Model S price justification (why so expensive?)

[richkae]

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

smart phone
flat screen TV
mp3 player
cell phone
laptop computer
dvd player
cd player
VCR
walkman
microwave oven
automatic dishwasher
...

Every one of those items was initially much more expensive than the item it replaced.
To some people they were so desirable they were worth far more than the item they replaced, others waited.

My decision to buy a Model S is based on many factors, including the quality of the driving experience and the utility of the car.

One hard to quantify factor is that I feel strongly about where my dollars go. I do not like where dollars spent on gasoline go and what they do.
I've done the break even calculations and they are not as important to me as knowing that my dollars are buying technology from a domestic upstart company instead of gasoline.

 

[JakeP]

I think this is an interesting thread and reflects the diversity of Tesla enthusiasts and their reasons for being willing to purchase a Model S. The plain truth is that for less than $50K (Im being generous) you can purchase a brand new vehicly that has 99% of the functional capacity of any car more expensive than that. Of course that excludes specialty cars with bullet proof glass, smoke screens etc but I giess that doesnt represent function capacity. With that in mind any body purchasing a car for more than that amount cannot be justified from a purely practical standpoint. Every one who spends more than that will have their own personal reasons to justify the additional expense. It is illogical to try to tell one who finds a value in the beauty of a Picaso that their choice is a poor one.
One may decide that environmental concerns drive their decision or that the love the beauty or the novelty of the car. Some may quote the unique driving experience.
For me its a little of all of the above. First and foremost I believe in climate change and the role humans play and so I believe anything I can do to lower my carbon foot print is doing my part. I also believe in evil big oil and the efforts they will go through to thwart any efforts for this technology to survive. It pains me to see how much they can get away with and how duped we are to continue to supprt them. The only way for this technology to get over the hump is for early adopters to take the relative risk necessary to reach critical mass so that the infrastructure necessary to make it practical will be built. Lastly, I flat out love the beauty, elegance, power, performance and cutting edge technology of Model S. All of those factors have a value to me for which I am willing to pay $100K

Going back a bit, +1 to c2tb...very well stated. My reasons for buying a bleeding-edge 100K vehicle are comprised of the same spectrum that you cite here. And I do so with open eyes, fully aware of the risks involved...be it a lack of center console storage, or a network of superchargers that may never hit the midwest in the density my travel style demands.

 

[pharma5]

And I don't know what other people think it's worth to have the hand of God swoosh down to give you a boost whenever you press the accelerator, but I think that's worth a lot.

Argentina would say priceless:

 

[kevincwelch]

First and foremost I believe in climate change and the role humans play and so I believe anything I can do to lower my carbon foot print is doing my part. I also believe in evil big oil and the efforts they will go through to thwart any efforts for this technology to survive. It pains me to see how much they can get away with and how duped we are to continue to supprt them. The only way for this technology to get over the hump is for early adopters to take the relative risk necessary to reach critical mass so that the infrastructure necessary to make it practical will be built. Lastly, I flat out love the beauty, elegance, power, performance and cutting edge technology of Model S. All of those factors have a value to me for which I am willing to pay $100K

Nicely put.

 

[Zextraterrestrial]

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

smart phone
flat screen TV
mp3 player
cell phone
laptop computer
dvd player
cd player
VCR
walkman
microwave oven
automatic dishwasher
...

I bought none of them initially
some of them years later - cd, vcr, dvd, mp3 player
cell phone but got rid of it 10+ years ago
some of them I don't have and never bought- smart phone, flat screen tv, microwave, dishwasher

but Tesla Model S will be a different story

 

[smoothoperator]

The price of any car beyond a Honda Fit for a small car or Chevy Malibu, Toyota Camry, etc for a full size car is a matter of desire. The cost to build an electric car due to battery costs and engineering is very high still today. Thus a limited market.
For me an electric car is a near lifetime desire.

Any car is a matter of desire (for that matter any extraneous item in life besides food, clothing & shelter) you can take public transit. It does not make sense to call a Honda Fit essential but not call a Model S essential. They both are in the same category- automobile ownership (which in itself is not an essential item and a matter of desire). Price has little to do with it; any car can be considered a luxury!

 

[SByer]

The 911 has very nice driving bits - engine, clutch, steering. I could see calling them works of art - certainly they're one of the best examples of ICE drive technology. But the ergonomics of the non-driving parts were meh at best. Buttons, unlabelled buttons, everywhere! And an HVAC control system that defied logic. It was the best ICE car I will ever own. Had it for 6 years (and had saved up for a new one when an opportunity came along).

I traded up to the Roadster. Full torque at zero. Throttle latency 1/2 that of the 911. Better steering (doesn't need power assist, thank goodness). And, the interior is a better design, in spite of using cheaper materials. Much better driving in traffic, or in the twisties (regen on the go pedal). There are many, many little subtle things in driving an EV that just make it better, and it takes more than one test drive to figure some of those out. After three years, I do not miss the 911 one bit. I have an aluminum and carbon fiber rolling work of engineering genius - it looks simple in spite of the complexity.

I get where I'm going happier, in a better mood, and having had more fun with the Roadster than I would have with the 911. It's mobile therapy on a whole new level. Now what is that worth?

 

[NigelM]

Argentina would say priceless:
View attachment 7899

Hey, some of us are stil sore about that!

 

[spatterso911]

I'm just trying to understand for myself: why the car which in terms of luxury is so behind is so expensive? I've got used to some standards in luxury cars and I want to understand if very questionable advantage of electrical power overweights obvious lack of basic luxury options

AlexSV, given that you have driven the Model S (and hopefully, with your vehicular ownership pedigree, driven the Performance), you can surely realize that it performs on par, if not better than many of the sedans you have owned. I would say that if you are in the market for an CLS 63, E63, M5, S6 Audi, Porsche Panamera (S or S hybrid, Panamera Turbo), you would be hard pressed to find areas that these vehicles substantially outperform the Model S. All while costing virtually the same or less, and with an average operating cost that puts the competition to shame.

Your comparison of the 911 to a Model S is apples to oranges. Being in the market for one of the above vehicles does not make this a "stupid decision" when you look at the big picture. I still don't have a clear idea of why you are looking at a BEV, if Green values are not important to you. If you have issues or concerns about conventional autos that compelled you to consider a 100% electric vehicle, I challenge you to re-explore them and ask yourself if they really are important to you. If they aren't, then you will not be satisfied with the Model S, because many of the early adopters hold those values in high esteem and are an important part of why we are on-board with Tesla, irrespective of the size of the car, amount of interior cubby holes, quality of leather, or presence/absence of adaptive cruise control, lane departure, pre-collision avoidance, heated steering, or rear camera.

My current car costs over $95K, has none of the above, costs $70 to drive 240 miles, and will cost a small fortune to maintain over the next several years, just in simple maintenance. Just so happens to be a fast German car.

 

[gg_got_a_tesla]

Well said, spatters! Yes, those said values are just as important as price/performance/features when comparing the Model S with a fancy (German) performance car.

AlexSV, if you are merely playing the Devil's Advocate here, then, this is probably moot. If you are genuinely considering the Model S, then, don't stop with using traditional metrics alone when comparing with a conventional performance ICE.

 

[Trnsl8r]

Holy cow, nine pages of this?! The answer to Alex's question is right here. You're welcome. Next thread.

Put another way:
"Doctor, it hurts when I do this."
"Well, don't do that."

 

[dmckinstry]

Holy cow, nine pages of this?! The answer to Alex's question is right here. You're welcome. Next thread.

Put another way:
"Doctor, it hurts when I do this."
"Well, don't do that."

Exactly. I've wasted an hour reading through this. To Alex: If you only have a short daily commute, want an electric, but don't want to spend much, get a Leaf. It will serve your purpose. It doesn't have the comfort, room or range of a Model S, but it should be enough for you if you have to complain about the Model S pricing.

 

[bonnie]

Holy cow, nine pages of this?! The answer to Alex's question is right here. You're welcome. Next thread.

Put another way:
"Doctor, it hurts when I do this."
"Well, don't do that."

Do you really think this is going to work?

 

[meloccom]

The car my Model S will replace is a Mercedes A Class that I bought new for AUD$46,000 in 1999 and was the most expensive car I had purchased by a factor of 2.5 at the time.
I spent the money then because the car had unique engineering \ styling and offered a unique experience compared to the 'normal' option.
Estimated cost of a 60Kwh Model S is about double that when it finally arrives here (Australia) plus options.
I would not have considered spending that sort of money on any car normally but again the Model S 'appears' to offer both unique engineering and driving experience not available anywhere else.
You're right, so far I 'only' have AUD$6,000 invested in it and the final decision to purchase will depend on a few things including Australian pricing and convincing my partner that it's worth all that dough.
Ignoring the Climate Change thing, I can see the logic behind the end of oil, and about 30 Australian's have died in Afganistan\Iraq too. I think about that when filling up my current car and can see this purchase as being part of the solution.
No other option, Leaf included, answers these concerns but at the same time has the range I need for a regular 16oKm highway trip every 2 weeks.
I see your point in comparing the Model S with other luxury cars, but I think a lot of perceived luxury comes from all the chromed controls and buttons that a regular ICE needs.
The Model S completely sidesteps this requirement with the touch screen interface leaving the rest of the interior looking a bit plain. But I think that's a good thing.
Quoting Mies van der Rohe I think "less is more" in the interior of the Model S and I don't think after a while you will miss all that clutter.

 

[deaton52]

I'm not so sure you're right.

There are over 10,000 reservations, and if you view my surveys, the majority of them are buying 85 kWh versions. That puts them all above $75,000 purchase price. So, the majority of people now are willing to pay a pretty penny for this car.

I don't think Tesla is going to have a problem selling 15,000...maybe 20,000 cars. The problem Tesla faces, IMHO, is that the market for the $75,000+ car will dwindle rapidly since, really, the upper 5% of Americans are the ones who can afford this car. There's a lot of competition in this price range. In order to capture the upper 10 or 15% of Americans or break into the middle class, the price of a reasonably equipped automobile is going to have to be <$40,000. Beyond that, the infrastructure has to develop, and that's not Tesla's job. They are at the mercy of those that develop the technology, implement it, and the demand of the people.]

This is, of course, a philosophical opinion and based on no firm data other than a reasonable assumption.

Kevinwealch - you are correct -- consider this press release in Jan of 2012:
(Reuters)
Thu Jan 5, 2012 3:57pm EST
The BMW brand sold 247,907 vehicles in 2011, up 13 percent from the previous year. Mercedes-Benz brand sold 245,231 vehicles, also up 13 percent.
BMW's surge ended the streak of 11 years for Lexus as the top-selling luxury brand in the U.S. market. Lexus was third in 2011, selling 198,552 vehicles, a drop of 13 percent. Toyota and Lexus sales suffered from the effects of last March's earthquake and tsunami in Japan.
Toyota officials projected on Wednesday that Lexus' 2012 U.S. sales will increase by more than 20 percent.
General Motors Co (GM.N) has positioned Buick as a luxury brand and it was fourth in that category in 2011, with sales of 177,633, up 13 percent. GM's Cadillac was a laggard among luxury brands; it grew by only 3 percent to 152,389 vehicles sold, for fifth place.
Honda's (7267.T) Acura brand also suffered from effects of the Japanese earthquake, and saw sales drop 8 percent to 123,299 vehicles.
In seventh place was Volkswagen AG's (VOWG_p.DE) Audi with sales of 117,561, up 16 percent. Nissan Motor Co's (7201.T) Infiniti, also impacted by the Japan earthquake, sold 98,461 vehicles, down 5 percent.

Let’s see: That’s over 1.3 million luxury cars sold in 2011. Given the unique market position of Tesla (the ONLY EV), and the universally rave reviews of the Model S, how could anyone conclude that Tesla will have a hard time selling a measly 20,000 cars a year? That is less than 2% of the luxury car market. This seems like a no-brainer to me. Perhaps another 'Apple' analogy is called for here. What market share of PCs did Apple have during its early years?

 

[VolkerP]

Great thread so far. Thanks to AlexSV for starting it.

I am concerned that someone posting a Tesla-critic position is put to derisive language, flaws in English are picked out, or is labelled a troll/foreigner/you-name-it. All the Tesla mantra was thrown towards him and he did a good job of answering it all alone. In turn, he was accused to "bring new arguments". Sorry?

Critical questions should help everybody to better understand what are his personal motivations to get involved in electric vehicles. This thread servers that reason well.

my 2c

 

[rcf8000]

I don't understand why people think the Model S is expensive. Compared to ICE cars with comparable performance, it's not. Price out a Panamera, for comparison.

 

[ElSupreme]

Now I'm totally confused. I see that 80% percent people here are up to most expensive Model S. So, we are talking about $100000+. This money buys Porsche 911 or BMW M5 or E63 AMG or S550. Do you mean that people who the whole life could afford only Hondayota and Geo Metro suddenly jumped into hundred thousand segment? Sorry, but I can not believe that anybody for whom 5K is a serious financial burden would ever consider purchase of so expensive and exotic car.

My previous most expensive car was a $22k 2007 VW GTI (exactly 2 options, rear side airbags, and 4 doors). I am buying a 40kWh S, with the tech package, and probably the air suspension. I was looking at buying a $30k car. I don't drive distances between 110 and 250 miles per day. So larger battery packs would only really buy me peace of mind, and the ability to road trip in an EV. But I am going to drive the fiancee/wife's car or rent when I have to drive to Charlotte, or Florence, SC.

 

[pharma5]

Hey, some of us are stil sore about that!

Sorry! :redface:

This thread seemed incomplete after I saw Bonnie's line... and knew the peculiar influence of Diego must have been afoot...

 

[ElSupreme]

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

smart phone
flat screen TV
mp3 player
cell phone
laptop computer
dvd player
cd player
VCR
walkman
microwave oven
automatic dishwasher

I think I can only claim to be early on DVD player. That sucker cost me about $500. I had a DVD drive in my computer before that which probably cost about $400 by itself. I did buy the first Android phone HTC/T-Mobile Dream/G1. But that was my first 'smart phone'. I was too young for everything up to CD player. And too poor/young for Laptop, cellphone, mp3 player, flat panel TV.

I bought none of them initially
some of them years later - cd, vcr, dvd, mp3 player
cell phone but got rid of it 10+ years ago
some of them I don't have and never bought- smart phone, flat screen tv, microwave, dishwasher

but Tesla Model S will be a different story

Zextra you need to get a dishwasher. I lived without one for about 3 years after college (I had one growing up) and had no problems washing them by hand. I bought a house, and thus a dishwasher, and it is a really crappy one. But I use it all the time. Of that list I would understand if someone didn't want to live with them, except microwave and dishwasher unless funds were a problem. Microwaves are so cheap and so efficient at heating up water. And dishwashers are huge time savers.\

All of these are just my opinion. And I also promote mobile telephones over land lines. And if you don't want a mobile, plug it into a charger in a drawer and Bluetooth it to some handsets. They really are cheaper than land lines. I wouldn't consider this a 'mobile phone' for the topics of this conversation though.