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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,

Maybe the complainers should just go negotiate with their local dealer...oh, wait...

@TorensP

If all you need are the parking sensors, just get them after delivery. They should be able to install at your local Tesla Shop.... It will cost more than $500 but less than a complete reconfigure.

My car was delivered in Feb and I want sensors. So I know I will have to pay up.

When you ordered I tether you knew that newer options were going to come soon. But you agreed to order based on the options available.... And I gather digitally signed for your configuration.

Take the car and upgrade after delivery.

I can appreciate those that are in the hopper for production to want to add, let's say, parking sensors at $500. What's the big deal...right? Just add them to my existing order which has not yet hit the production line.

I suspect that TM has priced the parking sensors accordingly with the requirement of the purchase of the tech package (which has gone up in price). I would imagine there are supply chain issues, production issues, hardware/software considerations etc that add to the cost. Therefore, to simply add them to an already existing order would do so at a loss (or less of a profit). Is that fair? Who am I to say...I don't run TM.

IMHO, TM has a product you can choose to purchase or not purchase. They are a for-profit company. If you're inclined to support them, buy their car with the options you want, at the price they are offering it to you.

I'm very happy with my MS and with TM.

In my particular case, my car left production a week ago and my appointment to pick it up is next week. So, I am very excited to finally own one of these fine automobiles. I ordered a P85+ with all the bells and whistles and now I see that PDC is an option. Would I have ordered this too, sure. Am I upset with Tesla in any way, NO! Here is my rational. PDC was never offered to me, nor did I pay for it. If my current car was sitting in the showroom without PDC, and there was one beside it with, but 12K higher I would not have ordered the newer one. I understand your frustrations that before a car is even built, can they not look the other way and throw on another option but that is getting your cake at eating it too. Automobile companies do this every single year, they just happen to call it a NEW model year. If you want a 2014 with more toy's, better options at a higher price then go for it. But if you want last weeks model, which is cheaper and may/maynot have the features you want...you have that option too.

I am thankful I pulled the trigger a month ago, and when I pull up behind another Model S with PDC I will know that guy paid way more than I did.

@ almostFitToEat, the cost of the tech package is actually lower under the new pricing scheme. There is no "loss" to Tesla in order to offer parking sensors without re-pricing the other options. The only rationale is that Tesla knows some owners will pay the higher price due to the popularity of parking sensors. Tesla is using this as leverage to get more money out of existing orders. They are just playing hardball because they are the only game in town.

@ Raven,

Congrats on the upcoming arrival of your new car. That has to be exciting and looking forward to that moment myself.

Quite honestly, in your situation I wouldn't be angry either because your car is already done.

Some of you are throwing out all kinds of various scenarios. But not all of the situations are all applicable. I guess it would be different if Tesla was saying, "it's not possible to upgrade to the PDC on this model and you have to wait until next year". But what IS frustrating is they aren't saying that.

They are saying YES it IS possible since your car hasn't yet entered production. We can do it. Oh, we can do it but you have to reconfigure your car pricing. THAT is what has some of us frustrated.

This isn't a situation where Tesla is saying it's not possible to do. Quite the contrary. They are saying it's easily possible only if we pay up! That's what you have to look at.

@Tobi_ger; You order your sausage sandwich. The waitress comes back to your table and informs you that you can add onions...but the price of your original sandwich goes up 10%...plus the onions.

Most of us are holding the onions.

And again, I'll reiterate that I think there would be some fair compromise where we might pay more than the $500 fee. The car doesn't need to be "retrofitted" since it hasn't yet entered production so that would be the easiest time to do it.

I know Tesla will probably come out with some retrofit option later but I believe it still makes sense to get this added now while it's still in pre-production phase.

Hopefully they can come up with some "retrofit fee" that would cover it so it's a win/win situation.

I can appreciate your point, and can fully understand your points of view. However, every car company on the planet offers up New and exciting features, options from year to year. That's a fact, thats how they keep attracting new customers. Look at it from the standpoint of a model year 2013 to a 2014. If the 14's came with PDC but the 13's on the ground were cheaper without, you have the option. Frankly, for the price difference they have now I feel like I got a fantastic deal.

@ Raven,

Oh absolutely I understand what you are saying. And I do understand the 2013 vs. 2014 example. And in that example you are absolutely 100% spot on target and I wouldn't be frustrated.

I'm not going to cancel my order and never even thought about that at all. I'm still excited to get my car.

But I agree with AmpedRealtor it feels like a money grab opportunity. I guess they have the right to do that but all of us customers in this situation have the right to feel like it's not right, not be as positive about the company or their business model or their appreciation for existing clients.

It's easy for people that already have ordered a car and already have them to say "tough cookies" but I'm very confident that if you guys and gals were in our situations with cars not even in production you would be singing a different tune.

Especially when Tesla is saying that it IS possible to add this feature on to our cars. Just for in some cases $8,000 more.

It's amazing how many of us fall into the same category: My S85 ( VIN #18143 ) is due to be delivered On 8/24. Would love to have parking sensors, like my current Volt does. Seeing the pictures of the tight integration with the dash ( rather than an led bar from an aftermarket solution ) looked really well done.

I drove up to my local delivery center to see if I could chat with someone in person. Got to chat with a very nice DS who said that he'd contact the factory with my request for parking sensors, and... about 3 hours later my phone rings with a call from Tesla.

To summarize the very pleasant conversation: Yes, parking sensors are available. To get them, we'd need to build you a new car, you'll go to the end of the line and that means another 6-8 week delay. Oh, and the cost of your car will go up by nearly three thousand dollars. We don't know if or when this will be available as a retrofit but we're looking at customer demand.

Like many of you, I've sung the praises of the technology, the car, and the company to just about everyone that I come into contact with. This little episode will now enter into the personal mythology and storytelling of just not me, but all of the Model S users who had the fortune to fall in this changeover, and it will become part of the example of how Tesla deals with edge cases like this.

So it may be less than 500 people (that's my guess ) who are in production while these options change over, but those people will now talk about this to every person who asks them about their car.

Tesla folks: I'm afraid you didn't handle this one very well. Hoping that a community of people wealthy enough to afford your product and are ,by default, detail-obsessive enthusiasts would not notice new options and prices wasn't a good plan. You should have anticipated this and at least have been ready with a response.

If there's a VIN list, please feel free to add mine to it.

Dan

@ dangentry and the rest...

I feel there would be greater value in everyone individually emailing George Blankenship with their thoughts rather than asking someone to add their VIN # to an email. As a consumer, when you send a letter that has much more weight than just signing your name to someone else's letter. George Blankenship needs to see a lot of emails on Monday morning, not just a few with a lot of names and VIN numbers.

I have already emailed Jerome Guillen and George Blankenship with my thoughts, especially with my sense of disappointment with how Tesla is handling this issue with existing orders. They need to hear individually from people, that is far more powerful.

So please, send your email to both jguillen@teslamotors.com and gblankenship@teslamotors.com. It also cannot hurt to CC emusk@teslamotors.com who has a tendency to step in when customers complain.

@earlyretirement @Raven the damage isn't with current owners or customers waiting for their Model S. They already crossed that mental hurdle, and while the changes are hard to swallow, if they want it badly enough they'll suck it up and pay more.

I think the real damage is with potential customers, and it comes in two ways:

1) Higher prices eliminate a large group of people that were already hesitant at the current price (or who had to get financing and couldn't just pay cash for the car)

2) The precedent is clear: prices will change without even so much as a peep or ahead-of-time warning. I understand "prices are subject to change", but I see it (and I imagine many others see it) as a lack of respect when prices are changed without a peep. And if this gets a lot of coverage, you can bet detractors will turn this against Tesla and argue that Tesla is no better than any other car dealer. And we don't want to see that.

I'm 5 months away from the end of my current lease (ends early January 2014) and am excited by the model S. But now I genuinely wonder how much the MS will cost when I am ready to purchase.

I put down a deposit on July 30. RN939548. I agree to the logic of giving the same price of options to those orders have not been to the production line.

@nonchalance,

Actually I'd disagree with you a bit. I'm not even one of those people that don't think price increases are necessary. Obviously price increases sometimes are necessary.

I don't think people in your situation is anything at all what some of us are complaining about. It's totally unrelated, IMHO.

The sad reality is that the Model S is fairly quickly becoming a car for more affluent people. With price increase after price increase I think it's becoming clearly that not everyone is meant to have one. Tesla says that will come in the next several generations of cars which may or may not be true.

But the car becoming more expensive for future buyers is quite different vs. what we are talking about on this thread.

@AmpedRealtor - you are of course correct. Thanks for pointing out those e-mail addresses.

Elon's email has actually changed. It's ElonMuskOffice@TeslaMotors.com

@earlyretirement I understand that the thread is focusing just on the customers in the pipeline, but as a future potential customer I should point out that many of us are similarly obsessing over prices and details regarding the model S. And the difference is that many of us haven't pulled the trigger yet. The damage here for future customers is that the tactics feel very ... ICE age, for lack of a better term. I was hoping that Tesla would handle this better than BMW (I had something similar happen with my current lease, where the price of an option changed between December and January, but it was settled pretty quickly), and I very much hope that they will do something on Monday

@ThorensP

If there is a VIN list, Please add my VIN#5YJSA1CN6DFP18064 to this list too.

This all seems a little iffy to me. If you ordered a BMW, a Mercedes, a Lexus would you expect to call up and change the order later because you wanted a new color, or a tinted windshield? I don't think so. Or, maybe the 2014 models come out with something your 2013 Bimmer, Mercedes or Lexus
didn't have. That's the way it goes.

Unlike car companies with annual models, Tesla keeps adding updates as they get them ready.
Missing out on them, or waiting for the retrofit later is part of being an early adopter.

I appreciate your pain, because I wanted the Performance Plus package that was announced the day after my P85 was started. Tough on me. That's the Tesla system and always has been. I'll see what the retrofit looks like later.

@ArmedRealtor....adding new features for cars already in production like yours at factory pricing can cost them money since it may require retrofitting. Retrofitting requires more labor work than adding the feature during original assembly. Your point of not costing them money may apply for orders which are not yet in production but not necessarily for cars already in production like yours. I suggest since your car is already in production to wait for their retrofitting program to kick in.

@ JaneW,

Your example is a bit different. We aren't talking about existing vehicles that are purchased on a lot, then a new model year comes out and you want the new features. To make your analogy more accurate... You just ordered your 8 series BMW to be custom built in Germany with all the bells and whistles. Before your car even enters production - it's still e-ink on e-paper in BMW's database and nothing has left the building - BMW announces a new set of options and prices. You really only want to add one of the new options without changing anything else about your order, but BMW says that in order to add the new $500 option they would have to re-price your entire vehicle - including options that you aren't even changing and that were included before - according to the higher prices. This feels manufactured and completely unnecessary. Wouldn't you be irked if you weren't able to add a new option without re-pricing your entire vehicle before BMW even started putting it together?

@JaneW the difference is that the other companies are pretty clear about their timeline. If you want a custom 2014 model with european delivery, you know which model (2013 or 2014) you are going to get when you place the order. The timeline is clear, communication is clear.

This situation might have been better handled by allowing customers to add the option just for the new option price (without having to reprice the entire car). That, prima facie, doesn't break the bank and seems like a reasonable and fair resolution for cars that haven't even hit the production line yet.

@ justineet, I was informed by Jerome Guillen that my vehicle was so early in the production cycle that I could add anything that I wanted, and that Tesla would happily accommodate me at the higher prices and without changing the production schedule for my vehicle. My discussions with Jerome were about building, not retrofitting.

Last time I checked, the USA is a free market economy (...well, mostly). There were no guarantees about future pricing, options, etc on the TM site. Yes, some folks likely have a decision to make about what is or is not important when building their Model S. I bought mine knowing that it did not have parking sensors (something I really wanted), and also was one of the folks who got trapped in the fog light conundrum (listed on the specs, part of my build list, but dropped in forward production without any $$ compensation). Now I will see how (and for how many $$) I can get parking sensors retrofit, and what might be done with the fog light issue. At the end of the day, people, we are talking about a car, a discretionary purchase (and not a trivial inexpensive one at that).

FWIW, I have a background in engineering and physics, and am the unofficial CIO/CTO of my practice. The question I get asked all the time is: 'What is the best______ that I should buy?", with the blank usually filled in with smartphone, computer and the like. My stock answer is: "Next year's model'. Whatever you buy today will be obsoleted in a month or 2, twice as fast and good in 6 months, at half the cost. Don't get mad, just freeze the technology and appreciate what you have and what it does.

I have always said that companies need to do what's fair for everyone, not just a select few who happen to be sitting in the in basket waiting for their order to be processed. What's fair, if PDC's are that important to you and are something that you can't live without, then get on the phone and modify your order and pay the uplift to 2014....done! For those of us who just missed this window by days even, and for all the cars on the ground without PDC's can wait for an announcement from TM on some retrofit. I will tell you this that by the time they ship you new bumper's, you are going to be within earshot of the 2014 pricing. I can live without PDC's Thank You Very Much.

I think generally some people are missing the point. It's about communication and a superior customer service experience. It's not about retrofitting or cars that are already being built. When there is a change like this, they ought to honor the people who have already finalized their orders and that one or two minor options. And the 2013 and 2014 comparison aren't apples to apples. There usually is a significant enough change that warrants the price change. Right now the exact same MS w certain options are more expensive.

1. Communicate in advance and the policy on how they will deal with the transition
2. Provide a smooth transition as what they could have stated in 1. since that is what their goal of making a superior customer service experience should be about.
3. Reputation goes beyond the bottom line. If they limit it to the people who have finalized their orders of that one or two weeks it should be reasonable for both sides.

I still support Tesla but this could have been handled in a much better and smoother way. And sometimes that's all the difference that's needed to keep most people happy.

On a side note: There was a gentleman at the shareholder meeting. He put down a 40k deposit for the X a year ago. As he stated, if he had put that in the stock it would've been 120k. So if the new options are going to cost you more I'd suggest putting the money for the MS into the stock and wait until it appreciates to cover the options, then buy the MS. After all, the price increase will definitely help with the margins and stock price. Just my two cents.

There is clearly a communication issue at Tesla when the delivery specialists and inside sales reps at the company have no clear idea of how the new options are different from what was included before. Ask three different people at Tesla and you'll get three different answers. For instance, my DS told me that the sound package was identical except for the price. Other Tesla people have been saying it's completely redesigned. How can anyone at Tesla in sales or delivery not know what these options are about? You would have expected all front line staff to have been briefed in advance.

100% agree Amped.

I totally agree with you Amped. There is a clear lack of communication there. I went through the same thing at the showroom where the staff gave incorrect information. I think that is the flaw in this model vs the dealership model. At least with commissioned salesman they have to understand the product whereas in some ways at Tesla these are just "warm bodies" in many cases that get paid the same no matter what they say or do.

In Tesla's model it puts the impetus on us as consumers to find out what is what and its difficult to figure that out when we get many different answers for different people within their organization.


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