Model S Wheel Pricing & Performance: Std|Perf|Sig

[gg_got_a_tesla]

Great analogy, strider! We do pay well over $80 bucks a month for Speed (for me - fantastic MotoGP race at Qatar yesterday btw!) and Lifetime Movie Network (for the wife!) which is all we watch on top of network TV (that could be had for < $20 or even less with Hulu Plus w/ Roku). It's mostly for profit but, also, it does support certain channels - whether one watches them or not - which would never get enough advertising revenue to survive but, that's beside the point.

ckessel, Tesla's probably not expecting to lose a lot of could-be-perf-upgrade folks like you because of the wheel disconnect. They could definitely be proven wrong but, 21" seems great, atleast on paper, to show off one's perf EV.

 

[ckessel]

ckessel, Tesla's probably not expecting to lose a lot of could-be-perf-upgrade folks like you because of the wheel disconnect.

Right, if we look purely at the numbers, will they lose money or gain it if they make a change? If they'd lose money, well, that's a no-brainer to keep the pricing as is. If they'd gain money, that's also a no-brainer. If it's a wash, then why not change it and make a few folks like me happy?

It can't all be about "what other manufacturers do". Other manufacturers also only offer a gas engine. And I wouldn't hold up a cable company's approach as an example of customer service done well... :tongue: Tesla has made changes in the past based on feedback, such as some interior combinations added in for Sig/Perf customers, changes that might have had some bottom line impact to Tesla.

I'm easily swayed by numbers. What do the numbers say on this? Would it be a monetary gain or a loss? There just isn't much way to know though, so all I can do is lay out what I think makes the most sense and hope.

 

[gg_got_a_tesla]

If you have the time for it, a formal petition - a la Wido's 3-phase charging campaign that succeeded - may not be a bad idea? It should be easy enough to put a package together for GeorgeB and others in quick time?

 

[stopcrazypp]

El Supreme, I do understand your point. For me the defining issues/differences are:

1) It's about what make sense rather than any comparison to other vendors. Tesla has set up a dual pricing scheme for tires which makes no sense to me. If you want to make a comparison, Tesla often touts themselves as being more like a tech company than a car company so let's compare it to building a computer. If you build a computer from almost any big tech vendor, you can downgrade and get credit for the parts you downgrade (e.g. smaller disk drive, cpu, etc).

Actually, I frequently order computers at Dell, and you don't really get an option to "downgrade". The only thing you can do is start ordering at a minimum spec and upgrade only the things you want (but you might miss out on some discounts that higher specs get). You can't start at a spec that is higher and "downgrade" because there that option isn't provided (this applies to processor, harddrive, monitor options etc.).

The only difference is Tesla is giving the extra option to "downgrade" (albeit without credit).

 

[dsm363]

As frustrating as this is for some, this really only applies to Signature customers and to the performance model (most expensive regular production model). Basically this provides extra cash for Tesla up front when they need it most to start production. It looks like not enough Signature customers canceled due to this issue since they sold out the signature series.

 

[Tesla 940]

I am a very humble earner and my dream specifications on a Model S would almost take my whole annual paycheck to cover if I paid it off in cash.

I just can't help myself - I'm absolutely amazed at what some people write.
ALMOST my whole annual paycheck - WOW - I sure a lot of people would love to have your income! Thank God you are so " very humble". ROTFLMAO

 

[BYT_P1837]

I just can't help myself - I'm absolutely amazed at what some people write.
ALMOST my whole annual paycheck - WOW - I sure a lot of people would love to have your income! Thank God you are so " very humble". ROTFLMAO

Where I live, it's barely Middle Class man... and I am humble...

 

[ckessel]

Basically this provides extra cash for Tesla up front when they need it most to start production.

That's the part I'm contending may or may not be true.

Just considering the Perf buyers (forget Sig owners, they're already resigned to paying a premium). Further, we only need to consider Perf customers that had a desire for 19" tires as the buyers committed to the 21" have no impact on the equation.

A = $ made due to margin if a Perf customer takes the 19" tires (would anyone really do this or would they get the 21" and sell/swap?)
B = $ made due to margin if a Perf customer takes the 21" tires even though they wanted the 19".
C = $ lost due to folks like me where a lack of wheel credit pushes the Perf out of contention

Is A+B > C? Tesla only makes more money if that's true.

 

[dsm363]

I agree with you. We don't know if this is a good thing for Tesla financially or not. Maybe it was just the easiest with ordering parts so far ahead of accepting orders. People who put a deposit down have not indicated which model they want (other than Signature reservation holders) so maybe Tesla felt it was easier to just order 2,000 sets of 21" rims to start and work from there. In the future, the only model this will be a problem on is the premium performance model so they're probably betting the performance wheels are what most of those customers would want.

 

[Jeeps17]

If you have the time for it, a formal petition - a la Wido's 3-phase charging campaign that succeeded - may not be a bad idea? It should be easy enough to put a package together for GeorgeB and others in quick time?

+1 to that!

I would definetly sign such a petition. In my case, I am leaning towards the performance model, but with the weather in Montreal the 21' tires would not be at their peak performance for more than 2-4 months per year... (and potentially unsafe due to outside temperature) not to mention what repeated freeze-thaw cycles do to our pavement.

It's a not much bang for a $3,500 premium.

I do need a set of winter rims, hoping to work something out come purchase time, but Tesla-approved "tire packages" would be great.

JP

 

[jerry33]

I thought 19" was 7" wide and 21" 7.5" wide

The example numbers were chosen for ease of math, not to reflect any particular tire or vehicle.

The nominal section width of both 19" and 21" tires is 245 mm when mounted on the measuring rim. The actual rim width that Tesla is using is wider (This is typical. Measuring rim width is chosen to comply with the TRA, ETRTO, or JTRTO published standards.) For best handling and ride comfort the rim width should be equal to the tread width. This allows the sidewall to have such a good shape for absorbing road irregularities and allowing the cornering forces to be transmitted from the wheels to the tread with the minimum amount of deformity. Which is why the actual rim width is wider than the measuring rim.

We know the tread width of the Goodyear because Goodyear publishes it, but Continental doesn't publish the tread width (I don't think anyone has contacted the Continental technical folks yet. When someone does we will then have the number) so we don't know the "official" number for the 21" tire. However, the 21" tire will almost certainly have a wider tread width than the 19" because tires become more "square" as the aspect ratio decreases.

 

[jerry33]

Ok the 19" and 21" WHEELS are different widths. But the tires as far as anyone can tell are both 245 wide. So tire width and contact patch for both size wheels will be stupidly close.

I wouldn't want to bet on that (depending upon what you mean by stupidly close). I'm going to go out on a limb and say there will be about half an inch wider tread on the 21" tire. This is because as the profile gets lower the tires more closely approximate a rectangle (the tread width gets closer to the nominal section width). I feel rather confident about this because the 21" wheel has a half inch wider rim width.

You're correct about the contact patch area because that's dependent upon inflation pressure, not tire dimensions (the shape of the contact patch is dependent upon tire dimensions). So as long as the tire pressures are equal, the contact patches will be equal.

 

[neroden]

El Supreme, I do understand your point. For me the defining issues/differences are:

1) It's about what make sense rather than any comparison to other vendors. Tesla has set up a dual pricing scheme for tires which makes no sense to me. If you want to make a comparison, Tesla often touts themselves as being more like a tech company than a car company....

This is absolutely correct. I realize that other car companies "do it wrong", I don't particularly like that either, but you can go into the dealer and haggle with them about it. Since Tesla doesn't do that, the fact that they're "doing it wrong" becomes much more obvious.

2) Downgrading to the 19" tires is desirable for many people due to the nature of tires and not just the cost. With other upgrade packages, there may be things you don't care about, but it'd be hard not to classify them as superior than their basic counterpart (e.g. improved headlights). Not caring about an upgrade is different from the case where 19" tires have distinct advantages beyond cost.

This is also correct. Since the 19" wheels are clearly superior to the 21" wheels for many situations, the only way to view the "included 21" wheel option" is as an increased premium for the package. Almost everything else in the package has to be viewed as an upgrade, whether it's one you want or not (I do know some people actively dislike leather seats, so there's that, and the multi-coat paint job isn't an upgrade if you want a different color). The 21" wheels are objectively inferior unless you're obsessed with looks, so I have to UPgrade from the 21" wheels to the 19" aeros in order to get the car "fully loaded".

The Sig premium is basically $5550 (treating the 19" aeros as the superior option), assuming you get white paint -- $7050 if you get black. That's pretty sizeable for "somewhat more leather" and "earlier". For me it's still worth it because of my allergies, but it seems *odd*. The Performance premium is higher -- $10500 -- but you get a Performance car from it.

It's worth noting that the difference in price between the two types of wheels on the Standard is $2000, a rather large amount. The inferior-except-for-aesthetics wheels cost $2000 more. Curious, that. The price difference is large enough to create this ridiculous wheel-trading market.

3) Tesla specifically offers a downgrade option on the tires. Tesla does not offer selective downgrades of the items in the tech package. No one is asking Tesla to create an option they don't already provide, we're only asking they charge for what's actually delivered. Again, that beautifully simple "pay for what you get" approach.

Tires/wheels are also ridiculously easy to swap in and out (without invalidating the warranty); there is no technical excuse for treating them as "included", whereas there is such a technical production-line reason on the tech package items. The swappability is also why this is an area where it makes no sense to do 'you gotta buy this' deals.

The pricing scheme makes it glaringly obvious that *either* people getting the Perf or the Sig with 19" wheels are being gouged on price, or that people getting the Standard with 21" wheels are being gouged on price.

It's one or the other, the way Tesla's set it up. That's not smart. It's fine to maximize profit, but make it a little less obvious when you're gouging us, OK? :wink: Leave the customer with the illusion that he's being given a fair deal.

 

[3lectronica]

Both the 19" and the 21" are 245 wide, so identical there. Only sidewall height differs, with the 19" having 1" taller sidewalls than the 21".

The contact patch is not the only factor in performance. Tire performance varies widely due to different compounds. Performance tires have stickier rubber for better grip in cornering and stopping. The 19" Goodyear Eagle RSA2 are optimized for all-around use. The 21" Continentals are optimized for acceleration, cornering and stopping, while still offering a low level of rolling resistance. If a Performance customer downgrades to the 19" wheels, I bet the 0-60mph times will suffer. Proof is in Roadster owners who are using snow treads (extreme example) mentioning slower performance. The side effect of 21" wheels will be lower range than advertised.

 

[jerry33]

The contact patch is not the only factor in performance. Tire performance varies widely due to different compounds. Performance tires have stickier rubber for better grip in cornering and stopping. The 19" Goodyear Eagle RSA2 are optimized for all-around use. The 21" Continentals are optimized for acceleration, cornering and stopping, while still offering a low level of rolling resistance. If a Performance customer downgrades to the 19" wheels, I bet the 0-60mph times will suffer. Proof is in Roadster owners who are using snow treads (extreme example) mentioning slower performance. The side effect of 21" wheels will be lower range than advertised.

+1 :smile:

 

[spatterso911]

Well, time to chime in here.

In order to sort this out, at least in my head, I had to establish some specific rules. Tesla has multiple goals in place. They need to use the Model S to fund the progress of the line and thusly the progress of the company. Signature buyers are fully aware of this fact and by virtue of the fact that they are the well-deserved early adopters (many of you have been diligently following this process for YEARS and have a real vested desire to see Tesla (and perhaps even vested enough to see TSLA) succeed, they are willing to pay extra to get the car very early and be a part of the buzz. Reward is greater than Risk.

Performance people are looking for vehicles that exceed the performance of either their current ride, or at the very least, match or come close to the performance of their current ride. They know that that performance does not come cheaply and are used to paying a premium for the performance oriented options even if the trade off is ride quality, mileage, or tire longevity. The benefit is, their vehicle comes equipped with all the tools necessary to maximize performance. Reward is greater than Risk here too.

So, lets continue on with how this plays out.

First, lets remove the Sig equation. It is designed to provide maximum profitability at the outset, so that the rest of the manufacturing ramp up can be financed by the sales. It's likely why the number is fixed at 1000 vs 1500 vs 2000 vs 500. Some advanced math is absolutely involved in this decision.

Next, lets remove the Performance equation. It is designed as a PERFORMANCE model. They are always trading performance for utility. The fact that they come standard with 21" wheels makes perfect sense, because that is more performance oriented, more sporty in appearance, and it balances the equation. Wanting the 19" wheels makes sense for practical reasons (weather, tire selection) but not sport reasons, as there are plenty of 21" performance tires available.

Now we are left with the production versions. They all come standard with 19" wheels. To get the 21" wheels, you should have to pay more. It's simple economics. If there were no performance version, and all vehicles came with 19" wheels, no one would complain at a costly wheel upgrade. You either pay or you don't. Same thing goes for CF upgrades. I'm certain there will be aftermarket options available soon, and they won't be cheap, by a long shot. Just look at what is available for the roadster.

The fact that Tesla offers 19" wheels for any and all models is great, but ultimately if you offered only 21" wheels for all models, those that want 18" or 19" wheels will simply buy them and commit garage storage for winter use. This issue was huge on the LR3 forums, given that Land Rover does not offer 18" wheels for the HSE, but anyone who off-roads regularly knows that 18" wheels with Coopers are a great set up and ideal for off-roading. Lot's of wheel trading to get that combination going on, and many people bought 18" wheels and tires to swap when they wanted to go on a trek.

The optimal solution is to offer multiple models with 19" wheels, and make everyone pay for the 21" upgrade. Including the Sig and Performance owners, which jacks up the Sig and Performance equations.

 

[onlinespending]

This is absolutely correct. I realize that other car companies "do it wrong", I don't particularly like that either, but you can go into the dealer and haggle with them about it. Since Tesla doesn't do that, the fact that they're "doing it wrong" becomes much more obvious.

even that's not entirely true. BMW and Mercedes don't even "do it wrong". The BMW M3/M5 allows for upgrading to a performance wheel, and can be done so individually or as part of an additional package. You pay to upgrade, and aren't forced into the highest price wheel but don't get any relief if you go with lower-end wheels as with the Model S. Also the Mercedes AMG series offers 4 wheel options each priced differently. It's not as if they charge you for the most expensive one without a change in price if you were to select one of the lower-end ones. So perhaps other companies "do it wrong", but not the two big luxury car makers that Tesla is trying to compete with in certain respects.

 

[ckessel]

The BMW M3/M5 allows for upgrading to a performance wheel, and can be done so individually or as part of an additional package. You pay to upgrade, and aren't forced into the highest price wheel but don't get any relief if you go with lower-end wheels as with the Model S. Also the Mercedes AMG series offers 4 wheel options each priced differently. It's not as if they charge you for the most expensive one without a change in price if you were to select one of the lower-end ones. So perhaps other companies "do it wrong", but not the two big luxury car makers that Tesla is trying to compete with in certain respects.

Interesting, hopefully that speaks to folks that were asking what other vendors give a credit. As you noted, it's not really a credit, but it is a single consistent pricing model where cost is based on what you get, which is probably the real concept that I'm actually in favor of (a credit for 21"->19" was a means to that end).

 

[ElSupreme]

even that's not entirely true. BMW and Mercedes don't even "do it wrong". The BMW M3/M5 allows for upgrading to a performance wheel, and can be done so individually or as part of an additional package. You pay to upgrade, and aren't forced into the highest price wheel but don't get any relief if you go with lower-end wheels as with the Model S. Also the Mercedes AMG series offers 4 wheel options each priced differently. It's not as if they charge you for the most expensive one without a change in price if you were to select one of the lower-end ones. So perhaps other companies "do it wrong", but not the two big luxury car makers that Tesla is trying to compete with in certain respects.

You can upgrade individually to 3 wheels with the Telsa Model S too. Sure they aren't offering the performance wheel seperately like BMW and MB. But MB and BMW do EXACTLY the same thing as Tesla. They have packages where you get bigger wheels. And I can't even find a way to downgrade them. Much less get a credit for them. I can buy 21" wheels for $3500, I can buy 19" aero for $1500.

Look the Performance wheels probably cost Tesla about $500 more than the 19" wheels. They are including they $3500 adder to add profit to their probably no margin MCC unit upgrade. This is standard practice in MANY industries. You bundle the high margin stuff with low/no margin items with high value so you can profit.

You are not being shorted $3500 dollars when you buy the package. You are forced to give Tesla profit. The people who buy the wheels outright are getting ripped off not you.

 

[onlinespending]

You can upgrade individually to 3 wheels with the Telsa Model S too. Sure they aren't offering the performance wheel seperately like BMW and MB. But MB and BMW do EXACTLY the same thing as Tesla. They have packages where you get bigger wheels. And I can't even find a way to downgrade them. Much less get a credit for them. I can buy 21" wheels for $3500, I can buy 19" aero for $1500.

For the base Model S you can choose 3 wheels, "not upgrade individually" to 3 wheels. You'd be able to upgrade from the standard 19" wheels to 2 other wheel choices. And Tesla does offer the performance wheel separately for the base model, as opposed to what you said. The BMW M5 is essentially BMW's performance version of its 5 series. So is the AMG series for Mercedes-Benz. And those performance cars allow you to individually upgrade to performance wheels. Hell, the AMG allows 4 different wheel choices all at different prices. Again, as I said before, this is in stark contrast to how the Performance Model S is being handled. Charging you for the highest price wheel regardless of which option you go with. Not sure what you were trying to say there, because there was a lot of misinformation in it.