How does Tesla continue to sell Model S for 40-50K more than 3.?

[dsnows]

The Model 3 is a really good car that sells for $40-50K less than comparable range Model S. How does Tesla continue to sell the Model S at such a premium? What can they do to distinguish it as a luxury model worth the extra cost? Free supercharging (not likely)? Nicer interior? Longer range? It seems that the technology will be similar on both models in the future. What else is there?

 

[Snow Drift]

The same way that BMW, Audi and MB do it...they offer different sized cars at different price ranges.

3 Series vs. 5/7 Series
A4 vs. A6/A7/A8
C Class vs. E/S Class

Consumers looking to buy a large luxury sedan will buy a Model S. They are not considering the smaller Model 3. You don't see people saying I really want an S-Class, but I decided to buy a smaller, less luxurious C-Class. They would buy the C-Class for their kids at 16.

 

[Derek Kessler]

Nicer interior, larger car, more power. It's pretty simple car manufacturing economics.

 

[SSedan]

Have you ever actually shopped for a new car.
Look up any "luxury" vehicle then compare base price to top options.

In luxury vehicles you can move the price on the same model $50k or more, even within the S I think you can still move the price that much.

 

[jjrandorin]

But OP has a point (to a point). I have been a "BMW person" for about 14 years. BMW offers nicer, more luxurious features in the 5 series vs the 3 (for example). Nicer leather options, more customization, more color options (or more ability to participate in their "individual" program to order off menu colors etc for additional costs).

These are in addition to the engine options etc. I was a BMW 3/4 series driver, my wife is an X5 driver. I bought the Tesla Model 3 P instead of another BMW, as I didnt want the larger 5 series. The pricing was similar.. I could have gotten a BMW 540 nicely equipped for what I paid for the model 3 performance. The 5 series is a completely different level of luxury comparatively to any 3/4

The interior of a model S is not appreciably nicer than a model 3 at this particular point, at least in my opinion. its just bigger, and the cost of the vehicle new does not match the level of "luxury" you get from those other brands. There is more to a vehicle than luxury, of course, but there should be some more differentiation in the interior for model S (and X) vehicles.

 

[HankLloydRight]

It think the M3 is a great car with lots of positives.

But I wouldn't buy one.

I just like large sport sedans, like the Model S or BMW M5 (E39 that is). I like the massive space the Model S provides. I like the way it looks A LOT more than the Model 3. And it's certainly not about "luxury". Tesla's are not "luxury" cars even though they may be priced like they are.

Just because the Model 3 is the new hot thing on the block doesn't mean that everyone's going to go run flocking towards it. The Model S is plenty "hot" for different reasons.

 

[MP3Mike]

The S still has things the 3 doesn't:

• Larger
• Hatchback
• Biodefense HEPA air filtration
• Air suspension
• Instrument Cluster
• Rear Facing Seats
• More storage
• Self-presenting door handles
• AM Radio (I'm not sure it still has it.)
• XM Radio
• Faster AC charging (I think it is still available.)
• Heated steering wheel
• Cooled seats
• Dynamic turning headlights
• Passive entry fob
• etc.

It is a different car, and some people prefer it even if it costs more than another car.

 

[viper2ko]

Why does the model 3 have newer battery cell tech that charges faster (could charge up to 150kw) but the S still doesn't? Also the S didn't get a new MCU until a full year after the 3 was released, before that the M3 mcu was much smoother.

 

[glide]

But OP has a point (to a point). I have been a "BMW person" for about 14 years. BMW offers nicer, more luxurious features in the 5 series vs the 3 (for example). Nicer leather options, more customization, more color options (or more ability to participate in their "individual" program to order off menu colors etc for additional costs).

These are in addition to the engine options etc. I was a BMW 3/4 series driver, my wife is an X5 driver. I bought the Tesla Model 3 P instead of another BMW, as I didnt want the larger 5 series. The pricing was similar.. I could have gotten a BMW 540 nicely equipped for what I paid for the model 3 performance. The 5 series is a completely different level of luxury comparatively to any 3/4

The interior of a model S is not appreciably nicer than a model 3 at this particular point, at least in my opinion. its just bigger, and the cost of the vehicle new does not match the level of "luxury" you get from those other brands. There is more to a vehicle than luxury, of course, but there should be some more differentiation in the interior for model S (and X) vehicles.

Tesla needs to start making more refined/luxurious interior upgrades available for all their models.

This vegan-leather crap has got to go when you’re charging $100K+

 

[viper2ko]

Tesla needs to start making more refined/luxurious interior upgrades available for all their models.

This vegan-leather crap has got to go when you’re charging $100K+

I actually like the vegan leather. I've seen what happens to normal leather in other luxury brands after a few years.

 

[Derek Kessler]

Tesla needs to start making more refined/luxurious interior upgrades available for all their models.

This vegan-leather crap has got to go when you’re charging $100K+

Cowhide doesn't fit with the environmentally friendly message of Tesla. You may not care about that, but Tesla does.

 

[Derek Kessler]

Why does the model 3 have newer battery cell tech that charges faster (could charge up to 150kw) but the S still doesn't? Also the S didn't get a new MCU until a full year after the 3 was released, before that the M3 mcu was much smoother.

Because it's not a simple matter to upgrade the battery pack of the S. Additionally, Tesla still has a contract with Panasonic for an unknown number of the 2170 18650 cells in the S and X.

Tesla's almost exclusive focus has been on the Model 3 for the past two years. Sure, there have been some minor updates to the S and X, plus the unveiling of the Semi and 2020 Roadster, but the bulk of Tesla's energy and capital has been expended on getting the Model 3 to market at scale. The S and X were still selling well, and providing valuable cash flow to help finance the Model 3.

The top end car doesn't always have the absolute latest and greatest all the time. This happens all the time across all technology companies. Eventually the top product will have all the bells and whistles plus some new ones, but sometimes a new lesser product comes between planned cycles for the top end and manages to one-up it in a few ways.

You need to look at the products as a whole, not in isolation. The Model S is still offers more amenities, space, range, and speed than the 3 and it always will.

 

[MP3Mike]

Because it's not a simple matter to upgrade the battery pack of the S. Additionally, Tesla still has a contract with Panasonic for an unknown number of the 18650 cells in the S and X.

Fixed that for you.

 

[iluvmacs]

The S still has things the 3 doesn't:

• Rear Facing Seats

That one is gone now (at least for new builds).

 

[MP3Mike]

That one is gone now (at least for new builds).

It is supposed to still be available off-book by placing your order via an OA instead of the site.

 

[glide]

Cowhide doesn't fit with the environmentally friendly message of Tesla. You may not care about that, but Tesla does.

I don’t care about it. Tesla didn’t care about it either until 2016-ish.

And they’ll stop caring about it when the shareholders figure out why people are leaving the brand for the competition in a few years.

 

[jjrandorin]

It think the M3 is a great car with lots of positives.

But I wouldn't buy one.

I just like large sport sedans, like the Model S or BMW M5 (E39 that is). I like the massive space the Model S provides. I like the way it looks A LOT more than the Model 3. And it's certainly not about "luxury". Tesla's are not "luxury" cars even though they may be priced like they are.

Just because the Model 3 is the new hot thing on the block doesn't mean that everyone's going to go run flocking towards it. The Model S is plenty "hot" for different reasons.

I feel the same way about the Model S (and 5 series, etc large sedans). "nice cars but dont want one". Thats why I drove 3/4 series (size) even though I could swing a 5 series just fine... although not a new M5 lol.

I think the Model S is a fine looking car... actually better looking than the model 3 by a fair bit. Its too big for me though, and for the price difference I agree with the OP that there should be more differentiation.

 

[Derek Kessler]

I don’t care about it. Tesla didn’t care about it either until 2016-ish.

And they’ll stop caring about it when the shareholders figure out why people are leaving the brand for the competition in a few years.

I don't know the details of Tesla's internal deliberations or supply agreements, but it's entirely possible Tesla wanted to do pleather from the start but appropriate replacement materials that'd be accepted by enough customers. There's a long history of companies not being able to do everything they want from the start. Literally every company ever, actually.

 

[aronth5]

I don’t care about it. Tesla didn’t care about it either until 2016-ish.

And they’ll stop caring about it when the shareholders figure out why people are leaving the brand for the competition in a few years.

The change was in great part due to pressure from many shareholders so I believe your concern is unwarranted. Here is some background information.

Tesla can deliver something many of its competitors can't
"The vegan interior issue isn't a casual "lifestyle choice," but a critical change needed for survival of life on our planet," Tesla investor Mark Peters told Business Insider in an email. Peters —who was one of the investors to speak at the shareholder meeting — cites research indicating that 51% of greenhouse gases emitted into the atmosphere come from animal agriculture.

 

[glide]

The change was in great part due to pressure from many shareholders so I believe your concern is unwarranted. Here is some background information.

Tesla can deliver something many of its competitors can't
"The vegan interior issue isn't a casual "lifestyle choice," but a critical change needed for survival of life on our planet," Tesla investor Mark Peters told Business Insider in an email. Peters —who was one of the investors to speak at the shareholder meeting — cites research indicating that 51% of greenhouse gases emitted into the atmosphere come from animal agriculture.

We will find out in a few years if pressure to use non animal sourced materials outweighs profits.

My guess is “no”. The vegan leather seats are not a comparable alternative to real leather. Buyers in the $100K+ segment are not going to be satisfied with “faux” anything. Especially when there is competition.