Model S March 2011 update

[ckessel]

Since a very-well-equipped signature edition is expected to be around $80K.

That's the 2nd time you've mentioned $80k for the Sig, but I can't find any such mention anywhere on the Tesla site or FAQ. Where does $80k for a Sig come from?

Ignoring the tax stuff, the base car is 57500, +20k for batteries is 77500. I'd be shocked if leather and other luxuries weren't another $10k, so I'm not sure how the 300 equipped Sig is less than nearly $90k.

 

[Arnold Panz]

That's the 2nd time you've mentioned $80k for the Sig, but I can't find any such mention anywhere on the Tesla site or FAQ. Where does $80k for a Sig come from?

Ignoring the tax stuff, the base car is 57500, +20k for batteries is 77500. I'd be shocked if leather and other luxuries weren't another $10k, so I'm not sure how the 300 equipped Sig is less than nearly $90k.

That's probably about right, but then in the US with the $7500 tax credit you're right back down closer to $80k. I figure that the battery pack is by far the most expensive option/upgrade, and a roughly $80k purchase price (after the tax credit) would make sense given that the original deposit was $40k, making it about half the price of the car.

 

[AnOutsider]

Yea, that probably won't fly for me. Part of sell of the car is low maintenance. Buying an expensive car, then having to spend $30k in 5 years, which is as much as our current cars cost new, to upgrade packs, isn't exactly living up to the concept of low maintenance.

$30k in 5 years on what? The 300 mile pack is a $20k upgrade, and in 5 years, the tech in the pack could be significantly cheaper than it will be at launch.

I'm still stunned at the 10k bump.

What "bump"? Batteries weren't priced previously, and most people expected it to be about $20k extra.

 

[qwk]

Since the sig series reservation number is pathetic, the 300 mile pack was announced to most likely sell the 1k units they planned on. Otherwise I doubt they could get 1k people to reserve the sig series.

 

[kgb]

That's the 2nd time you've mentioned $80k for the Sig, but I can't find any such mention anywhere on the Tesla site or FAQ. Where does $80k for a Sig come from?

I'm not saying that these guys are the best source for this kind of info, but I think that Tesla once announced a price (or mentioned a ball-park price) for the Model S Signature. But I am getting the impression they are backing away from it quietly.

Tesla Motors, the California-based maker of premium electric vehicles, said the first production versions of its new Model S sedan, now due in mid-2012, will be the high-end Signature series, priced from around $77,400.

Tesla Says First Model S Sedans Will Be Priced From $77,400

$77,400 then if you want the top of the line Model S 300, which initially will be called the "Model S Signature Series" in the US, a limited edition run of 1,000 autos with big batts.

Tesla Model S pricing and delivery details confirmed -- Engadget

Tesla (NASDAQ:TSLA) said the first 1,000 cars off the line at its Fremont (Calif.) assembly line will be the North American Model S Signature Series, equipped with a 300-mile range battery. It will be a limited-edition series selling for about $70,000 after a federal tax credit and come with unique badging and options.

Price, plan updated on Tesla's Model S sedan | New Mexico Business Weekly

 

[AnOutsider]

KGB, I see that as mere guesses/interpretations from the writers. They're quoting the battery prices I believe, which obviously do not encompass any possible options (which also have not been released yet)

 

[ckessel]

$30k in 5 years on what? The 300 mile pack is a $20k upgrade, and in 5 years, the tech in the pack could be significantly cheaper than it will be at launch.

I'm not sure I see any reason to believe it'll be cheaper in 5 years. Battery tech improves, but as demand for batteries does up with EV sales, I'm not sure I see any definitive reason for prices to go down (though capacity/weight may improve). And I seriously doubt I'd get any kind of resale value on my old battery when I upgraded, so it'd be a $30k upgrade. Hell, I wouldn't be surprised of a surcharge to handle disposing of the old battery.

For the sake of argument, let's say prices drop by 50% in 5 years. The 300 mile battery now costs $30k, so $15k in 5 years. You want to trade out your 160 mile battery. Your original battery has been made worthless by age and technology, so that $10k is unrecoverable. The new 300 battery costs $15k, so basically after 5 years it only costs you 10+15=25k for the 300 mile battery instead of $30k. Not a big savings over the cost right now. For future buyers, the battery cost reduction is great, but it won't likely save much for early adopters that want to later upgrade.

What "bump"?

The bump for each battery level. What else would I be talking about? It's a 10k bump for each level.

 

[ckessel]

I'm not saying that these guys are the best source for this kind of info, but I think that Tesla once announced a price (or mentioned a ball-park price) for the Model S Signature. But I am getting the impression they are backing away from it quietly.

I guess it's a wait and see. The Roadster has some pretty insane price jumps for interior options. The Model S is a much bigger car so even if they gain advantages of scale, it's balanced by more material and work for interior stuff, so I could see the options being just as expensive as on the Roadster. I hope not.

 

[Eberhard]

tesla want to be a successful company. Therefore it needs to make profit. this is only possible on the battery pack, where they can sell their USB for a good margin. That is ok. All buyers will be part of the story. Tesla will reinvest all profit into new products, making tesla even more successful in al long term.

 

[Doug_G]

Hell, I wouldn't be surprised of a surcharge to handle disposing of the old battery.

The "old" battery will still have significant life in it, for use as a stationary power source. There are valuable recycleable materials in it, such as lithium. They really ought to pay you for the old battery. But of course they'll probably say that's rolled into the replacement cost...

 

[ckessel]

tesla want to be a successful company. Therefore it needs to make profit. this is only possible on the battery pack, where they can sell their USB for a good margin.

Absolutely, I'm not criticizing the choice on Tesla's end. It's just more than I expected. I wasn't among those versed in current costs or any sorts of projections, so the per level cost has given me some sticker shock and thrown a bit of a wrench into my previous thoughts about what I can afford and when.

 

[AnOutsider]

I'm not sure I see any reason to believe it'll be cheaper in 5 years. Battery tech improves, but as demand for batteries does up with EV sales, I'm not sure I see any definitive reason for prices to go down (though capacity/weight may improve). And I seriously doubt I'd get any kind of resale value on my old battery when I upgraded, so it'd be a $30k upgrade. Hell, I wouldn't be surprised of a surcharge to handle disposing of the old battery.

Where's 30k? Unless my math is crazy, it's 10k for the 230 and an additional 10k for the 300, so $20k total.

For the sake of argument, let's say prices drop by 50% in 5 years. The 300 mile battery now costs $30k, so $15k in 5 years.

Again, $20k and $10k respectively.

You want to trade out your 160 mile battery. Your original battery has been made worthless by age and technology, so that $10k is unrecoverable.

WHAT 10k? The 160 mile pack is INCLUDED in the vehicle, you don't pay an extra 10k over MSRP just for the base battery.

The new 300 battery costs $15k, so basically after 5 years it only costs you 10+15=25k for the 300 mile battery instead of $30k. Not a big savings over the cost right now. For future buyers, the battery cost reduction is great, but it won't likely save much for early adopters that want to later upgrade.

It's actually be $15k since the 160 mile battery comes with the car, so in 5 years if prices drop 50%, then the price of the upgrade you would have gotten at the start is also 50%

The bump for each battery level. What else would I be talking about? It's a 10k bump for each level.

Your post made it seem like the 10k was a bump over "something else"... Considering it was the first time we heard about battery pricing, it wasn't really a "bump" up over anything but MSRP, which we all knew wouldn't include anything but the base battery.

 

[ckessel]

WHAT 10k? The 160 mile pack is INCLUDED in the vehicle, you don't pay an extra 10k over MSRP just for the base battery.

I was going to rant that you're being dense on purpose, but I'll try just a straight example.

That 160 battery in the base model isn't free. It costs 10k, but that's rolled into the base price. Just like the price of doors, windows, tires, etc. The 300 mile battery costs $30k. The default base battery is worth $10k to Tesla because they can put it in a 160 model, so the upgrade costs you $20k.

5 years down the road, you're not upgrading anymore. Your old battery isn't worth $10k trade in anymore to Tesla. It's old, degraded, and technologically outdated. You're buying a brand new 300 battery and basically throwing the old one away.

If that doesn't make sense to you, I'm really at a loss. I don't mean to be insulting, I'm simply not sure how to explain the concept. Maybe someone else can chime in.

 

[Arnold Panz]

I was going to rant that you're being dense on purpose, but I'll try just a straight example.

That 160 battery in the base model isn't free. It costs 10k, but that's rolled into the base price. Just like the price of doors, windows, tired, etc. The 300 mile battery costs $30k. The default base battery is worth $10k to Tesla because they can put it in a 160 model, so the upgrade costs you $20k.

5 years down the road, you're not upgrading anymore. Your old battery isn't worth $10k trade in anymore to Tesla. It's old, degraded, and technologically outdated. You're buying a brand new 300 battery and basically throwing the old one away.

If that doesn't make sense to you, I'm really at a loss. I don't mean to be insulting, I'm simply not sure how to explain the concept. Maybe someone else can chime in.

I agree with AnOutsider, actually. How do you have any idea what the base battery pack "costs"? Up until yesterday, all we knew was that we could get a 160 mile battery pack for $57k for the base car, but I've seen no information that indicates that the cost of that pack is $10k, only that the extra miles (240 and 300) cost an extra $10k respectively. Actually, if I had to guess I'd assume that the base 160 mile pack costs more than $10k as part of the total $57k, but we'll never know (nor should we) because it's part of the base price. And what "cost" are we referring to -- Tesla's, or the customer's? I'm assuming the $10k extra for the 240 and 300 mile packs are being sold at a profit by Tesla (at least I sure hope they are!), which means they're costing Tesla significantly less than $10k in "cost" to produce the extra mileage.

The base 160 mile pack loses value the same way the doors, windows etc. will lose value at that point being several years old, yet you wouldn't say that a "base" door costs $2k even if an option for a cooler door cost an extra $2k. So why are you making the same assumption about the battery pack?

 

[ckessel]

I agree with AnOutsider, actually. How do you have any idea what the base battery pack "costs"? Up until yesterday, all we knew was that we could get a 160 mile battery pack for $57k for the base car, but I've seen no information that indicates that the cost of that pack is $10k, only that the extra miles (240 and 300) cost an extra $10k respectively. Actually, if I had to guess I'd assume that the base 160 mile pack costs more than $10k as part of the total $57k...

True, but that only makes a trade-in 5 years later even financially worse as it's a larger sunk cost that's going to have a larger depreciation. Let's run some numbers for fun.

Base costs today. The 160 is rolled into the price, so I'm choosing an arbitrary price for the base battery. If it helps, pretend you could buy a base model at a reduced price if you got it without a battery.
160 = $10,000
240 = $20,000
300 = $30,000

Day One trade-in: You give Tesla the 160 and $20,000 and walk away with the 300.

Lets's say battery prices drop 50% over 5 years and assume degradation and tech has dropped your battery's trade-in value to nothing:
160 = $5,000
240 = $10,000
300 = $15,000

Year 5 upgrade = Trade in the 160 for $0 (it's worthless), buy the 300 for $15000. So, on year 5, your cost for the upgrade is $15000 rather than the initial upgrade cost of $20,000. Not a big savings despite the 50% battery price drop. If Tesla does buy back the old battery for something other than peanuts, then that helps.

Now, let's assume the Day One costs are:
160 = $30,000
240 = $40,000
300 = $50,000

Same day one trade in scenario. You trade in the $30,000 160 battery and get a 300 for another $20,000.

Year 5 changes quite a bit though. Trade in the 160 for $0 (it's worthless), buy the 300 for $25000. So, on year 5, your cost for the upgrade is $25000, more than what the original upgrade would have cost you! Again, any value in the original battery helps.

The more expensive you assume the base battery, the worse off you are upgrading years later because of the value lost in the depreciation of your original battery. If there's some reason to believe a 5 year old battery would hold it's value, then things change, but if the assumption is that battery tech is going to make batteries cheaper than it also means your 5 year old battery depreciates heavily.

The base 160 mile pack loses value the same way the doors, windows etc.

Exactly. If you came back 5 years later and wanted to upgrade your door, you're going to pay full price for the new door because they don't want your old door back as trade-in after 5 years. If you'd done it at the time of purchase, you're not buying a brand new door, you're paying the upgrade difference.

 

[qwk]

There is only one way to look at this.

You are buying a luxury car. By the time the battery needs replacement, most luxury car owners get a new car, so no need for battery replacement.

If you are trying to save money driving the s, you need to take a basic math class.

 

[AnOutsider]

I was going to respond, but I'm not sure it's worthwhile since I think your core argument is flawed. You're giving a 10k valuation to the base battery that comes with the car. You have no idea what it costs, or what the actual cost is to Tesla for it or the upgraded batteries. If I buy the 2.0T jetta vs the slower 2.5 jetta, I can't just take the cost of the upgraded engine and extrapolate that I paid X for the base engine when I bough the base car can I?

I now see what you're getting at, but I don't agree with the reasoning.

 

[ckessel]

I now see what you're getting at, but I don't agree with the reasoning.

You were stating that in 5 years it'll likely be cheap to upgrade to a 300 mile battery. I'm pointing out that no matter what the initial battery price is right now, that's not going to be true unless you're seeing battery prices drop by multiple orders of magnitude, like 300-400%.

As for the cost to Tesla, I'm not sure why it's relevant. The only cost that matters is what you, the end consumer, have to pay. Even if Tesla could invent batteries by pure thought power for free, if they're charging X dollars then it cost you X dollars.

 

[AnOutsider]

You were stating that in 5 years it'll likely be cheap to upgrade to a 300 mile battery. I'm pointing out that no matter what the initial battery price is right now, that's not going to be true unless you're seeing battery prices drop by multiple orders of magnitude, like 300-400%.

As for the cost to Tesla, I'm not sure why it's relevant. The only cost that matters is what you, the end consumer, have to pay. Even if Tesla could invent batteries by pure thought power for free, but if they're charging X dollars then it cost you X dollars.

I said that the batteries would be cheaper, I didn't say overall the cost of owning the car would be cheaper over the course of 5 years based on your numbers. You HAVE to buy the 160mi battery, it's what comes with the car. If you waited X years to get the larger battery, the cost of the battery would be cheaper. We'll just have to agree to disagree then.

 

[ckessel]

We'll just have to agree to disagree then.

Todd Burch said he'd buy the 230 mile pack now because his wife would balk at a higher price, then in 5 years get the 300. My point is that paying for the sunk cost of a battery now then basically throwing that battery away in 5 years and purchasing a new 300 mile battery saves absolutely nothing unless battery prices drop completely through the floor by orders of magnitude.

The fact I invented numbers for the base battery pack, the part you've taken the most exception to, is largely irrelevant to the mathematics of whether or not it's cheaper to upgrade later or now. Batteries will likely be cheaper in the future, but due to sunk costs and depreciation, it's likely upgrading now is better (or at least no worse) than later even despite battery prices drops. Unless, as I noted above, the drops are multiple orders of magnitude.

As for qwk's snarky response, I'm not sure what the point of that was. I suppose I'm not a typical luxury car buyer because I'm certainly not planning on switching to a new car in 5 years. I'm looking at the Model S as a very long term car, probably 10-15 years, precisely because EV's should have very good longevity as far as maintenance needs. The wife and I typically run on a 10 year cycle for our two cars, staggering one new car every 5 years.