By on May 10, 2012

Tesla is sitting on more than 10,000 orders for its all-electric Model S sedan. Tesla might finally deliver the first units next month, slightly ahead of plan, says Reuters. The only thing that keeps the production from starting is a successful completion of crash tests required by U.S. safety regulators. If the car doesn’t bomb during the crash, customers can soon flaunt their high-priced environmental responsibility while tooling down the car-pool lanes in solitary fashion.

“Once we complete and document the tests, we will be able to sell our vehicles in the United States,” CEO Elon Musk told shareholders. Tesla will take a “slow, methodical” approach to the launch. By the end of the year 5,000 Model S sedans are expected to be delivered, half of the pre-orders.

Tesla needs the money. Tesla reported a first-quarter net loss of $89.9 million, or 86 cents per share, compared to $48.9 million or 51 cents per share a year earlier.


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27 Comments on “Tesla Model S To Be Delivered In June – If It Does Crash Alright...”

  • avatar

    If I could afford two vehicles and one of them being close to 100,000 (top of the line model S) I would own one.

    • 0 avatar

      Hell – at $50k the entry model makes a compelling case for itself. It’s really hard to imagine them depreciating much at all, so long as they aren’t riddled with issues during their first year. Production numbers will be low enough at the onset that you can likely buy one, then sell it in 2-3 years and only lose a few bucks – some of which will be made up for by the gas you never bought.

      Look at the Roadster resale market… Folks that bought those a 3-4 years ago at are selling them now at about 80% of sticker. Not many new cars can pull off that kind of resale value.

  • avatar

    I’m right there with you, Nickoo. What a beautiful and interesting car.

  • avatar

    Here’s the deal.

    I wouldn’t mind supporting Tesla. I think it’s a company with a fabulous idea, and the Model S looks very good, especially the top model with the 300 mile range.

    Normally I buy used Mercedes as my daily drivers. My next car is likely to be on the order of a 2009 CLS, for instance, for about $40k reconditioned by my dealer. It happens that the CLS is an excellent comparable vehicle to the Model S. Both of them have swooshy styling and cost about the same amount.

    In circa 2016, the Model S should depreciate to the point when this would be possible. So I could buy a CLS or a Model S. Comparable acceleration, performance, styling, etc. Similar range, to the point where it wouldn’t bother me. My longest trip is about 150 miles so the 300 mile range of the Model S would suit me just fine. Cheaper fuel costs, but let’s face it, it’s all about ego and being on the vanguard of an exciting new movement.

    But if I bought my Model S, it is a very rapidly depreciating asset. Why? Because most of the cost is tied up in the battery pack. The difference between the $50k Model S and the $90k Model S is almost exclusively in a bigger battery. The Tesla Roadster battery pack cost about $40k, so let’s use that number. After circa 100k miles of total use, I would have to replace it, or the car becomes scrap, correct? And in that case my 50k mile Model S is almost worthless.

    If I drove a 50k mile CLS to 100k miles it would still be worth about $25k, and I could trade it in on a newer used $40k CLS. So it would cost maybe $20k or so for me to trade up (counting dealer profit, sales taxes, etc). If I drove a 50k mile Tesla to 100k miles I would have a car worth approximately nothing. I would have to pay the full used price again to continue the cycle.

    This probably means the Model S is going to have a disastrous depreciation curve. If I somehow get rich and buy a $95k Model S I’ll be lucky if it’s worth $25k after three years, making the used buyer’s proposition look comparable to that of a used CLS buyer.

    So It seems like the Model S is a loser thanks to depreciation. And even from a strict environmental perspective, you could reasonably argue that having to scrap your Model S after 100k miles is a huge environmental loss over a CLS550, which should have a life of 200k miles or more. What costs more, having to manufacturer twice the number of cars, or using gasoline?

    (Note that I am assuming I want 300 mile range. If I was content with 150 mile range I could get a Model S for $50k. But then, I would have a car that couldn’t get to Miami and back and therefore I would have to run two cars. So a Model S + a CLS-class? Seems like a huge waste and of course it would cost about as much as a top line Model S assuming I bought the CLS used and the Model S new).

    Am I missing something? Or does the Tesla Model S make very little sense in reality?


    • 0 avatar

      Honestly, with lithium batteries the number of cycles (mileage) isn’t that significant as long as you’re not doing anything crazy; it’s the calendar life that gets you.

      • 0 avatar

        It’s not the degradation, it’s the advancement in technology. The batteries in the S will be ancient history in five years. Heavy, hot, and with limited capacity that cost way more than newer cells. It’s the march of technology that will turn a current EV battery pack into a boat anchor in five years. Oh, the pack will still hold its charge, power a car and do everything you want it to. It’s just the odds are there will be battery packs that can hold more power while weighing X% less and generating Y% less heat and needing Z% less protection reducing A% weight increasing B% range and costing half as much. That is the bigger issue.

      • 0 avatar
        Robert Schwartz

        I take it you have never owned a cell phone.

      • 0 avatar

        One advantage of Tesla is that it uses laptop cells, 100 years from now someone will still make laptop cells to keep all those antique laptops running, and the odd antique Tesla. Other electric cars will be a bit harder since they use proprietary custom cells.

    • 0 avatar

      I can’t speak for the model S specifically, but electric motorcycles that have LiOn batteries can cycle 1,000 times before they degrade to the point of “no longer usable” which I believe is a degradation to 80%? That would put a 300 mile range at 300,000 miles. Also, I am hopeful that in the next 10 years, we figure out a way to overcome the limitations of current electric motor cars, either with low cost fuel cells or better battery technology, if we do, I’ll be first in line to buy one.

      The nice thing about an electric motor car is that if it’s properly built, it should last an order of magnitude longer than a comparable gasoline car, I would suspect that if these take off, battery replacements will be available.

    • 0 avatar

      Does any $100k car make any sense?

      “Cheaper fuel costs, but let’s face it, it’s all about ego and being on the vanguard of an exciting new movement.”

      That answers it right there, but still the CLS gets about 20mpg EPA combined using premium gas, probably $6 a gallon by 2016. Will you get any pleasure from driving an electric car compared to the CLS or you just are concerned about the cost?

      Tesla offers a $12k battery replacement plan for the Sporter, assume $18k for the S since its a larger battery. The S has a battery warranty of 8 years with unlimited miles so just make sure to save a bit of money every year.

      Most likely the battery will last far longer than that since it will be rarely fully cycled.. unless you get a brain fart and brick it.

      • 0 avatar

        At this price point, you’re making a statement, not any real-world economic or environmental sense. Which is dandy. Call it what it is, and you’d see people like me stop griping about having to hear about all the ‘responsibility’ malarkey. There’s absolutely zero true responsibility involved in the whole current green-car hysteria.

        That new plug-in hybrid Porsche idiocy is a perfect example. 100X the complexity for what? 15 gas-free miles? Sorry, but that’s just plain idiotic.

    • 0 avatar

      Yes, you are missing several things:

      1) By your logic used Tesla Roadsters should have depreciated to $25k by now. That isn’t the case at all… In fact, the cheapest I’ve seen a 2008 or 2009 Roadster go for is $70k. They depreciate far less than any other high-end car that comes to mind.

      2) The idea that hybrid or electric cars’ batteries will die every few years is a familiar refrain, but it has been thoroughly disproven. A battery could die, but it’s no more likely than an engine suffering a catastrophic failure.

      3) Battery technology is advancing at a remarkable pace. A pack that costs $40k now will likely cost less than $10k in 6 or 8 years, and it’s replacement will have even greater energy density. And if the volume of electric cars is great enough, aftermarket suppliers will enter the fray, further driving costs down.

      4) From an environmental perspective, let’s be clear: Nobody is going to be scrapping their Tesla’s after 100k due to depreciation. The same claims were made about the Prius… The fact is, remarkably few people are willing to maintain a CLS above 150k or so. With an electric car, mileage really isn’t an issue – battery replacement is straightforward – and other than minor wear items, the rest of the car should last indefinitely, at least until it rusts, rots, or otherwise decomposes.

      5) While battery replacement is expensive right now, compare it to the cost of maintaining a high-end engine for 200k, maybe with a full rebuild in there. Not much difference. The CLS gets what, around 20mpg? Let’s daydream that premium gas stays at $5/gallon for the car’s usable life. That’s $50k in gas alone!

      However, if you, or anyone else in this world wants to buy a model S and give it away for free because of its “depreciation” as it nears 100k, I’ll gladly take it off your hands. Even if the battery is dead!

      • 0 avatar

        On your point #3: I could not agree more. For some historical data, I worked on an electric vehicle at my University. The first car we built with a Lithium-based battery was the 2001 car (Before that, we used lead-acid, then silver-zinc, then NiMH). In 2001, a 5kWh battery cost the team ~$75k, and weighed something like 60kg. In 2007, a 5kWh lithium pack cost more like $6k and only weighed 30kg. This year, a 5kWh battery cost us $3k and weighed 20kg.

        Batteries are getting cheaper and lighter at a very rapid rate.

    • 0 avatar

      Most of our military budget (the non bat sh*t crazy part like star wars and domestic spying) goes to protecting oil distribution networks. People die as a result – young poor Americans die.

      China wants more oil and is getting a lot from Iran. Screw Iran you screw China and they own our *ss. India wants more oil and has 1.5 billion people with energy needs. This is where the fight over supply lines has begun (by proxy of course). This is another part of the equation.

      Coal , wind and hydro are domestic and are used to produce electricity. With the political will more renewable can be produced and coal plants could be a lot cleaner.

      • 0 avatar

        Getting a bit OT but coal is on its way out in this country thanks to the EPA. We are right now building coal export terminals all over the west coast so we can ship our midwestern coal to China. Then their coal plant emissions blow back over here on the jet stream . . .

        Natural gas will be the fuel of necessity for future base-load power plants in this country. We have lots of it, it’s considered “cleaner” than coal, and the plants can be built quickly. And T. Boone Pickens will become even richer.

      • 0 avatar

        Obama is turning into a great President, provided you’re Chinese.

      • 0 avatar

        CJinSD, that was funny!

        But there are a lot of Americans for whom Obama, the ‘crats and Obamacare has worked. I’m not one of those Americans. I’m doing worse.

        So on election day Independents like me may stay home and not vote since I don’t like either Obama or Romney; one is as bad as the other.

        Looking back over the years I can honestly say I did much better during Shrub and the Clintons. But, like you say, Obama is a great president, if you’re Chinese. I’m not Chinese.

      • 0 avatar

        I’m curious why you think Romney could possibly be as bad as an Obama unfettered by concerns about reelection. He’s basically daring us to let him have a second term.

  • avatar

    from the article: “By the end of the year 5000 Model S sedans are expected to be delivered”

    I get the slow and methodical thing, but waiting nearly three millennia to get a car seems a bit ridiculous.

    • 0 avatar

      Good eye – that’s hilarious!

      • 0 avatar

        Coal isn’t on the way out because of the EPA. It’s on the way out because at least some of us have realized that in a century or two you send into the atmosphere most of the carbon that was stored by planet over hundreds of millions of years without drastically changing the climate of the planet.

  • avatar

    Where are the ‘vaporware’ critics now?

    That Elon Musk is a real charlatan, launching real rockets into orbit and to the $100 billion International Space Station:

  • avatar

    I would hope the nature of battery advancement will make it easier to update an electric car than it would be to update an internal combustion car with a new engine and the rest of the drive train. A properly maintained, rust free car could be updated easier than Doc Brown’s DeLorean.

  • avatar

    For Tesla so far, I have bought the stock but not the product. It is up about 75% from my purchase so it is a better investment than the car at this point.

    I learned my lesson when I worked out that if I had invested the same amount In Apple stock that I did spend buying a trick Apple Cube desktop one day in 2000, that the stock would now be worth $240,000.00.

    That computer is now wrapped in visqueen on a shelf in a closet.

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