Tesla S - or - Why can't everybody else...?

[AnotherClarkey]

TooMany2cvs said:

Why on earth would you pre-pay for something that isn't going to be needed for a decade?

It is a gamble - the current estimated cost of the battery is $30,000ish. Either you have faith that the prices will halve by the time you need a replacement in 10+ years time (not an unreasonble assumption) or you pay up front.

I suppose it all depends on how risk averse each buyer is and whether they want to fix their motoring costs as much as possible at the time of purchase. I imagine that it may also help resale value if you need to sell at any point.

[dxg]

Viper said:

Wiki the CEO behind Telsa, Elon Musk, its an interesting read, he was behind paypal and formed SpaceX a very successful company started from scratch which put a rocket into space in a extremely short time

He is also famously quoted as saying that he intends to die on Mars.

I would say 'infamously' quoted, but I genuinely think the guy will achieve his dream. And good luck to him.

[delays]

I think perhaps there's a corporate structural element to it as well. Tesla seems to be a small company of like-minded individuals, working hard towards a common goal. Stripping out the layers of bureaucracy and policy that GM seems to be the very embodiment of, and you get quicker results and a more agile company.

Remember Tesla, as a new company, doesn't have the strictures of the big companies. There are no historic factories, no pension agreements laid down years back, a small number of employees, one factory in one state, sales in one country. All this helps simplicity of management and speed of decision making, saving development costs.

[delays]

delays said:

I think perhaps there's a corporate structural element to it as well. Tesla seems to be a small company of like-minded individuals, working hard towards a common goal. Stripping out the layers of bureaucracy and policy that GM seems to be the very embodiment of, and you get quicker results and a more agile company.

Remember Tesla, as a new company, doesn't have the strictures of the big companies. There are no historic factories, no pension agreements laid down years back, a small number of employees, one factory in one state, sales in (largely) one country. All this helps simplicity of management and speed of decision making, saving development costs.

[Clivey]

AnotherClarkey said:

That is my thinking too - pre-pay for another battery pack up front and it only costs $10000 - $12000 depending on size. That is 20 years of motoring on a warranted battery pack which takes 90 seconds to swap. Other servicing should be quite straightforward given the simple mechanical nature of the car and electronics like the entertainment system can probably be swapped out to keep up with the times as necessary.

I've just looked that up and seen their video. Very impressive.

I like the idea of the Model S as an everyday car…however, despite it being almost "all things to all people", I'd still have to have something petrol powered in the garage for fun drives!

[flatso]

I saw a lot of these on my recent northern Cali trip, they look absolutely stunning on the road, every single one turned my head. There is a lot of buzz about theses in the States, the big german players were caught completly off guard by these...it seems there have been more Tesla S sales this year than S-klasse+7er+A8 combined (not sure if that is accurate but I heard the rumorur while in California).
As soon as they get their infrastructure down in Europe the big premium players are going to need to scramble. I for one am happy, these traditional luxo-manufacturers have had it too easy for too long.
Can't wait to see Teslas city car.

[Otispunkmeyer]

wfarrell said:

...the reason Tesla are ahead is because they've been smarter than everybody else:

- a "non OEM" entrepreneurial mind-set (not held back by history, not afraid to take calculated risks, not afraid to threaten "conventional engine" products)
- "silicon valley tech" brand image
- premium pricing (but still accessible to target audience)
- attractive design and proportions
- awesome performance
- enough battery capacity to suppress "range anxiety"
- practical useful spacious comfortable car

...it's a desirable and practical "high status without guilt " premium EV - what's not to like ?

As such, it's a game changer - like the iPod or Nintendo Wii.

Almost certain that every significant car manufacturer has bought at least one for benchmarking and teardown....




Will

They are also looking at driverless tech. Would love to work for them of that one! ( maybe my engineering PhD can get me in there!?)

[TooMany2cvs]

AnotherClarkey said:

It is a gamble - the current estimated cost of the battery is $30,000ish. Either you have faith that the prices will halve by the time you need a replacement in 10+ years time (not an unreasonble assumption) or you pay up front.

Will you still own the car in ten years?
Is the prepayment transferable between owners?
What will it add to the resale value?

[AnotherClarkey]

TooMany2cvs said:

AnotherClarkey said:

It is a gamble - the current estimated cost of the battery is $30,000ish. Either you have faith that the prices will halve by the time you need a replacement in 10+ years time (not an unreasonble assumption) or you pay up front.

Will you still own the car in ten years?
Is the prepayment transferable between owners?
What will it add to the resale value?

A previous poster had given the opinion that the Tesla was a car you could buy and keep for decades, so in responding I was assuming that the car would still be with the original purchaser.

I have no idea if the payment is transferable but it may well be.

Which used electric car would you favour/pay a bit more for if buying it at ten years old? One which may cost you $10000 to replace the battery or one which might cost $30000 for the same job?

[Clivey]

TooMany2cvs said:

Will you still own the car in ten years?
Is the prepayment transferable between owners?
What will it add to the resale value?

The problem is that residual values will plummet if punters get a sense that there is a clock ticking down to the time they need to change the battery (or face another expensive bill - just look at Mazda RX8s as an example of that). - The real achievement will be if this car can last 10+ years...though I see that the warranties are good:

Wikipedia said:

The Model S battery is guaranteed by Tesla Motors for eight years or 125,000 mi (201,000 km) for the base model with the 60 kW·h battery pack. All models with the 85 kW·h battery pack are guaranteed for eight years and unlimited miles.

[kambites]

How much is a petrol 5-series of comparable performance worth at ten years anyway? Not a great deal, I'd imagine.

ETA: The answer seems to be £3-4k, so even if the Tesla was worthless at ten years, it would only have lost ~10% more than the petrol competition.

Edited by kambites on Sunday 15th December 17:46

[Clivey]

kambites said:

How much is a petrol 5-series of comparable performance worth at ten years anyway? Not a great deal, I'd imagine.

ETA: The answer seems to be £3-4k, so even if the Tesla was worthless at ten years, it would only have lost ~10% more than the petrol competition.

Edited by kambites on Sunday 15th December 17:46

I wouldn't compare it to a petrol - they depreciate because of UK fuel costs, tax etc. etc. and the people looking at this in the UK will typically be comparing it to rivals like the top-of-the-range diesel Germans. - The residuals of those are much higher than the petrol equivalents.

[DonkeyApple]

Clivey said:

TooMany2cvs said:

Will you still own the car in ten years?
Is the prepayment transferable between owners?
What will it add to the resale value?

The problem is that residual values will plummet if punters get a sense that there is a clock ticking down to the time they need to change the battery (or face another expensive bill - just look at Mazda RX8s as an example of that). - The real achievement will be if this car can last 10+ years...though I see that the warranties are good:

Wikipedia said:

The Model S battery is guaranteed by Tesla Motors for eight years or 125,000 mi (201,000 km) for the base model with the 60 kW·h battery pack. All models with the 85 kW·h battery pack are guaranteed for eight years and unlimited miles.

The battery packs will be priced in the market the same way as short dated leasehold property in the end.

Just like buying a flat with 8 years left on the lease your usage remains the same throughout the 8 years but the value decays towards zero in the final year. And just like with an expiring lease, the person holding that lease at expiry is liable to return the property to the freeholder in the original manner to which it was leased, so the person owning the car when the pack expires will have to pay for the replacement of the pack.

Likewise, just like paying for a lease extension at any time and it being priced at the current market rate, so you could have cells refurbed in your pack so as to extend your life cycle at a cost.

The variables for power packs will be dependent on how kaput they are when the warranties expire, they may transpire to have many years of remaining life or just need a quick dead cell refurb etc. at the same time there may be new battery tech by then or an entirely new way to store electricity. but as this information is really 7/8 years out from now, so 2020 will be the earliest we start getting meaningful data the market has to price packs with a value decay to zero as at the point of warranty expiry.

The car itself will probably depreciate in a similar fashion to normal cars but you would suspect it to fair better as it has less working parts so as long as it hasn't rotted then refurbing it to nearly new is going to be relatively inexpensive.

My gut feeling is that by 2020 the used market will have split into two segments. Your used EV without the battery pack and either as is or refurbed and a second market in battery packs where you can buy a shagged one, a new one or a refurbed one with differing degrees of refurbishment.

[kambites]

Clivey said:

I wouldn't compare it to a petrol - they depreciate because of UK fuel costs, tax etc. etc. and the people looking at this in the UK will typically be comparing it to rivals like the top-of-the-range diesel Germans. - The residuals of those are much higher than the petrol equivalents.

Is a 2003 530d really worth much more than a petrol?

[TooMany2cvs]

Clivey said:

I wouldn't compare it to a petrol

By which, of course, you mean "petrol or diesel". Well, them's the only choices. So by not comparing it to one, you're not comparing it to anything.

Clivey said:

they depreciate because of UK fuel costs, tax etc. etc

No, they depreciate because people won't pay the same for an old car as a new one. The UK isn't really comparable to other countries because we sit on the wrong side of the car to make used cars internationally portable, which is what props used values up in other European countries.

Clivey said:

and the people looking at this in the UK will typically be comparing it to rivals like the top-of-the-range diesel Germans. - The residuals of those are much higher than the petrol equivalents.

Small detail - a high-spec 10yo diesel 5-series is still only worth a small proportion of that pre-payment towards the new battery.

Anyway, they aren't.
Of 236 petrol 10yo+ 5-series on Autotrader, only one is over £5k (excluding the armoured one...). Only six are between £4k and £5k.
Of 97 diesel 10yo+ 5-series on Autotrader, only one is over £5k. Only seven are between £4k and £5k.

But, whilst this is all interesting, it gets away from the original question...

How come Tesla can develop a complete, seemingly ground-breaking and excellent car for a fraction of what the mainstream spend to develop a ho-hum same-old-same-old platform alone?

Edited by TooMany2cvs on Sunday 15th December 18:26

[Durzel]

I find it hard to believe people would keep a hold of these for more than 10 years. Even if everything is still working 100% at that point it is safe to assume there is going to be considerable development both in terms of EV technology but also general car technology (and looks) in that time.

[AnotherClarkey]

Durzel said:

I find it hard to believe people would keep a hold of these for more than 10 years. Even if everything is still working 100% at that point it is safe to assume there is going to be considerable development both in terms of EV technology but also general car technology (and looks) in that time.

I'm inclined to agree with you, the model S is probably going to look pretty limited by then.

In response to the original question, I imagine the most significant factor is probably senior management not being terrified of cannibalising an established business and a healthy mix of 'car types' and 'not car types'.

Edited by AnotherClarkey on Sunday 15th December 18:32

[Otispunkmeyer]

AnotherClarkey said:

TooMany2cvs said:

Why on earth would you pre-pay for something that isn't going to be needed for a decade?

It is a gamble - the current estimated cost of the battery is $30,000ish. Either you have faith that the prices will halve by the time you need a replacement in 10+ years time (not an unreasonble assumption) or you pay up front.

I suppose it all depends on how risk averse each buyer is and whether they want to fix their motoring costs as much as possible at the time of purchase. I imagine that it may also help resale value if you need to sell at any point.

Or perhaps in 10 years the battery still costs 30k, or maybe more, but the capacity is much much improved. A lot can happen in 10 years though, including Tesla going bust. However, I hope they are here to stay. I am a petrol head certainly and I know the ICE is going to be around for the rest of my lifetime (I am 27) because I have seen the road maps and the research going into them. This will be especially the case for applications that need big motive power... the big diesel and LNG engines. But for passenger cars, I definitely think electric is the way forward. I know people here like the sound of a good engine, but most people couldn't give a crap and would much rather they had something cheap to run and a comfy way to A->B.

Having driven a new Leaf, FIAT 500e and Ford Focus BEV they are absolutely lovely cars to ride in. The FIAT was a hoot because the italians have given it a rather meaty motor for such a small car, but the most impressive was the focus. Beautifully refined and genuinely useful performance, the NVH guys really did a great job on that car. It was serene. Range was the only killer mind at approx 100 miles. In fact none of the EVs brought along to the SAE world congress in Detroit were able to last a days worth of testing driving. I guess part of the problem is shoe horning batteries into a car thats already been optimised for a fuel tank and an ICE. A problem Tesla don't have.

Still, I'd easily have one of those cars. The refinement alone would be worth the price of admission. Most of the time I just want a quiet, soothing ride. (would still have a V8 in the garage for sunny days though!)

[garycat]

bigmadjohn said:

Saw a documentary about the model S the other night on National Geographic

....

Very good documentary, keep an eye out for it.

Here it is - http://www.youtube.com/watch?v=ESAAmlmKMn8

[DonkeyApple]

garycat said:

bigmadjohn said:

Saw a documentary about the model S the other night on National Geographic

....

Very good documentary, keep an eye out for it.

Here it is - http://www.youtube.com/watch?v=ESAAmlmKMn8

Really enjoyed that. Enormous amount of space in that car.

I'd like to know a little more about the founders' true feelings re petrol cars. The show displayed their ambition to replace all petrol cars. Kind of put me off the product.

If they can do so through competition, then fine, but I am now wondering if they use lobby groups to push the agenda?

Would be a shame.