Price Gouging...

Price Gouging...

It's unfortunate Tesla has decided to price gouge us with options.

I count a typical upgrade (not even including battery) at almost $10k for a decently equipped car.

Adding Navigation (who would have a 17" screen without their Nav package).
Adding Anything from low end Microfiber.
Adding Glass Roof.

Right there You're close to 10k.

What a shame. Very disappointed.

Thumper | 20 décembre 2011

I suggest you spend a little time on the BMW, Audi, Mercedes and Jaguar websites for a bit of perspective. I think Tesla is giving v ery good value for the money.

brianman | 20 décembre 2011

Instead of starting yet another I'd recommend jumping in the "Option pricing is up..." thread where there is a useful discussion already underway.

olanmills | 20 décembre 2011

I'm not too unhappy with the options. The only thing I'm dissappointed by is the tech package. That seems kind of expensive to me. The pricing on the other options is not bad imo. I am definitely going to get the tech package, but I just think it's overpriced. Everything else doesn't seem that out of line from other cars. The sunroof in my current car was $800. Yes, that means the Model S's is quite a bit more expensive, but it's also quite different. It's way better than a simple sunroof.

The main difference for me that will make it more expensive is that the price can't be haggled (I think?).

David M. | 20 décembre 2011

Sure the Tech pkg is high, but I can't get over
Black or white free, all other paint is upgrade.
Keyless entry and Homelink as options - really??

Timo | 21 décembre 2011

What bothers me in that options section is that without tech package car is not "complete". It is not luxury without that package, it is hardly even basic European car. (most of) that really should be standard.

Volker.Berlin | 21 décembre 2011

Timo, to me that's just a way of increasing the base price without increasing the base price. It's a little nit-picky, but it's alright IMO. Depending on which Model you talk about, the increase is between 7.5% and 5%, which is anything but outrageous given that the original price was announced in 2009!

On top they threw in some niceties into that Tech Package that they could as well have sold as separate options (i.e., the car would be "complete" without), so they are really sweetening it. Actually, I do not see a single option in that Tech Package that I would expect to come standard in a German premium car. It's as Thumper said, the option pricing is competitive and good value for money.

Thus, as far as I'm concerned, they matched everything that was announced beforehand -- with one exception: Some basic turn-by-turn navigation should be available even without the Tech Package. Basic navigation may simply be Google Maps with only little caching, but it should be there simply because (as far as I remember) it was promised.

ncn | 21 décembre 2011

Tesla is price-gouging on the Signature, which costs $3550 more than an identical fully-loaded Standard *assuming* you wanted every single option.

What do you get for that? Red paint option, white leather interior option, "extensive leather", perforated seats, badging, and delivery 3-6 months earlier (based on Tesla's current estimates).

That's a gouge. It's a mighty steep premium for early delivery and cheap cosmetic differences, and worse if there's even a single Signature-included option you didn't want.

Also, in the case of the 21" wheels I'm currently trying to figure out if I can save money by taking them, selling them for less than $3500, and using the profits to buy a set of 19" aerodynamics. Given the huge price increment for for the 21" wheels, this is probably actually possible, which would mean that they really should offer a discount for not getting them.

It's worst if you had the opportunity for an early "standard" reservation and got the Signature reservation instead, or if you "upgraded", not realizing that the upgrade might be a downgrade for you. Then you find that you've lent Telsa $40,000 for the privilege of paying extra, when you could have lent them only $5000 and gotten a car nearly as soon with pretty much the same options for *cheaper*. It's that last bit which makes it a gouge.

I hope Telsa reconsiders.

Perhaps, if pricing is final, they could make it possible for Signature reservation holders to jump the queue on Production cars instead of getting massively overpriced Signatures. (Telsa has, so far, have shown no indication that this will be the case.)

Or perhaps they could announce some additional perks included with the Signature which would make the premium smaller and thus less offensive: throw in all the UMC plug connectors, free annual service for a few years, free delivery, priority treatment at customer service, *something*.

Or perhaps a second special color, something which is actually a special and unusual color, rather than red. And the Signature Red is, as far as I can tell, essentially a very common shade of red -- now that I've been paying attention to red cars on the road, it's becoming clear it's the fad color of the last few years.

And regarding gouging: the way the pricing is written for the Standard Performance looks like deliberately misleading language -- a number of people suspect that the language means a base price of $84,900. If correct, that's not gouging, but it is shady behavior. So much for a "new type of car company" in terms of way-of-doing-business; Apple doesn't pull this stuff, and Apple was supposed to be their model for stores, wasn't it?

Bleah. I'm not disappointed in most of the straight-up options pricing (though the rear-facing child seats and the HPC are priced not to sell, and probably won't sell), but the treatment of Signature reservation holders and the way the Performance option is described -- those are beneath Tesla, and I am disappointed.

SD in the OC | 21 décembre 2011

I am not surprised by the pricing on the Signature Series and the performance adder as well. The reps I talked to had the mid $90s as a reference point for base Sig. However, unless I'm missing something, the difference in price between the Sig perf. and Model S perf. is $18k. If I add up standard options on the Sig perf. not included in the S perf. I come up with a $6450 difference (Tech $3750, Sound $950, Shelf $250, and Twin Charge $1500) Add another $1500 for Pearl White if you were going to choose that color. The only other difference is the Sig perf. does not have a mileage limit on battery warranty and the regular S perf. does. Also, you can get Sig. Red with the Sig. perf. Am I missing something, or am I paying $11550 more ($18k - $6.5k) (not choosing pearl white) to be first in line and the option to choose Sig. red (not choosing Sig. red either) with unlimited mileage warranty on the battery?

Volker.Berlin | 21 décembre 2011

The only other difference is the Sig perf. does not have a mileage limit on battery warranty and the regular S perf. does. (SD in the OC)

No it does not. The 85 kWh battery pack has an unlimited mileage warranty, regardless in which car it is used (P, Sig, Perf, Sig Perf). The column layout on the "Options & Pricing" page may be a little confusing, but if you look closely, it is evident.

Charged_Up | 21 décembre 2011

NCN - as early sig reservation holder I have to say everything you say is absolutely spot on. I'm not up in arms about the pricing as much as the fact that Tesla is not giving sig reservation holders what was promised - and what they did with the Roadster - extras not available on regular production. Other than the Sig red color, why buy a Signature when you can buy a comparably equipped 85kw car for thousands less a few months later?

dborn | 22 décembre 2011

The only value I can see in the sig is PERHAPS many years hence, they may appreciate in value as collectors items............ A very big if, and assuming that there are no glitches which destroy credibility....... Given that this is new tech, especially the gearbox and power electronics module, and the reputation that new tech has.. Look at every Windows iteration........

Robert.Boston | 22 décembre 2011

A Santana Row employee noted that the Sig had some premium upgrades in the cabin that were not available in the production line. Not that that is worth $3550.

Robert.Boston | 22 décembre 2011

@David M: Upcharges for metallic or pearl effect paint are perfectly standard in this range of car. BMW charges $550 for metallic paint on the lower-end 5-series; Audi, $475 on the A6; Mercedes, $720 metallic or $1,515 pearl. Tesla's upcharge is a little on the high side, but the existence of the upcharge shouldn't come as a surprise.

Suprkar | 22 décembre 2011

I just cancelled my reservation. I am very sad to have done so but the cost of the tech package was just too high.

Mycroft | 24 décembre 2011

What on earth was so important in the tech package??? I don't see anything that critical.

- Turn-by-turn - don't need it. Could use $100 Tom-Tom
- HD backup camera - nice, but not critical
- Power rear liftgate - for the lazy
- Automatic keyless entry - also for the lazy. What's wrong with normal keyless entry where you press a button on the fob?
- Xenon headlights - nice, but not critical
- LED foglights. nice, but absolutely not critical
- Electro side mirrors - totally unnecessary
- 16GB HDD - plug a $20 SD card into the USB port.
- Two rear USB ports. - superfluous
- Homelink - Use the fob that came with your garage door.

stephen.kamichik | 24 décembre 2011

I agree with Mycroft. I am interested in base model with leather interior, privacy shelf and largest battery pack I can afford (waiting for Canadian pricing).

William13 | 24 décembre 2011

Go Mycroft.

Dennisf | 24 décembre 2011

I've got every option on my BMW except for the power tailgate.

- navigation: Driving a high end car with a suction cap mark on the windscreen is a no go for me. I love the nav lady talk to me through the speakers.
- HD backup cam. Everybody can park with PDC. What Is the need for a backup cam?? In my X5 its one of the best options. I can get in very tight spaces (europe sucks for big cars) with the use of the cam. When pdc says beeeeeep I still have 20cms on the cam + there are lines on the screen to show you if it will fit. My wife drives this car the most and loves this option too.
- keyless entree: I have a car with and without it. Yes it's for laisy people (like me) but if you use it every day it works really good. You never take the key out of your pocket anymore. Downside: I had a loaner Mini a few weeks ago that sat with the key in the ignition all day at my office... So if you use it and get used there is a risk for car theft on the vehicle that doesn't have it.
Xenon: A year ago I bought a new car that didn't have xenon. After years of driving with this extreme good light system it was like I was driving a car with candles in the headlights. So be warned! Once you've had Xenon you will never want to drive at night without it!
- electro dimming side mirrors: take some getting used too at night. I find it really relaxing for my eyes that I am not bothered by upcoming traffic. When tired it is a bit dangerous because upcoming traffic is filtered.

I cannot comment on the other options but for 3750 for the total package this is almost a freebie to me.

In the end it's all up to where your preferences are. For me these options make a car very comfortable and luxury.
If Tesla would also add the active cornering headlights it would be perfect for me. This is a safety feature I love on the X5 that is incredible.

mscottring | 24 décembre 2011

Mycroft - Well now you're attacking Tesla's bottom line, they need to make a profit you know, shame on you.

mscottring | 24 décembre 2011

PS - :)

William13 | 24 décembre 2011

I agree that the sig is a lot more money for not much else. That is why I kept two reservations but will only use one. My red car is going to cost me $10,000 more than another color as I don't need/want some options. Remember that nothing was promised other than a place in line. I have waited all my life/over three years since announcement/nearly three years since deposit for this car.
I expect that Tesla will see the light and allow sig reservations prior to the pricing announcement to jump the p line. I would say waiting six extra months longer than an earlier p reservation if Tesla doesn't allow a downgrade would be galling but really three and a half years versus four years is not horrible.

mscottring | 24 décembre 2011

Dennis - You should be willing to get out of the car with a flashlight and look around those corners before you turn. :)

Dennisf | 24 décembre 2011

I am a bit "nightblind". I don't know the english word, but driving in the dark is asking a lot more from my eyes as with others. Xenon helps a lot to me so driving in the dark is made a lot easier for me.

But if you want to walk in front of me with a flaslight you are most welcome ;)

Robert.Boston | 24 décembre 2011

Interesting how differently people can view these options. While the turn-by-turn nav isn't at all important, given the access to the internet, my take on the other components:

Back-up camera: getting into our tandem parking spot involves backing down a steep driveway and making a sharp turn, then navigating between a stone wall and a fence. This is a big plus.

Rear lift-gate: lazy feature, perhaps, but when you're picking up your child at school in the pouring rain and he needs to throw his gear duffel in the rear, this is a nice feature.

Automatic keyless entry: I want. No need to fumble through my coat to dig out the key fob and then try to push the little button with my thickly gloved hand. This is my top item.

Xenon headlights: assuming these are also adaptive (look around corners), this is the favorite feature on our BMW. Also, our summer home is up in Maine, with lots of unlit, winding roads, co-occupied by deer and moose.

Electrochomatic side mirrors: my wife has a lot of trouble with glare at night. These are critical.

Rear USB ports: both of my kids want to plug in devices during longer trips. Big plus here.

Hard drive is too small, Homelink doesn't do anything for me. But the rest of the package is a bargain for me.

kublai | 25 décembre 2011

Will a non-HD backup camera come standard?

VincentA | 25 décembre 2011

I must say: Tesla did the same thing with the Roadster, and incurred much wrath from early customers then. But, pragmatically, the company survived, just barely. It is the same now. A volume of 20,000 cars/year is miniscule by industry standards, and without profitability by 2013, the whole dream could collapse. Tesla (Elon) reasonably believe that they must subsidize the 160 mile base car by luring more buyers to pricier configs with fatter margins. They are probably losing money on every base Model S they build at these volumes.

In 3-5 years, I think even Tesla's prices will moderate, as volume goes up with more models in the stable.

And one more thing-- the most expensive thing you pay for in a car is depreciation. These cars will become classics (especially the Sigs) and will run happily for decades (with a battery swap or two). I expect to own my Roadster and my Sig Model S until the day I die, and then pass them on to my sons. A few thousand more bucks in the short term become minor when invested over a lifetime of use.

Volker.Berlin | 25 décembre 2011

Tesla (Elon) reasonably believe that they must subsidize the 160 mile base car by luring more buyers to pricier configs with fatter margins. They are probably losing money on every base Model S they build at these volumes. (VincentA)

I agree. The 160 mi base model is most certainly the best value for money you can get in any Model S configuration, I suggested that before:
(My post from Oct 2)

It is shame that this bargain is spoiled by poorly managed/disappointed expectations. If you can afford the base model, assuming that you can cover your daily needs with its range, it's most definitely the best car you can buy for that money!

ckessel | 25 décembre 2011

>They are probably losing money on every base Model S they build at these volumes.

Elon has stated several times in interviews that they'll make a profit on the base model.

stephen.kamichik | 25 décembre 2011

Considering that the ICE, fuel system, exhaust system, ignition system, etc are replaced by aa AC motor, battery pack and electronics-an electric car should be cheaper to build. If the base model did not make a profit, TM would not be producing them.

juliancohen | 25 décembre 2011

I don’t think this is price gouging, but I am a little disappointed with the options as offered, or, rather, how they've been communicated. My two issues:

1. The limits of the 40kWh battery. I won't need more than 160 miles of range that often -- I drive 30 miles a day, tops, and this will be my commuter car. But still I'm disappointed I won't have "supercharger access" because of this -- if I ever did want to go further, I wouldn't have access to this great and future charging network because I chose a battery based on my most frequent use. Note that I have every intention of loading up on every other option -- I'm fine with the price of the pano roof, leather, and am even considering the tech package. But the lowest range battery is all I need, and it seems like I'm being penalized for this.

2. The $1500 for the rear-facing seats. I was under the impression that this was standard -- it's been in every video Mr. Musk has done, I even discussed it with the reps in the showroom, and all I've heard is "seats 7" one ever mentioned it would be an 'option', which means this car seats 5, not 7. Not a big deal, as it's not a lot of money in the grand scheme of things, but I can't help but feel like I've been lied to on this one particular feature.

All that said, this is not going to make me cancel my reservation. But I'm not as gung-ho, because I'm now torn between the 40 and 60 kWh batteries. It looks like I may have to spend an extra $10k on something I don't think I need, and probably won't use that much, just to get access to something everyone else has, and that I *might* need. Or am I missing something with regard to the batteries offered?



Brian H | 25 décembre 2011

Not certain, but the "network" should still be available, just not the supercharging DC option.

Brian H | 25 décembre 2011

All this makes me wonder if the Model X will even have a 160-mi. option. The pressure to have a lower-cost "base model" will be less, and I think that battery size is turning out to be more troubles than it's worth to Tesla. Next year's model (?) Model S might not have it, either.

Volker.Berlin | 26 décembre 2011

I agree that Tesla should be making money even on the base model. That's what they say, and besides, they simply have to. Still, I'm convinced that they make the lowest margin on the base model, which is another way of saying that the base model represents the best value for money proposition in the entire line-up -- assuming that your everyday driving is around, let's say, 100 miles or less.

Mycroft | 26 décembre 2011

Julian, I would recommend stretching to the 230 mile battery for the following reasons:

1. Access to supercharger.
2. Better acceleration due to the increased number of cells to draw from. (More fun!)
3. Better ride from the increased weight & low center of gravity.
4. Longer range so you can take those weekend excursion without necessarily worrying about supercharger locations.

Last and perhaps most important;

5. Greatly increased longevity of the battery! Especially since you'll be using a relatively low charge on a daily basis.

Leofingal | 27 décembre 2011

Regarding the comment on the rear facing seats. I beleive that at least for the past year most people (in the forums) were expecting this to be optional as most buyers will not need seating for 7. I think there would actually be some upset people if this were built into the price since most would opt out for credit (IMO).

Mycroft | 28 décembre 2011

True, but many, if not most, people in the forums also expected the off-line NAV to be optional as well. Expectations are not always consistent with reality.

Volker.Berlin | 28 décembre 2011

Mycroft, it all boils down to mis(sing)information.

It is my impression that the majority of complains regarding the optional nav is not that the onboard/offline nav is optional, although the complaints are phrased that way. What they actually complain about is that without the option they seem to be left with no nav at all -- which, we assume, is wrong. There should be offboard/online nav available as standard, but we don't know for sure and an uninitiated reader can certainly not tell from looking at the "Options & Pricing" page.

Same with the second charger: The uninitiated reader must assume that without a second charger, which comes optional and at a considerable price, high-speed charging is not possible. What's painfully lacking from the "Options & Pricing" page is an explanation that Tesla's Superchargers bypass the built-in charger altogether and thus support high-speed charging without the need to pay for an optional on-board charger.

This is the assessment I am trying to communicate in this thread:

Mycroft | 28 décembre 2011

You are correct as usual Volker. I think it will be some time before Tesla fills out their website though. They haven't been exactly in a hurry in that department to date.

The next website upgrade will probably be the Design Studio. Hopefully they'll fill out more information at the same time.

Brian H | 28 décembre 2011

Well, Mycroft, it happens they released the P&O immediately before the Xmas break, so that kind of put a hitch in the timing. Though I gather it will still be a week or few before the "standard" package detail is out.

I imagine there're going to be a few post-adrenaline "crashes" when they're done with this. Whenever that might be!

jackhub | 29 décembre 2011

My undeerstanding of price gouging is applied to something essential. While the Tesla Model S is very desirable, it is not essential. I understand that the pricing may be disappointing to some, but if you don't believe the benefits meet the costs, move on- or wait for the next generation. People who decide to buy the Model S are funding the next generation.

GoTeslaChicago | 29 décembre 2011

"People who decide to buy the Model S are funding the next generation."

That is one of the main reasons I'm buying the Model S, but since the October event, I'm so excited about the beauty, and performance of the car, that my altruistic motives have been supplanted by pure lust!

Volker.Berlin | 30 décembre 2011

"People who decide to buy the Model S are funding the next generation."

That is one of the main reasons I'm buying the Model S, but since the October event, I'm so excited about the beauty, and performance of the car, that my altruistic motives have been supplanted by pure lust!

I'd sign that statement anytime! (And I was not even at Fremont for the October event.)