Tesla is ripping off customer?

[oktane]

@RogerHScott - Good point regarding the retainer, probably attorneys on standby. But still might be travel expenses, etc.

@brkaus - Same practice by Tesla. Ever hear of an "inventory" car? Sizeable discounts ($20k) are often available to those willing to put in the effort.

Another "United Airlines" type problem with Tesla is lack of empowerment by the employees. It seems like sales staff all the way to the top store managers have little power to be flexible against Fremont corporate. Employees should be able to use their discretion in making decisions costing < $2,000 or so to fix customer problems (like one poster's $500 change fee).

 

[stopcrazypp]

I agree with you. But the burden of proof is on Tesla to show actual damages of at least $2,500, and even then this may not be enforceable in CA. Tesla's position is more credible after a car is produced. But the nonsense about how 1 week after the order the car becomes non-changeable and non-refundable is just comical (especially for those of us that waited several months to enter the production queue).

Furthermore, if a customer refuses delivery after the car is made, there is likely a justifiable reason - paint defect, poor interior quality, or anything else where any judge or arbiter would basically side with the customer. The only losing argument for the customer would be "I just changed my mind." Anything else will cost Tesla more in legal fees than the $2,500. It would be far smarter for Tesla to simply refund the $2,500.

Therefore, since Tesla's $2,500 non-refundable deposit will not actually let them keep the $2,500 in a majority of cases, this "threat" to the customer should be eliminated. To me, it makes them look like hustlers or thugs.

Not a lawyer, but my general understanding is that liquidated damages are intended to be estimates that are agreed upon by contract because exact damages are difficult to calculate. So Tesla does not have to demonstrate at least damages of $2500, only that the number in general would be reasonable. Some cases would be higher, some less, but the number should be an average. Given Tesla have sometimes given discounts on inventory cars of over $10k, I think it's pretty trivial for them to be able to justify $2500. You can also look at the number as a ratio to their margins on the car (which may easily be 10x that amount) and it's reasonable.

 

[oktane]

I think there is some CA legal precedent involving real estate (not cars) where actual damages have to be shown, despite a liquidated damages clause. There's always a gray line, and over $2,500, it should not be worth the hassle to enforce. Maybe an actual CA attorney knows the answer.

 

[AnxietyRanger]

Another "United Airlines" type problem with Tesla is lack of empowerment by the employees. It seems like sales staff all the way to the top store managers have little power to be flexible against Fremont corporate. Employees should be able to use their discretion in making decisions costing < $2,000 or so to fix customer problems (like one poster's $500 change fee).

That's true. This everyone pays the same / no dealerships system has actually ended up very bureucratic compared to dealerships. It is actually rather comical at times dealing with Tesla. The human factor is often completely lost, as it so often is when there are attempts to build a centralized "machine" to handle it all. Like a communist state. Centralized solutions rarely work for individuals, because whenever there is an abberration needed, it becomes very hard. Only if your case fits like a cog in the machine, are you good.

You can literally feel the disconnect when dealing with Tesla. Everything goes "somewhere" to be handled and you are never dealing with the same people even locally, not even when they sort of assign you someone. And you keep reading this on TMC time and time again, so it happens everywhere, unless you learn how to "work the system" (then you can perhaps get somewhere with special effort). In Europe it is not even unheard of that they assign you to someone in a different country for some task.

 

[Mediocrates]

Yes.

That's fair. We have a fundamental disagreement regarding obligations in the vehicle purchasing process. I don't expect you to change your mind, but I do expect you to be honest and consistent with your language.

This isn't really a "custom" built product when they're making 20,000+ a quarter. This is a commodity item. If I don't take it, someone else will. There is a 40% margin already built into the purchase price.

The number of vehicles built is irrelevant. Someone else purchasing the car is irrelevant. Margin on the vehicle is irrelevant. If the build is specified by the customer at the time of order, it is custom. Tesla did not elect to build that vehicle and make it available for general market access.

And I've "custom ordered" many cars in the $100,000+ price range and the deposit has ALWAYS been fully refundable, if for some reason I decided to not take possession of the car, even at the last second.

This is typically true of vehicle orders at any price point using standard dealership models. I don't consider this acceptable, you do.

Oh yeah, and despite what you sign, the non-refundable deposit is not really enforceable in CA. No judge is going to be convinced that Tesla sustained $2,500 in liquidated damages anyway. This is just an intimidation tactic used by Tesla to force you into buying a car. Do you think Porsche, Mercedes, or BMW pull these tricks?

Tesla has never forced anyone to buy a car. Tesla has terms of purchase that create negative consequences for buyers who choose to abandon the purchase. All of this is clearly defined in the purchase process. You disagree with it, but that doesn't make it a "trick." Hyperbole undermines your position.

 

[oktane]

That's fair. We have a fundamental disagreement regarding obligations in the vehicle purchasing process. I don't expect you to change your mind, but I do expect you to be honest and consistent with your language.



The number of vehicles built is irrelevant. Someone else purchasing the car is irrelevant. Margin on the vehicle is irrelevant. If the build is specified by the customer at the time of order, it is custom. Tesla did not elect to build that vehicle and make it available for general market access.



This is typically true of vehicle orders at any price point using standard dealership models. I don't consider this acceptable, you do.




Tesla has never forced anyone to buy a car. Tesla has terms of purchase that create negative consequences for buyers who choose to abandon the purchase. All of this is clearly defined in the purchase process. You disagree with it, but that doesn't make it a "trick." Hyperbole undermines your position.

Hey, at least we agree to disagree!

 

[brkaus]

brkaus - Same practice by Tesla. Ever hear of an "inventory" car? Sizeable discounts ($20k) are often available to those willing to put in the effort.

Yes, inventory (many, but not all, with wear an tear plus miles) are available for lower cost.

But walk into a traditional dealer and everyone pays a different price.

 

[Canuck]

Tesla has never forced anyone to buy a car.

They did me when they built the Model S. I couldn't resist the force of attraction.

 

[AnxietyRanger]

Frankly, I wouldn't mind dealing with a dealership. There are obvious upsides to it.

The main one being, you can actually talk to a human being at a dealership. In the Tesla system you can only do that by bypassing the system and basically demanding exceptions all the time, at a dealership you can form personal relationships much more easily. And I'm not just talking swag or driving event invites or better treatment at trade-in valuation or somesuch (although those exist too), but actually someone who has your car order in mind and is not just processing data on some centralized system.

I get it that not all share the experience, but the fact is, I've gotten better service from my local dealership than from Tesla. I mean, heaps and bounds better. That is not to say at a dealership you can't run into bad people, but there you always have the option to switching the people or switching the dealership entirely. And once you find a good one, you can stick with that more easily, because they are not set up to work as a machine like a Tesla Store/SC, but through people.

Not to mention the centralized system means Tesla needs to decide and implement which locations get Service Centers and Stores, instead of more organic growth in the market.

Now, @Canuck is right though, Tesla made such a great product in the car that one is ready to take all forms of crap just to have it.

 

[RogerHScott]

I think of Tesla somewhat like the Apple model, or the French (as in, in France) restaurant model: the seller has a very specific, very
well thought-out product they want to sell, as well as a way they want to sell it; if you want that thing, you do business with them and
get a relatively pure form of that thing; if you don't want it, you don't ask them to change -- you go somewhere else, with no hard feelings
on either end. This is in contrast to the (dominant) "American" model where businesses -- especially restaurants -- try to be everything
to everybody and wind up being kind of nothing to anyone. Personally, I kind of like choosing a vendor that wants to sell what I want to
buy, rather than counting on the vendor changing their practices to meet my personal needs. Bottom line: if you feel you're having to
put up with a lot of crap in order to own a Tesla, perhaps it is not the right car (company) for you.

 

[Zero CO2]

unfortunately you ordered the Model S 2 weeks before the elimination of 60 kWh option and 75kWh price change ... and your one week change window closed...you probably would have eventually gone for the upgrade to 75 at some point so why not take it now as modification for $500 vs $ 2000 that other 60/60D owners would have to pay... from their POV you are lucky

I was in similar situation and I really don't think my owner advisor knew the details of the price changes

good luck with your new Model S