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Are the "old" rules for car valuation gone now that exponential technology is here?

Discussion in 'Model S: Ordering, Production, Delivery' started by AmpedUP, Oct 30, 2014.

  1. AmpedUP

    AmpedUP EV Nut

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    I have been marveling lately at the upset caused by the introduction of the "D" Model S. Suddenly, it seems as though many owners who were perfectly happy with their cars a month ago want to get rid of them immediately. In puzzling over this situation, I am thinking that the rules associated with the "technology life cycle" have arrived within the automobile industry, and are poised to create great upheaval in the market place, particularly with regard to pricing.

    I have two ICE cars in my driveway. One is a 2004, and other than airbags and some computerization under the hood, it is pretty much the same product as a car decades older. From the standpoint of the user, it starts the same, runs the same, and has the same functions. My other car is a 2013, and has features that are far and away different than older cars. It has built in GPS, and will guide me to my destination. It has bluetooth connectivity to enable hands free driving while talking on a cell phone. It can wirelessly play music files from my phone on the stereo system. It has satellite based radio. It can call for help if I am in an accident. In short, the VALUE technology has brought to my 2013 car has made it far and away more useful to me than my 2004 vehicle.

    Now, enter the age of really useful EV vehicles, and the "D" Model S. Suddenly, it's as though the value technology is bringing to vehicles is making 2014 cars obsolete before they're even dry from their first car washes! 0-60 in 3.2 seconds aside, the new Model S can essentially drive itself! This value proposition created solely by technology has brought the "technology life cycle" firmly to the arena of cars, and I'm betting we're going to see used car valuations plummeting like we've never seen them before...and thus coming into sync with other high technology devices, such as cell phones and personal computers. Just as the iPhone 5 was a hot product 6 months ago and has now suddenly been supplanted by the iPhone 6, the Model S of 6 months ago has suddenly been supplanted by the "D" version. The iPhone 5 that cost several hundred dollars just a few months ago is now available for less that $100. Will a similar "valuation curve" now hit the car market, with the bleeding edge Model S leading the way?
     
  2. MarcG

    MarcG Active Member

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    Interesting analogy. I think we are indeed seeing a steeper curve in innovation within the automotive industry that has been brought over from the tech industry, however the majority of car manufacturers don't seem to be increasing the feature introduction rate nearly as much as Tesla is doing it. Whether or not it is due to Tesla being still relatively small and nimble compared to the rest of the competition is up for debate, but kudos to them for creating disruption in the space - we definitely needed it!!
     
  3. joefee

    joefee Over 2 Million TMC page views

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    As a shareholder the rate of innovation at Tesla is amazing... As a Sig owner it is depressing that my beloved P85 is obsolete vs a P85D. I won't be upgrading a 6 figure car evey 2 years ... Unless I get another homer in TSLA/SCTY!
     
  4. David_Cary

    David_Cary Member

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    I do think that Tesla owners and Tesla forum posters are not exactly average or normal when it comes to these issues. Much of new car tech is gadgets with limited value to much of the buying public. And some of the really useful stuff is available in the aftermarket. In fact everything your 2013 car has is available aftermarket for pennies. Yes - built in is nice but when navigation products that are better cost 10% of what car dealers charge, people deal with add-ons.

    Now - I absolutely love some of the new car gadgets - particularly USB plugs for your stereo. But folding mirrors and parking sensors - ehh.. Now a good autopilot maybe a game changer....
     

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