Model 3 Subscriptions & Priority Deliveries

[kilocar]

First of all Happy New Year TMC!

At the end of last year and based on our Model S/X fleet size, we put a deal in place with Tesla to purchase up to 500 Model 3s priority delivery in 2018. We're super excited about the possibilities here!

The specs for each one are as follows:
- Rear-wheel drive
- Long-range battery: $44k
- Premium Upgrade: $5k
- Enhanced Autopilot: $5k
- 18" or 19" wheels: 18" wheels included
- Choice of color: Black color included
Total sub-total: $54k
+ Destination and Doc Fee: $1,200
Total purchase price: $55,200

Upgrading to the 19" wheels or a different exterior color would add $1,500 and $1,000 respectively.

We plan to offer these Model 3s to our customers as subscriptions. Our subscription price will be $5k down and $699 per month for 36 months or $749 for 24 months or $849 for 12 months. If you live in Colorado or Utah (additional locations coming), there will be a month-to-month Model 3 subscription option too. It's $5k down and $899 per month. You can drive it until your Model 3 reservation gets delivered or until AWD or lower-priced versions become available for purchase.

We are planning to market this option to customers on our website and some other partner sites in the next couple of weeks. I wanted to give fellow TMC members the first dibs on this option. Both to say thanks for an amazing first year and to gauge the community's interest in our flexible subscription option.

We plan to offer this Model 3 inventory on a first-come, first serve basis to qualified customers. In order for you to reserve your place in line, we have a Docusign Letter of Intent where you can provide some basic information about yourself and formally indicate your interest in a Model 3 subscription. Once we accept your letter of intent, you'll be given a unique reservation number and can officially place your order (through Kilocar) with Tesla right away.

Please PM me with your e-mail address if you're interested in getting more information and/or to send you an executable Letter of Intent to get the ball rolling.

Thanks everyone! Hope 2018 is filled with much success, happiness and EV adoption!

 

[spudnik187]

If you did a month-to-month in Austin I would consider it until I get my Model 3.

 

[Sou7hCat09]

Do you have an estimate for when the Model 3's would be available for subscription if I filled out a Letter of Intent today? I think you have a good idea in the making.

 

[MP3Mike]

I love the idea, but I think the monthly prices are a little on the high side.

 

[kilocar]

If you did a month-to-month in Austin I would consider it until I get my Model 3.

We have a plan to add several locations in 2018...hopefully Austin will be one of them. Love that city!

 

[kilocar]

Do you have an estimate for when the Model 3's would be available for subscription if I filled out a Letter of Intent today? I think you have a good idea in the making.

Well, from what we've been told, they will be coming pretty quickly once we place each one. I would say end of Q1 to early Q2 on the ones we order in January. One of the reasons why we are going for the more loaded ones is so we can get them delivered as soon as possible.

Thanks for the interest!

 

[kilocar]

I love the idea, but I think the monthly prices are a little on the high side.

Thanks for the feedback Mike. If you drop the EAP, it lowers the monthly by $50 and same with the Premium Interior. So, you can get it down to $599 a month or under $500 once you factor in the fuel savings. We hope at this price point, it will be affordable for most everyone, especially considering that you get to drive a Tesla! You also save a decent chunk of change in sales taxes vs purchasing.

 

[SoCal Jimmy]

Interesting concept model, but as a subscription, why require the down payment? Netflix, Hulu, HBO subscriptions don't require down payments.

Just seems like a lease agreement without the term "lease" since its not a bank. How does insurance work? Covered under the subscription?

Are there mileage restrictions with these subscriptions?

 

[Cali_MY_M3]

I'd be interested as well but as someone else mentioned already, the down payment is slightly misleading.

Another question I have is, what's the penalty for ending the subscription early?

 

[sperkin]

Interesting concept model, but as a subscription, why require the down payment? Netflix, Hulu, HBO subscriptions don't require down payments.

Just seems like a lease agreement without the term "lease" since its not a bank. How does insurance work? Covered under the subscription?

Are there mileage restrictions with these subscriptions?

You can take the $5k down as a membership card to join his exclusive club. Subscription is just his marketing term for his leasing company. Just like Netflix Originals, Hulu Originals, and HBO Originals are not shows produced by themselves. They just call it that way for marketing like they produced it by their own studios. They don't own any studios and buy shows off of others. Our studio's name is never on any of their shows. Only Dreamworks got that deal.

Kilocar borrows money from the bank and then "subscribes" out. Basically what Netflix does when they buy from CBS, NBC, etc and sells it to other people

 

[kilocar]

Interesting concept model, but as a subscription, why require the down payment? Netflix, Hulu, HBO subscriptions don't require down payments.

Just seems like a lease agreement without the term "lease" since its not a bank. How does insurance work? Covered under the subscription?

Are there mileage restrictions with these subscriptions?

It's a similar concept to leasing for sure. At the same time, there are some really important distinctions other than simply calling it something else. The main benefits here are flexibility and cost. It saves customers money, which is always a plus. You can exercise a buyout at any time. There are shorter durations available. You can roll your down-payment into another subscription, so it helps customers who want to always be driving the latest and greatest Teslas who don't necessarily want to wait 3 years to upgrade. We charge a down payment mostly to make sure the customer is committed to driving that particular Tesla and also for consistency purposes so it's easy to compare with other typical lease options.

On insurance, we have an umbrella policy on the entire fleet. We initially bundled insurance into the subscription, but found that most customers prefer to use their existing agent / policy / company. We are flexible on that either way as long as it's covered to specified levels of coverage. The base subscription is 1k a month or 12k a year, but you can always upgrade to 15k per year (1,250 per month) for an extra $30 / month. 18k annual miles costs an extra $50 / month. It really comes down to what each customer needs. We allow and even encourage things like ridesharing (Uber/Lyft) and rentals (Turo), which I understand are restricted in typical leases. We're working on an app to make it really easy to locate and subscribe to your next Tesla.

PM me for additional info to get started. Thx!

 

[kilocar]

I'd be interested as well but as someone else mentioned already, the down payment is slightly misleading.

Another question I have is, what's the penalty for ending the subscription early?

The month-month has no early termination, 12-month is $1k, 24-month is $2k, 36-month is $3k. On a 36-month subscription, once you get 13 months into it, early termination drops down to $2k, and to $1k after 24 months. You pay a little bit of a premium for the shorter durations, but you gain more flexibility too. See response above on the down payment and comparisons to typical leases. Hope that helps!

 

[kilocar]

You can take the $5k down as a membership card to join his exclusive club. Subscription is just his marketing term for his leasing company. Just like Netflix Originals, Hulu Originals, and HBO Originals are not shows produced by themselves. They just call it that way for marketing like they produced it by their own studios. They don't own any studios and buy shows off of others. Our studio's name is never on any of their shows. Only Dreamworks got that deal.

Kilocar borrows money from the bank and then "subscribes" out. Basically what Netflix does when they buy from CBS, NBC, etc and sells it to other people

Great analogies. We love both Netflix and Hulu, so if we can fill a market niche like they have, I'll be super stoked! See response above for several key distinctions on Kilocar subscriptions vs. typical leases. We hope in aggregate they'll help us appeal to a new demographic of consumers. It would take more time to articulate how this might happen, but it's this notion of an extended test drive. In the hotel world, they refer to it as the extended stay market. People who want and need a Tesla, but also crave and need flexibility and prefer to side-step many of the drawbacks typically associated with long-term car ownership. We hope to do a good job filling this void over time.

About a year ago or so, Apple introduced a program where you can upgrade your i-phone either every year or every other year for a fixed amount per month. This same concept is what we have in mind for our subscriptions. After 12 months, 60% of the down payment ($3k) can rolled into another subscription with no early termination penalty. After 18 months, 50% of the down payment ($2.5k) of the down payment can be rolled into another subscription with no early termination penalty. Your monthly payment gets adjusted based on whatever Tesla you roll into. We call it the early-adopter program. Overall, once you add up all the various nuances and benefits, it will hopefully stand on it's own a unique option in the marketplace. We've created this option based on feedback from many of our customers, things they didn't love about traditional leasing & purchasing. Thanks to everyone who has provided great ideas and insights thus far!

 

[barjohn]

Can you explain how you are handling the $7,500 tax credit? It appears Tesla takes it off the residual. You don't state what the residual would be on these cars or how it is calculated. If one wants to go ahead and purchase the vehicle after 12 months what does it cost to do so? Thanks

 

[rubdom]

Can you explain how you are handling the $7,500 tax credit? It appears Tesla takes it off the residual. You don't state what the residual would be on these cars or how it is calculated. If one wants to go ahead and purchase the vehicle after 12 months what does it cost to do so? Thanks

Would like to know the answers to these questions as well.

 

[t00shay]

I would also like to know what the end term would be and the the buy out price. Thanks.

 

[kilocar]

If you did a month-to-month in Austin I would consider it until I get my Model 3.

If we had a location setup there, we would definitely offer it. We are excited to test this model to see how well it works.

 

[kilocar]

Do you have an estimate for when the Model 3's would be available for subscription if I filled out a Letter of Intent today? I think you have a good idea in the making.

Thanks for the support and kind words. We are trying to work this out with Tesla right now. We are ordering as many as they will let us order. All of ours are slated for "priority delivery", but this can have several different meanings. We are getting some as soon as 3 weeks from now. My best guess is sometime in Q2 when we can start to get a good number of them actually delivered to us. We will keep everyone posted.

 

[kilocar]

Can you explain how you are handling the $7,500 tax credit? It appears Tesla takes it off the residual. You don't state what the residual would be on these cars or how it is calculated. If one wants to go ahead and purchase the vehicle after 12 months what does it cost to do so? Thanks

Hi BarJohn. We handle the $7,500 tax credit in the same way that Tesla does...we add it back to the residual so the financed amount is reduced and therefore your monthly payments are lower. On the buyout price & timeline, we are working on those details. We typically figure out what the depreciation factor is and then lower the buyout price by this amount each month. It will likely be something similar here.

 

[kilocar]

Would like to know the answers to these questions as well.

See answer above Rubdom. Thx!