Page 4 of Q4 shareholder letter:
Wonder what the delay is for? Will definetely be listening to the conference call as it will probably come up.
For the first time since I made a reservation roughly two years ago, I am seriously disgusted with Tesla.
I read the 2/1 bulletin board entry mentioning, as an aside, that 40kwh cars will not be produced for a few months, but since I hadn't heard anything else about the production date being delayed again, I foolishly assumed that "few months" was just a poor choice of words and my car would still be delivered in March, as I was last told.
Tesla obviously knew about this delay for quite a while. It would have been nice if somebody had thought of informing the affected reservation holders.
So much for Tesla's efforts to improve customer communication.
Maybe they will decide not to produce 40kwh cars after all, and we'll read about that in a shareholder letter as well.
Although we signed an mvpa months ago, and spent a good chunk of change installing 14-50 outlets in two locations, my wife and I are seriously considering attempting to get our deposit back.
I feel really bad to the 40kWh folks. I was dieing to get my 60 and the extra wait seemed like eternity. This really sucks for them. Later this summer? That seems excessive and I usually side with Tesla.
At least they are locked in before the price increase.
Elon just said on the conference call that "less than 10%" of configurations they have recieved so far are of the 40 kWH pack so it may be that they are not as focused on produced the 40 kWH battery pack that quickly.
I believe their margins on the 40kWh are razor thin at this point, making production of this variant a low priority. As the customer, that is not my problem. I've given them my $5K and they've beneiftted from an inttrest-free loan for the last year and a half. They asked me to finalize in October, obviously with no intention to deliver the car within a "reasonable time" (sound familiar?). I feel they are mistreating some of their customers who were there for them when the Model S was still a very risky venture. I would think they would treat us better, or at least provide more information. This truely saddens me and has changed my positive experience with Tesla thus far.
Agree, but as one of 10% or less, I can't say that I'm a happy camper.
Posted at same time… my comment was responding to sayidreddy.
I felt the same as mbergman- until I got my car. Now I am happy again. DS was great, service people call back, car is terrific.
Tesla has to survive to deliver- and support- our cars.... so they are going to make delivery decisions around cash flow management and factory disruption.
So, do you suppose they'll send out emails or something to the 40kWh folks? I finalized my order in January and was given a delivery estimate of May-June. That hasn't changed on my account. Still shows delivery in the May-June time frame.
I wouldn't take a general statement in a financial report as a specific delivery date for your particular car. No reason to get upset, just check with Tesla and get an updated ETA. Then make a rational decision as to how to proceed...
The point isn't that the margins are razor thin or that orders represent less than 10%..the point is that Tesla have not given accurate information to reservation holders prior to finalizing. They originally said 40 kwh cars would be delivered Dec 2012..this was delayed to March 2013..now "later in the summer of 2013"?!? This is a horrible way to find out. I've been waiting 4 years..gave Tesla my reservation deposit when there was no guarantee they would even build the car and I find this out buried in a quarterly report? Not happy.
@spazthecat : Where you can see the estimated delivery date on your account after you finalized configuration ? I also saw May-June when I finalized mine. But after that, I could not see any schedule information on my account.
While I understand the need for Tesla to deliver the higher margin 85kWH and 60kWh cars first, at some point the issue of fairness must be considered. I'm a stock holder so I want Tesla to be profitable. At the same time, I think Tesla has an obligation to reward the loyal reservation holders who took a chance on the company with a $5,000 deposit when there was a risk that the company would not survive. If the 40kWh reservations represent only 10% of the total, delivering some of these cars now should not bankrupt the company. Ignoring the 40kWh reservation holders may be the right short-term business move but it is the wrong thing to do. I reserved my 40kWh in 11/2009. I used to be a huge fan of Tesla. But because of how I've been treated, I'm now just an upset client.
Why are you upset? Tesla hasn't missed their delivery deadline for your car yet. Get some facts first before reacting.
Joehuber, I know my facts. Telsa reps (and Elon in an investor call) first stated that 40kWh would begin in Dec, 2012. Then that figure was pushed back to March 2013. Now it is "later this summer". I see people reserving in December who now have their Model S. I have no choice but to wait. Tesla has my money. That is why I'm upset.
Joe, Tesla has missed several deadlines around delivery of the 40kWh. Also, it is reasonable to assume they may never choose to deliver the 40kW battery cars at this point. They clearly have no interest in it. They have had my money for close to 3 years now and it isn't clear I am going to get anything for the risk I assumed in handing a $5K deposit. Please don't tell ME not to be upset.
Unfortunately, if you placed an order today for an 85 kWh car (and possibly a 60 kWh car), you would likely receive it before any of us 40 kWh folks. There are many reservation holders (see DaveR75 above) who have been waiting for 3-4 years, and it doesn't seem right that someone placing an order today should get their car before those reservation holders.
Personally, I have only been waiting about a year and a half since reservation, but I signed my pre-MVPA on 9/4/12 (which was suppose to be about four months before delivery). We are coming up on six months, and it currently appears that I will be waiting another 3-4 months (for a likely total of 9-10 months after locking in configuration and money). Ever since configuring/signing the pre-MVPA, I really do feel held hostage (loss of $5k) to a certain extent, and all I can do is just wait. I'm not saying I want to cancel, but it has been very frustrating to the point that I have thought of calling to see if I could cancel and somehow get the $5k back... but I'm not at that point yet, so I will wait some more.
A couple of years ago on an earnings call, I believe Elon estimated 20% 85Kwh, 60%60Kwh, and 20% 40Kwh. In the call today, he said the actual numbers have been running over 50% 85Kwh and less than 10% 40Kwh. That may be affecting the production of the 40Kwh.
In his December 3rd E-mail, George wrote:
"40 kWh Model S will phase into production in March 2013"
And then added:
"We will continue to provide regular updates regarding these options as each gets closer to phasing into production. We have not done a great job at all in the past regarding communication on these items. I fully acknowledge our shortfall in this area. We now have a much better understanding of what it will take to bring each of these options into production and will do a much better job of communicating about them going forward."
It seems clear that neither of those commitments will be honored. March 1st is one week away and Tesla hasn't even released the EPA rating on the 40 kWh configuration yet.
I reserved in April 2009 when the Model S was nothing more than a prototype. My reservation number is P613 and I've watched as literally thousands of people reserved years after I did but received their cars before me.
When I reserved the target production date was "Late 2011". I believe in the cause and have been more than patient while Tesla made business decisions to maximized revenue. But, my wait is over. I have no faith left in what George says.
My MVPA, which was signed on August 8th, lists a delivery estimate of "Dec 2012 / Jan 2013". I ordered the active air suspension, a $1,500 option, because I didn't want to wait until March 2013 for my car. What a waste that decision turned out to be.
But, I don't feel trapped. My MVPA says:
"Scheduled Delivery Date. The date set forth in this Agreement for delivery of the Vehicle is an estimated date, and does not represent an affirmation or promise that the Vehicle will be delivered to you on that exact date. We will not be liable for failure to deliver, or delay in delivering, the Vehicle that is covered by this Agreement where such failure or delay is due, in whole or in part, to any cause beyond our control, that is not the result of our negligence."
There is no question that the delay in the delivery of my car is 100% in Tesla's control. They are pushing the delivery of the 40 kWh configuration back for business reasons. That's fine. But, I'm not going to wait indefinitely. If I don't receive my car by late March / early April, I'll request the return of my $5,000 deposit. If Tesla doesn't honor my request, I'll dispute the charge with my credit card company. That's the great thing about credit card purchases - Visa is inclined to side with its customer - me. Visa will credit the $5,000 back to my card and simply short Tesla $5,000 on its next merchant transfer. There is usually an exchange of information between the parties; but, the few times in my life when I've disputed a charge, Visa has always had my back.
I don't post very often and I'm inclined to give Tesla the benefit of the doubt given the ambitious nature of the Model S undertaking. However, the delivery delay for the 40 kWh configuration is way beyond reasonable. I'm disappointed in today's further delay; but, I'm even more disappointed that Tesla's failed to communicate it to me - the customer - in a timely and appropriate manner.
How many times do I have to accept George's apology for inadequate communication. I wish I got that many free passes at my job.
I, too, selected active air suspension only in the hopes that it would move my production date forward. So here, too, I feel misled by Tesla. So much for providing us with "regular updates". Blankenship and Tesla have failed to live up to promises made to me and my fellow 40kWh reservation holders.
I'm siding with the rest of my fellow 40's. I ordered 2 of these so they have had 10K locked up for near a year. Also we like most of the other 40's were promised the cars would be built in res number order. We also upgraded to Leather and Air each 3K, so that we did not have to wait longer.
We feel mislead, The thought back in Aug - Nov, was to hurry and lock in the 5K, and then for the few holding out, let increase the price in 2013, and get more to commit the 5K. Not cool in my books.
We have made a huge investment into the electrical, sizing our PV solar by and extra 50% to handle the two cars. That is already spent and installed.
If the reservation sequence number was not important, on the Model S Reservation Certificate I got with the 5K deposit, in hand with a black sharpie, Chuck Lusin #8,467.
Quoting from the Model S Reservation Aggreement: "4. Order Process. "Production of your Model S will then be commenced and your deposit payable under the Purchase Agreement will be held by Tesla as a non-refundable deposit" I'm not a lawer, but "Production of your Model S will then be commenced" sound alot like they will be building it then.
If they would rather not build that pesky 40kwh car, then they should eliminate it as an option, return our deposits and be done with it.
At this point, I know that if and when i do receive my car, I will probably have negligible tolerance for any of the weird little problems that pop up in some owners' cars. If I do decide to go ahead with this purchase (assuming I am ever really given that opportunity), I may be setting myself up for a whole lot of additional frustration, and I'm not sure I really want to do that. Like Brian, I have gone from being a huge Tesla fan to being a disgruntled customer.
Note that it wasn't stated that production "will" begin later this summer. Production is "expected" to begin then. Assuming "later this summer" means late summer, we are talking about a minimum of another 6 month delay from March.
And that's a six month delay without the courtesy of a notification, let alone an explanation or apology.
I'm starting to feel like an illegitimate stepchild that they are kind of embarrassed about and who they would rather just went away.
Unlike an ICE, I have spent a substantial amount in PV solar to handle the car. SCE and everybody is going to think what a fool, 6 more months, Dude they have your money and you have NO car.
I can't wait to tell my wife, after talking her in to a second car. Not happy campers!
Hey Chuck, we really should let this go until tomorrow and get some sleep.
Yea, you are right. No other group had be delayed this much.
40 kWH customers put up the same $5K as other non-signature Customers. Like Chuck, I also invested thousands of dollars in infrastructure costs for an electric car. I installed additional PVs, but unused surplus energy is at the end of the 12 month anniversary date is forfeited. Keeping in mind that our energy costs are $0.36/kWH, so that is not a negligible sum. I hope that someone in Tesla marketing is monitoring this thread. They are being very inconsiderate to 10% of their reservation holders to generate a bit more margin and definitely causing ill will. How many 40 kWH customers anticipate being repeat customers?
This gripe is legitimate - TM has made business decisions that have the effect of stringing along 40KW reservation holders. (Even if that wasn't the intent).
I think TM needs to mend fences with them. Here is my suggestion:
If you have a 40KW reservation and signed an MVPA, TM will refund your money on request, but grandfather in your option to purchase at the original price when the 40 starts production.
This would be a good faith gesture to credit supporters who've loaned them money. I think it would fix the problem and reaffirm folks' faith in the company's decency.
Reading the articles about 4th qtr results and the comments from Tesla, it sounds like they aren't going to start production of 40kwh models until production is more efficient. The said line workers were averaging 70 hrs per week in late 2012 and are now at about 50 hrs. The want to get to 45 hrs soon. This is an optimistic perspective on what is really holding production of 40kwh models back. I'm sorry, I do not believe that less than 10% of active reservation holders are 40kwh. Maybe its less than 10% for active 40kwh vs all reservation since day one or running less than 10% rate for newer reservations.
Tesla has pushed customers away from the smaller battery pack with prioritization and not offering supercharging and slower performance. Their stores don't "sell" much except trying to up-sell away from 40kwh. I understand their cost dilemma and need to reach profitability. I can accept this as the excuse for further delay but not reservation percentages. At some point the good will lost will outweigh the cost savings. It appears to me we are at that point. It is time for Tesla to suck it up and honor their commitments.
Mark K -
Not even close. What they need to do to mend fences is to apologize and then start building the damn cars now.
If I get my deposit back, I'm done with them forever.
Since they don't even offer the 40kWh car outside the US, it is clear they are only offering it here because they needed to meet the price point of under $60k for the base car. I suspect that the costs of the base car are high (read the report about the parts being flown in, getting poor prices from suppliers, etc), and if they ship a number of 40s they will have horrible gross margin.
Maybe the answer would be to offer long-term 40kWh reservation holders a discount on upgrading to the 60.
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