Witnessing a lot of speculation on the forums about an imminent S and/or X battery or interior update, I thought I'd give some reasons to why I don't expect a major refresh to occur within the next year. Small changes, sure, but a major update, I think not. My reasons;
1) Tesla times its updates based on "demand levers" or what they can use to entice urgency among buyers to purchase. With the impending end of the federal tax credit, I expect Tesla to, in the coming quarters, emphasize the urgency to purchase to be able to take advantage of the credit before it expires. This should produce enough demand to sell 25k/quarter without the need for a redesign.
2) After the Model X, it made perfect sense for the S to be updated seeing the new technology which was introduced in the X. However, with the 3 there is no significant new technology, rather I much prefer having more physical controls and a dashboard to the 3's minimalist design. By the way Tesla is actively promoting a second screen as a premium feature, I take it that they agree.
3) Currently, the 3 doesn't have a serious impact on S and X sales because for buyers just entering the market, the 3 is still months away and is not advertised at Tesla stores. However, after the production ramp and anyone can purchase any of the three cars within a reasonable time-frame and even witness and experience them side by side in a showroom, the differences in features and cost between the models will suddenly take the spotlight and it will be imperative to cement the more expensive cars with premium features in order to upsell.
4) Building on the previous point, once the tax credit expires it will be hard to justify a newer Model S or X buyer buying the same or similar car as a month before but for thousands more with the ending of the tax credit. Therefore with the expiry of the credit, either Tesla will have to lower the price of its cars, which will make it lose thousands of dollars, or add significant new features to justify the now higher effective cost of its vehicle to consumers.
6) Remember when AP2 came out? Immediately before it was released, Tesla had a massive sell-a-thon with deep discounts unprecedented at the time. As it turned out, they immediately followed that up with the release of AP2 making those who received deep discounts now feeling as if they hadn't gotten as good of a deal as they initially thought. I feel like those discounts were planned specifically to not piss those customers off and this is a strategy Tesla plays (mostly) before major changes, as they don't comply with the strategy of model years. Therefore, timing an update after the phase out if the tax credit makes a lot of sense.
5) The biggest complaint regarding the Model 3 it seems has been that the car is designed for a level of autonomy it currently is incapable of. Cruise control and wiper speed adjusted by the touchscreen, no speedometer in front of the driver, minimalist interior etc. If these changes were implemented likewise into the S before EAP and at least some features of FSD, Tesla would tank its short term sales rather than improve them. If, on the other hand, Tesla works on autopilot for a year and they reach at least a limited level 3 autonomy, an interior update to optimize that experience and push Tesla's self driving technologies the forefront.
6) Tesla has in the recent months added newer seats and seat materials, newer AP hardware, and battery and performance improvements. These are relatively major improvements for a short period of time (even by Tesla's standards) and if there was a large impending update, I would expect them to hold off on some of these improvements to really draw attention and sales.
7) Tesla currently has its hands full with scaling up production for the 3 and improving AP. Asking Tesla to add to that list an entire refresh for their flagship models at a critical time for the company is probably not practical for Tesla.
Therefore, after the phase out of the majority of the Tax credit occurs, (I'm thinking October 2018) it makes perfect sense for Tesla to now update the S and X and reinvigorate sales. I had also predicted the base Model 3 would not beat the Bolt in range (pats back) so I'm feeling confident.
Thoughts?
1) Tesla times its updates based on "demand levers" or what they can use to entice urgency among buyers to purchase. With the impending end of the federal tax credit, I expect Tesla to, in the coming quarters, emphasize the urgency to purchase to be able to take advantage of the credit before it expires. This should produce enough demand to sell 25k/quarter without the need for a redesign.
2) After the Model X, it made perfect sense for the S to be updated seeing the new technology which was introduced in the X. However, with the 3 there is no significant new technology, rather I much prefer having more physical controls and a dashboard to the 3's minimalist design. By the way Tesla is actively promoting a second screen as a premium feature, I take it that they agree.
3) Currently, the 3 doesn't have a serious impact on S and X sales because for buyers just entering the market, the 3 is still months away and is not advertised at Tesla stores. However, after the production ramp and anyone can purchase any of the three cars within a reasonable time-frame and even witness and experience them side by side in a showroom, the differences in features and cost between the models will suddenly take the spotlight and it will be imperative to cement the more expensive cars with premium features in order to upsell.
4) Building on the previous point, once the tax credit expires it will be hard to justify a newer Model S or X buyer buying the same or similar car as a month before but for thousands more with the ending of the tax credit. Therefore with the expiry of the credit, either Tesla will have to lower the price of its cars, which will make it lose thousands of dollars, or add significant new features to justify the now higher effective cost of its vehicle to consumers.
6) Remember when AP2 came out? Immediately before it was released, Tesla had a massive sell-a-thon with deep discounts unprecedented at the time. As it turned out, they immediately followed that up with the release of AP2 making those who received deep discounts now feeling as if they hadn't gotten as good of a deal as they initially thought. I feel like those discounts were planned specifically to not piss those customers off and this is a strategy Tesla plays (mostly) before major changes, as they don't comply with the strategy of model years. Therefore, timing an update after the phase out if the tax credit makes a lot of sense.
5) The biggest complaint regarding the Model 3 it seems has been that the car is designed for a level of autonomy it currently is incapable of. Cruise control and wiper speed adjusted by the touchscreen, no speedometer in front of the driver, minimalist interior etc. If these changes were implemented likewise into the S before EAP and at least some features of FSD, Tesla would tank its short term sales rather than improve them. If, on the other hand, Tesla works on autopilot for a year and they reach at least a limited level 3 autonomy, an interior update to optimize that experience and push Tesla's self driving technologies the forefront.
6) Tesla has in the recent months added newer seats and seat materials, newer AP hardware, and battery and performance improvements. These are relatively major improvements for a short period of time (even by Tesla's standards) and if there was a large impending update, I would expect them to hold off on some of these improvements to really draw attention and sales.
7) Tesla currently has its hands full with scaling up production for the 3 and improving AP. Asking Tesla to add to that list an entire refresh for their flagship models at a critical time for the company is probably not practical for Tesla.
Therefore, after the phase out of the majority of the Tax credit occurs, (I'm thinking October 2018) it makes perfect sense for Tesla to now update the S and X and reinvigorate sales. I had also predicted the base Model 3 would not beat the Bolt in range (pats back) so I'm feeling confident.
Thoughts?
