Will the up coming Model E to be released next year cause any significant diminution to Model S?

Will the up coming Model E to be released next year cause any significant diminution to Model S?

No doubt the more affordable Model E with minimum 200 mile range and starting price of $39,995 will have all the improvements lacking on the Model S in order to be competitive with other electric cars next year. Will this newer and better and more affordable Tesla Model E devalue the Model S?

enadler | January 8, 2014

First of all the Model E is not due for at least 2 years. Secondly, does the BMW 3 series devalue the 5 or the 7 series?

The E will begin to expand the product assortment offered by Tesla. Each vehicle will have a different niche to fill.

ABLC | January 8, 2014

They're always gradually improving and adding more features to the Model S every year. I got the impression from watching videos of Elon at a couple of launch events that the Model S will still be very much Tesla's 'flagship' model, even when the E is launched...

Jolinar | January 8, 2014

Model E is expected at 2016/2017 (2017 if you ask me) not any time sooner. We could see concept car at the begining of 2015 at Detroit autshow, but that would be only concept car, not production...

However Model X will come at the end of this year in small numbers and next year in higher numbers.

dramingly | January 8, 2014

Agree with Eric. A Honda Accord is a fine car (my daily car before my MS), but doesn't affect Lexus LS sales.

Mathew98 | January 8, 2014

@dramingly -

Accord vs Acura


Camry vs Lexus.

Let's not cross contaminate between different companies because they do compete against each other for sales.

Jesse K | January 8, 2014

If someone offered me a 2 -3 year old S550 MB or a brand new CLA class MB I would choose the S550 in a heartbeat. I would imagine the same rationale will be used for your question. No one thinks the CLA is a better car than the S550. Regardless of the year of manufacture.

Gen3Joe | January 8, 2014

I agree with most of what is being said here. There will be more value in the Model E over current S version simply due to the fact that the Model E will be taking advantage of 3-4 years of advancement in battery technology and/or cost reducton. My bet is that most purchasers of the Model S aren't doing it for a value proposition anyway though.

By the time the Model E comes the S will probably be on version 2 with some upgrades over current gen (battery, cup holders etc). Early adopters of rapidly changing technology should always expect to be behind the curve in a few years.

TeslaOR | January 8, 2014

We are early adopters. I bought a 720p 50" TV for $5000 10 years ago. As EV technology get cheaper due to technology advances and scale I expect to see cars rival my MS (from Tesla I hope) at lower cost.

avanti | January 8, 2014

It depends on what, exactly, one means by "devalue".

Will it make the Model S a less wonderful vehicle? Obviously not.

Will it reduce the proportion of Tesla sales represented by the Model S ? Obviously so.

Will it reduce the resale value of the Model S? Who knows.

Will it lower the absolute number of Model S sales? This is the most interesting question. As @TeslaOR says, current purchasers are by definition early adopters. These have very different purchasing habits from mainstream purchasers. The introduction of the Model E is, as I understand it, intended to facilitate the transition from early adopters to mainstream consumers. So, two things are changing at once: a different class of customer and a much more affordable car. On the one hand, some early adopters clearly made "stretch" purchases when purchasing their MS. If the ME were available, would they be less likely to do this? Probably. OTOH, the increased total sales that the ME will hopefully engender will tend to make Tesla ownership more acceptable to mainstream purchasers (a percentage of which will be "luxury" buyers), which will tend to increase total MS sales. How will this net out? Not enough data.

Haeze | January 8, 2014

The 2015 Detroit Auto Show is supposed to be the announcement of a drawing/picture of the GenIII, not a concept car.

The designer of the car has only announced that the design of the car will be unveiled at that show, NOT a functioning concept car.

dramingly | January 8, 2014

Matthew, you're right. I got momentarily confused!

olanmills | January 8, 2014

I hope it does devalue the Model S, but I'm not sure to what degree that will actually be true.

The comparison between the 3, 5, and 7 series BMW is an apt one, however, a big difference here is that Tesla will be iterating with new technology, ideas, and production processes. I think it would be great if the cars get better AND cheaper over time, like most consumer technology.

PapaSmurf | January 8, 2014

I plan on giving my 2013 Model S to my son in 4 years and then purchasing for myself the latest version of the 2018 Model S. So I really don't care about devaluation of my current car.

The Model E is irrelevant to the valuation of an older Model S. It is like a 2013 BMW 3 series being compared to 2009 BMW 7 series. Yeah, the technology may be a few years older, but it is still a great car that I would love to own.

1) It is a very safe design that I feel comfortable giving my son for his college car.

2) We might upgrade the battery at that time, it depends on how it ages and the range he needs. I really see us keeping the car for 10 years and handing it down to kids.

Mathew98 | January 8, 2014

@PapaSmurf - You are a brave soul to give the beast to a college bound teenager. What would any ordinary 17/18 years old do with so much instant power? I was just happy to drive a beater at that age given the lack of driving experience.

It may be more prudent to start him off with a hybrid or the smaller G3...

PapaSmurf | January 8, 2014

It is only a Standard 85. Not a performance. I consider it more of a safety car.

My 2018 Model S will likely be a Performance Plus car. That will be my midlife crisis car. Yeah, it will be red.

PapaSmurf | January 8, 2014

Maybe Tesla will have a valet mode (reduced acceleration potential) for us. Then I will just leave it in valet mode full time for the kid when he gets the car.

jordanrichard | January 8, 2014

If you watch any of the test drive videos on You Tube, at these "Get Amped" events, they govern the cars to a max speed of 80 mph. So limiting the car's performance can be done right now.

bonaire | January 8, 2014

PapaSmurf, I am thinking of leasing a slower EV for my son in college next year, they have on campus charging, adding more charging through my own donation and a short range EV would tether him nearby and he wouldn't go on long distance trips. The big attraction is free fuel with the campus charging. Either a Leaf or Spark EV if available. My son would put a Tesla through a wall or tree.

Haeze | January 9, 2014

Or perhaps he would re-create the Mexico accident and put it through BOTH !

theapple | January 9, 2014

I expect it probably will somewhat, though the MS will probably keep pace with updates/stay ahead. I'd also be surprised if the E supplied the same horsepower. I don't really care what my car's resale value is though, I'm never selling it! What more could anyone ever want, except a bigger battery, and I expect (hope?) that will be available as an upgrade when my current one wears out.

glenn | August 30, 2015

Waiting for the Model 3? Consider a lease.
I took out a 3-year lease on a Fiat 500e (sorry, California-only) in mid-2014 precisely because of the Model 3 announcement. The clincher was that it's economically neutral, other than insurance for an extra car: The monthly cost is $300 (could be less with a smaller mileage allowance on the lease), which is the same net cost as our 2001 Prius, which we kept for 12-13 years.

I am very, very pleased with it: It has great pick-up, but doesn't have an aggressive top-speed. The range is quoted as 100 miles, which seems like an honest baseline, but is definitely reduced if you drive over 65 MPH and (somewhat) if you use the A/C.

I'm looking forward to the Model 3.