Pricing/Option Aftermath: Still buying?

[kgb]

I certainly understand where all the disappointment is coming from. The reason I never put money down for the signature is because at no time could anyone at TM tell me what I'd get for my $40k no interest loan to the company. From what I could gather, all you get for the money was front-of-the-line access and red paint. (I know this is discussed elsewhere, I've got a point, so flame off for a sec...) As a result, I opted for the lesser $5k interest free loan.

The executives at TM seem to feel that the "Signature" badging has value to consumers much in the same way a limited-run comic book with special ink has value to comic collectors. However, most car buyers don't buy cars as collector items. In this respect, I think that the powers that be at TM are out of touch with their prospective consumers.

If TM wanted a flagship car to represent the best they had to offer, they should have had a "Signature" options package. For $X, you'd get <insert Signature options>. What they should have done for the people who extended the $40k interest free loan is guarantee the front-of-the-line access and offered a discount (10%) or perhaps a voucher that could be used to purchase options of the buyer's choosing. If a consumer chose to spend the voucher on the "Signature" options package, it would have been their choice.

I like TM just as much as the other forum users, but there is no need to defend this poor marketing decision. I don't even have a marketing degree, and I came up with this off the cuff. So, in conclusion: I'm very glad I didn't plop down $40k for a Signature, I am still getting the vehicle I want with the options I want at the price that was more-or-less initially promised. And to TM: This advice is free, next time you plan on some marketing campaign, check with me first, my rates are quite reasonable.

 

[Larry Chanin]

If TM wanted a flagship car to represent the best they had to offer, they should have had a "Signature" options package. For $X, you'd get <insert Signature options>. What they should have done for the people who extended the $40k interest free loan is guarantee the front-of-the-line access and offered a discount (10%) or perhaps a voucher that could be used to purchase options of the buyer's choosing. If a consumer chose to spend the voucher on the "Signature" options package, it would have been their choice.

Although I don't think it is unreasonable to offer greater benefits to those that provided a $40,000 interest free loan, I think that you are forgeting that Tesla's intention is to start production with high margin items with very limited variability between cars. You can't achieve that objective if you "guarantee the front-of-the-line access " and at the same time permit the purchasing of "options of the buyer's choosing".

I think that Tesla should be offering selective benefits to Signature reservation holders that can be redeemed at a later date. For example, offering free annual service check ups for a number of years, etc.

Larry

 

[linaser]

I'am also a bit disappointed. For me the primary reason to put down the $40k payment was, so that I would get my Model S earlier.

Now it seems, that I will get it after a substantial part of the general production cars in the US have been delivered (I live in Sitzerland) and I have to pay for options I don't want, like the 21"-wheels.

I'd be ok with paying premium for the Signature, if my car would've been delivered right after the US-Signatures, but that doesn't seems to be the case. (In my opinion, this would not have been unrealistic, if they would start the homologation process, right after they finish the release candidate cars.)

If there are app. 20 Signature and lets say about 200 general production reservations for Switzerland by the time delivery starts over here, this would mean that I would get the car maybe 2 or 3 weeks earlier that the last regular production reserve.

But

• providing a free $40k loan,
• paying premium,
• having to pay for options I don't want,
• and getting the car after many US-general production cars

doesn't sound like a good deal to me, even if I get the Signature badging.

 

[NigelM]

....if they would start the homologation process, right after they finish the release candidate cars.

But seeing as there are no release candidate cars yet, none of us know when that process can start or when Tesla plans to start it. Tesla has always said that EU will come in late 2012, they are sticking with their targeted dates so far. You sound disappointed, but on the delivery standpoint it's hard to understand why.

 

[ckessel]

You sound disappointed, but on the delivery standpoint it's hard to understand why.

He's disappointed the Sig premium has so little value given he's in Switzerland because of the delays involving homologation. It doesn't bump in forward in the line much at all because of the delays behind the US market production, going so far as to do the match on it only gaining him 2-3 weeks. I thought linaser's post was very well done and clear on those points.

Tesla doesn't need you to jump to their defense here, it's just a simple statement of fact by linaser that a Sig doesn't gain him much in delivery time.

 

[Mycroft]

Agreed. The problem is that linaser assumed that European Sigs would be delivered *before* US general production. Now that it is clear to him that this is not going to be the case, (Sigs will probably be at most one-month earlier than gen-prod in Europe since there will be so many fewer Sigs), it may not be worth it to be signed up for a Sig.

I would wait until the final Signature interior is made known before pulling out of the list though. You never know, the Sig interior differences may be worth it.

 

[AnOutsider]

I actually agree with NigelM. It's a disappointment, but not unexpected. No where was it ever stated that Signatures for all countries would arrive at once. Heck Canada won't even get their sigs until the Fall if I remember correctly. Also, with there being so few reservations in his country, there's not much of a line to jump.

I get the disappointment, but there's no need to "jump to" Tesla's defense here because they did nothing wrong. He bought the car to skip the line, but the line is very short. It would be like blaming Universal Studios because the fast pass you bought allowed you to skip all of 2 people in line at the coaster you wanted to ride.

 

[Doug_G]

It should come as no surprise that European vehicles will be delivered later... Tesla has been saying that from day one. Homologation also makes that inevitable.

 

[NigelM]

He's disappointed the Sig premium has so little value given he's in Switzerland because of the delays involving homologation. It doesn't bump in forward in the line much at all because of the delays behind the US market production, going so far as to do the match on it only gaining him 2-3 weeks. I thought linaser's post was very well done and clear on those points.

Tesla doesn't need you to jump to their defense here, it's just a simple statement of fact by linaser that a Sig doesn't gain him much in delivery time.

Re-read *linaser's* post:

I'am also a bit disappointed. For me the primary reason to put down the $40k payment was, so that I would get my Model S earlier....

Now it seems, that I will get it after a substantial part of the general production cars in the US have been delivered....

I'd be ok with paying premium for the Signature, if my car would've been delivered right after the US-Signatures....

I was pointing out that Tesla hadn't changed their previously announced availability in Europe, so it was hard to understand the disappointment. He was obviously expecting something that has never been on the table AFAIK.

 

[ckessel]

I was pointing out that Tesla hadn't changed their previously announced availability in Europe, so it was hard to understand the disappointment. He was obviously expecting something that has never been on the table AFAIK.

Your statement about the EU delivery schedule is absolutely correct. I did not get the impression though that that was the thrust of linaser's point. It's not clear to me whether linaser has a Sig reservation or was considering it. The verb tenses used lead me to believe he was considering it and was commenting on the lack of value in doing so given when EU Sig delivery would occur. That's unlike the Sig value to US folks where the Sig price has some value in the fact in also jumps up delivery time (at least for new reservation holders).

It's also worth noting that linaser may not have been actively aware of the EU schedule. Even knowing about it, I'm hard pressed to find anything about it on the Model S web pages. Even under "Facts->Production" there isn't really a comment about EU delivery schedules. The only reason we all know about it is we've been actively following every scrap of news for many months.

 

[NigelM]

Your statement about the EU delivery schedule is absolutely correct. I did not get the impression though that that was the thrust of linaser's point.

Hmm, he only mentioned it 3 times but maybe I misunderstood.....

 

[linaser]

Thanks for all the answers to my post. I think I can clear some things up here:

My main point is, that the late delivery, the higher price and the fact, that i have to pay for options I don't want sum up to an amount of things that make me unhappy.

If the late delivery would be the only problem, then I could accept this. For example: If I would get the Signature for a cheaper price, because I paid $40k up front or some options for free, then I could easily tolerate the longer wait.

It's not clear to me whether linaser has a Sig reservation or was considering it.

Actually I do have a Signaure reservation, but I think about downgrading.

It doesn't bump in forward in the line much at all because of the delays behind the US market production, going so far as to do the match on it only gaining him 2-3 weeks.

I suspected this already by the time I decided to go for a Signature Reservation and was not happy about it, but I was hoping to get some other benefits from it. Now it turns out, that there (almost) won't be any...

edit:

No where was it ever stated that Signatures for all countries would arrive at once.

You are right, but the opposite was also never stated, as far as I know. So in my point of view, there was (is?) still a small amount of hope, that they could manufacture all Signature Model S in one cycle and then start general production manufacturing.

edit 2:

The verb tenses used lead me to believe ...

I'm sorry, but I'm not a native speaker and I'm sure my wording must sound very strange to you :redface:

 

[VolkerP]

Hi linaser,

sorry to point that out but it was written in a Tesla blog entry by George Blankenship on March 7, 2011.

Delivery of the European left-hand drive Model S is scheduled to begin in late 2012. In mid-2013 we plan to begin delivering the right-hand drive Model S for Europe and Asia. Each launch will begin with a limited edition Signature Series.

For me that made clear that EU signatures would be produced after US general production cars. I received that as an email newsletter, too, since I was already a reservation holder. If you made your reservation later than March 7, this bit of information might have escaped your attention. Signature still is first in any queue, but there is one queue for each market.

Side note: The blog entry announced pricing for summer 2011 and they missed that target by wide and far.

 

[ckessel]

I'm sorry, but I'm not a native speaker and I'm sure my wording must sound very strange to you :redface:

Your english is excellent, probably better than many native US people (myself included).

 

[Edgar_N]

My reaction to the pricing.

I have tried for approximately 24 hours to post the following to the TeslaMotors.com forums, but I have been continually blocked by their spam filter -- I am not sure why and not ascribing a nefarious motive, but I would think that they could figure out a straight forward community forum system that actually works.... For what it is worth, I have also been lurking on these forums for a good amount of time, but not since 2010. So here goes with my post:

I have been lurking on these forums for basically all of 2010 and 2011. I’ve talked up the Model S to friends and family since 2010. I had planned to stop by my local Tesla storefront last week to deposit my $5k reservation. That is now on hold and as I told my wife last night, I think my dream of owning a Model S is dead. It was a sad night. It isn’t that I cannot afford it, but rather I feel a bit thrown under the bus and my image of Tesla (and the Model S) is pretty damaged. I spent the last two weeks thinking about things (so I didn't take to this post flippantly or for the sake of being a troll).

My plan had been to get the 60kWh model. I fully expected to pay $10k more than the base model for the upgraded battery pack. I also expected to pay more for more paint choices, the panoramic roof, upgraded wheels (if I wanted them), upgraded sound, rear facing seats, (possibly) the parcel shelf (although truth-be-told, I never really contemplated having/not having the parcel shelf), and the high powered wall connector.

I did not anticipate – nor, at a $50K+ sticker price, did I feel I would have to pay additional dollars for:
- Basic leather interior
- Turn-by turn navigation
- Power rear liftgate
- Automatic keyless entry
- Xenon headlamps
- Active Air Suspension
- Supercharger Access

In short, the leather package, tech package and active air suspension make me feel like I am being bent. It isn’t so much the actual dollars as it is the principle of the thing. I feel like the interviews, events, website and media reports all led me to believe that these items were part of EVERY Model S.

Reviewing the price list and thinking about what attracted me to Tesla in the first place (and subsequently to the Model S), I am left rather cold. It is only a slight exaggeration to say that I feel like the “I have to check with my manager” moment of most car purchase transactions has just occurred, just 6+ months before the typical in-store conversation; it doesn’t feel like Tesla is changing the way new cars are purchased.

Two more thoughts:

1. The fact that the Supercharger Access is still “TBD” renders the price list all-but useless for me as I cannot determine what I would actually be paying for the 60kWH model, as I see the Supercharger Access as essential to the “promise of the Model S” or frankly any high end EV. The part of the price list that is useful is what led to this post – a tool to tell me to stop waiting for Tesla to get their act together and look elsewhere.

2. For me the price list puts in stark relief all of the Apple Inc. – Tesla Motors comparisons. Tesla Motors is not Apple Inc. Apple’s products are straight forward, the consumer messaging is clear and the value proposition (at a premium price) is manifest. Apple does not say – oh, if you only get the 16 gig iPhone, you don’t get access to iCloud. They don’t say that the camera on the iPad is upgradeable for another $___. No, they say here are your choices and you might get to pick an alternative color (white). Apple does not purposefully include last century’s features (thinking specifically about the candle-lit headlights) in ANY of their models. I could go on and on, but as a TSLA shareholder, I am now officially CONCERNED.

Thinking back on it now, I wish TSLA had come out and said – look, we had hoped to include these things with the base model but our costs got away from us. To remedy the situation, what we’d like to do is offer them for you at approximately our cost (so that we are profiting from this and we are attempting to preserve the implicit marketing message of the last 20+ months). I would have even forgiven them a reasonable administrative mark-up for having to deal with the manufacturing headache/costs of so many different options packages. But that isn’t what they did here.

If you made it this far, thanks for reading.

Edgar

 

[mpt]

...spam filter...

They probably suffer the same pain that we do; spam! I pulled your post this morning from a bucket of about 30 spam messages. As a new user you're watched closely for keywords, phrases and urls, but, as you seem to be a human, not a bot and you've not tried to sell me any shoes from a popular sporting outlet, I've bumped your account to full member status.

Welcome!

 

[mpt]

Thinking back on it now, I wish TSLA had come out and said – look, we had hoped to include these things with the base model but our costs got away from us.

That's exactly what they did with the Roadster however, they blamed it on poor Martin… No one to blame this time.

 

[dsm363]

I understand some people feel mislead or let down but I just went to BMW's website and built up a $46,900 (MSRP) 2012 528i Sedan. Since it's the base model and Tesla has said they're going after this luxury market, I think it's possible to compare what both base models offer.

On the BMW:
1) leather is not standard and is a $1,450 option
2) the rear-view camera and navigation system is in a $1,850 technology package
3) for $1,350 you can get the features some people say should be in a luxury car but are not available in the Model S
•Active Blind Spot Detection
4) cold weather package for $1,450 includes heated front seats and fold down rear seats but also includes heated steering wheel which I don't think the Model S has
•Lane Departure Warning
•Automatic high beams
4) For $2,250 you can add back 2 features that is included in the Model S technology package, and one that isn't available
•Power tailgate
•Universal garage-door opener
•Park Distance Control
5) Comfort Access keyless entry is $1,000

Basically, why I agree that Tesla could have done a better job with communication and managing expectations, I don't think Tesla intended to try and trick anyone. It's also equally possible they fully intended to hit those targets but wasn't able to for whatever reason and didn't want to announce anything until all options were fully locked down and pricing finalized. This would avoid what happened with the Roadster where they had promised certain feature explicitly and had to back track later making them options (I believe I have this correct). If the car is still an option financially for you, I think you'd still be happy. While it would have been nice if some of the things in the technology package were standard, it actually doesn't look that bad. At least it's all in one package instead of split among three or four.

The BMW does have the opportunity to add a number of the high-tech features some people want though like Adaptive cruise control, Heads-up display, night vision..etc. When I added most of the cool features I'd want (some of which the Model S doesn't have), it goes up to $67,000. I'm sure Tesla will start to add these features in a few years, maybe after the Model X is launched.

 

[AnOutsider]

I'll never understand why people who made assumptions that turn out to be false are MAD at Tesla? Disappointed? Sure, but angry? I could see if they stated it and took it back, but if you just made an assumption....

 

[Mycroft]

Also, there is an early adopter EV price premium built into the price of some of the Model S models. The premium on the Leaf is about $20,000 less the $7,500 rebate. If you subtract that premium from the price of the 60kWh, it becomes a $47,000 sedan.

Of course if you're not willing to pay that premium, then there are lots of cars with similar "luxuries" that are arguably a better value. At least until that early adopter premium goes away.

(I don't use gas savings to offset the EV premium because the battery will need to be replaced at some point, while an ICE normally isn't. Also, while there aren't any oil changes, etc, there will be at least $600/year in maintenance charges for the Model S if it matches the Roadster's maint. cost.)