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I'm not sure that long-term mechanical reliability even matters anymore. It's gotten to the point that it's Good Enough. For reference, my other vehicle is a 1998 Lexus GS400. It has 190,000 miles on it and is still going strong. The drivetrain has been 100% trouble-free the entire 16 years I've had it. So why did I buy something new?
The thing that actually got me itching for a new car was not anything mechanical, but rather all the amenities. Being built in 1998, the stereo consists of a CD changer and cassette deck. There is no nav, no parking senors, no rear camera, no USB, no bluetooth, no phone integration, no remotely turning on the A/C, no keyless entry, etc. It also needs to have a few dings fixed, new paint, and definitely new upholstery. And yeah, I could do all of those things as after-market add-ons for less than the cost of a Model S. But at some point, most people just want a new car.
As for lease vs. buy, there's no right answer. It depends on your financial situation, your desired frequency of vehicle upgrade, and your psychology. Personally, I really like owning my stuff -- that has a certain value in itself.
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breser
AutoPilot Nostradamus
I sold my 1999 Lexus GS400 (170k miles) a few weeks ago since the Model S is replacing it. Similar experience, though I did have a seal go in the transmission late last year that cost me $2k to remove the engine and the transmission to replace a $50 seal. Have no doubt the guy that bought it will probably get another 100k miles out of it.
They never implemented that and removed the references to it from the service webpage.
fengshui
Member
The drive unit and battery pack replacement costs are artificial numbers for insurance purposes, and do not reflect actual costs to any Model S owner. Specifically, they include no core credit for the return of the problematic drive unit or battery pack. Depending on the severity of the problem, and the residual value of the parts, I could see Tesla providing substantial credits to customers who return a drive unit or battery. In the case of the battery specifically, Tesla is currently selling energy storage products to SolarCity customers using new batteries. In 8 years, Tesla or another company might pay you thousands of dollars for your degraded batteries, intending to use them in an energy storage system where they're willing to trade power density for battery cost.
What Tesla said in its November 2012 blog post never came to fruition. Nobody obtained said contract and nobody can. Call Tesla and ask. No such option exists.
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Unfortunately, most Model S owners would not qualify for a lease because Tesla's lease is geared towards business owners with very strict requirements. Coming here and saying that buying a Model S is stupid because he was able to qualify for a lease that most other customers cannot qualify for, is self aggrandizing at best and just plain insulting at worst.
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Your entire attempt to humiliate me online has not worked. I stated earlier in the thread I leased the Model S and I felt it was stupid to purchase. The entire argument of mine here is that this is a vehicle to lease, and not purchase over the long haul. It is a great disposable device as the costs of maintaining and repairing it past its warranty exceed that of an ICE, and numbers here about reduction in repair price are pure speculation.
It is a great car, but a long term investment it is not. It should be leased and deductions should be taken for the monthly expense. If Elon upgrades the vehicle with new features and bigger battery packs next month, guess what happens to your resale value? I would assume it wouldn't be pretty. After warranty it will cost more to repair than to just purchase a new one, and people will know this, and the car's value will fall off a cliff. Who would want to purchase a Model S out of warranty, when repair costs for the drive unit and battery would exceed the market value of the car?
After warranty this car is worth nothing. Any assumptions in repair costs post-warranty are pure speculation and likened to gambling.
Also, if not purchasing a new battery when the warranty is up in 8 years, good luck on the resale when you have an 8 year old battery pack that holds only 70% of its original charge. I'd assume the buyers wont be happy about buying a car with a reduced battery pack looking at a $12K replacement cost, with it potentially failing very soon. It is disposable, plain and simple.
breser
AutoPilot Nostradamus
Your entire argument could apply to any new vehicle. You seem to be under the presumption that everyone cares about resale value. I don't since I tend to keep vehicles for a long time. I resisted the urge to buy a new vehicle for 15 years and did without all sorts of contraptions like bluetooth, automatic wipers, etc... Every new vehicle is a gamble when it comes to maintenance costs. Some vehicles are cheaper to maintain than other. This can very from one vehicle to the next within the same make, model and year as well as just variations between makes and/or models.
It seems to be common practice for a lot of people to only keep a vehicle for a few years and to definitely get rid of the vehicle before the warranty expired. I used to be one of those people. I've come to realize that long term ownership, even with the unexpected costs can be way cheaper. Let's say the battery costs $36k to replace, which is the highest number I've ever really seen anyone float. That's still cheaper than a new vehicle.
The real question at that point becomes how much more life are you going to get out of the vehicle for that. If the car is in good shape otherwise (paint, interior, motor, etc) then just replacing the battery may give you a very significant increase in life.
So frankly I think you're evaluating things from the standpoint of underestimating the risks that you're familiar with (ICE vehicles) while overestimating the risks you're not familiar with.
I was not attempting to humiliate you, I was trying to understand the point you were trying to make. You mentioned a lot of non-issues to support your argument that buying this car is stupid - which, by the way, is insulting to everyone who bought this car in case you weren't aware. I don't think any owners here would consider their purchase stupid in any way, shape or form. Your diatribe over the cost of drive units was totally off base as was your insinuation that the Model S battery would need to be replaced after 8 years - absolutely no evidence of that. You quoted incorrect information, such as battery pack replacement cost of $12k-$15k.
You are very lucky that you were able to qualify for a lease. This is not something most owners would be able to take advantage of. For most of us regular folks, the only choice is to not buy the Model S or do a stupid thing. I take issue with how you frame your argument, looking down on us stupid owners simply because you were able to get a lease, which makes you the only smart guy in the room. I'm happy not to live in that world.
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breser
AutoPilot Nostradamus
Be nice if they put something up that says that definitively and update that old blog to link to that. Thanks for letting me know. I know I'm not the only one that presumed that option became available. Fortunately, it's not a big deal to me since I'd have never bought it.
The only concern I have is that it negates some of my belief that Tesla is betting on battery costs going down for Model S in the future.
No. You didn't.
You do realize you're contradicting yourself repeatedly here, right?
Most of us, myself included, can't lease this car. Our jobs are such that we can't get the business lease.
Nobody here (okay, less than 1% of us) would argue that spending $100k on any current production car makes sense from a purely financial standpoint. Cars depreciate. There are only a handful of cars in the world that are a "long term investment", and most of those are decades old.
If you've come here to tell us that our cars are going to be worth less in 8 years, thanks. We had no idea.
Everything is disposable on some time scale. The key difference is that as you replace various moving parts of an ICE, the car doesn't get any better. Whereas if I have to replace the battery in 2022, I will be replacing it with something like a 170kWh pack at maybe half the price of today's 85kWh pack. So yeah, it will cost money, but I'll end up with 500+ miles of range. I would seriously consider doing that upgrade even if the 85kWh pack were still at 100%.
I don't think that future battery costs and the replacement plan not coming to fruition have anything to do with one another.
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I wonder if some people on this thread have ever owned a car for more than 10 years? I have, the car replaced by my Tesla was a 2000 Audi A6, which I purchased in 2002. That replaced a 1993 Audi 100. In my experience, fears of expensive repairs, even on something like an Audi, tend to be overblown, especially if you purchased the car new. If you owned it since new, you've presumably taken decent care of it.
Most of the fear of expensive repairs comes from people who bought an expensive car when it's fully depreciated. Someone who bought a 2000 A6 like mine for $5k would be right to be concerned-- there may be considerable amounts of deferred maintenance, and any repairs will represent a significant fraction of their purchase price and may be unaffordable.
The moral of the story, IMO, is that the Model S will be no worse, and probably better, than most expensive cars on the market today. If you buy cars and keep them for a long time, I would have no more concerns about the Model S than a BMW 7-series or Audi A8. It will probably hold up better than any Cadillac or Lincoln that you buy new today.
Most of the fear of expensive repairs comes from people who bought an expensive car when it's fully depreciated. Someone who bought a 2000 A6 like mine for $5k would be right to be concerned-- there may be considerable amounts of deferred maintenance, and any repairs will represent a significant fraction of their purchase price and may be unaffordable.
The moral of the story, IMO, is that the Model S will be no worse, and probably better, than most expensive cars on the market today. If you buy cars and keep them for a long time, I would have no more concerns about the Model S than a BMW 7-series or Audi A8. It will probably hold up better than any Cadillac or Lincoln that you buy new today.
I agree. I read consistently from people who lease that purchasing is stupid or from people who pay for their car in cash that it is stupid to finance a car. All of this from the standpoint that a car is a depreciating asset. I have bought cars to be driven to the ground. I don't care how much it is worth in 3 years or 8 years. If you can lease, great for you! Buying a Tesla is one of the smartest decisions I've ever made.
@Perfect_Flaw: few points
* reliability of electric motors: if the drive unit doesn't break in the first 8 years, what are the chances it will break in the next 8? It's an AC electric motor and a fixed reduction gear. The “AC” means it doesn’t have brushes: the only parts that can wear out in an electric motor. There are plenty of AC motors around us: most refrigerators, furnaces and air conditioners, washers and dryers have them. How often do these things break due to the motor? I can’t recall a single time.
* BMW free brakes replacement: my experience begs to differ. I owned 4 different BMW models, 3 of them spec’d, ordered and bought brand new. The 4yr/50Kmi warranty applied for all 3. Not a single one had more than 2 brakes sets replaced for free. My E46 M Coupe was tracked and the local dealer told me that they will not replace the breaks for free for the third time since it’s outside of the expected maintenance schedule. I kid you not.
* cost of ICE engine replacement: your numbers are off by a factor of 2x-3x. Assuming your 750Li is E66 with N62B48, me thinks your new engine costs about $15K+ (source:google). I know for a fact that new S54 was $18K back in the day. They had bearing lubrication problems in the first ~2 years of production, and until the owners collected and provided BMW with enough evidence that it was a design flaw, BMW was blaming user errors and charging owners full new engine price when rods were fusing to crankshafts.
* post- warranty repair costs: how is it different from ICEs? A buyer of each out-of-warranty ICE is faced with a possibility of replacing engine, transmission, parts of cooling system, parts of exhaust system, etc. Out of pocket, not covered by warranty. Measuring the remaining resource of most of these parts is not trivial. On the other hand, measuring the remaining resource of batteries is pretty straightforward using the indicators readily available in the car (range) and applying it to the known battery capacity curve. And each ICE has much more systems that can break, compared to MS. I’ve owned 8+ y.o. ICE cars and the maintenance costs were impressive and unpredictable. Doesn’t mean that the cars were worth nothing. In fact, I sold one (14 y.o. at the time) car for 1/3 of its MSRP just before I got my MS.
* reliability of electric motors: if the drive unit doesn't break in the first 8 years, what are the chances it will break in the next 8? It's an AC electric motor and a fixed reduction gear. The “AC” means it doesn’t have brushes: the only parts that can wear out in an electric motor. There are plenty of AC motors around us: most refrigerators, furnaces and air conditioners, washers and dryers have them. How often do these things break due to the motor? I can’t recall a single time.
* BMW free brakes replacement: my experience begs to differ. I owned 4 different BMW models, 3 of them spec’d, ordered and bought brand new. The 4yr/50Kmi warranty applied for all 3. Not a single one had more than 2 brakes sets replaced for free. My E46 M Coupe was tracked and the local dealer told me that they will not replace the breaks for free for the third time since it’s outside of the expected maintenance schedule. I kid you not.
* cost of ICE engine replacement: your numbers are off by a factor of 2x-3x. Assuming your 750Li is E66 with N62B48, me thinks your new engine costs about $15K+ (source:google). I know for a fact that new S54 was $18K back in the day. They had bearing lubrication problems in the first ~2 years of production, and until the owners collected and provided BMW with enough evidence that it was a design flaw, BMW was blaming user errors and charging owners full new engine price when rods were fusing to crankshafts.
* post- warranty repair costs: how is it different from ICEs? A buyer of each out-of-warranty ICE is faced with a possibility of replacing engine, transmission, parts of cooling system, parts of exhaust system, etc. Out of pocket, not covered by warranty. Measuring the remaining resource of most of these parts is not trivial. On the other hand, measuring the remaining resource of batteries is pretty straightforward using the indicators readily available in the car (range) and applying it to the known battery capacity curve. And each ICE has much more systems that can break, compared to MS. I’ve owned 8+ y.o. ICE cars and the maintenance costs were impressive and unpredictable. Doesn’t mean that the cars were worth nothing. In fact, I sold one (14 y.o. at the time) car for 1/3 of its MSRP just before I got my MS.
Larry93428
Member
Simply put, I am offended by the "stupid" reference. I love my Tesla and the money means nothing. I am certain it will outlive me.
~Larry
robby
Member
I have a similar rationale.
I drive a '96 RAV4. It's had a remarkably low cost of ownership over 19 years but it's dying a slow death and will get expensive very quickly. Last year it needed a new front break system because the old one had rotted out. I recently discovered it needs frame welding to support the driver side rear strut, a new ABS module, and soon a new set of front struts. Performing this work would be throwing good money after bad. Why? Because the car's lifespan will be bottlenecked by its frame, and it is already showing signs of rot. When I am forced to move on from this car, I'll be throwing away a perfectly working engine, transmission, stereo, reasonably new tires, etc., all because of the age of the frame.
I have a Tesla X reservation and one of the things that draws me to it, that I feel not enough people talk about with respect to longevity, is the aluminum frame. Assuming Tesla survives and parts are available, a car like that should be operable almost indefinitely. So even after 15-20 years of ownership, I think any one piece, battery or motor being the most significant, would be worth replacing to keep the car running if my goal is to have a safe, functional four-wheel drive car. Unlike an ICE, you don't have the complicated logic of "What if I replace the engine now and then the transmission goes?" I'll have a small number of parts that can fail but should only do so very infrequently, and I'll have a frame that should hold up to the elements longer than my own flesh will.
I may be an atypical buyer in that if not for the Tesla X, I'd be buying a Subaru. I'm hoping to get a Tesla to vote with my wallet and to have a car I'm proud of owning and driving for environmental and corporate mission reasons. But after my purchase and after the loan is paid off, my goal will be to maximize the value I get out of it, just as it would be with a Subaru, just as it has been with my RAV4. I'll never say never, but if autopilot options are retrofittable, I'm not sure what could motivate me to get another car after it short of an unsalvageable accident.
This is a bit of a gray area. Tesla announced it but has never followed through.
CHG-ON
Still in love after all these miles
To me it is very simple. We are early adopters. If we are not willing to pay for that and willing to put up with headaches it will certainly bring, then we shouldn't do it.