The TCO analysis I did before purchasing indicated it would be similar to a fully loaded Camry (so more expensive than the 2004 Prius it replaced, but not inordinately so). After a year of driving, that analysis hasn't materially changed.
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Help! I am getting cold feet
- Thread starter pbleic
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The TCO analysis I did before purchasing indicated it would be similar to a fully loaded Camry (so more expensive than the 2004 Prius it replaced, but not inordinately so). After a year of driving, that analysis hasn't materially changed.
SwedishAdvocate
Active Member
@pbleic
May I ask what kind of 4WD SUV you are driving now?
When doing the TCO analysis, are you also comparing the Tesla to something other than your current 4WD SUV?
May I ask what kind of 4WD SUV you are driving now?
When doing the TCO analysis, are you also comparing the Tesla to something other than your current 4WD SUV?
Krugerrand
Meow
Tesla is already successful.
The car is already practical.
Nobody has to convince you of anything. The car sells itself as is evidenced by $0 traditional advertising, the fact that Tesla doesn't have traditional sales people/dealership model, et al and that they continue to have a waiting list.
People buy what best suits them in the moment. Those that need convincing or being talked into something tend to be disappointed after the fact. Make your own decision, based on your own personal preferences.
*You* place importance on 'minor' things. That doesn't mean others do and it doesn't mean the majority of others do. Also, you assume that everyone's list is the same. For instance, the only time I'd use a vanity mirror is if I thought I had something in my eye. And guess what? I've owned vehicles with no vanity mirrors, never mind lighted ones. I can use the rear view mirror, a compact (not that I've ever owned one, let alone carried it on my persons), a side mirror, or pull over at one of thousands of fast food restaurants and use their bathroom mirror.
So not having lighted vanity mirrors doesn't even hit my 'minor things list', making vanity mirror/lighted vanity mirror of less than zero relevance in my car life. Tesla already has paid attention to details - just not the details important to you, rather the ones important to Elon Musk - and from what I've read all over the Internet, The Early Adopters have been fantastic ambassadors for Tesla.
Tesla's major issue is already trying to keep up with demand and that's likely to continue for many years. They have been production constrained from the get go.
One of the draws of the Model S is the price. Many believe that if it costs more, it must be better. If Ford or Chevy sold the exact same car with similar specs, it would have less interest at 3/4 the price. The wait, the story and the intrigue, which are part of buying any new luxury vehicle is built into the price. I know one co worker who bought a new 740iL for $100k because he was in sales and "needed it". One of our younger guys bought a used 740il a few years later for $25k. Couldn't tell the difference.
to many early adopters, money is less of an option. Yet, we also read of people here stretching to make the payments, and who are also stretching to make a statement. Not a lot of people will pay more to make such a statement which is why high mile BEV for lower prices is absolutely needed for EVs to maintain growth in the market. Without incentives, they would be hurting badly. Norway without its incentives would not be a hotbed. CA without the HOV lane access rights would be less of an EV sales region. Yet many do pay up to save what they think is meaningful resources.
what will make a difference is very mass produced and mass accepted EVs. I will be going to the local auto show today or tomorrow in my area, Philadelphia. Last year, there was very little interest in electric cars and this year gasoline prices are very much the same as last year. Consumers will adopt eVs when it meets their level of convenience and price capacity. However they will want utility and that will be a mix of $20-25k 120 mile AER EVs along with something like the Mitsubishi Outlander CUV EREVs which may be a big hit in the USA like it was in Holland (due to incentives).
Early adopters along with government incentives are helping drive EV interest and slow early adoption. However, so much more is needed and we will see how the big companies do with the next generation of batteries coming along. I do feel that a 200 mile EV is not necessary. Make a good cheap 120 miler so that a family can buy both a commuter EV or two and have a backup leftover ICE for trips. I am a Volt driver now and am looking for this transition to happen before going forward with full BEV. I can imagine a commuter BeV sedan and EREV CUV being the norm in many households. I think we should rent our pickup trucks and not buy them just for the few times we use them. But this is America and boys will be boys.
@Kruggerand Tesla is not already successful. They have a long way to go in going from the early adopters who have bought a tiny number of cars to the mainstream. They aren't profitable yet and have financial multiples no different than any startup. They are just arriving at the chasm that can make or break companies. There is a limited market for a car at this price point and a huge challenge at meeting a mass market at the Model E price point. As a potential buyer, I really hope they can make it as I will be dependent on their success. It is easy for buyers and companies to get fooled into complacency. Witness Betamax.
Problem is, what if you already have the 7-series. You do not replace it with something new to save money. The only time it saves is this. You just receive word you have a $120k inheritance and must buy a car. You have to buy one car of at least $80k and the remaining money is for fuel and upkeep. Your choices are Mercedes, BMW and Tesla. You must keep it 10 years. Then doing a TCO of the choices, you will find the Tesla to have the lowest cost TCO. But nobody is going to lower their TCO by selling an existing car and replacing it with a new one. I wish people would skip the whole TCO benefit of EVs, small and large, and get to the point. They are cool, they have a smooth torquey drive, they are innovative. They keep you from using oil. Collectively if 9 million people drove EVs instead of ICE cars for at least 10,000 miles a year, we could stop buying oil from OPEC. That is a lot of work ahead of us. I say the cool factor of the Model s is 80% to the 20% practical aspects involved. It is an emotional purchase for some, it is vanity - just as their prior purchases of Mercedes or BMW were. Not a purely practical one. If we were all practical we would drive cheap, used, 40 mpg econoboxes or buy used off lease Volts and Leafs if you are really deep down allergic to oil. But many of the practical arguments "for" buying are in fact many people's attempt to hide their emotional- and vanity-driven desires.
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My assumption is that you are looking because the 7 Series is going to be replaced anyway, or that you are moving up from something to a 7 Series, not that you are selling your two or three year old 7 Series. You are comparing new 7 Series and new Model S, not existing 7 Series and new Model S. Of course, there are a lot of other reasons to purchase a Model S.
Tesla is on track with the long term strategy to provide compelling sustainable personal transportation to the masses -- that being the Model E in 2017 or so. Perhaps the Model E is what should be the target for the early majority and the rest, and IMO has always been Tesla's plan for crossing the chasm. The Model S is the more expensive "funding machine" that is helping Tesla gain capital to invest in the charging infrastructure and pay for the design and manufacture of later vehicles. The Model E's TCO will look much better. Revisit your arguments and think about them in terms of the Model E - does that fit better?
And -- Tesla's major issue is already keeping up with the demand.
Todd Burch
14-Year Member
Gotta say, you're pretty wrong here. Whether you consider Tesla "successful", that is an opinion without a concrete definition of what successful means. But I'd say garnering Motor Trend's Car of the year, Automobile magazine Car of the year, the highest score Consumer Reports has ever given to a car, the best safety score ever achieved by the NHTSA, outselling all competetive brands in many markets, and many other accolades would go a long way toward "successful".
As far as profitability, Tesla's already making tons of cash. That's why they paid off their loan early. We're talking on the order of 30% gross margin on every vehicle. That's huge. Of course, because Elon is a good businessman, they are investing that money in infrastructure (Superchargers, service centers, showrooms, battery factories) to build the company, but no matter how you look at it, they're making money.
They could slow R&D, Supercharger expansion, or any of those other items and show a much bigger profit, but they don't need to.
The company that wants to be successful today would stop those other expenses and start raking the cash in as pure profit.
The company that wants to continue to be successful tomorrow invests it into R&D, infrastructure, manufacturing capacity, etc.
But make no mistake--they are definitely profitable.
And if you think comparing them to "any other startup" is valid, you're wrong there. They're not any other startup. They're not just any other car company. Their product, technology, and infrastructure is far ahead of the competition. Even if a competing car company came out with a 400 mile EV, where's the charging network? Where's the high-speed charging technology? In this respect, Tesla is already YEARS ahead of the nearest competitor, and every day that goes by puts them another day ahead.
A roll into the median waiting to happen. Although a lot of people have 4WD, it's often referred to as 4 Wheel Skid.
Buy a used Subaru, wait 2 years and look again.
I don't agree with this. Tesla isn't a brand that commands a price premium. Tesla has a product that is at the forefront of a technology shift in cars and, as such, some are willing to pay more to be part of that (and/or to support a company that is serious about making the transition happen).
If the Model S was at a lower price, I'd buy more options (and/or buy more upgrades) not reconsider the car. If Ford or Chevy sold the same car with similar specs, I wouldn't be able to buy one because it would probably be a compliance car only available in California.
Todd, the Chevy Volt got all those awards back in 2011. Both the Volt and Model S are great cars. Awards do not promise a strong future. Volt sales are now slow, but mainly due to GM's own fault. There are some headwinds for all EV makers no matter how much we love them and want them on all streetcorners. If you are an EV owner, like me, we cringe when we see someone idling their SUV outside of a store waiting for someone to come out. However, we are a tiny minority.
brian, you are right, the price of admission is a desire to help the EV adoption happen. The number of people willing to pay it is limited. This is a premium price. In 10 years, cars equivalent to the MS will be under $50k for a P85. It indeed commands a premium price as we haves seen prices rise on options twice in the last 13 months. It commands it because there are no competitors. If you want an MS, you pay to play, or at least try to find a discounted loaner. I am more of a bottom feeder and might pick up a used MS in 2016 off lease or used. I just know this is like back in 1991 when my firm used to buy PCs with Intel 486-33 Mhz chips in them for $2800.00. Prices have come down since. In a similar view, the current list price of the MS will have to start to come down next year once the MX starts to ship. This current price is a start up price but is not sustainable years to come if the company is viewed as Tech.
brian, you are right, the price of admission is a desire to help the EV adoption happen. The number of people willing to pay it is limited. This is a premium price. In 10 years, cars equivalent to the MS will be under $50k for a P85. It indeed commands a premium price as we haves seen prices rise on options twice in the last 13 months. It commands it because there are no competitors. If you want an MS, you pay to play, or at least try to find a discounted loaner. I am more of a bottom feeder and might pick up a used MS in 2016 off lease or used. I just know this is like back in 1991 when my firm used to buy PCs with Intel 486-33 Mhz chips in them for $2800.00. Prices have come down since. In a similar view, the current list price of the MS will have to start to come down next year once the MX starts to ship. This current price is a start up price but is not sustainable years to come if the company is viewed as Tech.
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Todd:
Believe me, I would like to see Tesla as a profitable company, as that would increase my confidence that they will be successful one day (that is, financially secure). However, they are not profitable at this point under GAAP accounting. They lost $38M 3Q2013. You are quite correct that they have figured out how to manufacture a car with a gross margin of 30%. But that is not how you define profitability. That is their GROSS profit margin. To determine whether a company is profitable, you need to look at NET income, which is, and has been negative. BTW, their debt has increased YOY in Q3 from $475 to $677M. The Return on Assets is -6.81%, which means they are burning balance sheet cash to run their business, not producing cash. The trailing 12 month free cash flow is -$148M. Make no mistake, this is not a profitable company by any measure.
All that being said, they could well manage to make a huge success from this, especially with all the recognition and accolades that you mention. But the trick is going to be going after the mainstream market. Their big challenge in the coming years is scale - taking a 25,000 car producer to a 200,000/yr producer with multiple lines. This is going to require a LOT of investment, which will further depress profitability. They were lucky to buy up a lot of factories for cheap in 2008-2009, but it is going to cost them a lot going forward.
This also goes into my buying equation; I want to make sure the company I am buying from will be around and will be able to service my vehicle during it's lifetime.
Really. The Model S is not for you right now. Go buy a different car. Lots of 4WD options. Check again in a few years.
wiztecy
Active Member
Sounds like you should wait for the Model X which IS 4wd and won't be fishtailing up your driveway. Put you're reservation down and your done
Here are a few companies that exactly fit your description, but spectacularly failed: Iridium Communications, raised $6B in the 90's and was bankrupt by 2001. eToys, raised $386M, market cap of $11B in 1999, bankrupt in March 2001, Webvan went from a $1.2B in sales company with 4,500 employees to liquidation in 2 year. They overextended themselves by spending $1B on a string of $30M warehouses across the country, expanding too quickly
Companies at Tesla's stage are in a precarious position, despite all the hoopla about them. They need to begin to spend magnitudes more money, with that much more risk - ahead of the market. For me, I have no investment interest in them. As mentioned before, I just want them to be around to supply parts for my car as it ages.
That is just due to an oddity in GAAP accounting where some of the profits are postponed until later years. Bear in mind how accounting works:
A manager was interviewing some new prospective employees. The first applicant was an engineer. The manager asked, "How much is two plus two?". The engineer pulled out his laptop, typed in some formulae and responded, "Four". Next came a mathematician. The manager asked, "How much is two plus two?". The mathematician went to the blackboard wrote down some numbers and responded, "Four.". Then an accountant was interviewed. After being asked the same question, the accountant looked around, went to the windows and drew the curtains, went to the door looked out and closed the door. Then we went over to the manager and said, "How much would you like it to be?".
Merrill
Merrill
There is nothing in life as a sure thing. If that is what you need before you buy into the future you will never find it. Because if everyone felt that way Tesla would be non-existent.
purplewalt
Active Member
There are NO guarantees in life.
NONE.
You put your money down, and take your chances.
You seem to have very high standards for detail items and a need for full creature comfort.
Some of your points are valid (to you), this one is highly suspect and in my opinion flawed.
Best of Luck with the vehicle you decide to purchase.
I thought so exactly until I heard THREE rows of adult seats. I am done with minivans; grown kids. I want a 4WD Model S. Sounds like this is possible, but not until 2016 or so.Sounds like you should wait for the Model X which IS 4wd and won't be fishtailing up your driveway. Put you're reservation down and your done
PS - in answer to other questions - I have a BMW X3. The test drive vehicle was a P85 with snow tires. It really performed quite well going quickly up the driveway. However, the driveway can get a lot more icy, so I went up very slowly (which worked fine in my X3) and the car came to a standstill and slid backwards because of traction control. So, I took traction control off and that is when it fishtailed. Someone asked about that.
Despite my reservations, I am actually thinking that I will place a deposit this weekend.
PPS - I am not a stickler for lighted vanity mirrors. They just represent a bunch of things which typically come standard in a luxury car at this price point.
