Anyone else tired of the "anti" selling of M3?

[AnxietyRanger]

Yes, they need to maintain/increase S/X sales until 3 is launched and being profitable but I don't see this approach bearing fruit they are hoping for. Maybe I am way off, but I don't see conversion rate of reservation holders swinging to and S in any significant amount. I guess any profit now is better than profit later, but still comes off as short-sighted.

The thing about Model S is, a lot of people have been buying it because it is the only large-battery premium BEV on the market. Some of these people have come from a Prius.

It should not surprise Tesla - and probably does not surprise Tesla, but is a big problem for them still - that as Model 3 draws nearer, this part of their audience is gravitating towards Model 3 instead. It simply is a better large-battery BEV choice for a significant portion of Tesla's current buyers, some of which have been buying upwards of their usual class and size simply because there were no other alternatives.

The natural market for Model S simply is not as large as its selling market has been. Model 3 will correct this abnormality to a large extent, I expect.

In addition, the actual Model X/S crowd, those naturally interested in the cars, may be more subdued as well, because Model 3 signals likely product changes (e.g. 21-70 battery, possibly charging connector, interior, media hardware etc. changes) that might be passed onto Model S/X, not to mention possible upgrades to Model S/X to further differentiate from the Model 3...

Also, Model S/X are starting to show their age a little. Model 3 will look new and fresh next to them and that's a bit of an issue too. What a traditional automotive company would do at this stage is discount the older models, advertise the older models, offer discounted equipment packages etc. to keep them selling... but Tesla doesn't do that stuff, so they "have to" reverse market by anti-selling the Model 3...

 

[sandpiper]

I get it that is the reason they are putting out there, but are we really sure that is the reason Model S sales are dropping?

I'm not so sure people have been expecting Model 3 to be better than Mode S in any significant numbers.

What I am finding much more likely is that many are finding it likely Model 3 will be better value for them. And that Model S will get some updates alongside or after Model 3 (e.g. the new battery), so it makes sense to wait and see.

Had I not ordered my Model X in Q2/2016 (and reserved in 2014), and were instead in the market only now, I would definitely have waited beyond the final Model 3 unveil before ordering even a Model X.

It just makes sense to wait and see. Even if you are buying a Model X, because there may be changes that affect even that model. Rushing into a purchase now - unless absolutely necessary - may not be the wisest thing.

I agree with all of your points. I'd say there was some expectation... in part generated by Elon himself, and in part by media/fanboy hype. The "spaceship" comment certainly fed into the wild speculation.

I'm in a position to swap out for a S100D. But, I am assuming that the 3 will introduce some new tech that will also roll out into the S. And, while I am fortunate enough to be able to easily afford an S, I would certainly consider a model 3 if it had the range that the 100D does and AWD. I've never had a car that cost more than 40K before my current Tesla. And I'd be just fine with going back to cheaper cars.

There are probably a bunch of people like me out there who would be easy to push into the 3 and away from the S.

 

[AnxietyRanger]

I'm in a position to swap out for a S100D. But, I am assuming that the 3 will introduce some new tech that will also roll out into the S. There are probably a bunch of people like me. And, while I am fortunate enough to be able to easily afford an S, I would certainly consider a model 3 if it had the range that the 100D does and AWD. I've never had a car that cost more than 40K before my current Tesla. And I'd be just fine with going back to cheaper cars.

Yep, which is completely understandable for you and makes sense in all levels... except sucks big time for Tesla, of course, until they mature/learn to manage these undercurrents within their product portfolio like any automotive manufacturer must.

For example, I myself am completely agnostic on vehicle size. The premium experience and class I guess is pretty much mandatory, but beyond that I'd have no problem buying an Audi Q2 to replace my Model X, were they making an interesting version of that. Heck, I might even replace the Model X with an Audi A1, though that'd probably have to be some hot hatch AWD BEV to be interesting... (I did dig the A1 e-tron concept back in the day...) So people do move from class to class even within those who can afford the cars... Not that my examples are usual at all, but Model S too has been gathering very unusual buyers due to lack of large-battery BEV choice...

 

[Big-T]

Tesla is walking a tightrope. The S/X is keeping the company afloat. I'm sure that they would LOVE to talk-up the Model 3, but that would be corporate suicide.

Certainly Tesla has to upgrade the S to make it into a true luxury car. And I'm sure that they're working on it like mad. I was really hoping that we'd see that around the time of the 3 reveal. But we're hearing noises about minor features being added to the S: wifi hotspot, 360 vision, auto-adjusting steering column, etc... All of those features are software only and are easy wins for differentiating the S and 3. That makes me wonder if the S upgrade is further off.

The S/X was keeping the company afloat, true. But are going to be less and less relevant each quarter starting in Q3. Frankly if S/X sales dipped 30% this year and Tesla lost more money than they're burning thru now, wall street would just shrug it off and Elon would do another round of capital raise.

All eyes are on Model 3, almost to the exclusion of all else. By 2018, if Elon is to be believed they'll be cranking out 500,000 of these per year. Compare that to just under 80,000 S/X combined S/X deliveries last year.

They should be focusing on making the Model 3 better than the S/X (in whatever ways make sense) or once they burn thru the 400,000 die hard reservation holders in 2018 they're going to have a lot of extra production capacity on their hands. The first 400,000 didn't need convincing to buy the car, the next 4,000,000 will.

 

[AnxietyRanger]

The S/X was keeping the company afloat, true. But are going to be less and less relevant each quarter starting in Q3. Frankly if S/X sales dipped 30% this year and Tesla lost more money than they're burning thru now, wall street would just shrug it off and Elon would do another round of capital raise.

All eyes are on Model 3, almost to the exclusion of all else. By 2018, if Elon is to be believed they'll be cranking out 500,000 of these per year. Compare that to just under 80,000 S/X combined S/X deliveries last year.

They should be focusing on making the Model 3 better than the S/X (in whatever ways make sense) or once they burn thru the 400,000 die hard reservation holders in 2018 they're going to have a lot of extra production capacity on their hands. The first 400,000 didn't need convincing to buy the car, the next 4,000,000 will.

I guess the problem could be if Model 3 profitability or ramp-up is not looking as good as some hope - and Model S/X is needed longer than optimistically expected?

 

[Sonny Daze]

I think there are good ways to do that -- for example, Tesla removed incentives in supercharging, removed lower battery capacities to spur buying now for those on the fence.

I would have considered a 60 but now that's not available, which steers me to the 3 even more.

Hind sight is 20/20. They didn't expect the response that they got for the model 3. They needed the excitement to get the money to let them build the factory. And they overshot by a mile.

After the reveal event when they knew reservations were skyrocketing Elon tweeted about a P version and spaceship controls as well as letting everyone know the 3 would have AP2 hardware. What would the situation be like now if no one knew the 3 would have the same AP hardware?

What I am finding much more likely is that many are finding it likely Model 3 will be better value for them. And that Model S will get some updates alongside or after Model 3 (e.g. the new battery), so it makes sense to wait and see

I resemble that remark.

 

[Tummy]

The same thing happened when Mercedes came out with the 190e. They called it the "Baby Benz" and it was discontented compared to other MB at the time, but ended up being a great car. The 190e became the C-Class for MB, their highest volume lineup. Then a few years ago they came out with the A-Class or CLA for $29k based on a front wheel drive platform. It was shocking that for similar price to a loaded Honda Accord, you could get a Mercedes. The marketing limits the potential of these lower end cars and makes those cars "less than" the higher lines, yet they are all able to co-exist in the lineup. The lower priced cars address a different demographic, yet they are all in the same family as the $200k Maybach and AMG models. Only the most snooty of MB owners look down on the lower priced lines since they realize it's the volume cars which make the high-end cars possible. I would say if you are offended, that you need to get over it, since all the auto companies limit feature sets by model tiers.

 

[sandpiper]

The S/X was keeping the company afloat, true. But are going to be less and less relevant each quarter starting in Q3. Frankly if S/X sales dipped 30% this year and Tesla lost more money than they're burning thru now, wall street would just shrug it off and Elon would do another round of capital raise.

All eyes are on Model 3, almost to the exclusion of all else. By 2018, if Elon is to be believed they'll be cranking out 500,000 of these per year. Compare that to just under 80,000 S/X combined S/X deliveries last year.

They should be focusing on making the Model 3 better than the S/X (in whatever ways make sense) or once they burn thru the 400,000 die hard reservation holders in 2018 they're going to have a lot of extra production capacity on their hands. The first 400,000 didn't need convincing to buy the car, the next 4,000,000 will.

The key point is "if Elon is to be believed". Elon has an incredible record of accomplishing amazing (often unbelievable) things. But he has an abominable record of meeting schedules. Based on track record alone we can expect the 3 to be a great car for a good price. But we can expect a tiny trickle of pseudo-production cars to start to hit the road in August or September, and with true production ramp-up starting in January or February.

As such, it's unrealistic to expect the 3 to contribute anything but red ink to the bottom line for 2 years. If the Model 3 has a difficult launch, while demand for the S drops, while the prospect of direct competition starts to become realistic, you could have Wall St. crucify the company. And then raising money becomes ever more difficult.

Think about RIM and the Blackberry, or Apple in the 90s. When a company has a small number of products, a small number of strategic errors or a product delivery miss can destroy a huge business in short order, even in a rapidly growing market.

Tesla requires the S/X to continue to be successful for the next two years. I deeply hope that they've planned for this inflection point, by making the requisite upgrades to the S/X and that they're in the near-term pipeline.

 

[jelloslug]

Perhaps you are looking at it the wrong way. People are getting hot and bothered by sales tactics that they find, well to use your word, idiotic.

You don't have to agree with them, but this is IMO what the displeasure is about. Not the fact that Tesla sells, but how it sells.

They are not saying anything that is not the truth. If you want more space for things, more screens, more options, or more range, pay more money.

 

[Mr X]

I'll be able to buy a CPO Model S in the $40,000 dollar range next year where the Model 3 will be on average more than $40,000. People talking about Model S's cost more but you forget that CPO's are cheaper and better than brand new overpriced S's.


Model S is Daddy. Model 3 is the son. I want Daddy.

 

[AnxietyRanger]

They are not saying anything that is not the truth. If you want more space for things, more screens, more options, or more range, pay more money.

Well, it remains to be seen if the sheet is an accurate representation of Model 3 as it launches...

But be "truth" as it may, anti-selling - no matter how truthfully - still looks a bit silly to many of us. There are some PR downsides to it, for sure.

 

[daniel]

What we're seeing is that for a long time Model S was the only game in town if you wanted a proper electric car. Now with Model 3 in sight, people who would have been willing to go outside their budget for an S, just to have a proper electric car, can get one for half the price if they're willing to wait a little longer. Tesla is undercutting its own sales. Except that it's also expanding its potential customer base to include an awful lot of people who just would never be able to swing a Model S, or who are unwilling to take money away from something else (opportunity cost).

Some people who would have bought an S will now buy a 3 instead, but that's inevitable if Tesla is to grow and expand into more affordable cars. Elon just wants buyers of the Model 3 to understand that $35,000 does not get you what $70,000 does. If you can spring for $70,000 you'll get a fancier car. A better car if, unlike me, you like big. The Model 3 is for people who cannot afford the Model S. So (says Elon) buy the bigger car if you can afford it because it's better.

My choice would be a Model S the size of my old '89 Civic. Maybe some day Tesla will build that. Maybe with full autopilot. I'll buy that car if I'm still around. Meanwhile, as someone said above, the Model 3 will be the best electric car you can get for $35,000. And since stinkers, well, stink, I'll call it the best car you can get for $35,000.

 

[gregincal]

Well, it remains to be seen if the sheet is an accurate representation of Model 3 as it launches...

But be "truth" as it may, anti-selling - no matter how truthfully - still looks a bit silly to many of us. There are some PR downsides to it, for sure.

Short term, perhaps. But once the Model 3 launches with great fanfare it will be evaluated on it's own merits and all the existential angst of the springtime will be completely forgotten.

 

[206er]

Short term, perhaps. But once the Model 3 launches with great fanfare it will be evaluated on it's own merits and all the existential angst of the springtime will be completely forgotten.

I sure hope that you're right.

 

[Whistle2Whine]

I'm in agreement with a lot of the posters: If Tesla is that concerned about keeping S/X sales high, they'd put some Q3-like incentives and leases on inventory models to make them affordable for any fence-sitters. Mercedes-Benz just went through this with the C and E Classes. The current C-class, when it came out a few years ago made the E-class of the time look old and dated. They knew a new E-class was on the way in a couple years, but as C-class sales jumped, MB kept really good lease deals on the E's, especially once the replacement had been unveiled. My folks got a great deal on a 16' E-class because MB knew they had to move them until the new ones arrived.

Also, having a reveal of some upgrades to the S/X (interior, especially) would be helpful. The July event better be PACKED after all this time, with all these questions in the air.

 

[AnxietyRanger]

Good post, @Whistle2Whine !

 

[jelloslug]

Well, it remains to be seen if the sheet is an accurate representation of Model 3 as it launches...

But be "truth" as it may, anti-selling - no matter how truthfully - still looks a bit silly to many of us. There are some PR downsides to it, for sure.

Frankly, the only think that looks silly is the uproar over nothing.

 

[AnxietyRanger]

Frankly, the only think that looks silly is the uproar over nothing.

That's the PR downside. Apparently it is not nothing.

 

[jelloslug]

That's the PR downside. Apparently it is not nothing.

You can't please everybody.

 

[ikjadoon]

IMO, just wait for the car to release.

Build up all the cars you want with the options you want. Read their reviews. Test-drive them all. Buy the one that fits you best. It's just like we've done for a century. Tesla isn't changing that part of the equation.

It's nice to be emotionally satisfied with a purchase. But, get that from your own buying confidence--not Tesla saying you are buying the best car. Depend on yourself, not on a corporation, to know that you're buying the best car for you.