So, What exactly is the value of a Signature Model S?

[Todd Burch]

At the risk of putting myself in the line of fire, I thought the primary attraction to getting a sig was that it's a limited edition car with limited edition paint (if you went sig red). The "you get it first" has always, in my mind, been secondary to that. Then again, I'm a P...

 

[Jkam]

I sure hope you are right, but as a Sig reservation holder I've seen absolutely no evidence that this is the case. In fact, I would say every piece of evidence is to the contrary. Free connectivity for a year is the only bone they've thrown us, and without sounding ungrateful, that's not exactly making up the difference. Given Tesla's repeated inability to meet deadlines (my original MVPA said September and now I'm really half-expecting I won't get the car until after Thanksgiving), I'll be very happy to just get my car and I'm really not expecting much else from them.

It's sad it has gotten to this point for me, but Tesla chose this path when they chose to charge a premium for the Signatures. My frustration is a direct result of that, and nothing else. Even if I were paying exactly the same as a non-Sig I'd be 95% less annoyed by this whole situation. This is why I never got worked up about the $600/year for service -- I already got taken to the cleaners for $7500 by Tesla, so what's another ~$2000?!

+1 That pretty much sums up what I feel too, and probably said more eloquently than I would have done. I think I've pretty much agreed 100% with all of Arnold Panz's posts on this subject.

I don't see any evidence that Tesla will do anything special for Sig owners. Really sad how the Sig program has amounted to nothing more than a money grab for Tesla. I guess I'm more bothered that I was gullible enough to fall for it.

 

[Arnold Panz]

At the risk of putting myself in the line of fire, I thought the primary attraction to getting a sig was that it's a limited edition car with limited edition paint (if you went sig red). The "you get it first" has always, in my mind, been secondary to that. Then again, I'm a P...

I'm sure there are some who loved the color and upgraded for that, but I would've been just as happy with a regular color choice. For me, it was showing support for Tesla, and ensuring I got the car first. We didn't know about the S curve then. When they announced pricing and options, I was pretty bummed (well documented here at TMC), but still figured I was getting my car at least two months earlier, and they'd surely offer lots of other goodies. Plus, they told me if I downgraded they'd "try" to get me to my original spot in line, but no guarantees! So I was vulnerable to being worse off if I downgraded at that point. And I was still drinking the Kool-Aid pretty hard back then. By the time they talked about the S curve in production, it was way too late.

Brianman says it best -- the only way to justify in one's mind the Sig premium at this point is as a donation to Tesla, because there really was no benefit to it, at all, at least for me. We know Tesla will make around $7.5 million extra in revenue from the Sig premium. The question is, how much will they lose in the loss of enthusiasts like me not pimping the company like we once did? That's much harder to quantify but I would argue a lot more costly in the long run.

Case in point: a good friend saw the S at a local car show this weekend and was raving to me about it. He was probably ripe to plunk down a reservation on an S or X, but I didn't even bother trying to push him because I frankly don't know what his experience would be like and don't want to put my own credibility on the line with friends by pushing a brand that hasn't treating its best customers in a way I would have expected.

Clearly, I'm not going to sell anything close to $7.5 million worth of cars, but I'm not the only one who feels this way, so multiply my experience times many people and many years. I just think it was myopic, short term thinking by Tesla to charge the premium that they are -- they could've kept me drinking the Kool-Aid indefinitely with a couple of different decisions, and I don't think I'm alone in that assessment.

 

[Charged_Up]

Case in point: a good friend saw the S at a local car show this weekend and was raving to me about it. He was probably ripe to plunk down a reservation on an S or X, but I didn't even bother trying to push him because I frankly don't know what his experience would be like and don't want to put my own credibility on the line with friends by pushing a brand that hasn't treating its best customers in a way I would have expected.

This is exactly the point I made recently in a conversation with management. I can't tell you how many people I have talked to about Tesla and my expectations for the car. But my excitement has been tempered by not wanting someone to go through the lack of communication that I received as a theoretically "preferred" customer. The early reservation holders are Tesla's best salespeople and they have been blowing it by ignoring inquiries and overpromising and underdelivering rather than the reverse. I'm pretty sure they got the message, but the proof will be in behavior from here out....

 

[kevincwelch]

That alone is sad, and Tesla should take note.

I think Tesla should really do something for Sig owners ex post facto like they did with 60 kWh folks who had already finalized before the SC announcement.

Given your thread (and the options to get grey wheels for anyone), it seems as though the real value in being a Sig owner is the color, branding and being first or close to first.

Tokens of good will should include:
1. Free wireless for 1 year
2. Free service for 4 years
3. Swag
4. Options not available to regular production (CCI, software add-ons, etc.)

I'd be dismayed if I plunked down and interest-free $40,000 deposit 3 years ago and all I got was a paint color no one else had.

Another fine example of how Tesla's innovation hasn't extended to the PR department yet.

 

[gg_got_a_tesla]

Second your suggestions, Kevin. 4 years of free service and a free CCI sound like great rewards for Sigs.

 

[Jkam]

This is exactly the point I made recently in a conversation with management. I can't tell you how many people I have talked to about Tesla and my expectations for the car. But my excitement has been tempered by not wanting someone to go through the lack of communication that I received as a theoretically "preferred" customer. The early reservation holders are Tesla's best salespeople and they have been blowing it by ignoring inquiries and overpromising and underdelivering rather than the reverse. I'm pretty sure they got the message, but the proof will be in behavior from here out....

What makes you think they will change their attitude/behavior towards the Signatures? Everything up until now has indicated that Tesla is indifferent at best about the Sigs. Oh wait...I forgot they gave one year data plan. That's the only positive action Tesla has taken towards the Sigs. Everything else has been bad news otherwise.

 

[steve841]

Wow .... Im sensing a lot of hostility ...

I'm giving Tesla the benefit of the doubt only to the extent that I feel comfortable they've had a chance to get over learning production/supply/distribution/delivery and whatever else before I start to feel burned in some way.

If I was to give a timeline, I'd say after they pass the 5,000 mark. At that point, the operation should be much more refined. Orders should have increased as visibility of actual owned models are on the road.

So, FWIW, I'd say by the end of March 2013, if Telsa hasn't "thanked" their signature owners in some way, my attitude is sure to change. But, I've adopted early before only to be let down, so I'm not anticipating a blood pressure increase if we get nothing.

 

[Charged_Up]

What makes you think they will change their attitude/behavior towards the Signatures? Everything up until now has indicated that Tesla is indifferent at best about the Sigs. Oh wait...I forgot they gave one year data plan. That's the only positive action Tesla has taken towards the Sigs. Everything else has been bad news otherwise.

I don't know that they will change with respect to sigs, only that I think they have changed with respect to me. But I'm hoping that a renewed focus on customer communication will spread rapidly...:smile:

- - - Updated - - -

At the risk of putting myself in the line of fire, I thought the primary attraction to getting a sig was that it's a limited edition car with limited edition paint (if you went sig red). The "you get it first" has always, in my mind, been secondary to that. Then again, I'm a P...

Todd - you have to go back nearly three years and understand that the Sig was sold as an exclusive that would have features and badging that production cars would not have. The general feeling is that the difference of a single paint color and white leather (not the most popular interior) was not the exclusive "collectors edition" that most were led to believe. But failing the paint and white interior and "extensive leather" inside, then the big difference became early delivery with a general understanding that low reservations numbers would have cars well before production vehicles were distributed - but that has also turned out not to be the case. So the bottom line is that for a few relatively minor cosmetic differences, sig holders were charged roughly $4-6k more than an equivalently featured production model - and to date the primary difference is the addition of a year's cell service. Personally, I think all of the above would have been tolerable if the company had treated the earlier sig reservers as my understanding of how they treated early roadster reservers - little basket of logo'd items, maybe a close up or two with managers or an exclusive event - that kind of thing. One suspects that almost every ounce of energy has gone into engineering and production to meet a timetable that nobody wants to miss as a public company - but it will hurt down the road in fewer sales as people like Arnold or myself just aren't as gung ho with well-heeled friends as they don't want their own credibility questioned if their referrals are not treated well. That's not to assign any ill intent to anyone, and I do believe that Tesla listens to its customers - likely more than most - but that good intentions have had difficulty getting translated into action. I just think it's a shame of a missed opportunity for Tesla to create huge goodwill and loyalty....

 

[Arnold Panz]

That's not to assign any ill intent to anyone, and I do believe that Tesla listens to its customers - likely more than most - but that good intentions have had difficulty getting translated into action. I just think it's a shame of a missed opportunity for Tesla to create huge goodwill and loyalty....

I view this as a sort of Tragedy of the Commons, because when I speak to any individual at Tesla, they totally get it and are very sympathetic to what I say about this stuff, but Someone made a decision, and they all have to toe the company line, even if a majority know its not the right decision. I hold no ill will towards anyone at Tesla (except possibly George B assuming these were his calls, though I doubt it was only him), but collectively as a group of executives, they plain screwed up.

The other problem with an ex post facto gift to the Sigs is they've already lost me. It's a simple thing -- it takes any company a lot to build a good reputation and not much to lose it, especially as a start up. I , and others, were more than willing to give Tesla plenty of rope, but now anything they do is going to feel like a lame effort after the fact, and only because we complained. Meanwhile, at the time these decisions were made there were many of us warning about what could happen if they went down this path. But once the decision was made to do little to nothing for the Sigs, it seems like Tesla dug in its heels instead of trying to listen to its best and most loyal customers. It was a real lost opportunity for Tesla, and that's really unfortunate.

 

[PRJIM]

Tesla could have implemented cheaper alternatives for the first 1000 Signature cars: How about snapping a photo of a customers Model S mounted on a wood plaque with the vin number? This would have cost almost nothing to produce.

 

[Jkam]

It should be interesting to see what happens with X Signatures. As of recently there are less than 200 X Signatures reserved. On Tesla's web page, it says the X Signature will be "wonderfully equipped" and have "exclusive options and colors".

Given what we know from the S Signature program

1) Does Tesla do the exact same thing and offer red exterior/white interior to the X Signatures?
2) Does Tesla add in some other exclusive options/colors? And if Tesla adds exclusive options/colors beyond what was given to S Signatures, does that bother any of the S Signatures?
3) Does Tesla charge the same premium for the X Signatures as the S Signatures?

I think Tesla has put itself in a predicament. If Tesla does what it did with S Signatures, I don't see how it sells 1,000 X Signatures. If I was Tesla, I'd be embarrassed if I couldn't sell out of my "limited edition" model. If Tesla did offer more substantial exclusive options/extras or didn't charge the Signature premium, I'd be happy for the X Signatures, but as an S Signature I think I'd feel taken again.

 

[gg_got_a_tesla]

Well put, JKam. Tesla's indeed in a bind here; if they don't do something substantial for S Sigs soon, they may as well not bother with an X Sig line. I feel that folks such as AnOutsider and others who have an X Sig res to go with an S Sig are waiting to get their S and then look for Tesla to step up and do something before choosing to drop to X general production.

 

[steve841]

I think all of us have to remember some business basics.

1. Tesla is cash strapped.
2. Tesla is clearly dealing with production delays.
3. Staffing. Tesla is increasing staff to try to keep up with production ramp up, show rooms, service, and delivery- clearly it takes a while to develope and train those folks further adding to cash flow problems.

I am sure the powers that be would like to do something special, but reality is, they are trying to survive. It's an endless catching up for Tesla until they get to profitability. So, be patient. Let's not write them off just yet as not customer friendly. There will be missteps and misunderstandings and miscommunication, that's just par for this course.

 

[Arnold Panz]

Great question JKam. I for one would not resent a better Sig experience for the X reservation holders than we got. It would be terrible if Tesla couldn't learn from its mistakes. I'd be much more worried if they didn't think they made any mistakes with the S Sigs and did the same things with the X!

That said, regardless of what the X Sig offers, they can still sell out the X Sigs, but it would be right before production started. In other words, the one true benefit the S Sig program offered was to a very latecomer who wanted to either upgrade or get a new reservation. They are really seeing the benefit of paying the Sig premium. So, if I wanted an X and had enough money, I could just wait until the last minute and then order a Sig. That way, you jump the whole queue without having your money tied up with Tesla for more than a few months. Those who did that with the S seem pretty satisfied that they got bang for their buck in paying the Sig premium.

To Steve's point, this seems to defeat the purpose for Tesla of getting their hands on some free cash during the intervening wait period, but that's the incentive program that the S Sigs created.

 

[steve841]

To Steve's point, this seems to defeat the purpose for Tesla of getting their hands on some free cash during the intervening wait period, but that's the incentive program that the S Sigs created.

My point is far simpler: let's let them build their business before we Signature owners hold our hands out.

 

[Jkam]

Great question JKam. I for one would not resent a better Sig experience for the X reservation holders than we got. It would be terrible if Tesla couldn't learn from its mistakes. I'd be much more worried if they didn't think they made any mistakes with the S Sigs and did the same things with the X!

That said, regardless of what the X Sig offers, they can still sell out the X Sigs, but it would be right before production started. In other words, the one true benefit the S Sig program offered was to a very latecomer who wanted to either upgrade or get a new reservation. They are really seeing the benefit of paying the Sig premium. So, if I wanted an X and had enough money, I could just wait until the last minute and then order a Sig. That way, you jump the whole queue without having your money tied up with Tesla for more than a few months. Those who did that with the S seem pretty satisfied that they got bang for their buck in paying the Sig premium.

To Steve's point, this seems to defeat the purpose for Tesla of getting their hands on some free cash during the intervening wait period, but that's the incentive program that the S Sigs created.

I'm not so sure selling out the X Signatures is such an easy proposition. The S Sigs didn't sell out until Dec 2012/January 2013, and with all the downgrades/cancellations (about 25%) one board member was able to secure a Signature S as late as this past June/July. So in my mind, the S Signatures barely sold out. And keep in mind there was a lot more reservations and overall interest for the S at the same point than the X. In fact some board members have said that they will likely downgrade their Signature X reservation if Tesla doesn't do much to make the Signature program more attractive than the S Signatures. Granted X reservations may pick up as the final date gets closer and people see other Tesla cars on the road. However, unless Tesla makes significant changes to the Signature program, I think it will be tough to sell out the X signatures even acknowledging that the latecomers to the party get the best deal and probably will be significant.

 

[AnOutsider]

My point is far simpler: let's let them build their business before we Signature owners hold our hands out.

...but they held THEIR hands out, and alluded to what we'd get for forking over cash. I think just about every sig holder who didn't jump in last minute likely feels what we've seen so far is insufficient. Sure, we can sit back and wait for them to get their ducks in a row, but in the interim, shouldn't we get some communication on it? We could be waiting for something that's never going to come otherwise.

I'm not so sure selling out the X Signatures is such an easy proposition. The S Sigs didn't sell out until Dec 2012/January 2013,

Aside from your time traveling, I agree (though I think they secured a founders). As someone stated, with the line running a bit smoother by then, there likely will be less value to getting your vehicle early.

 

[steve841]

...but they held THEIR hands out, and alluded to what we'd get for forking over cash. I think just about every sig holder who didn't jump in last minute likely feels what we've seen so far is insufficient. Sure, we can sit back and wait for them to get their ducks in a row, but in the interim, shouldn't we get some communication on it? We could be waiting for something that's never going to come otherwise.
.

I appreciate your position, I've felt that way at times. However, my preference would be a strong company with a future rather than a shiny new Model S and a bankrupt Tesla. I'd sleep better with a warranty that can be honored over some knick knacks...also, I don't recall anyone pointing a gun to my head to put $5000 down, let alone tossing in another $35,000. If it turns out the P's were the smart ones, then so be it. Live and learn.

 

[ckessel]

I appreciate your position, I've felt that way at times. However, my preference would be a strong company with a future rather than a shiny new Model S and a bankrupt Tesla. I'd sleep better with a warranty that can be honored over some knick knacks...

If Telsa can't avoid bankruptcy without shafting their Sig customers, then I don't particularly feel like they should be in business anyway. We're talking about maybe $10M? 10k per customer * 1000 cars. They just offered stocks so they could sit on $200M as a safety net.