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Battling Model S depreciation by locking software updates?

Discussion in 'Model S' started by krnshh, Apr 17, 2015.

  1. krnshh

    krnshh Member

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    Hi,

    As a recent owner of the Model S (love the car), I was wondering if there were ways Tesla could hold or deter depreciation of the car by deferring software updates? Hear me out...

    For example, you need to pass a certain threshold (for e.g. months or miles driven?) to enable the latest software update for..say.. the new user interface/valet mode/app store or something a bit unique. Of course critical updates need to be pushed out immediately but the other not functional or nice-to-have features could be available as you use the car more?

    Then, in 2 years time, you could have just a few Model S's running software 8.2 with Spotify on it and in the event those users would think of selling them, they would probably get a better deal due to their car being 'a limited edition' and having more features than others so far?

    Does this make sense? What do you guys think?

    PS: I am a bit worried about depreciation in 3-4 years when battery costs get lower and/or better technology comes out. (But I'm focusing on trying to solve it, rather than worry about it)
     
  2. Twiglett

    Twiglett Single pedal driver

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    That sounds rather like the behavior of other car manufacturers, except in software.
    Luxury cars always have appalling depreciation anyway regardless of manufacturer, withholding software updates would be counter productive and contrary to the Tesla method differentiation.
     
  3. bonnie

    bonnie Oil is for sissies.

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    So you would rather not have new functionality for your car as soon as it is available (with the exception of critical updates for safety), to maintain the value of your car ... I don't get it.
     
  4. dirkhh

    dirkhh Middle-aged Member

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    Teslas depreciate like iPhones. A two year old model is just not attractive compared to what's available new.
    And Tesla (just like Apple) has absolutely no reason to do anything about it. Quite the contrary. The more they make new cars more appealing, the more of there existing customer base (let's call them "fools" - see my signature) will come back and trade their perfectly fine car for a new one, once again triggering twenty-some-odd percent of margin for Tesla.
     
  5. Saghost

    Saghost Active Member

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    So you want your car to level up over time/distance driven, like a video game?

    Tesla certainty could do it, but I'm having trouble imagining how it would be in their best interest.

    Tesla makes money on the car once, when you buy the new car. Thereafter, they make no money on it - the only benefit resale value has to them is in getting uncertain customers in the door.

    Under the plan you're suggesting, the new cars they make money off of wouldn't have the features that people could get by buying a used car. That makes it less likely that people will make Tesla money by buying new cars, I'm addition to annoying folks who arrive in the showroom.

    Keep in mind, Tesla is currently selling every car they can build with no advertising or incentives. Why would they do something like you're suggesting to support resale value when they don't need to attract more customers to begin with?
     
  6. lolachampcar

    lolachampcar Active Member

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    Anyone that has swum in the A8,S Class, Seven Series,, waters knows they are going to loose their rears (and no, I'm not talking about tires) in depreciation. It is simply the nature of the beast.

    We actually had it much better for the first couple of years until the PD triggered so many trades. Tesla accelerated the depreciation by offering much less than existing wholesale for the cars while, almost at the same time, buoying prices by holding on to all that inventory and not letting it dump onto the secondary market (which, likely, would have driven wholesale prices down to what Tesla is offering). I put 4500 miles on my P85 for free and lost about 60% of the depreciation on my PD than what I would have had on a Seven Series.

    Moral of the story, if you think MS depreciation is bad, stay away from ALL the other premium luxury rides.
     
  7. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    Achievement unlocked! You now have the valet feature!
     
  8. JimmyAZ

    JimmyAZ Member

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    I can see your reasoning for wanting it, but to be honest I think it's a bad idea. Especially for those of us that don't drive a lot of miles or work from home. We would never be able to unlock certain features because we don't put the miles on the car.
     
  9. No2DinosaurFuel

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    + on this post!

    Sounds like the poster is not happy with the depreciation elon musk promised them. I think most people need to understand they are buying a luxury car and the depreciation will be much higher than other cars.

    If you dont plan to trade up or buy new cars, why worry about the depreciation rate. You should be worried about part replacement ccost and warranty.
     
  10. ecarfan

    ecarfan Well-Known Member

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    To the OP: your proposal makes no sense to me. And Tesla certainly is not going to do it, nor would I want them to.

    My late 2013 S is now a much more capable car compared to when I bought it, which amazes me. New S's are much more capable than mine and that is a wonderful thing. Go Tesla!
     
  11. MsElectric

    MsElectric Active Member

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    I really don't get where this expectation that premium luxury car depreciation can be artificially controlled comes from. It is set by the market and with any premium car over $60K, you can expect to loose about 25% of its value just the first year for the simple reason that for most people making such a large purchase it does not make sense for them to save just 10-15% percent to buy a used car, I know I wouldn't do that. This sets the stage for a steep decline in values the first year.

    You combine that with new models being introduces as every automaker needs to do to keep demand up you are looking at further depreciation. When it comes to driving the best automotive technology available on earth it's just a simple mattering of you having to pay to play.

    Also consider the fact that a top end P85D has a lease price of about $1600. Where do you think that value comes from? It comes from depreciation and then there is also that $7,000 initial payment. So just in a leasing situation where you are paying for the depreciation after the first year you've lost about $1600 X 12 + $7,000 for payments.

    My advice is buy the car you want and can afford and enjoy it for as long as you can. If you can't deal with high depreciation for a premium car you just can't afford to purchase that car new car.

    Also your proposal makes absolutely no sense as when you buy a car you are paying for the features in the car. It's not some video game where you toil away to unlock accomplishments...
     
  12. skilly

    skilly Member

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    In fact, this is more likely to hold value than take it away. The notion that the car gets "better" as it gets older....more like fine wine!
     
  13. jgs

    jgs Member

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    It's hard for me to imagine an action Tesla could take that would trigger more customer rage, short of exiting the EV market and deciding to build ICE vehicles instead.

    I bought my car as transportation, not an investment.
     
  14. dirkhh

    dirkhh Middle-aged Member

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    "transportation" sounds a bit too mundane for what a Model S is doing :)
    But yes, very much. It's not an investment. It's the most amazing car in the market. And it continues to do so every few months when yet another amazing new thing is added...
     
  15. RichardL

    RichardL Member

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    I've seen people who put vinyl covers on their leather seats to maintain value for re-sale.

    That never made sense to me either - if I buy something I want to use it, not store it for the next owner to use...
     
  16. Twiglett

    Twiglett Single pedal driver

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    The sad truth is that if depreciation is a huge concern - never ever purchase a new car.
    Be patient and wait to get a two or three year old with lots of warranty left.
     
  17. dirkhh

    dirkhh Middle-aged Member

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    That just makes me cringe. It's like these people who initially didn't drive their Model S in the rain (especially hilarious to consider if you live in Oregon). It's a car.
    Oh wait, now I've offended the "I wash my Tesla every day" crowd again.
     
  18. walla2

    walla2 Member

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    My 2012 Sig P85 is an awesome car that is still perfect without sensors and AWD. It may have depreciated but it's still attractive and amazing.
     
  19. jgs

    jgs Member

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    Yeah, I wasn't quite happy with putting it that way, but I didn't have a better way to express it. I guess I should have said "I bought my car as an intergalactic spaceboat of light and wonder, not an investment."
     
  20. dirkhh

    dirkhh Middle-aged Member

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    You are right, I phrased this poorly.
    When making a buying decision right now, a new 70D looks interesting when comparing to a two year old car. And that depresses prices.
    Of course the 2 y/o Model S is still a breathtakingly amazing car.
     

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