Is Tesla Considering Cancellation Of Model S and X P90D?

NOV 1 2016 BY STEVEN LOVEDAY 37

Tesla Model S P90D

Tesla Model S P90D

Elon Musk has explained that the new Models S and X P100D and P100DL models are contributing extra cash toward the development costs associated with the Model 3. Is there really a need for the P90D anymore?

Tesla Model X

Tesla Model X

To say that Tesla has a lot going on right now is a huge understatement. The list seems endless; the Gigafactory, the SolarCity deal, Model 3 looming, fully self-driving vehicles and the Tesla Network, Supercharger expansion, lawsuits, future plans for the Model Y and whatever else is up Musk’s sleeve. Wow! It’s a ton.

Streamlining back to using two battery configurations for the Model S and the Model X seems sensible. Running just two batteries (the 75 and the 100) could save Tesla time and money. Both of which the company needs considerably.

On top of this, consumers have the ability to pay and unlock features later. This is becoming typical of how Tesla is choosing to handle things. Over-the-air updates make this a breeze, and while a customer may be short funds at the intital time of purchase, money can be saved to make the upgrades later. It is an enticing situation. Rather than buying a new car, you can save and upgrade the one you have.

Looking at Telsa’s inventory page shows that the company is trying to move a slew of Model X P90Ds. It will be interesting to see how it all plays out. Get your P90D while you can, or gamble with waiting to see if Tesla chooses this other route.

Tesla's New Inventory Page Is Full Of P90Ds

Tesla’s New Inventory Page Is Full Of P90Ds

Source: Teslarati

Categories: Tesla

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37 Comments on "Is Tesla Considering Cancellation Of Model S and X P90D?"

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In the Q3 conference call, Musk said that they were still ramping up production on the P100D, and until the bugs were worked out, they weren’t going to produce the 100D. I assume they are keeping the 90 around because its faster and less costly to produce. Once the 100 production ramps up, they will surely discontinue the 90’s. They’ve always had just two packs and it doesn’t make sense to continue producing two products with a 10% difference.

So what would the standard battery sizes be, 75kWh and 100kWh? Then just use software to adjust the usable.

the problem with doing that is that, in a 75kWh car, you build in 25kWh of material cost for which you get no revenue. for 25kWh of battery capacity, that could be a good $4,000. to make matters worse, you give people an incentive to buy the 75kWh car.

i would think that the incentive for cutting down the number of battery options is that you not only reduce the number of order codes (which at tesla’s current size, is probably not that big of a deal), but it would allow you to reduce the number of manufacturing options that you would have to implement in the factory.

on the flipside, a leased 75D can be flipped to a 100D at the touch of a button, increasing it’s CPO certified value considerably. It’s a matter of math and cost. I think it’s more logical to have a 60/80/100 option. How they slice the configuration is based on internal Tesla math and costs to produce. (1 size for 3 or 3 diff size packs).

“no comment” commented:

“…to make matters worse, you give people an incentive to buy the 75kWh car.”

Buy the S75 instead of the S60? I don’t see how that is “worse” for anyone. It’s certainly not worse for Tesla Motors’ gross profit margin!

As has been noted, Tesla phased out the S60 and X60 options once they had met their quarterly sales quota. So the S60 and X60 were just an end-of-quarter sales promotion, nothing more.

And with Tesla’s CPO program, I think they expect to take possession of most of their cars a second time, after they’re a few years old. Those S60 and X60 cars can be upgraded at that time, so even if the first owner doesn’t choose to upgrade the car, Tesla can still recoup most of that extra money invested when it’s resold.

“no comment”, you lost me. I’m saying get rid of any 60kwh, or 80kwh, or 90kwh Teslas. Just make 75kWh and 100kWh ones (regarding the physical battery). Yes, they would not get instant revenue for the extra 15kWh they put in the 75kWh car that was sold as a 60kWh, but they would have the potential of getting that revenue later with a software unlock. Same goes for a 100kWh battery sold as an 85kWh car.

your best revenue opportunity comes when you are selling a car “new”. not only is there the advantage that you don’t get “time discounted” money (as would be the case if you activate the additional capacity on a resale car), but upgrades get you more money on a new car than they do on a used car.

So you think Tesla’s current business model is a mistake then?

keep in mind, right now, tesla is a small volume auto manufacturer which is trying to build a business. in that mode, you can make “investments in the future” that don’t necessarily make sense for a going concern.

Sooooo… do you think Tesla’s current business model is a mistake then?

if the current business model for tesla will remain the business model for all time at tesla, then it’s a mistake. as i’ve stated, i agree with bob lutz that there are problems with the way that tesla is currently operating. where i disagree with bob lutz, is in his belief (apparently like you) that the current way in which tesla is operating is the *only* way that they will operate.

i personally think that the people are tesla are aware of the difference in how you operate a company in a startup/emerging phase and how you operate the company as a going concern.

You said “upgrades get you more money on a new car than they do on a used car.” Tesla charges more for the upgrades if you do them later. Wouldn’t that counter what you’re saying?

Also, being able to get more wheels on the roads at a lower price point, w/a foot in the door for upgrades later, seems like a good strategy. I guess it will all come down to how many people actually upgrade, and we wont have those #’s for some time (if they are even made available).

i’m probably working from a different model than you are. i was envisioning that a car would get sold as a 75kWh, not upgraded by the original owner, and tesla takes the car back as a used car and resells it as a 100kWh used car. as a general rule, when you look at the price difference between two different levels of trim for a new car, the price differences are less when they are used cars. that’s why i stated that, under the model that i envisioned, the revenue gain is less if they tried to sell a 100kWh car used than they would get if they sold it new.

it looks to me that you are envisioning a model where tesla resells the 75kWh car as a used 75kWh and the buyer of the used car pays to upgrade the used car to a 100kWh car (the specific numbers “75” and “100” are less important than the idea of a configurable upgrade).

i suppose in what i perceive to be your model, tesla would get more revenue assuming that the used car buyer did pay for the upgrade. but i doubt that everyone would pay for the upgrade.

Yes. And borderline fraudulent. I passionately hate this type of segmentation. All companies should ideally find themselves in competition and be forced to offer the best product they can at every price point. That is incompatible with hampering a product, which does absolutely nothing to reduce the cost of making it, and selling it at reduced price.

In short, if Tesla finds it is more expensive to make the battery in 60, 75, 90 and 100 kWh sizes than just two sizes, they should then offer only two sizes.

I really hope some hacker manages to jailbreak the car and starts selling $200 upgrades. That small revenue would obviously not go to Tesla, but to the hacker, and it would be well deserved for both the hacker and Tesla!

i wonder about the future of the model X period. that car seems to have a lot of reliability problems.

They have no problem selling them.

but there seems to also be no shortage of reliability complaints from people who have bought them. i saw some really critical remarks on the gm-volt website from a person who bought a model X and complained about how unreliable the car was. there were complaints coming from someone who has been a pretty reliable elon musk fanboy.

This is true, but a new vehicle, especially one with the complex features of the Model X, make this rather inevitable.

The early Gen II volts also are having more reliability issues than the late Gen I Volts as I’m sure you’ve also noticed on GM-Volt.

I think Chevy and Tesla will improve reliability on both cars in coming years.

“no comment” commented:

“i saw some really critical remarks on the gm-volt website from a person who bought a model X and complained about how unreliable the car was.”

And so what? You can find similar complaints about every model of car. If that wasn’t true, there wouldn’t be any need for “lemon laws”.

Tesla Motors has a 98% customer satisfaction rating. That’s higher than any other auto maker! Of course, that does indicate 2% of customers aren’t satisfied. And sure, some of those are gonna post complaints online.

As Tesla ramps up sales, the number of complaints seen online is going to grow. Simple math makes that inevitable. But it appears the number of satisfied customers is growing 50 times as fast! 🙂

Don’t try to put lipstick on a pig. The Model X is known for it’s issues. Even Tesla admits they they are getting better.

presumably, tesla can fix the problems with the model X. but tesla already has a lot of “fish to fry”; do they really need problems with the model X?

the model X might be the second biggest blunder by tesla (right after the solarcity merger/bailout).

It is probably fair to call certain decisions Tesla made for the MX blunders, but to call the car overall a “blunder” is something only a serial Tesla basher would do.

Tesla is selling, on average, well over a thousand of what you’re calling a “blunder” every month! It seems a great number of auto buyers don’t agree with your Tesla bashing, “no comment”. They say that money talks. And at about $100k per car, it’s saying very loudly that THEY PREFER THIS CAR!

In business, “no comment”, this sort of “blunder” is technically known as a “success”. 😉

because neither of us actually owns a tesla, neither of us has any first hand knowledge of the issues with owning one. the difference is that i realize that i don’t know and you believe that you do “know”. i suggest that you read the comments from “mark z” on the gm-volt website. he’s as big an elon musk fanboy as they come. and while he seems generally pleased with his model S, he seems very displeased with his experience with his model X (my impression is that “mark z” is a “baller”; it wouldn’t surprise me if he also owned a b#@z-o and a bentley). according to him, in the 10 months that he as owned his model X, the car has been out of commission for various reasons for half the time that he has owned it. my observations of the postings of “mark z” is that he used to be “over the moon” about BEVs, but with first hand experience in owning one, his opinions seem more realistic. by “realistic”, that doesn’t mean that you have to say that BEVs suck for all purposes, but it means that you don’t buy into this nonsense about BEVs being… Read more »

How can it be a blunder to enter the most lucrative automotive niche on the planet, and within a year climb to be one of the top 5 sellers?

Maybe certain specifics of the design could be argued to be blunders (falcon wing doors seem to cause a huge amount of trouble), but the X itself, overall, was a well-aimed move to capitalize on the previous engineering and manufacturing expertise built up for the Model S.

They seem to be improving the X rapidly, so I think it will take even more of the high end luxury SUV market in the next year or two.

relying on selling $100,000 cars is not a good plan. there is just not enough volume in that niche; either you have to go to making $1,0000,000 cars or you make $30,000 cars. the people at tesla realize that they don’t have a viable business model relying on model S and model X sales; that’s why they put so much importance on the hopes that the model 3 will be able to achieve benz c-class/bm 3-series type volumes.

Tesla would be fine if it stuck with S and X. They are trying to get to higher volumes because that was the ultimate goal: mass market. That requires the gigafactory and all the R&D and the Freemont buildout, etc.

there is NO evidence that tesla would be profitable relying on model S and model X sales. fortunately for tesla shareholders, you aren’t running the company, but it appears that the people who do tesla realize that they do need a car that they can sell at higher volumes.

Kdawg said:

“Even Tesla admits they they are getting better.”

You mean, Tesla brags that the Model X is getting better. How very odd that you phrased that as if it’s a bad thing!

GM brags that the Volt 2.0 is better than the Volt 1.0. Do you also see that as a bad thing? Somehow I doubt that a GM fanboy like you sees it that way!

That’s not the context of Tesla’s comments about the Model X. They are responding to all of the issues saying, “it’s getting better”. It’s no a Musk tweet announcing a great new thing. It’s “yes we realize we have these issues and we are fixing them.”

Falcon doors, including them thinking you’re closed fully closed when they’re not, HVAC and infotainment problems are most reported…At least they don’t seem to be dying on the road…

Tesla should always have a 25 kWh gap between 2 battery sizes based off the highest battery density-75D and 100D.
85D and 110D…etc. Simplify the assembly line.

I doubt they do it or not really matters in the long run.

Once the Gigafactory is putting out the new format batteries, Tesla will introduce new Model S and X battery packs eventually anyways. What happens between now and then isn’t really going to have that much impact to the bigger picture.

Indeed, I’m quite surprised that Tesla introduced a new design for the Model S/X battery pack when the Gigafactory is so close to production, and they obviously will have to redesign the packs again to take advantage of the new, cheaper-per-kWh cells.

It just seems to be part of the culture of constant improvement at Tesla. I’m sure the new battery pack includes various improvements that will carry over to the design that incorporates the next gen cells built in the Gigafactory.

By incorporating it ASAP they not only build experience and expertise with the new design, they also grabbed a ton of great publicity with the 100DL becoming arguably the quickest mass produced car on the planet.

100DL also helps drive Model X sales despite the reliability issues seen so far. If you want the quickest SUV on the planet: here you go, for half the price of a slower Bentley.

Agreed.

I don’t think they will keep the Model S 60 kWh for long. They’ve converted some Model 3 buyers into Model S buyers with it and got a good Q3, but with HW 2.0 I think they can’t keep handing out so much “free” hardware. People buying a 60 without enhanced AP can’t be good business.

75 and 100 kWh seems plausible. I think they will keep using the 18650s for the P100-versions because of the cell count and use the new 21-70s in the normal 100-versions. Doubt we’ll se any bigger than 100 packs in 2017.

there was some previous discussion here that the 60kWh model S was probably going to get axed anyway to create a more clear price point differentiation between the model S and the model 3. this article is discussion the possible future for the 90kWh model S.