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Model S service plans

FYI: Model S service plan info online now: http://www.teslamotors.com/service

I read somewhere- can't find it now- that the main reason for the REQUIRED annual maintenance is maintenance of the battery pack. Anybody else see this?

Let's do the math from a corporate standpoint:

For each service appointment:
Estimate 2 hr labor (perhaps at $80/hr since they may need to be highly trained).
Materials: maybe no more than $40 (on average per service)

So, total cost to TM is: $200 per service

The plan to charge us $600/vehicle for a visit

Net to TM is $400 per vehicle visit

20K Model S (maybe more, but let's assume 20K for this math)

That's $8M annual net to TM's bottom line.

Now, they probably need to pay the software engineers and QE folks some for the continuous upgrade/testing of our s/w. At Silicon Valley "burdened" labor rate of about $160K to $200K per engineer (on average), that will pay for 40 to 50 engineers. Burdened rate takes into account benefits, office costs, stock options, etc.

So, this is not out of line from a TM corporate standpoint - especially if they intend to make some money on service (which all dealerships do on ICE cars).

So, in short, IMO, we are partially paying to keep the car "technologically" viable by having s/w engineers continually adding features and "fixing" any possible issues. This is a good thing since it keeps the resale value of the Model S high versus an ICE car that is "frozen" in features once it leaves the lot.

Just a few "cents" for thought.

Tesla labor rates are far more than $80 an hour. The reason the Roadster service is so expensive is because they must physically remove the PEM and do a long list of inspections of the vehicle. Remember part of the purpose of the Roadster was to be a R&D vehicle for future Tesla models. When you look at cars such as the Fisker Karma that include maintenance (much more maintenance than a Model S due to ICE Motor) as well as BMW etc the value proposition just is not there for the Model S. With the >30% margins that Tesla is making on the Model S they could have easily included maintenance (at least for the higher end Performance Models), instead they want to use it as a profit center. The main motivation behind this service program is profit. People would gladly pay a small fee for enhanced function software updates (not firmware)- exclusive of maintenance(much like a new version of computer software).

With regards to the resale value of an EV vs ICE, you are misled. As an EV ages and loses battery capacity the cost diminishes far more significantly than an iCE car. the most expensive part of an EV is the battery, the cost of replacing the battery is not taken into consideration in maintenance costs. After 100k miles and a 70% capacity battery the value of an EV will be significantly diminished.

We drive the Model S because we see a future with this type of technology, not because it is cheaper, more convenient has more features etc than an ICE car. In the whole scheme of things every other vehicle in the Model S' class is cheaper to operate long term.

A friend of mine is about to replace her 2002 EV Toyota Rav4. The batteries (NiCad) are failing and they will be $18,000 to replace. These are obviously old technology. They are buying the new Rav4 with Tesla batteries and drive train.

"jackhub | September 14, 2012

I read somewhere- can't find it now- that the main reason for the REQUIRED annual maintenance is maintenance of the battery pack. Anybody else see this?"

Where did you see that the annual maintenance is REQUIRED?

I don't see that anywhere, and have spoken to a number of Tesla reps who have explicitly said that the maintenance is optional, not required. Your warranty is still intact, without yearly maintenance, as long as you do not ignore warnings about specific system problems from your car.

@smoothoperator...
I agree with your last paragraph.

However, the cost of new batteries at the end of our current battery life should be offset by the cost savings between gasoline for an ICE car and the electricity it costs to operate the Model S over a 10 year period (assuming 12K miles per year). Even at that, there are roadsters that are still operating well beyond 120k miles (maybe battery capacity is lower than 70%, but it's up the each individual to determine when it a good time to get new batteries. So, resale value would be high if the car was sold with a new battery. Otherwise, we've enjoyed the savings of electricy over gas and that savings goes into the depreciation of the car when sold.

But I wonder if the maintenance of a Model S will be easier than that of a roadster. Remember the Model S was build from the ground up versus the roadster. So, I'd expect TM to design for manufacturing (DFM), reliability, and ease of service.

And, yes, I'd actually prefer for pay for upgrades if it meant I also get new features (especially if the annual maintenance is not mandatory or required).

@dahyte,

Right now we can only look at what battery prices have done since the Roadster came out. The prices have not come down at all on Roadster batteries, and some of us who have had to come out of pocket to have batteries replaced in a Tesla Roadster. Reading some of the posts on here and on the other forum, one would think that Tesla Service is all picnics and blue jeans. Once your car is out of warranty Tesla is far less forgiving with regards to replacing items. They nickle and dime pretty badly and it gets quite expensive (far more expensive than my most expensive ICE vehicle).

I am skeptical that battery prices will come down enough to make the EV proposition pencil financially vs an ICE. Right now it is best to look at this as a hobby, feel good, emotional type of reason with regards to procuring a Model S. Looking at it any other way is setting oneself up for a let down. If a few years from now Tesla starts to offer a 10k 85kwh battery, let it be a pleasant surprise; but don't expect it will happen.

Personally, I am outraged by the $600 annual fee. All along, one of the s elling points was that maintenance would be so much easier and less expensive. No oil changes, no fans or belts, no transmission fluid, pistons, etc. It sounded like it should save a lot of money, helping out with the cost benefit analysis of going all electric. Well the annual fee is 50% more than the 15k service for my Infiniti G35. It seems like the reason they waited so long to announce it was they didn't want to put a damper on the enthusiasm for thee car.

To their credit, I don't think Tesla ever said the maintenance would cost less. They just said there would be less maintenance. Of course, you can somewhat mitigate the cost of maintenance in your mind if you apply the value you place on your time.

For those who do not feel they are getting screwed blue and tattooed, the prepaid option may yield more bang for the buck should interest rates go negative. Late address to the time value of money question.

I think the model that Tesla is using isn't the same model that we car purchasers are used to seeing. That is, Telsa is selling a maintenance contract where they actually do maintenance (similar to an aerospace maintenance contract). The dealer's are selling service with a 29 nine point checklist--which means they make 29 checkmarks on a piece of paper in about thirty seconds and charge you for it*. Assuming that Tesla personnel actually inspect each item on the Model S (as shown in the Roadster service pictures) and replace parts that are questionable it's more than fair.

The plan with the Ranger service costs $0.05 cents per mile. This is about the same as the maintenance on the Prius (because I replace items such as water pumps before they break) and far less than the maintenance on the VW TDI ($0.22/mile). So although I would have been tickled pink to have it for $100 per year, that really wasn't a very realistic expectation. On the other hand, I think they should go back and think about changing it to an annual service regardless of miles or better yet base it on predictive maintenance. My thought is, that based on the comments in the forums, there will be far more Model S purchasers driving less than 12,000 miles/year than the few who drive more.

*And that's what they must do, otherwise you wouldn't have the service done, have everything check out okay, and then at the next service find that both pads and rotors require replacing. If a real inspection was performed they would tell you that the pads aren't going to last another service interval. You also wouldn't have to point out any problems (like leaky struts). I suspect they would notice if the engine was missing, but I'm not sure they would catch anything smaller.

See this post on TMC from George B for a detailed explanation of the service plans:

http://www.teslamotorsclub.com/showthread.php/10101-Model-S-Service-Contracts-the-poll-edition%28tm%29!/page47?p=187010&viewfull=1#post187010

I agree with what Bennett R. had to say. I've have had a lot of enthusiasm for this car, ever since it was announced; now, I feel like this is just one additional way for Mr. Musk to increase Tesla's revenue.

I understand that Tesla is a business and needs to make money. What I don't understand is how an EV praised for it's mechanical simplicity and lack of necessary maintenance can require 600 dollars worth of maintenance every 12,500 miles.

I'm sure most of us willing to spend this kind of dough can afford the extra 600 dollars, but that is not the point.

600 dollars is simply too much money for a service that consists of an inspection, system monitoring, remote diagnostics, software updates, roadside assistance, and windshield wipers/brake pads.

With it's regenerative braking, how many sets of pads are you going to go through? Included windshield wipers, updates, and system monitoring? What a joke... Does your Mac or PC charge you for updates? I hope not because updates are created to fix what the engineers didn't get right the first time and now we should pay through the nose for this courtesy every 12,500 miles?

I'm a technology enthusiast and also have some Tesla stocks. I was very interested in Tesla from the beginning of the company.

And I've planned to have the model S for my next car, but after walked out from Tesla's showroom in Santana Row after learning about the maintenance cost, I'm really disappointed.

The real beauty of electric car technology compare to combustion engine is cleaner, simpler, more reliability, better performance. Why isn't maintenance cost getting lower?

What if I'm happy with the current software version and don't want any new updates?

What if I really know how drive the car in such a way that could save the brake pads for a longer time?

What if I want to do all the basics maintenance by myself: windshield wipers, tire rotations, brake pads,..

I know Tesla company is still a young company and really need money to keep things going, but i think the mandatory $600/year maintenance cost is not reasonable.

Why don't Tesla:

* Allows customers to decline software update (if it is not a major update). If it is a major update, it should be free since that is equivalent to a recall.

* Allows car owners to perform some basic maintenances without voiding the basic warranty (battery, motor, transmission..). For example, owner could replace brake pad by himself if he want to. Tesla could sell parts and also provide tutorial video on youtube...

* Customers who don't want to maintenance by himself could just pay $600/year.

I own a Toyota, and usually decline many services offered by the dealer since I knows many of them are not necessary.

Many simple things such as changing air-filter, windshield wipers, tire rotations...are always be done by myself.

I know the Model S is not an economy car, but it should have options for people who has less money, who want to drive it and spend time to maintain it (instead of spending money).

If I spend $50k on an electric car, I really want it to beat my Toyota Camry in all aspects: cleaner, less maintenance, less operational cost (electric).

With $50k, I could just go with Mercedes, BMW, Lexus... if I really want a luxury sedan with all the stupid gadgets and a huge engine.

I think to help reduce the warranty cost for Tesla, it should provide an environment to help owners to reduce maintenance cost in long-term (DIYs, tutorials, parts...). Since it is not about the 4 years of warranty and maintenance, people will expect to own and drive this car for ten, fifteen, twenty years.

Hope this will help.

Thanks,

Phillip Phan
San Jose, CA

phan;
Don't multi-post. You already put this up in General.

There is additional information on the new service and warranty plans over here: http://www.teslamotors.com/blog/2013-model-s-price-increase

Yeah. And the focus of the discussion has shifted to this thread:
http://www.teslamotors.com/forum/forums/extended-warranty-and-service-pl...


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