If you’ve been a follower of my posts, you’ll know that I’m an early Model S adopter who’s been salivating over every new feature Tesla has released since 2014. At the top of my list is all wheel drive (I live in New England) followed by Autopilot (I’m a geek who loves technology and I also drive a lot) and a nice-to-have such as automatic high beams.
I’ve been fighting the urge to upgrade my Model S for 2.5 years now and it certainly doesn’t help that Tesla has been so kind to remind me of all the newest features I don’t have.
I feel bothered by this for a couple of reasons:
Let me explain.
Bear in mind that my scenarios may different from yours or someone else, but nevertheless I thought it’s worth sharing.
Scenario 1 – Upgrade now to a new Model S
If I were to get a new Model S I’d want one with at least the amount of range, if not more, than what I already have (85 kWh). This makes the Model S 90D my preferred choice. Features I opted out of from my first purchase could remain off. Smart Air Suspension: not needed. High Fidelity Sound System: nope. More power: tempting, but no thanks. However, I do want dual motor all-wheel drive and Autopilot, but you already knew that.
Had I purchased late in 2014 (versus early in 2014) I wouldn’t have any appetite for a Model S or Model 3 at this point.
Configuring a new Model S 90D with my bare minimums costs approximately $110,000.
Tesla’s “Full Self-Driving Capability” is one of the most questionable choices here and an option that could be skipped for a later time. My main question on this upgrade is whether hardware is bundled upfront and the feature gets “turned on” as a software upgrade at a later date or is the hardware a completely separate upgrade in itself. For me, I want all possible hardware upfront whether it be a Model 3 or Model S.
My current Model S is at 70,000 miles, 2.5 years old and in perfect shape. Its value? $49,000 according to Tesla, as a trade-in. It could be a bit less, now, since the trade-in quote is several months old. What this means is that it would cost me nearly $60,000, out of pocket or through financing, to upgrade to the latest and greatest.
This excludes any benefits or tax incentives which may or may not be available for Scenario 2 below.
Scenario 2 – Wait for Model 3 and trade in my Model S
Everything we’ve seen and heard about the Model 3 thus far implies that it will have all the same capabilities as the Model S but through add-ons.
The Model 3 appears to be 80-90% of the size of the Model S. The Model 3 seats 5 comfortably. The Model 3 will have the option for dual motors and all-wheel drive. And Tesla will obviously put a heavy emphasis on Autopilot and autonomous driving features on the Model 3.
If we take a look at the pricing model for the Model S and Model X, a fully loaded version of each vehicle is just over twice the base price. For example, the most basic Tesla Model S 60 today is $66,000 and a fully loaded P100DL is $160,000 (2.4 times the base). Since I would not want a fully loaded Model 3, I’ll use twice the base price for my sample calculation.
If the Model 3 truly starts at a base price of $35,000 and we double that to a “reasonably equipped” version, we can assume the price for the Model 3 can jump to $70,000 and beyond. Since there’s no question that my trade-in value will be less a year from now, and dropping from $49,000 to likely $40,000, my net out of pocket would be $30,000, or half the cost of upgrading now. That is a pretty wide gap!
So I wait
Each time Tesla contacts me with an upgrade opportunity, I ask the representative to provide a cost benefit on such an upgrade. And each time they ignore my reply. I personally think Tesla should at least respond to their current customers and provide an answer to a very reasonable question.
Tesla is an amazing company, has great products and holds a bright future, but their sales team could do a better job in communicating the benefits for existing owners to upgrade. The recent price hike in the Model S also doesn’t help convince existing owners the value of upgrading versus waiting it out for the Model 3.
I question – Is there enough product differentiation between the Model S and the Model 3? From where I sit right now, no, there isn’t.
Are you a Model S owner getting the same emails? Are you a new buyer thinking about the Model S now versus waiting on the Model 3? I’d love to hear your thoughts on this. Leave me a comment.
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