MS ownership in 6-7 years time

[Sunlight]

Interesting comments. I think Romp summed it up succinctly.

The thing that will adjust our thinking in the future will be how many EV repair workshops/companies spring up to rebuild AC motors/drivelines/battery packs. If these can be done at a financially viable cost - and well below the equivalent ICE - then the long term prospects and running costs of EVs are promising.

If the body structure of an MS/MX lasts 'indefinitely' due to the aluminium construction; the odds and ends turn out to be reliable; batteries are longer lasting than anticipated; AC motors can be fixed cheaply (or also last indefinitely) and the software (and some hardware) can be upgraded simply, then the prospects of MS/MX's being viable for 20 years or longer (and still contemporary) is very real - and exciting.

ICE cars will always hit a cliff when repair is way more than the realistic value of the car (unless it is a historic/collectors piece)

 

[bob_p]

Overall, the Model S is a much simpler design than any ICE because of the significantly smaller number of moving parts.

With Tesla now providing 8 year coverage for the most expensive elements - the battery pack and the motor, long-term maintenance should be better than any ICE.

A major difference between the Model S maintenance and ICEs is elimination of the 3 month service intervals typically recommended for ICEs to service the engine - which isn't needed with the Model S. Only the tires need service more than once per year (or 12.5K miles).

Another major difference is that Tesla plans to continue updating the onboard software for the lifetime of the car. While the current software features may be viewed as basic today - they will improve over time - and owners should benefit from major functionality upgrades via software releases - something other manufacturers have not yet committed to provide for their owners.

And, as Tesla adds new hardware capabilities, at least so far, they've provided an upgrade path. Early owners that want to add parking sensors or power folding mirrors can do so. And while the cost of those upgrades are higher than purchasing those features in a new car - it's still less expensive than purchasing an entirely new car - which is the preferred upgrade path for the other manufacturers.

Because of the 8 year warranty, the sweet spot for re-selling a Model S may be in years 6 or 7 - so there will still be some of the 8 year warranty left to provide assurance to the new owner on the highest price components of the car.

Leasing is another option - which is essentially making the decision up front to walk away from the car in a shorter time frame than a longer term purchase & re-sale, without paying for the entire cost of the car up front.

At least from the perspective of a high mileage Model S owner - at this point, compared to my previous ICEs, the overall service experience has been considerably better with my Model S.

 

[jerry33]

This is a bit of a gray area. Tesla announced it but has never followed through.

My thought [about the $12K pre purchase battery] is that they announced it, but then realized that when the gigafactory gets up and running, $12,000 would be too much for an 85 kWh battery.

 

[Killface]

My thought [about the $12K pre purchase battery] is that they announced it, but then realized that when the gigafactory gets up and running, $12,000 would be too much for an 85 kWh battery.

Long-term, perhaps. But when the Gigafactory first goes live (~2017), most analysts think Tesla's cost will still be nearly $200 per kWh, or almost $17k for a 85kWh battery. And I believe that doesn't even take into account the profit they'll need to make to pay off their initial investment in the factory.

 

[jerry33]

Long-term, perhaps. But when the Gigafactory first goes live (~2017), most analysts think Tesla's cost will still be nearly $200 per kWh, or almost $17k for a 85kWh battery. And I believe that doesn't even take into account the profit they'll need to make to pay off their initial investment in the factory.

1. They take back the used battery so there's a core refund. A battery that is no longer good enough for a car still has a minimum of 50% of it's life left (not that you'll get 50% of what you paid for it).

2. Most analysts don't seem to do very well when it comes to companies that break the mold.

 

[breser]

My thought [about the $12K pre purchase battery] is that they announced it, but then realized that when the gigafactory gets up and running, $12,000 would be too much for an 85 kWh battery.

It's my understanding that the gigafactory is making batteries for the Model 3 not the S or X. Those will still be sourced from Japan.

 

[rlang59]

It's my understanding that the gigafactory is making batteries for the Model 3 not the S or X. Those will still be sourced from Japan.

No the factory will be making batteries for all Tesla vehicles.

 

[Killface]

1. They take back the used battery so there's a core refund. A battery that is no longer good enough for a car still has a minimum of 50% of it's life left (not that you'll get 50% of what you paid for it).

2. Most analysts don't seem to do very well when it comes to companies that break the mold.

Both of these are very good points.

I'm hoping that in a few years I'll be able to trade my 85kWh battery in, pay a bit of money, and get a 100-120kWh battery upgrade.

 

[CHG-ON]

I completely agree. Most analysts seem to have a poor vision of the future. They tend to think in what is happening now, which I believe is a huge mistake in tech, which this car is.

 

[omgwtfbyobbq]

Interesting comments. I think Romp summed it up succinctly.

The thing that will adjust our thinking in the future will be how many EV repair workshops/companies spring up to rebuild AC motors/drivelines/battery packs. If these can be done at a financially viable cost - and well below the equivalent ICE - then the long term prospects and running costs of EVs are promising.

If the body structure of an MS/MX lasts 'indefinitely' due to the aluminium construction; the odds and ends turn out to be reliable; batteries are longer lasting than anticipated; AC motors can be fixed cheaply (or also last indefinitely) and the software (and some hardware) can be upgraded simply, then the prospects of MS/MX's being viable for 20 years or longer (and still contemporary) is very real - and exciting.

ICE cars will always hit a cliff when repair is way more than the realistic value of the car (unless it is a historic/collectors piece)

That might be a big if unless Tesla can compete with existing dealers in terms of part prices and documentation (FSM). The biggest hang-ups for me are knowing that a part for an S is going to be far more than a part for just about any other mass-produced car and no factory support for DIY. I'm holding off on a purchase because I'm not inclined to pay several thousand dollars (Or pay thousands of dollars for an extended warranty) to fix a $300 AC compressor (or w/e) when I can do that myself in a few hours.

If consumers don't have inexpensive alternatives, the mark-up from the service centers for labor/parts will show up in the depreciation as these cars age, especially if they have some model specific quirks. New models/platforms in particular tend to have more defects that show up with age.

With that said, in the aggregate, I think EVs will hold their value better than their ICE counterparts, just like hybrids have, adjusting of course for the federal tax credit and regional incentives.

 

[breser]

No the factory will be making batteries for all Tesla vehicles.

Got a source on that? In another thread someone mentioned that Elon had said that wasn't the case (I don't think they had a source for that either). If the cells for the Model 3 end up being different from the current Model S cells then I can entirely see them not bothering to switch the Model S over to them for a while (though I'd imagine eventually they will). If switching requires more than just changing the pack design and starts impacting things like the charger then I'd bet the switch will take longer and might help older cars at all.

 

[jerry33]

I'm not inclined to pay several thousand dollars (Or pay thousands of dollars for an extended warranty) to fix a $300 AC compressor (or w/e) when I can do that myself in a few hours.

Bear in mind these are not typical $300 auto a/c compressors. They are electric variable speed scroll compressors. There's not a lot to repair on them. Hoses and refrigerant--yes, those can be replaced.

 

[rlang59]

Got a source on that? In another thread someone mentioned that Elon had said that wasn't the case (I don't think they had a source for that either). If the cells for the Model 3 end up being different from the current Model S cells then I can entirely see them not bothering to switch the Model S over to them for a while (though I'd imagine eventually they will). If switching requires more than just changing the pack design and starts impacting things like the charger then I'd bet the switch will take longer and might help older cars at all.

They are probably confusing the fact that in the earnings call they mentioned that a different style cell will be made at the factory than the ones currently used in the Model S. The purpose of the Gigafactory is to drive down the cost of the battery pack and is required for he price targets for the Model 3 but the output will not be just used for that.

Panasonic and Tesla Sign Agreement for the Gigafactory | Press Releases | Tesla Motors

JB Straubel, Chief Technical Officer and Co-founder of Tesla Motors said: "the Gigafactory represents a fundamental change in the way large scale battery production can be realized. Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications."

 

[omgwtfbyobbq]

Bear in mind these are not typical $300 auto a/c compressors. They are electric variable speed scroll compressors. There's not a lot to repair on them. Hoses and refrigerant--yes, those can be replaced.

Fair enough, they aren't quite as inexpensive as conventional compresors, but rockauto is showing ~$400-$750 for the brand new scroll compressors in the last/current gen Prius. I doubt I could purchase a compressor from Tesla for anywhere near that price. I could be wrong about that, but when a steering rack runs ~$3000+, it looks like Tesla has some really substantial mark-ups. Assuming they'll sell parts to someone in the first place.

Stretchla Blog | Stretched Vanagon Westfalia shell on a Tesla platform

Not that I'm saying there's anything wrong with that per say. It's a free country, etc... But I do think the higher costs of repair/extra warranty costs will show up in the depreciation schedule. If parts/documentation become available, then that may change, but that hasn't happened with the Roadster and I don't see anything indicating it'll happen with the S.

 

[Sunlight]

This thread makes me think of the following scenario.

After 8 years ownership, the owner of an MS runs out of motor/drivetrain and battery warranty. They must decide what to do. They have maintained the car meticulously and the various issues associated with a 'start-up' company have been resolved. The motor/drivetrain issue is long forgotten and these components seem to have an indefinite life-span. Anyway there are companies that now refurbish Tesla components at reasonable cost.

The car has been routinely upgraded via software downloads etc and various hardware improvements have been done. The car satisfies all their current needs. The running costs are now lower than the equivalent ICE and they still love the car.

The range has reduced by 74% but this is still adequate for their needs especially with so many super/fast chargers now all over the place. It seems that the battery can continue to degrade at about 3% per annum and at some point they can upgrade to the newer battery (which in 2021 is at a reasonable price). Their only concern is that the battery will unexpectedly die once it gets to a lower capacity.

As the car drives nearly like new, it is still cost-effective to buy an upgraded battery and keep the car for many more years - and/or to improve its resale value in the medium term.

Likewise a potential new owner would be faced with the same scenario if they were intending to buy second hand. If they could cope with the reduced range or were willing to buy an upgraded battery, they could end up with a wonderful car at 30% of the 2013 new price - give or take the impact of the battery costs.

It is what I look forward to in a few years - sounds a great deal to me.......

 

[AmpedRealtor]

This thread makes me think of the following scenario.

After 8 years ownership, the owner of an MS runs out of motor/drivetrain and battery warranty. They must decide what to do. They have maintained the car meticulously and the various issues associated with a 'start-up' company have been resolved. The motor/drivetrain issue is long forgotten and these components seem to have an indefinite life-span. Anyway there are companies that now refurbish Tesla components at reasonable cost.

The car has been routinely upgraded via software downloads etc and various hardware improvements have been done. The car satisfies all their current needs. The running costs are now lower than the equivalent ICE and they still love the car.

The range has reduced by 74% but this is still adequate for their needs especially with so many super/fast chargers now all over the place. It seems that the battery can continue to degrade at about 3% per annum and at some point they can upgrade to the newer battery (which in 2021 is at a reasonable price). Their only concern is that the battery will unexpectedly die once it gets to a lower capacity.

As the car drives nearly like new, it is still cost-effective to buy an upgraded battery and keep the car for many more years - and/or to improve its resale value in the medium term.

Likewise a potential new owner would be faced with the same scenario if they were intending to buy second hand. If they could cope with the reduced range or were willing to buy an upgraded battery, they could end up with a wonderful car at 30% of the 2013 new price - give or take the impact of the battery costs.

It is what I look forward to in a few years - sounds a great deal to me.......

Or not.

 

[Perfect_Flaw]

This thread makes me think of the following scenario.

After 8 years ownership, the owner of an MS runs out of motor/drivetrain and battery warranty. They must decide what to do. They have maintained the car meticulously and the various issues associated with a 'start-up' company have been resolved. The motor/drivetrain issue is long forgotten and these components seem to have an indefinite life-span. Anyway there are companies that now refurbish Tesla components at reasonable cost.

The car has been routinely upgraded via software downloads etc and various hardware improvements have been done. The car satisfies all their current needs. The running costs are now lower than the equivalent ICE and they still love the car.

The range has reduced by 74% but this is still adequate for their needs especially with so many super/fast chargers now all over the place. It seems that the battery can continue to degrade at about 3% per annum and at some point they can upgrade to the newer battery (which in 2021 is at a reasonable price). Their only concern is that the battery will unexpectedly die once it gets to a lower capacity.

As the car drives nearly like new, it is still cost-effective to buy an upgraded battery and keep the car for many more years - and/or to improve its resale value in the medium term.

Likewise a potential new owner would be faced with the same scenario if they were intending to buy second hand. If they could cope with the reduced range or were willing to buy an upgraded battery, they could end up with a wonderful car at 30% of the 2013 new price - give or take the impact of the battery costs.

It is what I look forward to in a few years - sounds a great deal to me.......

Let us know when you get back from fantasy land. The Tesla is a great car, but thinking you can buy one and never buy another is very strange.

- - - Updated - - -

Likewise a potential new owner would be faced with the same scenario if they were intending to buy second hand. If they could cope with the reduced range or were willing to buy an upgraded battery, they could end up with a wonderful car at 30% of the 2013 new price - give or take the impact of the battery costs.

It is what I look forward to in a few years - sounds a great deal to me.......

Also, no one shopping for a used 8 year old car is in the market for a "fixer upper". Would you buy an 8 year old ICE needing a new transmission or engine? I doubt people will want to buy an old Model S with a degraded battery that already needs it to be replaced. Tesla Model S, the first disposable vehicle. When the warranty is up, it goes to the dump(tm)

 

[Sunlight]

Hey PerfectFlaw you really belong to the Throw-away society! Don't think this is Elon's idea.....

and yes yes our current car is 12 years old and it suits us fine (for now...). And I recall quite a few on this forum have had cars for long periods.

i see a Tesla as a possible long term solution and why not?

buying a Tesla needing new batteries is hardly the same as an ICE needing a new drivetrain!

 

[robby]

Also, no one shopping for a used 8 year old car is in the market for a "fixer upper". Would you buy an 8 year old ICE needing a new transmission or engine? I doubt people will want to buy an old Model S with a degraded battery that already needs it to be replaced. Tesla Model S, the first disposable vehicle. When the warranty is up, it goes to the dump(tm)

How do you reconcile this belief against people like me who are happily driving beater 4-cylinder 19-year-old ICEs?

If you're talking about people who want a new-ish car every handful years, sure, a Tesla is not long-term vehicle for them. But that's a function of the owner, not the car. For people who take pride in or otherwise derive value from driving cars as long as they can, investing in a new battery in an old Model S doesn't strike me as daunting, because they don't have to worry about another dozen things that can go at any moment like they do in an old ICE.

Here are the things I can imagine that would make current Teslas "disposable":

1) Autopilot technology that is not made available as a retrofit.
2) Ubiquitous, cost-effective Uber-like service that renders the maintenance and upkeep of cars a losing value proposition for most owners (I think Tesla would be in good standing among such fleets, but the unit economics would be bad for the company, hence part availability problems, etc.).
3) Massive decreases in cost of production such that it is cheaper for Tesla to make and ship a new car than to repair any one particular part. Never say never, but unheard of in the automotive industry thus far.

It's worth noting that all of these situations are driven by external forces, not by any characteristic of the Model S itself.

 

[jerry33]

1) Autopilot technology that is not made available as a retrofit.

Unless government mandates autopilot, I think this will be very slow to catch on.

2) Ubiquitous, cost-effective Uber-like service that renders the maintenance and upkeep of cars a losing value proposition for most owners (I think Tesla would be in good standing among such fleets, but the unit economics would be bad for the company, hence part availability problems, etc.).

I'm not grokking this one. You're saying that good service at low cost will cause people to get rid of their cars??

3) Massive decreases in cost of production such that it is cheaper for Tesla to make and ship a new car than to repair any one particular part. Never say never, but unheard of in the automotive industry thus far.

Of the various part of the car, the only thing that can get cheaper by any significant amount are the batteries. Aluminum, stamping techniques, motors, tires, and brakes are about as efficient (in terms of manufacture) as it's possible to get. The batteries can get significantly cheaper, but the battery is an easily replaceable subsystem.