Who makes these decisions at Tesla?

[Muhammad]

As Tesla matures and rolls out pricing and design changes across their lineup, certain items in the design studio and certain decisions confuse me and make me think, who thought this was good idea? They seem to neither benefit Tesla, nor the consumer. Please aide me in uncovering the hidden wisdom behind these choices.

1) Why such a steep upgrade cost between models? On the S to get 75 more miles range between the 75 and 100 it costs a whopping $20,000! all this after a similar 25 Kw upgrade on the 3 costs only $9,000!

2) And it gets worse. Want a second and a half faster acceleration? Well, just give up 20 miles of range, AND $40,000! Sure you get 8k of options free, but that still leaves you paying 32k for not much value. Similar numbers exist on the X

3) There is absolutely nothing that separates the top of the line X and S aesthetically. Neither exterior, nor interior, not even a lighter wheel package. Instead, should you upgrade to the performance larger diameter wheels, you will be held down by 30 Lb wheels that prevent an amazing performing car from performing even better.

The net result of this pricing scheme is that I barely find any non base-battery cars here in the Bay Area. And this is after I'm sure many (including myself) would have payed a reasonable amount to upgrade should the upgrade be reasonable.

3) Ok, I get it, Tesla wants to limit customization to increase production efficiency. But taking away wheel options? Does that really help? We are left with one ugly base silver wheel, and to get them painted black you can spend 2.5k-3k respectively! Do they really want noone to upgrade? And don't even ask about the outrageous upgrade to those heavy 21" and 22" wheels. Also, what happened to Arachnids that were supposed to be available?

Oh, and while were on this topic, how about paint choices: Two black colors that look exactly the same? Take away some of the most popular colors like base white and titanium metallic? Why?

4) Now how about depraving a luxury car from basic items. Firstly, the Model X 5 seater has an AC system that barely works for the rear passengers. How difficult would it be to streamline models and give all of them the same ducting and AC? All this for an over $100,000 SUV. And while on the topic of seat configurations, how hard is it to figure out a ventilated seat? Why does a 7 seat upgrade cost $3,000 and then not even have power middle seats? Why does the 6 seater cost an astounding $6,000? 6K for a seat configuration? Insane.


Feel free to add to this list as it definitely isn't exhaustive

 

[Akikiki]

Well, since you are asking who decides, not why its decided, what difference does it make who decides? Do you think having the name of the person that made the decision is going to make a difference? Let me try again. So, let's say for a minute, someone can reveal to you who decides. What are you going to do with that information?

 

[SSedan]

Value of something is what someone is willing to pay, not the cost to produce, and they have been pretty open about "fully loaded" cars padding margins so the money can be invested elsewhere.

 

[boaterva]

And, well, we know *why* the S and X are higher for the 'same' difference. It's been clearly stated it's to fund R&D of the 'mass' market car(s), the 3 and perhaps the Y, etc. (Whoops, @SSedan said pretty much that already, what I get for not reading the whole thread! )

 

[deonb]

Well, since you are asking who decides, not why its decided, what difference does it make who decides? Do you think having the name of the person that made the decision is going to make a difference? Let me try again. So, let's say for a minute, someone can reveal to you who decides. What are you going to do with that information?

His name is Bill. It's always a Bill.

 

[Muhammad]

Well, since you are asking who decides, not why its decided, what difference does it make who decides? Do you think having the name of the person that made the decision is going to make a difference? Let me try again. So, let's say for a minute, someone can reveal to you who decides. What are you going to do with that information?

LOL Ok I'm not literally asking "who" decides, more of a figure of speech

It seems most are focusing on the options pricing. What about paint choices? Wheel choices? etc

 

[Brando]

People who can afford it, pay for it. As Elon has mentioned, thanks to Model S/X buyers as they help finance the Model 3 development.

Also note that production rate is the bottleneck, not sales demand. When/if sales demand becomes a bottleneck consider some of the options Tesla has including - pricing (vehicle/option packages), SuperCharging charges, fleet sales (car rental, Limo, Taxi, corporate cars).

Another way to look at option pricing; The base model is a really good deal (for example, Elon said at $35,000 the best car you can buy for that price).

Customizing your car for your taste is what aftermarket companies are all about. - You can paint your own brake calipers and wheels, really. Someday Tesla stores may carry more items. Growth is tricky and Tesla done an amazing job so far. Look to England - as an example - of many, many car makers that never did expand much. Lotus, Morgan, TVR, RR, Aston Martin, many more.

 

[Esme Es Mejor]

LOL Ok I'm not literally asking "who" decides, more of a figure of speech

It seems most are focusing on the options pricing. What about paint choices? Wheel choices? etc

Why? Because it works. Lots of people pay lots of money for performance and other options. It creates value for them, and provides Tesla with money it can pour into its future.

Are those options not worth it to you? Cool! Don't order them. I didn't. The only option I added was dual motors. But I'm cheap, as far as Tesla owners go.

 

[MarcusMaximus]

Want a second and a half faster acceleration?

"a second and a half" is not in units of acceleration. 4.1 seconds 0-60 to 2.5 seconds 0-60 is a roughly 64% increase in acceleration(from 14.634 m/h/sec to 24 m/h/sec). So it's a 44% increase in base price for something that accelerates 64% faster and your mentioned options.

If that's still too expensive for you, then don't buy it.

 

[malcolm]

Why aren't options more varied and more cost effective?

One word: Competition.

There isn't any.

Everyone promises to launch something to beat last year's Model S, next year or even later. It's embarrassing.

 

[Jays200]

I want the option to pay for ambient lighting. It's built in to my car, I've added the under seat lighting and for a few hundred bucks I'd happily pay for the software switch.

 

[tomas]

Also have to consider volume. S and X are relatively low volume because of price tag. So they HAVE to yield bigger margins (particularly on options) to cover overhead. The 3 will be say 5x the volume, so margin can be lower.

 

[idoco]

Somehow I can't see, "why is _____ charging so much for ______ and not offering ______ " being posted on a BMW or Mercedes or Lexus or Maserati forum.

Is Tesla held to a higher standard? Are Tesla owners more demanding?

My personal opinion is that many Tesla owners have previously never paid this much for a car. As such they expect more bells and whistles for their money. But other manufacturers do the same thing. IMHO

 

[SSedan]

British TopGear touched on options pricing for a few brands over the years, funny stuff and Tesla's options pricing practices were common long before they arrived on scene.

Also consider that with things like Ludicrous mode they are exposing themselves to a lot more warranty risk, which is more than the cost of the battery, motor, gearbox, but also towing, a loaner, installation labor.

The comment about a lot of Tesla owners never having paid so much for a car before is spot on.

 

[AlMc]

It is called maximizing GM for future self financing of additional products and to keep the company viable.

I am in the 'camp' of a person who never has spent half this much on a vehicle before the model S.

Full disclosure: As a stockholder I want to thank everyone who pays for these extras or buys despite not getting everything they think they need/want when buying an S or X.

 

[tomas]

Yeah the Ferrari 812 super fast is $315k and doesn't even have nav (In reality IDK but point is nobody is going to post that on Ferrari forum).

 

[bkp_duke]

When did anyone say that upgrades have to be "linearly" priced? Anyone buying a 100kWh battery is paying for the extra engineering to cram in all those extra cells (which Elon himself said pretty much turned out to be a miracle).

TOP END has always cost more, dis-proportionally so.

They know they can sell the top end for a premium.

If you cannot afford it, or don't want to pay the premium, then vote with your pocket book. If the 100s don't sell at current pricing, Tesla will discount them. If they do, they will continue to sell them at this premium (or worse!).

 

[Rowan256]

Old type of battery and new type of battery, so it's simply x% more.
1,5 second is actually quite a lot, especially since the first one already has a very low 0-60 time, just try to find a similar sized petrol car that shows similar numbers, it will cost more exponentially
The color thing is probably because Tesla automates almost everything, except things like these, in other words, it's human work, which they don't like, which costs a lot of money.
Colors is the same story, they need to build an entire new factory part each color.
I'm not that surprised at all TBH

 

[cwerdna]

The proper units for battery capacity are kWh, not "Kw"

It seems most are focusing on the options pricing. What about paint choices? Wheel choices? etc

Probably a combination of product planners, marketing, bean counters (accountants), MBAs w/input from consumer insights researchers, designers, supply chain and engineering.

I'm sure they internally run projections on if I price something _____ or bundle A as part of B for C price, we're probably going to get ____ amount of uptake. _______ is our COGS (cost of good and services) on this. If ___% don't take it, they'll go with ____ instead that will lead to _____ less revenue and profit.

I'd imagine they've done some research amongst competitors and consumers on colors. But, they need to make sure they can secure the paint in sufficient quantities, paint the cars reliably with it and that it meets their durability requirements.

They might remove colors if they find it's unpopular, has durability problems, process problems w/painting, can't secure supply anymore, out of style, etc.

 

[David_Cary]

Competition.
Fact is with a large battery EV, speed is relatively cheap. Presumably in 5 years, there will be several sub 3 sec 0-60 sedans and SUVs that cost significantly less that today's P100DL. But for now, there is no substitute so they charge what the market will bear.
Now they could easily drop the high end pricing and sell more. They may or may not make more money of course.

Just because Ferrari does something doesn't make it a great decision. It will remain a niche manufacturer which is not Tesla's plan. I think comparing anything to Ferrari is dubious. But comparing to BMW is fair and they do some crazy option pricing also. But until there is enough competition, they might as well do it and get away with it.

I would hope the warranty increase on a P100DL is not that much but who knows.