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Cannibalization of Model S sales
- Thread starter Leftysmasher
- Start date
nigelsilva
Member
Possibly, but in my opinion the Model S caters to a different category, just as it was intended to, and this will reflect in sales. For instance take the Mercedes Benz C-Class, it starts around $35k and can be optioned up to almost $50k. Or look a 2014/15 S-Class with some miles on it, you can find them around $40-$50k. People still buy new S-Classes because it’s what they want, and different people prefer to buy a loaded C-Class for the same price as an S-Class because it’s what they may feel comfortable with, or want, even though they can be around the same price. This is an oversimplification and I’m sure you already understand it, but it gets my point across. The Model S will remain (and sell) for those who want luxury, either those willing to pay a premium and get one brand new, or those looking to buy CPO/3rd party and get an older one. The model 3 will obviously cater to the dealer service/warranty folks who like to have the peace of mind that comes with being the sole owner of a warranties vehicle. In the long run it could go both ways.. if the model 3 is very good it may render the S obsolete, but that would be a poor business move.
whitex
Well-Known Member
So far Model 3 added to Model S sales, as folks who originally wanted a Model 3 decided to stretch to get an S now vs. 3 in 2 years. Of those 400,000 in reservation queue right now, most who would be willing and were able to buy a Model S already did, which means anyone who receives a Model 3 over the next 2 years will not cause a lost Model S sale - they wouldn't have bought it anyways. Once Model 3 becomes freely available, like Model S today, absolutely it will divert some people who could have stretched for the S, but really all they wanted was a good EV and feel more comfortable with a lower priced one. By then, it won't be just the Model 3 that will detract from Model S, there will be other competition.
True in normal circs, but these are not completely normal. Model 3 will likely affect the part of the sales that wanted a large-battery (and possibly fast-charging) BEV, but not a $100k large sedan/hatchback.
We know many people bought a larger and more expensive car in Model S because there was no other large-battery BEV or no other large-battery BEV with a roadtripping fast-charging network. These people will likely find a more appealing candidate in Model 3.
Probably don't have to look farther than the Tesla CPO site. Inventory numbers are really low so either Tesla is holding back some cars or people are realizing a reasonably optioned Model 3 will still cost 45k-50k and would rather get a Model S in the same price range especially since it will be roomier inside.
Saimaannorppa
Member
A lot of people are simply waiting right now, because there is no way to test drive or even peek in a Model 3. Model S sales is already taking the hit from waiting out.
So once Model 3 starts to be more widely available, many of the waiters will actually decide to upgrade to a Model S, for all the reasons already stated here.
I did that even before possibility to see one in person, and I have friends who want Model S but Model 3 value prop is just too tempting and they want to try it first before deciding.
So once Model 3 starts to be more widely available, many of the waiters will actually decide to upgrade to a Model S, for all the reasons already stated here.
I did that even before possibility to see one in person, and I have friends who want Model S but Model 3 value prop is just too tempting and they want to try it first before deciding.
Its a good question, not sure there is a good answer for it though. As an owner of a 2012 CPO model S, I have often wondered about when the resale value of my car will drop like a rock. It for the most part probably already has. I would like to buy a new Tesla sometime in the next year before the CPO warranty goes away.
The 3 would be a lot more tempting to me if it were a hatch back instead of a sedan with a trunk. With the S I can take the front wheel off the mountain bike and easily put it in the back of the car with the seat folded down. Can not do that with the 3.
As others have stated its all about supply and demand. The demand for a 2012 or 2013 is probably pretty low, but there were really not that many of them made to begin with and a fair number of them are no longer around, so in a way it kind of balances out.
gavine
Petrol Head turned EV Enthusiast
At half the price of a Model S for comparable range, the Model 3 is a much better car. It has a newer, nicer styled interior and newer technology than the aging Model S. Musk tipped his hat with the Roadster announcement, there will be MAJOR range increases coming to Model S/X. This is almost a foregone conclusion. Tesla needs to somehow justify double the price for the S/X over the 3. Currently there is very little justification for the price difference. The only reason why Model 3 isn't completely decimating Model S sales is because Model 3 is on backorder.
nigelsilva
Member
I disagree, the model S has more technology, and a much more premium interior than the three. Interior styling on the Model S is much more advanced than the three. Also it is not double the price for the same car. In order to get a model 3 up to par with an S you're looking at several options bringing the car up to around 50-60k – well within the range of a CPO Model S.
Yup. The funny thing is that I got a new base Model S 2 months ago, where after the $7500 tax incentive, my price will be close to $60,000. That’s far more car than the Model 3 for a very similar price.
I had been on the 3 wait list, but between impatience, test driving the S for 24 hours (and falling in love with it) and questioning how much, if any of that $7500 I’d see waiting for the 3, there was little doubt the S was the way to go.
I haven’t regretted the decision for one second.
That is the million dollar question, I wonder what the value of well optioned S85 2012 with very low miles will be in say 6 months? Sub 40K? Or less than that??? I have a low miles (24K) fully loaded S85 2012 and will be selling it as well in say 6 months but that depends on how much I can get for it. The car drives like a dream with no issues whatsoever
nigelsilva
Member
Yup. The funny thing is that I got a new base Model S 2 months ago, where after the $7500 tax incentive, my price will be close to $60,000. That’s far more car than the Model 3 for a very similar price.
I had been on the 3 wait list, but between impatience, test driving the S for 24 hours (and falling in love with it) and questioning how much, if any of that $7500 I’d see waiting for the 3, there was little doubt the S was the way to go.
I haven’t regretted the decision for one second.
Glad to hear you're happy with the decision! I think the Model 3 is perfect for someone looking to spend ~35-40k and wants a brand new vehicle with plenty of warranty, full electric, and on par with an entry level 3-series or c-class (320i/c300). For those of us that want more Tesla-specific features, such as the dual screens (driver and main control unit), AP, spaceship-like/modern interior styling, premium interior, guaranteed tax incentive (if you order ASAP), Model S is the way to go. Don't get me wrong I love the 3 and would buy one in a heartbeat, but I would be stingy with the options. And like you said, the tax-incentive is quickly running out, and with the proposed tax plan it looks like we could lose it all together.
I think that when they really get production of the model-3 going full speed that could happen. The high mileage cars are already in that price range. Here is one for $35,960.That is the million dollar question, I wonder what the value of well optioned S85 2012 with very low miles will be in say 6 months? Sub 40K? Or less than that??? I have a low miles (24K) fully loaded S85 2012 and will be selling it as well in say 6 months but that depends on how much I can get for it. The car drives like a dream with no issues whatsoever
https://www.ksl.com/auto/listing/4193911?ad_cid=16
nigelsilva
Member
whitex
Well-Known Member
You are not the only one. The key here is the availability of the Model 3, which won't happen until the reservation queue is gone, so in 2 years or so. Until then, people who can stretch, will stretch for a MS, the others will wait for their Model 3, but they don't cost a Model S sale since they wouldn't stretch for it anyways. There will be a very small number of people who would have bought an S if Model 3 reservation line wasn't available - that number will be offset by those who wouldn't have even looked at the Model S because of its price, but after getting excited about Model 3, decided to stretch for a Model S instead so they don't have to wait.
whitex
Well-Known Member
So what you are saying is that all Tesla has to do to sell more Model S now is provide Model 3 test drives to current reservation holders, to shake loose those impending Model S sales?
Two different cars and two different buyers...for the most part. There will be some overlap just because of the “I want an EV”, particularly a Tesla EV, so I will stretch, or get a bigger car than I need or really want. 7 series BMW and 3 series BMW seems a more reasonable analogy here. I guess some are saying the 3 is “as good” or “better” than the S but I don’t see the 3 as a successor to the S, just a smaller, different Tesla EV, for a different buyer.
