Largest concern about buying a model 3

[ArtLightstone]

This overlooks the fact that every ICE vehicle is becoming out of date and obsolete much faster than any Tesla ever produced.

So true. At this point, I can hardly believe that anyone would put anything more than $5,000 or $6,000 on a used gas car. Who would buy a new gas car? Sales of gas cars are dropping, and more jurisdictions are announcing bans on gas cars by the years 2025 or 2030. I wouldn't say a gas car is a prudent investment at all.

 

[Rownolds]

Dude, lease it. Seriously. It'll give you a measure of comfort regardless.
However, having said that, I'd also like to say that (knowing what I know about what it's like to own and drive a M3), if I didn't already own one and Tesla was bankrupt and there was only one M3 left for sale, I'd snap it up.

 

[aerodyne]

I share everything you said and just last week we picked up our Model 3 from Cleveland. Very cool car, but I have moments that I fell that we 'rolled the dice' on this. Can't shake it.

It is the "U" in FUD. Cure is daily drive, and visit to TMC.

 

[brianman]

As far as "real" - I'd probably think Model X launch was far riskier than what is happening with the 3. Or before the first Roadster launched.

Or that last Roadster launch, the one out of the atmosphere.

 

[Dinoraptor101]

I have been lurking these forums for a couple of months so I know some people are going to respond that Tesla is all unicorns and rainbows but for the rest of us I have a question. My largest concern about buying a model 3 (besides that it will be, by far, the most expensive auto I have ever purchased) is a potential collapse of Tesla. I don’t want to buy this car with a shiny 4 year warranty then have tesla go out of business 3 months later, this car has to be able to get me to work for the next 6+ years. And while I know Tesla is always riding the edge it seems like more of its exes are abandoning ship, US demand isn’t great, they are trying to pull ever demand lever every created, they lost a ton in q1, wall street is worried, etc. Does anyone else share this concern?

Hi, as a shareholder in Tesla I can tell you to worry not the company is so cutting edge it makes Apple look like a water bottle company. We have the smartest people on the planet in the leadership including those who helped shape many modern world technologies. Executive roles have serving terms and after which they can choose to be re-elected or be voted out, etc. That's very normal in all companies (more so in public companies)

Tesla as company (not as public shareholder interest) focuses on long-term success, all this short-term profits and losses are organic behaviours when you re-invest all your revenue back into R&D the demand is pretty high (higher than most American cars) but it doesn't meet Tesla's projections (which aims even higher)

As far as vehicle technology goes. Currently car companies build a crap product, polish it, slap some MVP upgrade and fool-consumers (with marketing strategies) as innovation. The fact that cars are stuck with engines, have low safety rates, a 1970s wiring, and a cheap BT, is ridiculous if not outright a scam!

Middle Class people don't need to be cool and they buy Model X and Model S simply because those are the best vehicles ever built by the human race to date.

The Model 3 brings some of those real achievements in autonomous mobility, energy conservative motor tech, and space-grade energy solutions down to the affordability of the average Joe.

If the question is what do you get for your money when you buy a Tesla car. You are getting your hands on a technology meant for at least 300 years from now.

The business world hates Tesla because it forces them to jump on the innovation train, rather than milk the market for more money re-selling the old again and again. Governments are not super happy with Tesla as it undermines the value of crude oil, and prevents the chance of accidents significantly. The car makers world is very angry with Tesla because it's raises the bar for what a car can be in terms of maintenance free, fuel source independent, lasting an avg of 15 years VS 7. Capable of Autonomy, remote control, access, and configuration for Valet and so on. The Tesla car standard is so high no one has even built something like it since it launched release Model S in 2012

At worse Tesla will remain the maker of the elite Model S marvel. At best Tesla will he the Apple of car-makers.

Remember the day when you though there's no way you'd spend over 200 bucks on a phone? And now you have a 700-1000 smartphone? Tesla isn't a car. It's the next leap in vehicle autonomy and energy like the world has never seen before.

If you love technology like I do and you can come up with the money to leap into future tech, this is your one chance. If you want to get the good-enough re-paint of your current car scam...

May as well stick to your current car until it dies first. Because you'll be buying the same engine, mess with oil change, deal with traffic on rush hours, and so on.

You can buy any other car and you'll be happy for 1 day, you can buy a Tesla and be happy for 15 years.
You can stick to your current car and spend the money on fixing your house?? Hmm Solar Panels?


The choice is yours :3

 

[Dinoraptor101]

It is the "U" in FUD. Cure is daily drive, and visit to TMC.

The Cure comment had me ROFLMAO

 

[b team]

So apparently there are a lot of people walking through life perceiving risks and dangers where there are none. If buying a car is what qualifies as a “risk” or a “leap of faith” for you, you must lead a fairly dull existent.

 

[Dinoraptor101]

So apparently there are a lot of people walking through life perceiving risks and dangers where there are none. If buying a car is what qualifies as a “risk” or a “leap of faith” for you, you must lead a fairly dull existent.

Clearly the risk he outlines is financial. A seemingly to him a big investment is worth calculating

 

[SR22pilot]

So true. At this point, I can hardly believe that anyone would put anything more than $5,000 or $6,000 on a used gas car. Who would buy a new gas car? Sales of gas cars are dropping, and more jurisdictions are announcing bans on gas cars by the years 2025 or 2030. I wouldn't say a gas car is a prudent investment at all.

I wonder what is happening to ICE resale values in Norway? Are they propped up by the tax structure so that used is a way of avoiding the big tax on new ICE? I don't know. Down the road, as ICE cars are banned from many cities, resale values will fall. I suspect that is only a few years away in Europe and China. The US will lag but it will happen within 10 years. I am glad to be ICE free before the fall.

 

[Midnight Star]

To the OP: I can understand why you may be concerned, give the noise out there, but this video helped me put it into context:

The reality imo is if Tesla is no longer able to operate as an independent entity, others will step in and buy them out, as they have tried to do previously.

There are also plenty of examples in car making history of independent marques that got into trouble, being rescued and going on to succeed as part of a broader group. Auto majors and big tech would fight over Tesla for sure (and the winner would continue to provide support for your purchase )

 

[srs5694]

Yeah the interesting thing I saw looking at CR ratings, is that all Tesla cars have a "Predicted Owner Satisfaction" of 5 out of 5.
Does this mean that even while some cars have issues, the owners still love them?

Basically, yes. Keep in mind, too, that the number of problems with the average new car today is quite low compared to the not-so-distant past. I don't recall the precise figures offhand, but IIRC, something like half or fewer of new cars have any sort of issue in the first year. Even a car that's really bad might have just one issue per vehicle, on average. I suspect that most people would be willing to forgive one service visit in the first year for a car that's otherwise very good. Certainly you see a lot of posts here to that effect -- the car is out of service for a week as the body shop fixes delivery-time paint problems but the owner still loves the car.

This contrasts with the state of affairs in, say, the 1970s, when new cars routinely went in to the dealership to fix problems two or three times in the first year. At that time, the hassle of dealing with a car with below-average reliability was much worse than today, because what constitutes "average" has changed. (From time to time, CR and others have written articles about this. The improvement in automotive reliability over the past few decades is significant.) I don't know if there was a stronger correlation between customer satisfaction and reliability back then, but it wouldn't surprise me if that correlation has dropped with time, as overall industry reliability has improved. IMHO, the weight CR puts on reliability is a holdover from those times, and should be reduced a bit, given the improvements in automotive reliability. Fortunately, although CR does have its "Recommended" category, and an overall numerical score, it breaks things out pretty clearly, so you can re-weight things yourself, either formally or informally.

 

[ArtLightstone]

I wonder what is happening to ICE resale values in Norway? Are they propped up by the tax structure so that used is a way of avoiding the big tax on new ICE? I don't know. Down the road, as ICE cars are banned from many cities, resale values will fall. I suspect that is only a few years away in Europe and China. The US will lag but it will happen within 10 years. I am glad to be ICE free before the fall.

Yeah. I saw the writing on the wall, so when I had someone interested in buying my 2012 Honda Civic, I dumped that thing like a hot potato!

 

[daver3]

No risk, no reward Go buy some other boring car.

Keep in mind that I bet 2/3 of the owners of Tesla's also spent more than they ever had on a car before as well. You are by no means alone.
It's only natural because with an EV you're paying some costs up front.

In the long run, for say a LR RWD, the long term cost of owning and operating is probably on the order of a Nicer Honda Accord (maybe an Audi A4) say, a $25k - $32k ICE car.

Now, I must say, that partly depends on what electricity costs you. There is a HUGE gap in what folks pay across the USA. Any where from $0.08 kWh to $0.32 kWh. And some folks can charge at work free etc. So it partly depends on where you get your kW from that affects the ROI. I have a fairly high rate but I have Solar to cover most of it. I'll know better after a year of ownership.

Also factor in TIREs. A lot of lead foots are eating their tires faster than they are saving on gas.

Insurance is a another thing to watch out for. You need to shop around, and if you do you can find very reasonable rates. My worry is, over time the model 3 rates will go way up. Fast, expensive cars, tedious to fix, young drivers and running Beta AP could push the stats towards more $$$ for everyone.

I didn't really consider cost savings that much, but I'm using about $20 in electricity per month (4 months an owner) vs. $80 in gas in a Prius before and the maintenance is laughable. . .10k miles, check your tires, at 2 yrs change the cabin air filter. I filled up my wife's car the other day and had to think about how the gas pump worked, when it was automatic before. I'll never go back!

 

[glgador007]

I have been lurking these forums for a couple of months so I know some people are going to respond that Tesla is all unicorns and rainbows but for the rest of us I have a question. My largest concern about buying a model 3 (besides that it will be, by far, the most expensive auto I have ever purchased) is a potential collapse of Tesla. I don’t want to buy this car with a shiny 4 year warranty then have tesla go out of business 3 months later, this car has to be able to get me to work for the next 6+ years. And while I know Tesla is always riding the edge it seems like more of its exes are abandoning ship, US demand isn’t great, they are trying to pull ever demand lever every created, they lost a ton in q1, wall street is worried, etc. Does anyone else share this concern?

If your only concern is for Tesla to go belly-up, don't buy their product. Tesla is just like any business. Some succeed, some don't. No one really knows what is going to happen in the future or even tomorrow. As for its cars, it may be expensive than the average price of some cars but not so much with cars in its category. In short, you are an adult and I'm sure well read and conduct research before buying. It's really your own personal decision and no one else. Btw, there were also manufacturers that went bankrupt like American Motors, Renault Alliance, just to name a few. What happened to the cars that they sold?

 

[b team]

In all seriousness though, the answer to the bankruptcy risk question is straightforward. Unsecured bonds issued by Ford, GM, and Fiat Chrysler all yield around 4.3%. Tesla bonds yield around 8%, indicating that debt investors perceive a significantly higher default risk. As others have pointed out, whether you will be able to get a car serviced is a distinct question. If Tesla (1) goes bankrupt and (2) ceases operations (a distinct question and even less likely), others will figure out how to service these vehicles. In short, you are imagining risk where there is none.

 

[Triplett]

Let's keep this thread alive for 4 years. That way, the OP could have bought the car today and Tesla will still be in business by the time everybody is done trolling him.

 

[Triplett]

Tesla goes bankrupt. One of three things happen:

It's a reorg and not a liquidation - you have no bigger problem than the **** service Tesla already provides today.
It's a liquidation, Apple, Google, etc rush in and take over - your service just got better.
It's a liquidation, nobody comes in and takes over. The Court orders part of the assets to be held in trust to service all remaining warranty contracts - you have no bigger problem than the **** service Tesla already provides today.

I have done high value bankruptcies. The Court will protect the consumers.

 

[N5329K]

I have been lurking these forums for a couple of months so I know some people are going to respond that Tesla is all unicorns and rainbows but for the rest of us I have a question. My largest concern about buying a model 3 (besides that it will be, by far, the most expensive auto I have ever purchased) is a potential collapse of Tesla. I don’t want to buy this car with a shiny 4 year warranty then have tesla go out of business 3 months later, this car has to be able to get me to work for the next 6+ years. And while I know Tesla is always riding the edge it seems like more of its exes are abandoning ship, US demand isn’t great, they are trying to pull ever demand lever every created, they lost a ton in q1, wall street is worried, etc. Does anyone else share this concern?

Direct answers from my perspective:
1. Tesla going BK is very unlikely, though not impossible. Most startups do turn their toes up. But not all of them.
2. Chances are good that someone would step in to support the cars even if it did.
3. Working with and for EM can be very difficult, very frustrating (search distortion field and you'll see why). SV execs have a lot of well-paying options and some are choosing to bail, and some always will. But the company also attracts top talent and gets amazing work out of them. Some burn out and leave. Others you'd have to wheel out in a gurney to make them quit.
4. Demand dropped in Q1. There are reasons why that happened. Some are unique to Q1 (bad weather, the Q4 tax/rebate push, cars shipped overseas and in transit, S and X updates imminent, etc). Some might not be. Q2 will tell.
5. There are a lot of bad actors trying to manipulate the share price in order to prove themselves right, and even make some money. Some of what they say is ridiculous, but still widely-believed. Occasionally some of it is worth paying attention to.
6. And for the rainbows and unicorn set:

Robin

 

[neroden]

I have been lurking these forums for a couple of months so I know some people are going to respond that Tesla is all unicorns and rainbows but for the rest of us I have a question. My largest concern about buying a model 3 (besides that it will be, by far, the most expensive auto I have ever purchased) is a potential collapse of Tesla.

Zero chance event, don't worry about it.

I don’t want to buy this car with a shiny 4 year warranty then have tesla go out of business 3 months later,

There are over half a million Teslas on the road and an endless line of customers trying to buy more. There is precisely ZERO chance that they will go out of business. Absolute worst case, some other company buys them out. That is extremely unlikely because they have piles of cash and plenty of people happy to give them more.

Does anyone else share this concern?

Nobody who has a clue shares that concern. Some idiots might.

 

[neroden]

I'd be much more worried buying from a traditional carmaker. Many of them won't survive the transition to electric cars, which is clearly where the industry is headed, and Tesla has a huge lead over the competition.

Yep.

For all of Tesla's many, many achievements, there is a non-zero chance that they will go belly up.

Depends what you mean by "belly up". They might wipe out the stockholders. There is ZERO, yes, ZERO chance that they will stop operations. Someone else would buy them out and support the cars on the road. It's too valuable.