Tesla Rewards Its Wealthiest Model S Buyers With Shortest Wait Time

MAR 12 2015 BY ERIC LOVEDAY 66

Tesla has decided that its wealthiest Model S buyers should be given priority delivery.

No, those are not the words of the automaker, but it’s apparent from delivery statuses that Tesla believes P85D buyers should get their cars in a more timely fashion than those who place an order for the less costly 60 kWh or 85D versions of the Model S.

The average wait time for the top-rung P85D is down to just a couple of weeks now (order today, receive by end of March), whereas orders placed for a 60 kWh or 85D have delivery estimates of May 2015.

Both 60 kWh And 85D Shows May Delivery If Ordered Today

Both 60 kWh And 85D Shows May Delivery If Ordered Today

The Wall Street Journal suggests that Tesla is prioritizing delivery of the P85D in an effort to boost revenue.  Tesla officially states that the automaker has “prioritized deliveries of the P85D” without providing a reason, according to the Wall Street Journal.

Regardless of the actual reason, the end results is the same: those with the means to buy the P85D will wait far less time to take delivery than those amongst us who can only afford the cheaper 60 kWh or 85D.

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66 Comments on "Tesla Rewards Its Wealthiest Model S Buyers With Shortest Wait Time"

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It makes sense. Being a new component, the D hardware should be out in the wild, in quantities, as soon as possible to iron out the quirks out of it and be trouble free in time for the X launch.
And, of course, profits are better in higher end models so it will help for the first quarter profit and shareholder should be happy.

This headline is idiotic and misleading. A base P85D runs 110k. A friend of mine who’s a college professor has one on order, he’s not “wealthy” by any means. He lives alone, seems like a frugal person and only drives one car and he really like the P85D. “Rewarding” your “wealthiest” customers is a misleading, clickbaiting headline meant to imply Tesla is giving special bias just for wealthy individuals which is just false.

If you can afford to spend $110,000 on a car, you qualify as “wealthy.” This doesn’t require spin.

..and it doesn’t require much to see you’re a constant Tesla hater.

if you’re spending over $100k FOR A CAR (which, btw, is a depreciating asset), and you’re not wealthy, then you may have issues when it comes to setting priorities.

If your annual mileage is high, it’s a good investment.

True, I bought one in 2013 and sold it in 2014 for 2000 more than I paid and I made 16k last year and no one gave me any monetary gifts either.

Why don’t you repeat it now?
Caution: Check ebay first on resale values of old Teslas.

The car is too expensive to make economic sense for anyone.

I am about to actually.

I’m with Spider-Dan and ‘no comment’ . . . if you are buying a $100K car then you are either wealthy or a bit of an idiot with bad priorities.

Bruh if you can afford a 100k+ car you are wealthy

Majority of people make under 100k a year

Or maybe you are just intelligent and dont waste money on BS crap like fancy cell phones with outrageous rates and commercialized BS cable TV and gas and car maintenance etc…..

A $110k car at Tesla’s default financing options of 10% down/3% APR/72 mos works out to a car payment of over $1500 per month. That’s an awful lot of fancy cell phones with outrageous rates and commercialized BS cable TV. But hey, maybe instead of watching TV, you can go sit in your car instead.

P.S. The manufacturer-recommended maintenance for a Model S is $600/year, which is not a significant savings over most ICE vehicles.

$600/year for maintenance is a significant savings over most $100k luxury cars.

Cable TV is certainly not the only way to view “TV”. You must know that. Fancy cell phones and cable tv were just 2 examples of wasted money. There is plenty of money being wasted elsewhere….

..”but we have one in inventory” is increasingly what s85
order holders hear, as the word is tesla has begun producing cars away from custom orders. Production is above deliveries. No?

Nope… wait times for variants other than the P85D is still 2 months or so in the U.S. and far longer outside the U.S. So Tesla is still production constrained.

Production was ahead of deliveries, by 1,400 cars in Q4. That is what Tesla said, because of “vacations”, seats, etc. I think it is a chose to believe thing, with whether Tesla is actually demand-constrained, or not. Early in ’14 it was expected Panasonic would be producing to demand, for 2H. That was published here. No, it doesn’t make it fact, but wait times also prove nothing if ~60 days are what some of the most customized cars in the biz can take, to make (irrespective of demand).

Ah, yes, you are right, I read your post wrong. Production is ahead of deliveries, as it must be. It takes time to make deliveries and production is increasing, so delivery numbers have to lag production. Also, any delay in deliveries causes a further lag, but those numbers are usually caught up within a quarter except for this time due to the timing of the P85D launch.

As for the delay in custom orders from other automakers, that’s a completely different animal. Other automakers make more than one vehicle type in a factory and your order slots within other orders and the batching effect is likely far larger.

Tesla is still production constrained overall. The metrics are very easy to see if one cares to look.

If Tesla is still ‘production constraint’ while making few cars per day of just just one model , after 13 years of business, then Tesla’s management is completely incompetent. They must be let go.

Maybe you should actually look at the numbers.
35,000 cars last year vs. 22,450 in 2014.

You’re only trolling yourself.

Few as in nearly 100 a day!

How many other new American car companies have done this well in the past half century?

The top spec Model S has been given priority delivery for a very long time.

It is not necessarily the wealthiest customers but those willing to spend the most.

Some of Tesla’s wealthiest customers prefer a non performance version because of longer range or softer suspension. Or just because they are “cheap.”

That is correct. Their wealthiest buyers don’t usually buy the Performance version.

Nope. Those who ordered P85D early January also have the same estimated delivery date of March. It’s not prioritized. I think, Tesla only has a handful of P85D orders. It is clubbing together all those, and will set up the robots in last week of quarter to crank out all the orders in one week. Then, it will deliver all in an all-nighter; put the numbers in their quarterly ER.
Who knows, they could even be fooling with the dates here.

80,2xxth vin released today.

ST, Pure Genius, nothing less. Bwahahahah!!!

They prioritize the product they make the most money on, what’s wrong with that? Makes perfect sense to me.

Perhaps this has to do with production scheduling, they are currently tooled up to produce the P85D and will switch to produce the other cars next month? Just a guess.

What a biased title!

Yeah. Typical class-warfare BS.

Sounds like the title was written by someone who was Occupying Wall Street before they got this gig.

Just to reiterate, this has been Tesla’s standard operating procedure for quite some time. Higher spec variants get top priority. I’m not sure why it is all of a sudden news.

So guess they don’t believe in Tesla-neutrality.

🙂

I think the article title is a bit misleading – Tesla isn’t rewarding its “Wealthiest Model S buyers” (since presumably they have no way to know who’s wealthiest), but rather the ones (rich or middle-class) willing to buy the top-end Tesla Model P85D.

And Tech01x is correct, this isn’t new news. I’m sure the P85D has a higher margin than the lower-spec cars, hence the priority.

Attention grabbing headline, but I agree this is nothing new. When I ordered my Model S in 2013 the shortest wait time was for P85, followed by 85, and longest was 60. Of course they’re going to prioritize the cars with the highest margin.

So much for “First come, first served”.

Tesla was never first come first serve. This was true even during the Model S launch (85kWh was made first). Also, Tesla manufactures in batches so the reservation number you get does not indicate the order your car will be delivered.

Gosh Eric…

So when Model III comes out, NO ONE will ever get their theirs, ’cause all the rich Model S & X people will be perpetually ahead of them in line???

*Cries* 😉

I know you think you are joking, but we will be waiting decades for a practical $20k EV for working class families.

Well, the iMieV already provides a very low cost EV. But I agree, it is not very practical. The Spark EV though is a pretty great low-cost EV.

I don’t think you are going to be getting a practical $20K Ev from Tesla any time soon . . . if ever.

MIII was never going to be 20K.

But it’s quite likely that Nissan / Renault will be first to step into that market, and much sooner than you anticipate. The Zoe is a very nice EV with about 180 mile range and fast charging. It would be great to see it available in more markets, the world over.

Which is why I expect to wait for a while. I’m not going to be springing for many luxury options on my Model 3.

Yeah, it’s always been this way. The P version always had priority delivery. But it’s apparently Tesla isn’t really production constrained anymore. A build-to-order wait time of approximately 2 months is standard throughout the industry.

The market for $70k – $100k cars of all types is small. Tesla has expanded it, compelling people who have never spent that much before to do so, but it’s still small.

This idea that Tesla isn’t production constrained is a myth spread by EV bashers; a myth they’ve been trying to promote since even before the first Model S rolled off the production line.

As I understand it, it takes an average of two weeks to produce the average Model S. If the average wait time between order and domestic delivery is significantly longer than that plus a few days for the actual delivery — and it is considerably longer — it’s because demand continues to exceed supply. Comparing Tesla’s production to special orders at a legacy auto maker is rather irrelevant. Most auto makers aren’t set up to cater to custom orders, whereas Tesla does nearly -all- its production as custom orders.

Other ongoing indications of limited Model S supply are the much higher than industry standard resale values, and the fact that Tesla still is spending no money at all on mass advertising.

There was a time when used Model S sold for more than new, just because you could get them immediately. Now that was production constrained.

Wait times are short and stable at about two months, same as any other car ordered from a factory. The actual assembly time is always a small fraction of that, on the order of days. That doesn’t mean that all cars are production constrained.

I don’t doubt that Tesla could stimulate more demand with advertising, lowering price, or adding features like they did with the D, but until then it appears they have caught up with demand for the Model S in keeping with industry standards.

If you want to check what production constraint is, look at BMW i8. There is a huge dealer mark-up. Instead, Tesla is offering big discounts even on P85D models this quarter. And pretty big ones too.

U are like a bottomless pit of (word that rhymes with pit)

LOL! That is because they are only making a few hundred of them. It is a self-imposed constraint. You really are quite the straight-up troll.

Thats for damn sure.

Hahaha!

Do you write for Fox when you’re not commenting here? 😀

[ citation needed ]

Tesla is opting to preserve, or raise, Average Selling Price, and thus gross margin, rather than expand volume. There is a history of this from the start, when they dropped the 40.

Since what matters is gross margin, the need to maintain high ASP might mean that their cost basis has not dropped that much. One aspect of this is that Tesla can’t really squeeze their most important supplier, Panasonic, because they need to make sure that Panasonic’s battery sales to Tesla are profitable enough to justify their investment in the Gigafactory.

This article is misleading b/c this is nothing new. I own a Tesla and last year the P85/P85+ was also prioritized over my order which was fine with me. A P85 ordered last year was about a 6wk wait. So the WSJ again is spreading misleading facts about Tesla to garner clicks. What a shame the WSJ has become since Rupert Murdoch bought it.

Tesla’s MO since the beginning is offering more value the more money you spend.

Spend more, get more range per $
Spend more, get more performance
Spend more, get you car faster

There is no downside to spending more. There is nothing new here, it is just good business by Tesla. This is how Tesla keeps 25+% margins on Model S sales. It is probably the reason why the ASP is about $30k over starting MSRP.

In comparison an eGolf is $3k more (MSRP pre-rebates) than a Golf GTI. You are giving up both range and performance, and spending more $. I would still want the eGolf, but you can see why some would think twice.

“There is no downside to spending more.”

Other than, you know, losing more money in the process.

If you don’t consider increased cost as a “downside,” then nearly every product line has “no downside” to the higher-end configurations.

Why is this being reported as “news”? Tesla has always given production priority to Performance package orders. When the Model S first went into production, Tesla concentrated on producing as many “P” cars as possible before starting production on any others.

So if everyone already knew this and it’s not news, I suppose there will be zero objections in the next Bolt/2G Leaf/Model 3 article if it’s pointed out that the “$35,000” Model 3s won’t be getting delivered until orders are met for the highest-end trims first?

Spider-Dan, I certainly didn’t claim nobody would voice any objections. Humans being irrational animals, you can count on -anything- finding at least a few who will whine about it, no matter how good it is for most or how sensible it is. I merely pointed out that Tesla has always given priority to producing the highest-priced versions of its cars.

In fact, I recall an analyst’s article from a few years ago that claimed Tesla would have a cash-flow problem in its second year of producing the Model S, because Tesla front-loaded all the Performance orders into production, and they were going to produce the 40 kWh version later. Of course that was before the 40 kWh version got cancelled due to very low orders (only about 2% of all orders, as I recall). And of course that was years before the “D” version gave new attention to the Model S, and new batch of orders for pricier versions of the Model S.

Tesla is showing good business sense in prioritizing production of pricier cars. As someone who wants Tesla to continue to grow, I heartily approve.

Fair enough.

Sounds like typical Batch Manufacturing.

The only difference is that most car makers build for inventory, while Tesla builds for direct customer delivery so we can actually see it happening.

Right now, Tesla is spending MASSIVE amounts of CapEx to build the gigafactory, tool up for the Model X, design the Model 3, and deploy more Superchargers. It is just good business sense to prioritize the most profitable customers in order to enhance cash flow.

+1

Changing the world for the better, isn’t cheap.

i dont understand why you babies are crying over digital text

if you are going to complain about how something is worded then get off the internet and go make money

In other news, FedEx and UPS also reward their wealthiest customers with the shortest wait times.