Model S price justification (why so expensive?)

[AndyM]

Do you really think this is going to work?

+1 for the "Ignore Thread" option on the forums?

 

[bonnie]

*cough* ... topic. Stay on it.

 

[bonnie]

So safe to say everyone has put in their two cents about what the Model S is worth?

 

[richkae]

So safe to say everyone has put in their two cents about what the Model S is worth?

Not even close. There is a lot more to say.

 

[ElSupreme]

So safe to say everyone has put in their two cents about what the Model S is worth?

Bonnie I think a Model S is worth WAY more than two cents. Even if everyone on the forum chipped in. :biggrin:

 

[bonnie]

Bonnie I think a Model S is worth WAY more than two cents. Even if everyone on the forum chipped in. :biggrin:

We could start a raffle. Who wants to donate their Model S?

 

[raymond]

I'm not so sure about $40-50K for the battery.

Wikipedia mentions US$2.5/Wh, which would amount to US$34.000 for the 85kWh battery, excluding thermal protection, etc. That makes the quoted amount "plausible".

 

[brianman]

Wikipedia mentions US$2.5/Wh, which would amount to US$34.000 for the 85kWh battery, excluding thermal protection, etc. That makes the quoted amount "plausible".

I hate to nitpick but here, I think, you're using the period as numeric delimiter in two different ways and in a larger post it would be terribly confusing.

I believe you mean "5/2" for "2.5" whereas I think you mean "34*1000" for "34.000".

 

[ItsNotAboutTheMoney]

I hate to nitpick but here, I think, you're using the period as numeric delimiter in two different ways and in a larger post it would be terribly confusing.

I believe you mean "5/2" for "2.5" whereas I think you mean "34*1000" for "34.000".

I think, Mr Picky McPicker, that he went Dutch on his separators and forgot to translate the second one.

 

[brianman]

Yah, I figured that. The partial conversion is the issue, not the conversion itself.

 

[ElSupreme]

Wikipedia mentions US$2.5/Wh, which would amount to US$34.000 for the 85kWh battery, excluding thermal protection, etc. That makes the quoted amount "plausible".

I think that is also Cell price. Not assembled battery pack price.

 

[AustinPowers]

While you may be correct about the American market, Tesla has barely tapped the international market and could see significant growth from foreign markets. Already Norway is the 2nd biggest customer of Tesla I believe. In Europe gas costs $7-$8 a gallon. Germany is the largest producer of solar electricity in the world. The European market is ripe for Tesla's taking. If BMW, Mercedes and Audi can sell enough luxury cars to sustain themselves, I see no reason why Tesla can't.

I can see several (even though I hope Tesla will manage to sort out many of them before they start selling the Model S here).

The problem with Tesla and the European market is that the Model S is not really geared towards the needs and expectations of the European (and especially German / French / British) customer. It is far too large for European cities, parking spaces, etc. The lack of Tesla facilities is contrary to what European customers are used to - having a dealership or workshop practically around every corner. And while the driving experience may be out of this world, the car leaves a lot to be desired in other vital areas (interior, options, comfort, practicality).

 

[AustinPowers]

You are correct, and here's why: In Norway a fully optioned Model S Performance costs about the same as a base Audi A7 with the 2.8L engine and NO options at all. A fully optioned S7 costs 2,5 times as much and still the P85 Model S is faster.

A base Model S will probably cost less than a VW Golf GTD with the 2.0 170hp TDI engine and DSG gearbox.

:scared:

What crazy prizes does VW / Audi charge its Norwegian customers?
I just now and just for fun configured an S7 with every option available (always the most advanced and expensive, including many extras the Model S buyer can only dream of! - HUD, LED headlights, assistants galore, ski-bag, B&O sound system, climatized massage seats, ...), and it topped out at about 138K Euro. How is that 2.5 times a Performance Model S? That would mean a P85 Model S would cost around 55K Euro!? No way that's gonna be the case.

Especially as European pricing hasn't even been announced yet? Or has that changed?

 

[AustinPowers]

How many of the following did you buy when they first came on the market?

...
automatic dishwasher
...

???

Hasn't that been around for decades? If so, I certainly wasn't around on this planet at that time .
Wait, what was this thread originally about again? ;-)

 

[jkirkebo]

:scared:

What crazy prizes does VW / Audi charge its Norwegian customers?
I just now and just for fun configured an S7 with every option available (always the most advanced and expensive, including many extras the Model S buyer can only dream of! - HUD, LED headlights, assistants galore, ski-bag, B&O sound system, climatized massage seats, ...), and it topped out at about 138K Euro. How is that 2.5 times a Performance Model S? That would mean a P85 Model S would cost around 55K Euro!? No way that's gonna be the case.

Especially as European pricing hasn't even been announced yet? Or has that changed?

Over here a fully optioned S7 costs about 250k euros. So I was wrong, it's more like 3x the price of the Model S. Remember we have 25% VAT and a lot of taxes on horsepower and weight which hit the S7 hard. EVs like the Model S are exempt from VAT and all other taxes.

I expect the P85 S to cost about 85-90k euros here. Directly converted from dollars the one I want would cost 81k euros but I assume they will add between 5k and 10k euros to the price for the EU models.

 

[Cobos]

:scared:

What crazy prizes does VW / Audi charge its Norwegian customers?
I just now and just for fun configured an S7 with every option available (always the most advanced and expensive, including many extras the Model S buyer can only dream of! - HUD, LED headlights, assistants galore, ski-bag, B&O sound system, climatized massage seats, ...), and it topped out at about 138K Euro. How is that 2.5 times a Performance Model S? That would mean a P85 Model S would cost around 55K Euro!? No way that's gonna be the case.

Especially as European pricing hasn't even been announced yet? Or has that changed?

Using the Roadster as a baseline for US to Norwegian prices the Model S should be around 7NOK per USD rounded up to the nearest nice round number. That's the basis for a Model S pricing in Norway.
Using the S7 baseprice WITHOUT any options at all I get 186 000 Euro on the Norwegian price list. That includes VAT and our pigouvian taxes on cars. 99 500 Euro of those 186 000 are just VAT and pigouvian taxes. If you go crazy on the options list you easily add another 20 000 Euro to that.

That's why Model S will sell very well in Norway. Here the Model SP85 will probably be slightly cheaper than the A7 2.8FSI in base trim. And the options on the Model S are a lot cheaper (and there's not so many choices with the Performance version anyway)

Cobos

 

[brian45011]

You have to factor in the hundreds of millions of dollars spent in R&D to develop and commercialize the technology. That investment is recouped over the useful life of that tech and amortized over each unit/car sold. With a relatively low volume vehicle, that expense can be relatively high.

SoCalGuy:
You may be failing to distinguish expensed vs capitalized R&D. Since the debut of the Model S debut in April, 2009, Tesla has expensed about $380 million in R&D. Those expenses are part of Tesla's $760 million in accumulated deficit. Since it has previously been expensed, there is no need to amortize it and it will not appear on future income statements. Plant and equipment capitalized costs will be depeciated over their useful life which may be different from the useful life of the vehicle they are first put into service to build.

 

[AustinPowers]

Using the S7 baseprice WITHOUT any options at all I get 186 000 Euro on the Norwegian price list. That includes VAT and our pigouvian taxes on cars. 99 500 Euro of those 186 000 are just VAT and pigouvian taxes. If you go crazy on the options list you easily add another 20 000 Euro to that.

EVs like the Model S are exempt from VAT and all other taxes.

No THAT would be a concept I could live with! Here it is quite the opposite. VAT is 19% no matter what kind of car you buy. A base S7 here costs 79 900 Euro including VAT (there are no other taxes on cars here). Keep in mind that here the "naked" base comes with Xenon Plus headlights with "adaptive light", heated leather/alcantara seats with memory, power rear liftgate, adaptive air suspension as well as Bluetooth interface and AWD (among many other amenities and assistants) as standard - which are mostly Extras on the Model S. When I configured the car with all extras imaginable yesterday it added another 58 000 Euro (as I said, I added ALL options, and if there were several to choose from, I always chose the most exclusive / expensive, something I would never do in real life).

So, if I take a base S7 here, I get a car that is quite a bit better equipped than a P85 Model S, for a much lower price (I am sure the 92 400 dollars the P85 costs (including air suspension and leather/alcantara seats) will translate to roughly the same amount in Euro). That way not many people here will think the P85 Model S will be preferable over an S7. (You can burn a lot of gas for 12 500 Euro, not that most people who can afford such expensive cars seem to care about that anyway).

I thought I read somewhere that (German) automakers sell their cars in Skandinavian countries (where taxes in general seem to be extremely high) at a base price (ex taxes) considerably lower than in countries with lower taxes, as to make the final price not too far apart from other markets. At least as far as high-performance cars like the S7 are concerned, that doesn't seem to be the case, as the Norwegian base price for the S7 ex taxes according to your calculation seems to be 87K Euro, 7K Euro more than here.

 

[jkirkebo]

Using the Roadster as a baseline for US to Norwegian prices the Model S should be around 7NOK per USD rounded up to the nearest nice round number. That's the basis for a Model S pricing in Norway.

I'd be surprised if they just use a higher conversion rate for currency when selling to Europe. That way a P85 would have a much larger "EU surcharge" than a S40, and I don't see why they would do that as it would push people towards the cheaper versions with fewer options.

I seriously hope they just add a fixed surcharge for all cars instead (€5k-€10k). The added cost for Tesla to make EU cars and ship them here should be idential for the different versions. This way they'll sell more 85kWh cars and less 40kWh ones, which is what I believe they want.

 

[jkirkebo]

I thought I read somewhere that (German) automakers sell their cars in Skandinavian countries (where taxes in general seem to be extremely high) at a base price (ex taxes) considerably lower than in countries with lower taxes, as to make the final price not too far apart from other markets. At least as far as high-performance cars like the S7 are concerned, that doesn't seem to be the case, as the Norwegian base price for the S7 ex taxes according to your calculation seems to be 87K Euro, 7K Euro more than here.

Base price S7 without taxes is actually €86.700 here, but base spec. can vary from country to country I believe. I do not think they are concerned about selling too many of these here If they have lowered the base price of any of the models it's going to be the 204hp 3.0TDI which is €70.300 before tax and €100.500 after.