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Why Reserve?

Please don't jump on me for asking this question.

I've been following these forums for awhile now. And I see everyone reserving their model s. I just don't know why. As I'm reading over the forums, I'm seeing production starting mid 2012 and deliveries ranging from late 2012 - 2013. I've also heard horror stories from other car makers of their delays in production. So why reserve? Why not just wait til the car actually comes or, then buy it? Is their any benefit to reserving besides the reservation may get you the car a month earlier ? Or is it more drastic of a time frame?

Might be a dumb question, but I've never reserved a car before.

@Decfolife,

Excellent question! I've also never reserved a car before, but I've been on the Model S reservation list for just about a year now. Right now, there are approximately 7,400 reservations. By the time production begins in mid 2012, there will likely be about 12,000 reservations. Tesla is only making 5,000 to 6,000 cars in 2012 (including 1,000 Sigs).

Currently, the only way you can receive a car in 2012, is by reserving a Signature Series car ($40K deposit, ~$90K total cost?).

After shipping 6,000 cars in 2012, Tesla will probably begin 2013 with an orders backlog of at least 12,000 cars. Tesla plans on shipping 20,000 cars in 2013. So, if you never pre-ordered, the earliest you could expect to get a car would be late 2013, or 2014. Simply put, demand will exceed shipments at least until then. UNLESS, Tesla operates 2 shifts in 2013, increasing production to 30K or 40K units. Though, I doubt they will. They've still got to figure out a way to logistically deliver more than 20K cars a year, with less than 20 stores nationwide.

"Is their any benefit to reserving besides the reservation may get you the car a month earlier ? Or is it more drastic of a time frame?"

As David M said, it's far more drastic than a mere month. Until they start up a second shift (which I don't see happening for a long time), I think that orders will exceed production. I think they'll be happy with that for several reasons. Marketing, planning, labor, supplies, etc. etc.

I've never even ordered a new car from the factory before, much less "reserved" a pre-order! Since there won't be an inventory, folks will have to order their personalized model each time. That's why they're opening up their sales stores in malls rather than using the high-overhead dealership model. It's all about presentation and expectation setting. It's a whole new way of selling cars!

@Decfolife,

In addition to the reasons David stated, I had one other; My deposit was placed two and a half years ago, while the number of hurdles for Tesla to bring the S to market where still too many to count. One of the major comments from most naysayers was that there simply was not any true demand for any EVs. By placing a sizable deposit, it showed Tesla there was true commitment to the path they had chosen and showed the naysayers they where wrong.

Peter

Thanks for everyone's responses!

Oh well, no Tesla Model S for me. Don't want to wait until mid 2013 to get the car. That's just too long for me. :(

I'll live bicariously through you older reservation guys. Enjoy!!

No need to wait that long, just do what I did and drop $40k on a Signature Edition. :D It's only money.

@Mycroft, Excellent!

However, I had a tough decision:
1. Put the $40K deposit on a Signature, or
2. Put $5K deposit on the (P), and use the other $35K for TSLA shares.

Obviously chose #2.

Fully expecting share price to hit $50 by Fall 2012, cashing in to get $35K off the price of my Model S. Should be exciting to see if it all plays out that way.

Decfolife, I suggest you reserve now. If you think about buying a $60k-$90k car, the $5k reservation fee (100% refundable) should not be a serious hurdle. Then buy some cheap ICE car to bridge the time until your Model S is delivered -- and live happier while enjoying the wait! :-)

I dropped my EUR 4k immediately when the Model S was announced in April 2009 (and at the time, it was only 90% refundable). Why? Because I wanted to be the first in line (after Signatures, let the rich guys buy their way to the front of the line and let them find the early problems first ;-) and because I wanted to support Tesla, see Peter above. But as a side effect I am more interested in alternative fuels than ever, have learned a lot, have talked to interesting people, proudly wear a Tesla shirt, and feel like a child waiting for Christmas whenever I want.

I've also heard horror stories from other car makers of their delays in production. (Decfolife)

Tesla is not Fisker. In many respects. Delivery was planned for 2012 from day one, and until now it seems that they have met every milestone on time.

If you wonder why you should want one at all, with or without reservation, continue reading here:
http://www.teslamotors.com/forum/forums/why-do-you-want-one

Decfolife,
As delivery time comes, some reservation holders will decline, which is why they are slightly over reserved at this time.

Also, your reservation number is not your absolute position in the production line. At the recent factory tour we were told that the Signature class would be produced first, limited to 1,000. Next would be general production run starting with the 300 mile battery models, then the 230 mile battery models, then the 160 mile battery models.

Right now, Tesla does not know which reservation owners want which battery packs. I guess they will start calling us in numerical reservation sequence and getting signed contracts. Only then will we know our delivery sequence.

My reservation for the general production run is 4,142 and I'm opting for a 230 mile pack which should put me somewhere in the fall of 2012. Even with a late reservation it's possible you could ship before me by ordering a 300 mile pack. I guess you'd have to talk to the dealer. Worth a try.

See my post in the Projected Delivery Dates thread, wherein I tease the 230/160 model reservation holders by saying that when the 1st Signatures and 300-mile models hit the streets, TM will be flooded with so many 300 orders that the others will be bumped further and further back in line, so that they'll be lucky to get delivery before 2014!!
;)

I would hope that they would still honor early reservation holders. They originally promised 2nd quarter of 2012, without knowing what pack was being ordered. I expect Sig. and 300 packs to come out earlier, but doubt they're going to give out a 300 pack order made at the last minute over people who ordered a year or two ago.

@David70

I expect a fairly simple ordering:
1. Process SSL
2. Process S
3. Process R
4. Process P

where Process means:
a. Contact reservation holder to offer opt out
b. Contact reservation holder to begin configuration
c. Configuration complete, battery size chosen
d. {Configuration, RH} goes into the production queue
e. Production branches at some point based on battery size

They might comingle SSL and S, and they might comingle R and P; their choice.

I doubt they will ramp up 300mi battery pack production to 100% and leave 230 and 160 at 0%. They might have 80/10/10, 50/25/25, 40/30/30, or adjust dynamically so none of the branches of step E get too backlogged.

All that said, there might be some annoying priority inversions but I doubt they'll let it get too extreme like the example you mentioned.

Brianman, I have a feeling they will not begin producing a car they don't feel reasonably sure they will get paid for. They'll probably ask for some amount down or credit approval or something prior to beginning production of someone's vehicle. That will cause some to have to decline and people behind those reservation holders to move up in line.

@mwu

Huh? That would be part of step c.

Gotcha. I wasn't trying to discredit or devalue your post. It just wasn't explicitly part of the process listed, but felt it deserved a mention.

Why Reserve?

It's a terrible disease called Early Adopter Syndrome that compels some of us to do this.

But don't worry, if you're asking the question it means you don't have the disease. ;-)

Larry

Taking out the crystal ball . . .
I believe that sometime after final pricing is released, Tesla will contact the first 5,000 reservation holders to determine which battery and which other options they will likely be ordering. Probably 1Q 2012. They need this information to know how to stock up, and to determine a preliminary build order. Then, based on the preliminary build order, when they are within 90 days of production of your vehicle, you will be asked to finalize your battery and other options.

They will HAVE to draw a "line in the sand" with regard to reservation number and production order. I cannot imagine that (P)9,550 who reserves on 4/9/12, selecting a 300mi battery, would come before (P)830 who reserved on 5/09/09, selecting a 160 battery.

I fully understand that Tesla needs the average unit price to be much higher in 2012, in order to achieve profitability sooner. I'm sure they will have so many orders by 2Q 2012, that they could easily build only 300mi batteries in 2012 and sell every car (if that's what they chose to do). But I suspect that they will draw a line in the sand and honor older reservations for 230s and 160s in 4Q 2012.

Hopefully not impacting my 3Q 2012 delivery (P)2,624 - 300mi. :)

Decfolife. “Oh well, no Tesla Model S for me. Don't want to wait until mid 2013 to get the car. That's just too long for me.”

None of us ‘wants’ to wait. The ‘S’ is that good, that advanced, and no car or carmaker has anything remotely comparable. I have seen and ridden in an “S” and it is worth the wait (to me and 8,000 others). I’m sure your current vehicle will last another year or two or three.

The longer you procrastinate… the longer you will wait. When the auto press gets their hands on the ‘S’ they will go crazy and a tsunami of orders will follow. “I gotta get me one of those,” is going to be the consumer war cry when the man on the street sees one of these silent beauties cruise by.

P.S. If a traditional manufacturer had designed and built the “S” the independent retailing dealerships would mark up the car by another $20-$25K! Not Tesla!

To bring the rhetoric down a bit, the Tesla is at least 3 times the price that nearly everyone I know would normally pay for a car, even if they bought it new (which they rarely would do).

In fact, normally, I wouldn't pay more than $10k for a used car. The fuel and ICE maintenance savings cannot even come close to justifying the expense. The only reason I'm paying 10 times my normal car expense is because a) the house is paid off, and b) I truly believe electric vehicles are the future and I want a "classic" now.

If you don't have this drive and to you, the Model S is just another means of luxury transportation, (albeit a cool one), then you should probably skip the reservation list. However, if you believe in it and you want, no, need to be a part of this and you can't scrape up the $40k for a Sig, then put $5k down and spend your time waiting for the car saving up the rest.

Didn't Tesla report that the Model S is realistically more like $35k as apposed to $50k after you take into consideration the ROI of not fueling it and maintenance costs? When you look at in that way, it's not so far out of reach, it is still $10k more then I spend on my last brand new car back in 2003 but one that I would fork out happily for a car this beautiful both inside and out... :)

I think those "savings" are overblown. Yes, you'll save money on fuel and maintenance. BUT, most used cars can be maintained fairly inexpensively at independent mechanic shops.

Tesla vehicles, for the most part, can only be serviced at Tesla. I'm definitely opting for the extended warranty and I'll continue renewing it as long as I can. I gather that this is normal for high-end cars, (BMW, Porsche, Mercedes), but it's not something I would normally do with the cars I've purchased in the past.

"But I suspect that they will draw a line in the sand and honor older reservations for 230s and 160s in 4Q 2012."

Hi Dave,

I think that your crystal ball is pretty good, and I agree that Tesla will draw a line so as to treat non-300 reservation holders fairly.

No doubt things will be somewhat fluid after the pricing is released. For example, a sizeable number of Signature reservation holders will be surprised when they discover the car they want prices out close to or over $100k. So the question is how many will drop back to a general production car, and if so, how will Tesla handle that? In fairness Tesla should look at the date of their original reservation and slide them into the general production line at that date. I also think that there will be attrition from all reservation holders as folks realise that this is going to be an expensive car fully loaded.

Of course the other variables that effect whether any non-300 reservation holders get their car in 2012 are how quickly will Tesla be able to ramp up production rates to achieve their target numbers of between 5,500 to 6,000 cars in 2012, and of course when will production actually start. Wouldn't it be great if they got an early start?

Larry

@Mycroft I am paraphrasing and yes, that maybe overblown, but the whole care consists of a bunch of batteries, an electric motor and the transformer to power it unlike the million other things that move and can go wrong in a BMW, Porsche, Mercedes!!

@Larry, - Agreed.

I'm not sure I understand the question from the original poster. Does he want the car, or not? If he wants one then logic dictates he should reserve one... now. This is not some crazy concept that only goes with a new electric car by the way. I ordered the Porsche Boxster S, the first model year that the S was available. From the day I placed the order until the day I took delivery twelve months had passed. So, no, having to wait for THIS car is not that big of a deal. I'm excited, I do want it to be delivered. But I have waited for a car before. And I'm sure some of the others who reserved have as well. I happen to believe it's worth the wait, I happen to believe it's absolutely worth reserving. And I absolutely believe I'm not alone in believing that.

So, you can walk on to a lot and buy some average car, or even an above average car. But it won't be a Tesla Model S.

I am by no means wealthy, however, here in California getting a new car give you 'rockstar' status! I have owned a few first model year cars in my life so far, and I will tell you, for me, it's an amazing feeling having hundreds of people ask you about your new car! Again, this is not for everyone, however, I have a feeling this car will be like having a new $300k exotic, as far as 'attention getters' go!

Either way, I also want the opportunity to drive in the HOV lanes ASAP, and snub my nose at $5.00 a gal gas (BTW... It's fall, and gas is at $4.00 a gal right now, so for all I know, we could be looking at $6.00 or $7.00 a gal by June of 2012! eeeeeek!)

Average those gas prices into your decision to buy a Model S and that is a great motivator if for no other reason and there are a gallons upon gallons of other reasons as well (Pun Intended)

Don't worry about buyers remorse either. I absolute know I'll smile everytime I drive by a gas station.

@ThomasN, I'm smiling now at the thought of it and I get highly annoyed every time my wife asks, "when are we buying a new car?" I tell her that ICE based cars in my eyes are obsolete and Hybrids are cheap toys and bad idea's that mask another ICE. She then just looks at me funny and so I smile again. I guess, as long as Tesla continues on it's path and get's me a car before the end of 2012, I'll just keep smiling and hope nothing get's in the way!

About the 300/230/160 priority issue, it's a fairly simple yes/no question for TM: "Will all new 300 purchasers go ahead of the smaller battery deliveries?"

I wonder what they'll say...

I've got to go with the "first model year" effect.

I had BMW Z3 number 10 in Dallas back in '96 and it was as close to being a rock star as I've ever gotten. I'd get the #1 spot at valet parking, VIP lines at nightclubs, and even women (I'm sure young Roadster owners know what I'm talking about).

Years and a wife later, I don't go to many night clubs and while having women want to go for a ride would be nice, its not happening.

What IS going to be fun is pulling up to the country club or restaurant in my Model S and making the Maseratti's, Bentley's and various other luxury cars in the lot, look tired and outdated.

So, vanity is another reason to reserve a Model S. There, I said it.


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