty was offered to us in order to give Tesla a starting price of $49000. This was Tesla's offer and we 40 owners took it. Tesla chose not to build the car that they offered. Therefore, we got a good deal on a modified 60. This was Tesla's decision and their offer to us. I have absolutely no need to upgrade and no need to take road trips to play with Tesla's superchargers. That being said, I am a huge supporter of Tesla and love my car, the company, and the stock. I spent two days in the last month at Tesla and Plug-in events showing people my car and telling them how much I love it. I would be more than happy to send Tesla more money for an upgrade that I don't need, but not $12500. It would be easy money for Tesla to upgrade these cars at a more reasonable price. I would be happy to pay.
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How did this thread get bumped off "what's new" ?
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How did this thread get bumped off "what's new" ?
Dont get me wrong. I am happy Tesla did make them for those of you who preordered and honored the price while giving you a better car in the process. I also think for a HUGE number of people the range and performance of the 40 are more than sufficient. I think you guys got a screaming deal in the big picture of things. I wish they still made them just to get more people buying the model S. There are a lot of people who plunked down money for the S60 or S85 just as a sort of insurance policy and they will never really use that extra range capability. I am in no way anti-40. I just think it makes no sense financially or from a PR perspective to discount the upgrade and I think offering the SC capability as a stand alone option for the 40 brings a can of worms Telsa would rather avoid dealing with and I can't blame them.
Let's assume you're an TSLA investor (I don't know if you are and you don't need to say). As an investor, would you be happy if they did this (offered the upgrade at a lower price)? As an investor, would you be happy if they sent a rebate check to everyone that bought a 60 kWh or 85 kWh car for the difference between what they paid and what this "discounted retrofit" is saving the 40 kWh owners?
As an investor and owner, I think the 40 folks got a hell of a good deal and it's frankly sickening that they are then turning it around into "but we want more". It's exactly like what's going on politically in a lot of ways, and I expected better of Tesla owners.
To be fair, not all 40 owners are in that camp, but I would bet all of those who are in agreement about a discounted upgrade or stand alone SC access option are 40 owners.
It reminds me of the saying "A government that robs Peter to pay Paul can always count on the unwavering support of Paul!"
No question about it, we did get an amazing deal. I would have been perfectly happy if Tesla delivered what I originally ordered: a Model S with a 40 kWh battery pack, slower acceleration, and no ability to upgrade or have supercharger access. However, that is not what Tesla decided to do. I don't like the fact that Tesla made very little, if any, profit on my sale. I thought I was supporting the company by placing an order in 2011 for one of their vehicles, but in the end, they may have lost money on me. Ugh.
Regardless, I had about a year to decide on my exact configuration, and I put a lot of thought into it, and I never thought $10k was worth the extra 70 ideal miles plus supercharger access (with pricing unknown at that time) since this was going to be my family's daily driver, not our long-distance car, so instead, I ordered my 40 with most of the options since, to me, the options were more valuable than the extra range.
In my mind, this isn't an entitlement or a "we want more" issue. I have no problem with Tesla keeping the upgrades at full price and me keeping my car as is. That is completely Tesla's right, and you will never hear me complain about it. However, almost all cars, as well as technology, depreciate with time, and the Model S is a combination of the two. If I go to a dealer and buy last year's model, it is always less than what people paid for it last year. If it's used, it's even that much lower. Same goes for computers, iPads, etc. In fact, those owners who purchased 60 kWh cars four or five months ago couldn't sell them for the same price that they bought them. Keeping depreciating assets at full price over time almost never makes sense.
