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Letter to George Blankenship

Posted this letter to George Blankenship today. Thoughts?

George,
I am a long-time fan of Tesla with an order in for a P85 (VIN: P17616) due to be delivered on August 22. Let me start by acknowledging what an extraordinary thing you all at Tesla are doing for your customers and the world at large. Thank you.

I am writing today because I noticed that Tesla is now offering the Parking Sensors for $500. I would love to add those to my configuration, but I am seeing in the forums that Tesla is only allowing me to add the sensors if I am willing to reconfigure my order, which would cost me several thousand dollars more than my current $114,453.00. I have already arranged financing for this amount. I have already signed the Tesla purchase agreement. All I want to do is install the parking sensors that you are currently offering.

This seems grossly unreasonable. And, in the past, Tesla seems to have always chosen the reasonable course.

Given Tesla's interest in providing world-class customer service to people willing to spend more than $100,000 on a car, I would hope that Tesla would be more accommodating for those few of us who fall between the cracks and have made a commitment, arranged financing, signed the paperwork, but whose car has not been built or delivered yet. I have to believe that the parking sensors will be available as an aftermarket upgrade sometime in the near future (likely at a higher cost than the $500 Design Center option). I also have to believe that it will be more costly to add the $500 parking sensors as a retrofit, since you will likely need to remove the nose cone and rear numbers, drill some holes and install the sensors. If that is the best you can do, I will wait for the retrofit option. However, this seems like a classless solution being offered by a very classy car company. Is there not a compromise between paying thousands of dollars for reconfiguring the car just to get a $500 feature (A feature that probably should have been part of the Tech Package already) and being forced to wait until the car is completed, then have to bring it all the way back to Tesla, wait for days, and pay extra for the retrofit? This doesn't sound like world-class customer service to me.

The minor cost of accomodating those few of us who are in this situation would seem trivial when compared to the loss of image to the elite Tesla Brand. Or, at the very least, would it not be more indicative of world-class service to offer to install these new options in those cars currently going through their builds for some incremental amount above the current Design Center List Price but below the expected retrofit price. Everyone would be a winner and you would once again be viewed as stepping up to another level of customer service.

I hope you can resolve this. In any event, I remain a big fan and a hope to be happy customer driving my P85 very soon. Thank you again for all that you and your employees do for us.

Warm regards,

I find myself closest to @raven's point when all is considered.
Many of you will disagree but the car is what the car is when you push the button and order.
My S85, tech, Pano, sound, air suspension, (102k) configured, is what it is.
I personally am thrilled it will be mine on Thursday and yes, I would love the upgrades but they were simply not there when I ordered.
Ok, upgrading a tech car should be simple and not gouge you, but I ordered what I wanted at the time and I am very happy that in a few short days what I asked for, ordered and am paying for will be mine to drive.
Sure, Tesla should do a better job of announcing new features so that those that care to can wait and order, but, would you want them to stage these upgrades like new models? Something new only every 3 or 4 years?
Would you,like them to wait to upgrade your car with a new tech version only once a year?
Face it... This is all new , and it's new to them too.
Sure, forums are a place to "bark", but , be careful for what you ask for....
I like my upgrade opportunities on the fly... Not staged as an event every 3 or 4 years.
Sorry,
Sailor

Maybe this will settle some issues for some folks as it did for me...

I just called the Sr. Delivery Specialist, I have his cell phone number. I am really happy that he took my call on a Sunday afternoon, another reason why Tesla is different. He seemed quite knowledgeable about all but one of the new options. He told me quite confidently and in no uncertain terms that the new sound package was the same old "studio" package, just rebranded and repriced to better reflect the value of the product. The same applies to the active air suspension - new name, same product.

He said he wasn't sure about this one, but thought that P85s under the older option structure did come with the extended Nappa leather on the dash, doors, etc., but again he said he wasn't sure and this is an area of some confusion. With regard to the lighting package, he said it's the same as what has been shipping with the P85s but with the addition of two interior lights in the passenger row.

I asked him point blank whether he would stay put or re-price to get the "new" options. He looked at my order, laughed a little, and said to stay put at my price is a total no-brainer. He said that he is not in sales and has no horse in the race, but that $500 in parking sensors are totally not worth paying the increase in cost and considering that I'm already getting 90% of what is now being sold at additional cost.

That made me feel a whole lot better about not changing my order and staying put.

I was told that the extended napa leather was a new option

Another update - got a call from Tesla Headquarters today (OK, so they get points for calling on a Sunday afternoon...) wanting to answer my questions about adding the parking sensors to my Model S that has been ordered but still at the "sourcing parts" stage, that I'd emailed my local Tesla rep about earlier.

He reiterated what's been said here - I had the option to re-configure from scratch and add the sensors, or stick with my current order. When I pointed out that would cost $7,500 more, he too said that didn't sound like a very good deal, and I should stick with my current order and enjoy my "early adopter discount".

Also, he confirmed that the audio system, leather seats, and interior lighting options are identical to the previous P85 configuration, only that they were "re-priced to better reflect their true value" or something like that. Didn't ask specifically about the extended Nappa though.

Still not happy, but like AmpedRealtor above, made me feel a little better about the situation, and about Tesla as a company.

Oh, and the guy said to check back with him in about 30 days because he'd have a lot more information about a possible retrofit option for the parking sensors with pricing details. I gotta think it'll be less than $7,500...

Early adopter discount. I have to remember that one. What will the price be in Dec. 2013. may want to sell my 2011 volt and try out a tesla but not right now.

I that the same for the old S60 config also

Well, it sounds like they are definitely NOT going to offer any options for those of us stuck in this situation. I just heard back just now from Jerome.

The only options he said Tesla would offer for those in this situation are these below:

- Build and deliver the car as ordered (no parking sensors)
- Reconfigure the car with its current options plus the parking sensors and re-price the entire car
- Reconfigure the car to a different set of options which include the parking sensors but is closer in price to the original car

I guess the best that we can hope for is some retrofit option that doesn't cost an arm and a leg and fairly easy to add in.

He ended the email asking how I wanted to proceed and as with most people, I've opted to move forward without them.

I did ask Jerome when there might be some announcement on a possible retrofit option after I get the car and what it might cost? So I'll post back once I hear.

One thing I'll say about George and Jerome and some of the management.... they are extremely hard workers. No one can take that from them. Jerome is still in the office on a sunday night.

The retrofit option sounds like it will be expensive. In Jerome's words, "Retrofit should be possible, but it might be quite expensive. The fascia are likely needing to be replaced, since the holes need to be made by a special sonic punch machine, which is located in our Fremont facility".

So it sounds like in the future if a retrofit was needed it might have to be done there in Fremont. Ouch.

Here's the official word from Jerome in response to my letter:

----------------

Dear:

I am the VP of sales and service, reporting to Elon. Thank you very much for your order of a Model S. We are looking forward to building and delivering the car for you in the coming weeks.

I appreciate your interest in adding the parking sensor to your existing order. Unfortunately, we cannot add this new feature to an order with the "old" prices: the entire vehicle would have to be re-priced. Price, options, and terms are all set at the same time, similarly to other companies.

We can consider some possibilities with you:
- Build and deliver the car as ordered (no parking sensors)
- Reconfigure the car with its current options plus the parking sensors and re-price the entire car
- Reconfigure the car to a different set of options which include the parking sensors but is closer in price to the original car

Please let us know how you would like to proceed. We appreciate your support. Best regards,
Jerome Guillen I VP for service and sales operations. Model S program director I jguillen@teslamotors.com I 45500 Fremont boulevard, Fremont CA 94538 I tel 650.681.5390 I mobile 503.970.5217

Yep Thorens. I got the same identical email from Jerome. I do have to give him credit for staying in the office on a Sunday to email us back.

Originally I was going to just go ahead with my order as planned. But in hearing his follow up email about it probably being a "quite expensive" option to retrofit the PDC, I think I might go ahead and reconfigure as crazy as that sounds.

It will be more expensive but I might want to bite the bullet now and do it rather than later because Jerome made it sound like it won't be a simple retrofit and could take time and it does NOT sound cheap.

I didn't like the red piping on the Performance leather seats anyway so I could get rid of that but I think I'd pretty much keep everything else.

I'd love to hear some thoughts on reconfiguring assuming that a retrofit is NOT going to be easy or cheap?

I just asked Jerome assuming I DO reconfigure and pay the more expensive price, what the timing would be because I was getting conflicting information. With one person saying it wouldn't change the date and another saying several weeks delay.

So for those of you in my situation I asked him to please let me know and give me an ACCURATE estimate on timing assuming I reconfigure.

My thinking is I'm the type of person that doesn't change cars too often. The retrofit option definitely doesn't sound like it will be cheap or easy and I can't imagine not having it for many years as much as I parallel park. The safety aspect of it as well having young kids is worth it to me to have.

Let's see what timing estimate to gives. He said he would get back to me tomorrow.

"VP of sales and service" ?? - I thought George was VP of sales. Or did Jerome just put sales as short hand for sales operations?

I'm not going to indulge in speculation...

I understand how frustrating this can be, but as a Model S owner that took delivery 2 weeks ago, take it from me and just get the car and enjoy the lower price, the car is awesome and you will be very happy with it. Also, coming from a previous car with PDC and no camera, to the Tesla with rear camera and no PDC, the camera is more than adequate and actually better than PDC. This sort of options change happens all the time with all car companies, nearly every model year, as well as price increases. I pre ordered my last car in 2011 as a 2012 model year because I wanted some of the newer options, but paid not only the higher 2012 price, I couldn't negotiate much on the price because the dealer had a lot full of 2011 models they wanted to unload. Just be glad you're saving several thousand dollars and enjoy it until you get your next Tesla which I know will be a better car than the last one.

As for the retrofit option, I hope they do offer it and I definitely don't buy the concept that they need to drill the holes in the panels at the factory. They could definitely drill those in the field. Selling upgrades like this would be very unusual for a car company, but Tesla is not a normal car company, so I hope they go forward with it. It may help values stay high, which will also help them sell more new cars as I don't think too many people will buy a new $100k car just to get some of the new options.

I received the exact word for word email from Jerome as well. I'm impressed with his quick response but I'm still disappointed with the solutions ( or same solutions as before ). :(

I received the same cut-and-past email from Jerome too. :)

Is there an anybody re-configuring with the "Ultra High Fidelity Sound" upgrade? I'll probably leave it out, because it is hard to justify the price going from $950 to $2500 if the components are exactly the same. The new specs list the basic system as 200W 7 speakers.

Well there you have it. This one can now be put to bed. Case closed.

@greenmachine,

I originally ordered the sound package but if I decide to reconfigure I am NOT going to add the sound package this time around. On the test drive it wasn't I pressure to me. But for $950 it was semi worth it but I don't feel the same way at $2,500.

The only things I won't add if I reconfigure is Performance seating as I didn't like the red piping anyway and the sound. But adding everything else. I'm waiting to hear how long the delay would be.

Looking at all of the new numbers, I've never been so happy not to have something.

As an owner I hate to say this:
You've been screwed by TM, and you should get used to it.

There almost certainly won't be a retrofit option. If there is, then it will likely cost the same as if you recalculated your order with the higher prices and sensors.

TM is making this type of behavior a habit. It's SO disappointing! I'm glad I got the buyback guarantee. Unless TM begins to make amends for this behavior, I'll be selling my car back in 36 months.

Just imagine what will happen when your warranty expires. You're going to get f#^*ed...and you better like it.

EAdopter,

I'm not sure what prompted your attitude toward Tesla, but this issue does not warrant your attitude. Tesla made it clear when these people ordered what car they would get. Everything was agreed upon, and Tesla didn't try to change anything after the fact.

Someone who wants parking sensors is basically saying to Tesla: Yes, I agreed to buy this car at this price, but now that I've seen this new thing, I want to amend our agreement so I get something else I want, and I want to get that something on the same terms you are offering to someone else who is paying more for the car.

What would you say if after an agreement was made, Tesla suddenly decided that they wanted to change the agreement to get something new that they wanted? Would they have the right to complain if you wanted to just go through with the original agreement? "We noticed that you paid a higher margin on your BMW, so now we want the same margin on your car, so please pony up another 2k..." Would you stand for that? I don't think so.

Fairness has to go both ways.

I hate so say this, but I kinda agree with eAdopter. I feel the new price increase reflects that the company is under tremendous amount of pressure from stock shareholders. Tesla needs to hit their promised 25% profit sooner than later.

I understand there will be new features added to newer models but I don't recall seeing 10+% price hike from year to year from other luxury cars. When is the last time you see a high demand luxury car permanently raised the manufactured car price due to higher demand?

Yes firerock, the manufacturers don't usually raise the price due to high demand. That is the job of the dealers! They ask for a ridiculous price, and if you refuse, they go to the next name on the list. People paid 20% more than I did for my Subaru because it had just come out when they got it, and was in high demand.

I've now been screwed by TM twice and I'm sick of it. I love the car. The SC teams and service are good. But I don't agree TM corporate is treating people well. In fact, I've now read many stories that disappoint me - far too many.

This is not MB or BMW, well established brands. People purchasing a Model S are putting a lot(!) of faith and money into a company that could evaporate in a year or two. I think TM needs to reciprocate by making these purchases more(!) than just good. Every purchase experience needs to be excellent(!) or TM will lose the public trust. The entire world is watching.

A purchaser who's car is not yet in production shoould get the sensor upgrade for $500. This is how TM can show the world it's world-class, not money-grubbing. They need to provide fair warning of price increases. One way or another, every purchase must be right.

I'm an owner. I'm a shareholder. I expect nothng less.

+1 EcLectric

In general, expectation management is key.
Customers want to be able to anticipate what's coming.

As I said before: some kind of roadmap about future developments -both large and small- would lay a basis for further communication. Internal as well as external.
Being as open as you possibly can, without hurting your marketing plans.
For example: a development release schedule with functional descriptions.
Tesla has to walk a fine line...

Although, the high level of transparancy would set them apart from the competition and fit greatly into their direct/internet business model and strategy. The transparancy would work as a platform for (prospect) customers's faith to grow into trust. That future options can be retrofitted/upgraded at a fair price, if technically possible.

O, and yes, I am a con-sult-ant. Indeed knowing things better and here to both con and insult... hahaha
(@Tesla: should you need some more assistance with extra conning and/or insulting to be done, I would be available for y'all. My hourly rate has at least 3 numbers before the dot. After signing me on I would tell you that's in euros and EU notation, not US... hahaha dot is 1000 and comma is decimal separator)

O, should you wonder what the ant part of consultant stands for:
we're so busy, we have to write time with each of our 8 legs concurrant(ly?).

Oops, forgot to press the key before posting for grammar/spell checking... hahaha

How is TM not treating you well, I am about to pick this fine automobile up next week and getting everything that I had asked for. You on the other hand do have a choice. Fact of the matter is, you want PDC's for $500.00 and what about the poor guy who is ordering now, is that fair for him..no. Keep innovating TM, you obviously have come out with options that every one wants but some don't want to pay for.

George,
PDC is a safety item that should have been included with the Model S from the beginning. It not only aids in parking, but also prevents injuries. Anybody who has small kids, pets has to watch out for accidents. With my Model S, I have to make sure my young kids are not around the car, before I drive away. Of course, I have done this even before PDCs showed up. However, PDCs do add a layer of safety. This is not about upgrading a sound system, leather interior, wheels, etc after the order has been placed or the car delivered.

I understand Tesla management has a business to run and have to make a profit to continue developing BEVs and invest in factories. However, I feel that safety items should be available for upgrade at reasonable prices.

While this is price change was surprise to most of us, there seems to be a general sentiment that Tesla deliberately and maliciously sprung this on unsuspecting owners to satisfy the demands of the wall street fat cats.

Tesla has a multi-year business plan stretching out at least as far as 2017 and probably well beyond and with the exception of a few delays seems to have been executing it pretty well. Most decisions seem to have been made years ago, and it wouldn't surprise me if this decision was the same.

Given the very strong statements Elon made about 25% gross margin a long time ago, it is quite possible if not probable that this change was always planned, and that the nuances of exactly which spec cars and which options would be most/least common are the only things that have affected the decision.

As an owner I clearly want Tesla to succeed in the long term. There has to be a balance between the harsh realities of running a multi-billion $$ public business and meeting the expectations of every customer.

Yet again Tesla have REALLY screwed up communications, and the implementation of a change. Could they have handled it better? Absolutely. Would the price still have changed? Absolutely.

Tesla needs to get a new head of communications and sort that mess out, but that's about the only take away I've got from this. This is still a new company in a very speculative business. Things are always going to change.


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