Tesla will never stop innovating. Major revisions every 12-18 months.

[S4WRXTTCS]

I'm in a 2 year lease. How can you say if you lease you are stuck with outdated car? Sure, go ahead and buy/finance. THe depreciation is even more unpredictable the longer you hold and depending on how much you put down. I could not imagine paying cash for the full car based on how quick it's being improved. Talk about loss.. If you are rich, then none of this is pertinent.

I think people overestimate how much the car has been improved. Every single annoyance I have with my 2015 70D still exists with the 2017 100D, and likely won't be addressed until well after the tax rebate runs out. It's going to take the new guy from Volvo a lot time to fix what I want fixed.

There have been improvements, but the focus has been elsewhere. Where it's focused on performance in a straight line, improved battery technology (100KW battery), or the hardware for autonomous driving. Those are the main bullet items people see, and don't count the numerous enhancements/fixes people don't see (that are to reduce problems and to speed production).

There will be, but those enhancements (to the body shape, and interior) are on a much slower upgrade track.

Until the Model 3 comes out it's really about how much value someone puts on AP2 versus AP1. Much of that value right now is future predicting.

As to leasing versus buying it really comes down to miles. This car is tremendously easy to put miles onto, and it would be really tough for me to keep within the limits of a normal lease. Plus if I finance then I get the $7500 rebate versus it being built into the lease. I also haven't seen really good lease deals for it anyways.

When I financed my 70D things were a lot different.

Washington State had a sales tax exemption that was about to expire
Tesla had a resale guarantee that guaranteed the price of the car, and this was only applicable to ones financed through Tesla (or through the approved vendor).

So I got those things and free supercharging for life. I'm not exactly keen on upgrading for promises on AP2. I'm more likely to do the smart thing, and ALWAYS the smart thing of keeping it till the wheels fall off. Where you don't get suckered by the new.

 

[S4WRXTTCS]

You need to read through the threads right after AP came out, then the D, then the facelift, then AP2.0, and you won't need to ask that question. There's so many of them, Elon Musk had to say to them that they are "buying the wrong car". What CEO would say that unless you've been whined to too much? It's like a parent talking to a spoiled child.

I was referring to THIS thread because that's what Ohmman was referring to. I can't count every single thread because 100K car owners tend to be whiny. Of course they're whiny. I'm whiny sometimes.

As to Elons Tweet that was in response to a HW1 to HW2 upgrade question. Which was completely understandable since he kept being asked that question over and over.

 

[Xminus6]

I like the idea of the yearly upgrade program for Teslas. Imagine if there was also a program that got you into a one year old tesla, upgraded yearly, for a reduced price. That might get a lot of traction.

I've been thinking that this is the future of Tesla for a while now. It makes sense and would actually ease people into the "car subscription" model more smoothly. If you're leasing on a pre-determined timeline because you want to be able to update to the latest and greatest when the lease expires, it's basically the same thing. The benefit of a plan like that is just like the benefit that Apple enjoys from the iPhone Forever plan. Brand loyalty and sales predictability. That allows you to forecast your supply needs more accurately and make the supply chain more efficient. It's basically a renewing, short-term lease.

Tesla has the added benefit of being able to take those cars back after two years and cheaply increase their value by turning on FSD and AP2 whether or not the previous owner (user) paid for those features. They can even increase the battery capacity for the software-limited packs. They can add significant value with just a few clicks of a mouse and resell it at a premium.

I've always suspected that's why Apple is so generous with new products for warranty replacements. They refurbish the products very well and sell them at a decent price in the reburb store while moving more new inventory.

 

[SageBrush]

If you think some of the service centers are busy now, just wait for one-off upgrades.

 

[S4WRXTTCS]

One concern I have when it comes to Tesla is so much value is wrapped into future expectations. Where there is the expectation that AP2 will accomplish full-self driving.

This value directly correlates to diminished resale values of AP1 cars.

Not only in owners trading in their AP1 cars for AP2 cars, but in new owners avoiding AP1 cars. I myself have told a few people to avoid an AP1 car if they at all cared about semi-autonomous driving.

But, this specific depreciation value isn't based on anything that exist today. As of this moment AP1 is way better than AP2.

We don't know if AP2 will ever achieve FSD even if Tesla sells it as being capable of it. Tesla is operating completely untethered from software development cycles. Where they release the hardware well before the software is finished. That's part of why they can have such a fast development cycle. They release the hardware, and then they monkey with the software for the next 6 months. Where they might or might not achieve what they set out to do.

If we go all the way back to the release of AP1 there was a huge list of expectations for it, but what was actually released fell way short of what was expected. Sure it didn't need to have much to be a lot better than nothing, but it's far short of what was expected.

With AP2 it's not just software, but regulatory requirement as well for it to really achieve anything greater than AP1.

For me personally I find FSD to be too big of a promise for Tesla to be making purely from a technology perspective not even counting a regulatory one. If Tesla didn't advertise AP2 as being capable of FSD I doubt we'd see the same level of obsession with AP2. Instead it would be more restrained where people simply saw it as the next phase. I admit it's hard for me to resist the lure of FSD. Just in the off chance that they are able to accomplish it to some degree.

 

[AnxietyRanger]

No, that's clearly not the *funny* emoticon. You don't seriously need me to interpret the emoticons that you requested I use to clarify my mood, do you?

I'm sure you know this, but when I suggested the use of more emoticons, I didn't mean messages with simply an emoticon.

You managed to come across as angry even with emoticons, so I guess my suggestion failed.

p.s. Fair enough on the Model 3. I hope you get it soon!

 

[AnxietyRanger]

I am the unofficial CIO/CTO in my group (...'chief geek'). I am asked all the time what the best (fill in the blank) to buy now (like smartphone, camera, Wifi networking hardware, etc, etc). My stock answer is always: 'next year's model'. Whatever you buy will be faster, cheaper, better, whiter and brighter next week/month/year. You have to freeze the technology and appreciate what you have. I drive a mid-2013 S85. My wife drives a mid 2015 S70D. Are either really 'obsolete"? Even thought I drive a 'dinosaur', I savor every day that I have had an opportunity to drive it. And yes, I still am getting firmware updates, some less meaningful, but all appreciated. All good...

Funny as that may be, one of the most popular features of the Apple following site MacRumors is their Buyer's Guide:

iPhone, iPad, Mac Buyer's Guide: Know When to Buy

They have made a science out of reporting on and predicting Apple product upgrade cycles.

Why? Because it actually is very useful information for most types of products.

With Tesla the product changes are so random, give a little there and then take away some more in another place, maintaining such a guide would be quite difficult. I'm not saying there isn't info people can gather and try to maintain, but it is much harder to try and find suitable buying points where buying would happen in a good time.

So Tesla is in fact creating a perpetual Osborning of their product with significant product changes happening every quarter, many times a quarter in a manner that people will at this rate end up expecting, even when Tesla maintains theoretically secrecy.

My suggestion to everyone who asks - as I am in a similar position as you in my own immediate community - is that it is never a good time to buy a Tesla.

 

[AnxietyRanger]

You need to read through the threads right after AP came out, then the D, then the facelift, then AP2.0, and you won't need to ask that question. There's so many of them, Elon Musk had to say to them that they are "buying the wrong car". What CEO would say that unless you've been whined to too much? It's like a parent talking to a spoiled child.

Maybe a lot of people indeed are buying the wrong car. Maybe that is the message Elon is sending, don't buy this car.

If you care about finding a good moment to buy a car that is not obsoleted even before you get it, never buy a Tesla. That seems like solid advice at the moment. I'm not sure that is the best message, but hey who am I to judge.

There would be nothing majorly problematic from this perspective with major revisions every 12-18 months as the title says. But with Tesla the recent and foreseeable reality is major changes every 2-3 months and several smaller changes likely within each quarter as well.

12-18 months would be like planning an iPhone purchase. Great, no problem. 2-3 months change frequency with a car that can have 3-4 month delivery time, it becomes very difficult to find a reasonably good buying moment, for those who care about such things.

Of course there are also always customers who do not care about such things. This does not apply to them. But I think I've seen enough people say "well, I thought about upgrading my S or X, but Tesla keeps making so many changes I might as well wait a couple of years to see what comes out"...

If Tesla created more clear-cut buying opportunities by pacing and grouping changes a bit more, these people would nudge and be happy doing so. Instead now we see constant cancellations and moves to waiting pattern - and constant displeasure of your new car being old before you even get it. Maybe it isn't much, but there is some Osborning of sales definitely already. I mean, eventually, it could amount to something that matters if the culture persists.

Look, Canuck, I appreciate your be-happy outlook on life. If that is how you truly are in everything you do, good for you, sir. There are many areas in life where I follow your advice personally, cars included. But even I think Tesla's method may be excessively fast-changing when examining the cultural phenomenon around the sales and what works long-term.

If your customers know something better is always coming in a couple of months from Tesla, many of them can and will wait for those couple of months, especially if it takes 3-4 months to get the car. If the loop starts again after those couple of months, then it can take a long time... This is not necessarily good for the psychology of sales.

The good thing about clear new-product buying opportunities is that those who care about such things, have that moment where they are happy - and when the next such opportunity arrives, they can be your repeat customers. Without any such cycle, these people have very little recourse. If you make changes faster than people can even get their cars, there literally never is a good time.

p.s. By the way, did Elon just Freudian slip new AP hardware in 12-18 months? AP3? (Sure it is coming at some stage, because Tesla's suite is woefully inadequate in the radar department, but did he just give a timeline?)

 

[jbcarioca]

There is a class if buyers who do care about depreciation rates. You can disagree with their viewpoint all you want, but they exist and are potential customers. I would argue the 35k market has more of them than the 70k market, so eventually its going to be a factor for Tesla if their cars score at the bottom of that list compared to their competitors.

If they did, it would be. Luckily, Tesla does not score anywhere near the bottom on depreciation tables of analogous vehicles. It's nearer the top than the bottom, but there are a good many variables to balance the numbers.
The shock is for those who have never before had a vehicle of this price class, or a new vehicle at all. It is indeed shocking for such people and it is a concern to Tesla, I am sure.
For anyone who's ever bought a new BM S-class or E-class, a BMW 7, 6, or 5, any Porsche, Maserati or Lexus Tesla depreciation will be unsurprising.

I do not denigrate those who worry about this issue. My closest friend (in the UK) buys his 'new' vehicles a minimum of one year old and has done so for decades. His last 'new' car was a two year old Jaguar he bought for 45% the new MSRP.
Another friend (in the US) just bought an impeccable 2008 BMW 750Li for $8,000 (original MSRP was $103,700). It was loaded.

Just keep in mind those proportions. Nothing Tesla has built so far depreciates the way others in their class do.
Anybody shocked by these numbers should buy private used. Those are the best deals. Following that are CPO, then inventory cars with high miles and now-discontinued specifications. If the latter look for AP-1, 85 or 70 kWh batteries, old nose cone etc. That is the way to decrease the depreciation bite.
BTW, the BMW and Jaguar stories were the same. Both were both the last year before a major model change. The principles are the same for any vehicle buy.
if you want a deal on a comparable ICE buy an old-style new BMW 5-series right now, as the new ones are arriving. You'll get, in the US, ~15,000 of MSRP if you negotiate well.

 

[Krugerrand]

I'm sure you know this, but when I suggested the use of more emoticons, I didn't mean messages with simply an emoticon.

I know exactly what you suggested. Be careful what you wish for, it might come true. (Winky face not equal to angry.)

You managed to come across as angry even with emoticons, so I guess my suggestion failed.

No, I didn't. You managed to be purposefully obtuse (regardless of the addition of the *big grin*).

It appears the answer is yes, I do need to explain what the emoticons mean even though they come with explanatory text when using them.
FYI this is the angry emoticon: And is neither angry nor funny, though other people found my use of it funny in the context of the posts.

p.s. Fair enough on the Model 3. I hope you get it soon!

 

[ohmman]

Who exactly is whining? Most of the posts I've read is simply about trying to gauge it.

@Canuck is probably right that I've read enough of these threads and sentiments that I'm reflecting the historical sentiments back to this thread. I'm not going to name people who are whining - that's not very kind. But I disagree that none of the posts are, at a minimum, complaining about the update pace. I haven't found a lot of posts "trying to gauge it" in a positive manner. I see people who are trying to set expectations in an arena where it's very difficult, and being disappointed when reality and expectations don't meet.

Buy the car for which you paid. If you're happy with that deal, be happy with that deal afterwards, no matter what. Easier said than done? Maybe, but it also makes for a happier life.

 

[AnxietyRanger]

I know exactly what you suggested. Be careful what you wish for, it might come true. (Winky face not equal to angry.)

No, I didn't. You managed to be purposefully obtuse (regardless of the addition of the *big grin*).

It appears the answer is yes, I do need to explain what the emoticons mean even though they come with explanatory text when using them.
FYI this is the angry emoticon: And is neither angry nor funny, though other people found my use of it funny in the context of the posts.

Nah, I'm fairly confident I read you right the whole time - your use of included.

The "something funny there?" question was not a suggestion you found my post funny literally, but that you found my post ... then I made an attempt to converse the points. Which found no real response from you, obviously.

Anyway, my initial suggestion for you to use emoticons was a genuine attempt at reaching your better angels and you responded over multiple threads with single-emoticon posts. Again, clearly my attempt to reach those better angels failed.

Oh well.

 

[AnxietyRanger]

@Canuck is probably right that I've read enough of these threads and sentiments that I'm reflecting the historical sentiments back to this thread. I'm not going to name people who are whining - that's not very kind. But I disagree that none of the posts are, at a minimum, complaining about the update pace. I haven't found a lot of posts "trying to gauge it" in a positive manner. I see people who are trying to set expectations in an arena where it's very difficult, and being disappointed when reality and expectations don't meet.

Buy the car for which you paid. If you're happy with that deal, be happy with that deal afterwards, no matter what. Easier said than done? Maybe, but it also makes for a happier life.

Are you suggesting that conversation, differing views and feedback on the psychological and other market ramifications on Tesla's product update cycle is not fair game? Would you label disagreement with and concern over Tesla's chosen method as whining?

You don't see the concern as genuine that a constant 2-3 month significant change cycle on a product with a potential 3-4 month delivery time could be problematic in the long run, as a perpetual Osborne cycle, no matter if Tesla agrees?

It is one thing to have concern or comment over what people should do with the car they bought subjectively. Some of those cases will always exist, no matter the model.

But what about concern over the idea that this policy will lead to more people waiting longer on their purchases (and even risk forgoing them entirely)? Is that whining when discussing the sales and product update model removed from personal purchase?

I bought a non-AP P85 which was delivered two weeks after P85D launch. I have never complained to myself or to anyone else. I have paid my dues. This is not about that for me. The 2014 P85D launch was not an issue at this level. It was IMO perfectly fine, a nice breakpoint, a nice buying opportunity that grouped multiple upgrades into one and lasted for a significant period after that.

Other 2013-2015 changes were minor. But in 2016-2017 Tesla has spread out major changes in a much wider timespan from quarterly facelift to P100D to AP2 to 100D plus those smaller changes and then expect things like HUD etc going forward...

 

[ohmman]

But what about concern over the idea that this policy will lead to more people waiting longer on their purchases? Is that whining?

Wait, I thought nobody was buying Teslas anymore because of those confusing and punitive idle fees. Hey, problem solved!

 

[AnxietyRanger]

@ohmman That message saddens me.

 

[jbcarioca]

Wait, I thought nobody was buying Teslas anymore because of those confusing and punitive idle fees. Hey, problem solved!

Great, does that mean the waiting time to order S100D is now down to two weeks?

 

[AnxietyRanger]

Great, does that mean the waiting time to order S100D is now down to two weeks?

Bunch of cancelled 90D's are probably available soon.

I wonder what happened just plain nice disagreeing. Why the need to label people with a negative opinion as whiners and all sorts of mean humor.

 

[jbcarioca]

...

I wonder what happened just plain nice disagreeing. Why the need to label people with a negative opinion as whiners and all sorts of mean humor.

We do need to be very careful here. Ordinarily we've been a very civilized bunch. It is a major risk that we decline into incivility, just as so much of the global political climate has done.
It seems appropriate that we discuss potential impact on TSLA of political conditions when we think of medium or long range investment prospects. The question is how to do that without being snarky, or letting snarkiness spill over in threads such as this one. I worry about that. I worry that a couple friends for decades have quit speaking to me because they disagree with my political views. I hope we do not do things like that here.

 

[AB4EJ]

Other car companies dont make "major" revisions every 12-18 months. They do it every 5 years.

I worked in auto industry 30 years (last 15 for Mercedes assembly plant), and here are a a few thoughts:

• Don't get me wrong, it's cool that Elon is getting free publicity (i.e., free marketing) by making this claim. (I am a Tesla owner and also stockholder).

• A lot of the interpretation of this depends on what you consider a "major" revision. It is truly a big deal (i.e., expensive and time consuming) to do a major revision with a lot of changes - unless these are all software, these involve changes to supplier systems, requalification of quality, consumption of obsolete parts, etc etc etc - plus you have to retrain the team. It's problematic to constantly change what the workers have to do to build the car (this is much more of a problem than it might appear on the surface).
• Mercedes (and I suspect other engineering-driven companies like BMW, Porsche and Audi) make constant changes to their cars even within a model year. They just don't tout this as an advantage. Again, it drives up cost and drives down quality because assembly line people (including those at suppliers) are often changing what they have to do, as well as having to recalibrate production equipment.
  
• This has implications to service also. You can't know what part is going to be needed for a repair by knowing the year the car was built - you have to look up the VIN. Then you find that service parts are phenomenally expensive because there are so many different ones, and the lower volume of each drives up the cost. The cost to Tesla for warranty work will go up too.
  
• Tesla won't do this for Model 3 (again, unless it is software only) for the reasons cited above, because it is contrary to the high volume high quality approach. Moreover, the Model 3 will have much more automation in the assembly process than MX and MS - and changes to automated assembly is much more difficult than changing processes being done by humans.

Feel free to disbelieve me and disagree with all of this, but I lived through the constant engineering changes for many years, and I can tell you, constant revisions drives up cost and drives down quality (check how often Toyota changes something - very infrequently - and this contributes to better quality and lower cost).

Having said all that, one could argue that an EV is simpler to build than an ICE, so maybe constant revisions are not an issue (again, unless they are talking only about software changes). But remember that the Tesla has a lot of content besides the power train, and there are a lot of things that can go wrong with all the other systems when you have constant changes. I hope that Elon's claim of major revisions refers mostly to software -they can get away with that. Hardware is a much different issue.

 

[ecarfan]

You don't see the concern as genuine that a constant 2-3 month significant change cycle on a product with a potential 3-4 month delivery time could be problematic in the long run, as a perpetual Osborne cycle, no matter if Tesla agrees?

There is no "constant 2-3 month significant change cycle" with Tesla. There are ongoing continuous improvements, most of them too minor for those outside of Tesla to notice or be aware of. There are also major changes every 12-18 months as Elon recently emphasized. They will not be announced in advance, which I think is the best way to handle them. I am very pleased that Tesla will continue to innovate on their own schedule, and as a long TSLA investor I support that approach.

You are welcome to disagree. Repeatedly. In the meantime, Tesla will continue innovating and selling more and more cars every year.