Model S Service Contracts - the poll edition(tm)!

[smorgasbord]

Interesting link. That seems to show BMW in USA charges about US$1,000/year for something similar. Or, am I reading this wrong?

Tesla doesn't offer what BMW is offering - the ability to extend not only the warranty by another 2 or 4 years (depending on what you buy), but also the ability to extend free servicing, including wear parts like brakes, for another 2 years/another 50,000 miles. The latter plan means you end up with 6 years/100K miles of free servicing and warranty. Thus, you virtually pay nothing additional to run your car for those 6 years/100K miles.

With Tesla, there is no free service - you pay $1900 for service and the warranty runs out after 4 years.

As for BMW plan pricing, my point was Tesla's not unique in having that there's a couple hundred dollars additional for not buying the plan upfront (so Tesla's not unique in that regard). As for what the BMW plans actually cost to buy, they're more negotiable than the price of the car (or at least were in 2005), and you can end up getting them for a little more than of half what BMW lists.

 

[AnOutsider]

$475/year isn't HORRIBLE, it's definitely better -- but remember, that's only if you prepay for 4 years, and it's still more expensive than the cars they claimed to be cheaper to maintain than.

 

[ModelS1079]

Fours years or 50k miles, whichever comes first I am sure. Little disappointing. maybe I'll feel better when I review the waranty. But service is about $40/ month or your first 40-48 months...more after that. It is an immediate second revenue stream for tesla though!

 

[qwk]

Tesla isn't stupid. You don't spend $700M to develop a vehicle then fail basic contract and warranty law, especially given the new nature of the technology beneath. I'm sure they have their i's dotted and t's crossed and zero's slashed, and they even use the little stroke through the center of the "7" to distinguish it from the "1".

While Tesla isn't stupid, some departments are clearly either underfunded, or they hire people who either could care less or have very little smarts to do the job. Web design and maintenance, marketing, and their legal departments are pathetic. How many lawsuits has Tesla won? Exactly.

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Not the behavior of a company who doesn't care about their customers. JMO.

I don't think that anybody here is saying that. What they are saying is that Tesla promises things that obviously never seem to happen. They hype and hype and then comes the dissapointment. Examples are the Promises for the early sig depositors. Tesla promised a fully loaded car that would come with options not available an regular production cars and the other options would be less costly than bought separately on a regular production car. When that didn't happen, the carrot dangled in front of sig depositors was the early delivery. It's close to October and just a handfull of sigs have been delivered. There is a pattern of this with nearly every promise. This type of behavior gets very old quickly, especially for someone who has been waiting and waiting and waiting.

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$475/year isn't HORRIBLE, it's definitely better -- but remember, that's only if you prepay for 4 years, and it's still more expensive than the cars they claimed to be cheaper to maintain than.

Yes, I would bet that most people including myself have no problem with the price. It's the way it is communicated that gets everyone hostile and as a result is going to lose Tesla a lot of potential business. The problem is that Tesla is counting chickens that havent hatched yet as a sure thing. It's a dog eat dog world out there. The $100 ranger visits are actually dirt cheap IMO.

 

[FlasherZ]

While Tesla isn't stupid, some departments are clearly either underfunded, or they hire people who either could care less or have very little smarts to do the job. Web design and maintenance, marketing, and their legal departments are pathetic. How many lawsuits has Tesla won? Exactly.

Litigation services are quite different from go-to-market legal services, where the details of sales and service contracts and warranty management are the key focus. I don't disagree with the statements regarding their web presence, but damning their entire legal department or team based on the results of a couple of hard-to-prove circumstantial lawsuits is throwing the baby out with the bath water. I can accept the minor risk that a poor web forum software package choice poses to a $700M development effort; I won't accept the major risk that bad contract & warranty quality results in.

 

[Johann Koeber]

Tesla should simply raise the base price and include maintance for 4 years then have a Ranger service plan.

+1

You got it. Several others have suggested this. This is the way to go for Tesla.

BUT:

I guess they need the cash.

My 'back of the napkin' calculations:

5.000 Model S in 2012 x ($ 600 to $ 2.400) = approx. 5 m$
should cover most of the cost of opening the new service centers
20.000 Model S in 2013 x $ 600 = 12 m$
should cover the expense of maintaining the service centers and the rangers

 

[raptorweb]

While I understand that others see this price as being high, and without a detailed list of what all is preformed I would tend to agree. The pricing that was announced is a considerable amount less then I was expecting it to be.

From the start I hoped that it would be cheaper then the roadster maintenance but planned on it being $600/yr. I live about 400 miles from the closest service center so when that price is added to the maintenance I was expecting something $1000+/yr. For me and others that live a considerable distance from a service center with no new locations planed in their area the $2400/4yr unlimited ranger plan is a very good deal.

All that said I think Tesla needs to release the a detailed checklist of sorts so that everyone can know what all is being preformed and not just publicly display it as wipers and brakes.

 

[qwk]

Litigation services are quite different from go-to-market legal services, where the details of sales and service contracts and warranty management are the key focus. I don't disagree with the statements regarding their web presence, but damning their entire legal department or team based on the results of a couple of hard-to-prove circumstantial lawsuits is throwing the baby out with the bath water. I can accept the minor risk that a poor web forum software package choice poses to a $700M development effort; I won't accept the major risk that bad contract & warranty quality results in.

Yes, they are different but I'm sure it's the same legal team. You are either competent or you are not. BTW, the Top Gear case would have been a slam dunk with good attorneys IMO.

 

[epley]

How much did the base model Roadster cost? $109,000 a few years ago?????

...different income/financial bracket....

With the model s advertised at $57,400 base....different income/financial bracket....

harder to absorb the impact of charge upon charge....

....that and the fact that Tesla said the model s would be cheaper to maintain .... not so.

I agree the listed price is much lower, but in all honesty I'm spending as much on my Model S as the base price on the Roadster, so it doesn't feel that much different to me.

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....so I understand why Tesla wants to inspect everyone's car. It's a new car, they don't *know* what sort of parts are going to fail regularly, they could have all manner of warranty-covered repairs and not know why they're happening unless they have a larger sample to inspect.

But they should have simply included the $1900 or $2400 in the price of the car and made it a "free service". Then nobody would be complaining (except the people complaining that the car was priced too high, which they're doing anyway).

(Edit: note that the reason I said the service was overpriced *for me* is that I don't drive much. I'm probably not going to hit 20,000 miles within the warranty period. For people who drive huge numbers of miles, the service is probably appropriately priced.)

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That would indeed be worth it.

It definitely would have helped our mindset to have included the maintenance fees in the price of the car. I think Tesla was trying to stick to their original public price claim and maybe this is why they didn't do it the standard way?

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I wrote to my Tesla rep this morning and received emailed answers to a few questions about the service contract which hopefully will be helpful and prevent some unsupported speculation:

1. Tesla Ranger warranty visits, if needed, as well as service visits are included in the "4 year anywhere" plan.
2. Tire rotation is included in the annual service visit.
3. When asked if a person elects to go without any service plan will they get any kind of software updates? "Service plans, the annual service, and warranty have no bearing on software updates. All Model S owners are eligible. However, some updates may require a service technician or a service visit to complete"

A friend (TMC lurker) and I were discussing last night. Will the service include swapping out summer and winter wheels/tires? If so, much more worth it for me!

 

[westcoast]

"A. This is a new car, Tesla's first, and they want to see it way too often to make sure they understand how things are wearing, and catch design issues."

Absolutely, but this is THEIR problem. There are two MAJOR problems with this.

1. If they want to check the car to gain data, then THEY should be paying US to examine the car, not the other way around. It's just totally screwed up for us to have to pay the cost of their lack of information.

2. The fact that they are so worried about this vehicle that they need to spend "hours" looking them over every 12,500 miles makes me completely question the quality of this product. It sounds to me like they haven't got the foggiest idea how this thing will wear or what will need to be replaced. That worries me.

 

[ckessel]

It's worth realizing all cars are pretty cheap to maintain for the first 2-4 years as cars are really well built these days, so the fact Tesla isn't cheaper in that time frame doesn't surprise me. Where something like a Tesla will win out is longer term when ICE's need to have timing belts replaced, water pumps, spark plugs/cables, alternator/generator, catalytic converters, fuel line filters, etc. Those things start kicking in around 60k miles. Though if you're someone that trades in cars every 3 years, you'll never see that kick in.

I do understand the disillusionment with the early maintenance cost not being cheap, but I don't think that invalidates Tesla's claim of significantly cheaper maintenance over the life of the car.

 

[RDoc]

It's worth realizing all cars are pretty cheap to maintain for the first 2-4 years as cars are really well built these days, so the fact Tesla isn't cheaper in that time frame doesn't surprise me. Where something like a Tesla will win out is longer term when ICE's need to have timing belts replaced, water pumps, spark plugs/cables, alternator/generator, catalytic converters, fuel line filters, etc. Those things start kicking in around 60k miles. Though if you're someone that trades in cars every 3 years, you'll never see that kick in.

I do understand the disillusionment with the early maintenance cost not being cheap, but I don't think that invalidates Tesla's claim of significantly cheaper maintenance over the life of the car.

Well, there is battery replacement to look forward to.

 

[westcoast]

My major problem with this whole deal is not so much the $600 per se, but the fact that the cost of this thing keeps rising seemingly monthly for the buyer.

How can I commit to keep my reservation when they keep adding new charges every month or so?

Here's what I saw when I first heard about Tesla: "Long battery life! Low maintenance cost! All for $50K!".

I thought... "awesome! sure, 50k for that sounds expensive, but I can deal with that."

$49,900. Cool.
But then I learn that the battery degrades over time, meaning that I really need a 60kwh to make the car worthwhile, considering I'd plan on keeping this for a long time. 40kwh loses its appeal awfully fast when you get a few years out and run into battery degradation. Let's say 6 or so years total.

Crap. That makes it $59,900.

You sort of need the tech package it seems to me, since if you ever want to sell this thing and you have no tech package the buyer on the other end would be "wtf? an expensive car with no nav or headlamps?"
$63,650.

Active air suspension is forced on everyone this year, and from everything I've heard is pretty much a must anyway.
Crap, already up to $65,150.

They want to charge $950 to protect the paint on the car? Really? I'd refuse this on principal, but it comes across to me as "hey, our paint is probably crappy, so you need to spend another $1000."

Then it looks like you need a home charger. Well the car is useless without reasonable charging times. So I have to select the $1200 connector.
$66,350 now.

Everyone should drive a black or white Tesla car, according to their $50000 claim. Any other color and that's another nickle-diming of $750. To make sure that paint stays on real good (multi-coat) $1500.
$67,100

Sh*t. Getting up there.

Fortunately I don't need a sun roof. Oh wait, there's not enough head room for my passengers in the back, but the sun roof option magically makes it comfortable for them. So, I absolutely NEED the sunroof now.

That's $1500 more. Just so the guys in the backs don't rub their scalps raw on the ceiling.

$68,600

Interior. Since the $50,000 car is now a $70,000 car, you need leather seats for resale purposes. It's just expected of this price range. So it's not really an option. That's $1500 more.

$70,100

Holy crap. I'm already bleeding cash out my pores. Oh, I can afford it, but it's not what I thought I was getting when I registered. I can't take much more of this inflation...

DELIVERY FEE: $990.

WTH. Now I'm starting to see red. They want me to pay $1000 to SELL ME the car? Shouldn't they be giving me a $1000 incentive to TAKE the car? "Final inspection fee" $180.

I'm close to cancelling at this point.

Now we're hit with "$600 per year service so we can spend HOURS checking to see if anything is broken, because frankly we have no idea how this car will hold up in the real world. But we'll charge you for it anyway."

You just know some extortionate "3G fee" will be on the way. And that their super-charging stations will be so overpriced as to be shocking. And that the battery upgrades 5 years down the line will be so monopolisticly prohibitively expensive that you're be shouting and screaming down the line.


So I'm done, folks. Uncle. Uncle. You win, Tesla. You have turned my $50,000 dream vehicle into an $75,000 brain hemorrhage. I understood it might cost more than $50k, but we're at a 50% increase and counting. It's not just one thing -- it's a whole heap of inflationary "options" which are not options but pretty much required. You have priced me out of the vehicle I signed up for.

I love the car, but a $50,000 low-maintenance vehicle simply does not exist. It is a mirage for now, and I hope to purchase one in a few years when cost of ownership is more transparent.

(Edited out the bit about sales tax. Of course that's not Tesla's fault. The point (once my sarcasm is removed) is that I do feel misled about the true costs of this vehicle)

 

[Mycroft]

Technically, you don't need the $1,200 home charging connector unless you buy the second charger for the car. A 50A outlet is more than enough.

Also, you add in leather, etc. for "resale value", but stuff like that doesn't pay for itself in resale alone.

 

[jkirkebo]

By the way I have driven several TDI's myself, and our current family Touran is again a (this time BlueMotion) TDI, great fuel economy and no reliability problems whatsoever. And we never had to pay even close to $600 for a service for any of our TDI cars.

You are lucky then. I also have a Touran 2.0TDI DSG. Regular service is about $600, but then comes the extra items like: 90.000km service, timing belt, $1000. 120.000km service, DSG gearbox oil change, $1000. In addition, the repairs are expensive. My car is 8 years old now, 135.000km, and this year I spent $3500 on service and repairs so far. I am happy to get rid of it next year when my Model S arrives.

 

[westcoast]

Thanks, nice to know Mycroft. We loved the car. Went to an event and truly loved it. The continual nickle and diming though has changed our view of the entire project.

 

[ckessel]

Well, there is battery replacement to look forward to.

True, but sort of muddy waters. Long term degradation isn't well known. My 85kwh will still be very useful to me even at 50% capacity and that could take a decade? And who knows what battery prices will be at that point.

I'm not discounting it, I just have no idea what the cost might be.

 

[qwk]

My major problem with this whole deal is not so much the $600 per se, but the fact that the cost of this thing keeps rising seemingly monthly for the buyer.

How can I commit to keep my reservation when they keep adding new charges every month or so?

Here's what I saw when I first heard about Tesla: "Long battery life! Low maintenance cost! All for $50K!".

I thought... "awesome! sure, 50k for that sounds expensive, but I can deal with that."

$49,900. Cool.
But then I learn that the battery degrades over time, meaning that I really need a 60kwh to make the car worthwhile, considering I'd plan on keeping this for a long time. 40kwh loses its appeal awfully fast when you get a few years out and run into battery degradation. Let's say 6 or so years total.

Crap. That makes it $59,900.

You sort of need the tech package it seems to me, since if you ever want to sell this thing and you have no tech package the buyer on the other end would be "wtf? an expensive car with no nav or headlamps?"
$63,650.

Active air suspension is forced on everyone this year, and from everything I've heard is pretty much a must anyway.
Crap, already up to $65,150.

They want to charge $950 to protect the paint on the car? Really? I'd refuse this on principal, but it comes across to me as "hey, our paint is probably crappy, so you need to spend another $1000."

Then it looks like you need a home charger. Well the car is useless without reasonable charging times. So I have to select the $1200 connector.
$66,350 now.

Everyone should drive a black or white Tesla car, according to their $50000 claim. Any other color and that's another nickle-diming of $750. To make sure that paint stays on real good (multi-coat) $1500.
$67,100

Sh*t. Getting up there.

Fortunately I don't need a sun roof. Oh wait, there's not enough head room for my passengers in the back, but the sun roof option magically makes it comfortable for them. So, I absolutely NEED the sunroof now.

That's $1500 more. Just so the guys in the backs don't rub their scalps raw on the ceiling.

$68,600

Interior. Since the $50,000 car is now a $70,000 car, you need leather seats for resale purposes. It's just expected of this price range. So it's not really an option. That's $1500 more.

$70,100

Holy crap. I'm already bleeding cash out my pores. Oh, I can afford it, but it's not what I thought I was getting when I registered. I can't take much more of this inflation...

DELIVERY FEE: $990.

WTH. Now I'm starting to see red. They want me to pay $1000 to SELL ME the car? Shouldn't they be giving me a $1000 incentive to TAKE the car?

California state tax... $6000, "Final inspection fee" $180.

I'm close to cancelling at this point.

Now we're hit with "$600 per year service so we can spend HOURS checking to see if anything is broken, because frankly we have no idea how this car will hold up in the real world. But we'll charge you for it anyway."

You just know some extortionate "3G fee" will be on the way. And that their super-charging stations will be so overpriced as to be shocking. And that the battery upgrades 5 years down the line will be so monopolisticly prohibitively expensive that you're be shouting and screaming down the line.


So I'm done, folks. Uncle. Uncle. You win, Tesla. You have turned my $50,000 dream vehicle into an $80,000 brain hemorrhage. I understood it might cost more than $50k, but we're at a 60% increase and counting. It's not just one thing -- it's a whole heap of inflationary "options" which are not options but pretty much required. You have priced me out of the vehicle I signed up for.

I love the car, but a $50,000 low-maintenance vehicle simply does not exist. It is a mirage for now, and I hope to purchase one in a few years when cost of ownership is more transparent.

To be fair, we knew that the base price would be the base price with no options. Most of the things you listed are "wants" and probably have little to do with resale value or usability. Nobody should have expected a 300 mile pack car for 50k. What most did expect was supercharging accross all packs, details on supercharging, all of the specifications, warranty terms, maintenance cost and intervals and so on before locking in. None of those except one(a few days ago I may add) have been provided and people are actually receiving their cars? Talk about being kept in the dark.

 

[ckessel]

My major problem with this whole deal is not so much the $600 per se, but the fact that the cost of this thing keeps rising seemingly monthly for the buyer.

<a mass of misinformation deleted...seriously complaining about CA sales tax as a unexpected cost?>

You might consider contacting John Peterson about co-authoring an article.

 

[brianman]

You might consider contacting John Peterson about co-authoring an article.

That's a bit harsh. He's making a fair point.