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"Delivery of cars with the 40 kWh battery pack is expected to begin later this summer."

"Delivery of cars with the 40 kWh battery pack is expected to begin later this summer."

sayidreddy | February 20, 2013

Wonder what the delay is for? Will definetely be listening to the conference call as it will probably come up.

mbergman | February 20, 2013

For the first time since I made a reservation roughly two years ago, I am seriously disgusted with Tesla.

I read the 2/1 bulletin board entry mentioning, as an aside, that 40kwh cars will not be produced for a few months, but since I hadn't heard anything else about the production date being delayed again, I foolishly assumed that "few months" was just a poor choice of words and my car would still be delivered in March, as I was last told.

Tesla obviously knew about this delay for quite a while. It would have been nice if somebody had thought of informing the affected reservation holders.

So much for Tesla's efforts to improve customer communication.

Maybe they will decide not to produce 40kwh cars after all, and we'll read about that in a shareholder letter as well.

Although we signed an mvpa months ago, and spent a good chunk of change installing 14-50 outlets in two locations, my wife and I are seriously considering attempting to get our deposit back.

Sudre_ | February 20, 2013

I feel really bad to the 40kWh folks. I was dieing to get my 60 and the extra wait seemed like eternity. This really sucks for them. Later this summer? That seems excessive and I usually side with Tesla.
At least they are locked in before the price increase.

sayidreddy | February 20, 2013

Elon just said on the conference call that "less than 10%" of configurations they have recieved so far are of the 40 kWH pack so it may be that they are not as focused on produced the 40 kWH battery pack that quickly.

ChasF | February 20, 2013

I believe their margins on the 40kWh are razor thin at this point, making production of this variant a low priority. As the customer, that is not my problem. I've given them my $5K and they've beneiftted from an inttrest-free loan for the last year and a half. They asked me to finalize in October, obviously with no intention to deliver the car within a "reasonable time" (sound familiar?). I feel they are mistreating some of their customers who were there for them when the Model S was still a very risky venture. I would think they would treat us better, or at least provide more information. This truely saddens me and has changed my positive experience with Tesla thus far.

Longhorn92 | February 20, 2013

Agree, but as one of 10% or less, I can't say that I'm a happy camper.

Longhorn92 | February 20, 2013

Posted at same time… my comment was responding to sayidreddy.

DTsea | February 20, 2013

I felt the same as mbergman- until I got my car. Now I am happy again. DS was great, service people call back, car is terrific.

Tesla has to survive to deliver- and support- our cars.... so they are going to make delivery decisions around cash flow management and factory disruption.

spazthecat | February 20, 2013

So, do you suppose they'll send out emails or something to the 40kWh folks? I finalized my order in January and was given a delivery estimate of May-June. That hasn't changed on my account. Still shows delivery in the May-June time frame.

--Andy

joehuber | February 20, 2013

I wouldn't take a general statement in a financial report as a specific delivery date for your particular car. No reason to get upset, just check with Tesla and get an updated ETA. Then make a rational decision as to how to proceed...

DaveR75 | February 20, 2013

The point isn't that the margins are razor thin or that orders represent less than 10%..the point is that Tesla have not given accurate information to reservation holders prior to finalizing. They originally said 40 kwh cars would be delivered Dec 2012..this was delayed to March 2013..now "later in the summer of 2013"?!? This is a horrible way to find out. I've been waiting 4 years..gave Tesla my reservation deposit when there was no guarantee they would even build the car and I find this out buried in a quarterly report? Not happy.

vincent1001 | February 20, 2013

@spazthecat : Where you can see the estimated delivery date on your account after you finalized configuration ? I also saw May-June when I finalized mine. But after that, I could not see any schedule information on my account.

Brian10 | February 20, 2013

While I understand the need for Tesla to deliver the higher margin 85kWH and 60kWh cars first, at some point the issue of fairness must be considered. I'm a stock holder so I want Tesla to be profitable. At the same time, I think Tesla has an obligation to reward the loyal reservation holders who took a chance on the company with a $5,000 deposit when there was a risk that the company would not survive. If the 40kWh reservations represent only 10% of the total, delivering some of these cars now should not bankrupt the company. Ignoring the 40kWh reservation holders may be the right short-term business move but it is the wrong thing to do. I reserved my 40kWh in 11/2009. I used to be a huge fan of Tesla. But because of how I've been treated, I'm now just an upset client.

joehuber | February 20, 2013

Brian

Why are you upset? Tesla hasn't missed their delivery deadline for your car yet. Get some facts first before reacting.

Brian10 | February 20, 2013

Joehuber, I know my facts. Telsa reps (and Elon in an investor call) first stated that 40kWh would begin in Dec, 2012. Then that figure was pushed back to March 2013. Now it is "later this summer". I see people reserving in December who now have their Model S. I have no choice but to wait. Tesla has my money. That is why I'm upset.

syddent | February 20, 2013

+1 Brian
Joe, Tesla has missed several deadlines around delivery of the 40kWh. Also, it is reasonable to assume they may never choose to deliver the 40kW battery cars at this point. They clearly have no interest in it. They have had my money for close to 3 years now and it isn't clear I am going to get anything for the risk I assumed in handing a $5K deposit. Please don't tell ME not to be upset.

Longhorn92 | February 20, 2013

Unfortunately, if you placed an order today for an 85 kWh car (and possibly a 60 kWh car), you would likely receive it before any of us 40 kWh folks. There are many reservation holders (see DaveR75 above) who have been waiting for 3-4 years, and it doesn't seem right that someone placing an order today should get their car before those reservation holders.

Personally, I have only been waiting about a year and a half since reservation, but I signed my pre-MVPA on 9/4/12 (which was suppose to be about four months before delivery). We are coming up on six months, and it currently appears that I will be waiting another 3-4 months (for a likely total of 9-10 months after locking in configuration and money). Ever since configuring/signing the pre-MVPA, I really do feel held hostage (loss of $5k) to a certain extent, and all I can do is just wait. I'm not saying I want to cancel, but it has been very frustrating to the point that I have thought of calling to see if I could cancel and somehow get the $5k back... but I'm not at that point yet, so I will wait some more.

jackhub | February 20, 2013

A couple of years ago on an earnings call, I believe Elon estimated 20% 85Kwh, 60%60Kwh, and 20% 40Kwh. In the call today, he said the actual numbers have been running over 50% 85Kwh and less than 10% 40Kwh. That may be affecting the production of the 40Kwh.

tshock | February 20, 2013

In his December 3rd E-mail, George wrote:

"40 kWh Model S will phase into production in March 2013"

And then added:

"We will continue to provide regular updates regarding these options as each gets closer to phasing into production. We have not done a great job at all in the past regarding communication on these items. I fully acknowledge our shortfall in this area. We now have a much better understanding of what it will take to bring each of these options into production and will do a much better job of communicating about them going forward."

It seems clear that neither of those commitments will be honored. March 1st is one week away and Tesla hasn't even released the EPA rating on the 40 kWh configuration yet.

I reserved in April 2009 when the Model S was nothing more than a prototype. My reservation number is P613 and I've watched as literally thousands of people reserved years after I did but received their cars before me.

When I reserved the target production date was "Late 2011". I believe in the cause and have been more than patient while Tesla made business decisions to maximized revenue. But, my wait is over. I have no faith left in what George says.

My MVPA, which was signed on August 8th, lists a delivery estimate of "Dec 2012 / Jan 2013". I ordered the active air suspension, a $1,500 option, because I didn't want to wait until March 2013 for my car. What a waste that decision turned out to be.

But, I don't feel trapped. My MVPA says:

"Scheduled Delivery Date. The date set forth in this Agreement for delivery of the Vehicle is an estimated date, and does not represent an affirmation or promise that the Vehicle will be delivered to you on that exact date. We will not be liable for failure to deliver, or delay in delivering, the Vehicle that is covered by this Agreement where such failure or delay is due, in whole or in part, to any cause beyond our control, that is not the result of our negligence."

There is no question that the delay in the delivery of my car is 100% in Tesla's control. They are pushing the delivery of the 40 kWh configuration back for business reasons. That's fine. But, I'm not going to wait indefinitely. If I don't receive my car by late March / early April, I'll request the return of my $5,000 deposit. If Tesla doesn't honor my request, I'll dispute the charge with my credit card company. That's the great thing about credit card purchases - Visa is inclined to side with its customer - me. Visa will credit the $5,000 back to my card and simply short Tesla $5,000 on its next merchant transfer. There is usually an exchange of information between the parties; but, the few times in my life when I've disputed a charge, Visa has always had my back.

I don't post very often and I'm inclined to give Tesla the benefit of the doubt given the ambitious nature of the Model S undertaking. However, the delivery delay for the 40 kWh configuration is way beyond reasonable. I'm disappointed in today's further delay; but, I'm even more disappointed that Tesla's failed to communicate it to me - the customer - in a timely and appropriate manner.

How many times do I have to accept George's apology for inadequate communication. I wish I got that many free passes at my job.

Brian10 | February 20, 2013

tshock +1

I, too, selected active air suspension only in the hopes that it would move my production date forward. So here, too, I feel misled by Tesla. So much for providing us with "regular updates". Blankenship and Tesla have failed to live up to promises made to me and my fellow 40kWh reservation holders.

Chuck Lusin | February 20, 2013

I'm siding with the rest of my fellow 40's. I ordered 2 of these so they have had 10K locked up for near a year. Also we like most of the other 40's were promised the cars would be built in res number order. We also upgraded to Leather and Air each 3K, so that we did not have to wait longer.

We feel mislead, The thought back in Aug - Nov, was to hurry and lock in the 5K, and then for the few holding out, let increase the price in 2013, and get more to commit the 5K. Not cool in my books.

We have made a huge investment into the electrical, sizing our PV solar by and extra 50% to handle the two cars. That is already spent and installed.

If the reservation sequence number was not important, on the Model S Reservation Certificate I got with the 5K deposit, in hand with a black sharpie, Chuck Lusin #8,467.

Quoting from the Model S Reservation Aggreement: "4. Order Process. "Production of your Model S will then be commenced and your deposit payable under the Purchase Agreement will be held by Tesla as a non-refundable deposit" I'm not a lawer, but "Production of your Model S will then be commenced" sound alot like they will be building it then.

mbergman | February 21, 2013

If they would rather not build that pesky 40kwh car, then they should eliminate it as an option, return our deposits and be done with it.

At this point, I know that if and when i do receive my car, I will probably have negligible tolerance for any of the weird little problems that pop up in some owners' cars. If I do decide to go ahead with this purchase (assuming I am ever really given that opportunity), I may be setting myself up for a whole lot of additional frustration, and I'm not sure I really want to do that. Like Brian, I have gone from being a huge Tesla fan to being a disgruntled customer.

Note that it wasn't stated that production "will" begin later this summer. Production is "expected" to begin then. Assuming "later this summer" means late summer, we are talking about a minimum of another 6 month delay from March.

And that's a six month delay without the courtesy of a notification, let alone an explanation or apology.

I'm starting to feel like an illegitimate stepchild that they are kind of embarrassed about and who they would rather just went away.

Chuck Lusin | February 21, 2013

Unlike an ICE, I have spent a substantial amount in PV solar to handle the car. SCE and everybody is going to think what a fool, 6 more months, Dude they have your money and you have NO car.

I can't wait to tell my wife, after talking her in to a second car. Not happy campers!

mbergman | February 21, 2013

Hey Chuck, we really should let this go until tomorrow and get some sleep.

P2748

Chuck Lusin | February 21, 2013

Yea, you are right. No other group had be delayed this much.

Thanks mbergman

solarpowered | February 21, 2013

40 kWH customers put up the same $5K as other non-signature Customers. Like Chuck, I also invested thousands of dollars in infrastructure costs for an electric car. I installed additional PVs, but unused surplus energy is at the end of the 12 month anniversary date is forfeited. Keeping in mind that our energy costs are $0.36/kWH, so that is not a negligible sum. I hope that someone in Tesla marketing is monitoring this thread. They are being very inconsiderate to 10% of their reservation holders to generate a bit more margin and definitely causing ill will. How many 40 kWH customers anticipate being repeat customers?

Mark K | February 21, 2013

This gripe is legitimate - TM has made business decisions that have the effect of stringing along 40KW reservation holders. (Even if that wasn't the intent).

I think TM needs to mend fences with them. Here is my suggestion:

If you have a 40KW reservation and signed an MVPA, TM will refund your money on request, but grandfather in your option to purchase at the original price when the 40 starts production.

This would be a good faith gesture to credit supporters who've loaned them money. I think it would fix the problem and reaffirm folks' faith in the company's decency.

Koz | February 21, 2013

Reading the articles about 4th qtr results and the comments from Tesla, it sounds like they aren't going to start production of 40kwh models until production is more efficient. The said line workers were averaging 70 hrs per week in late 2012 and are now at about 50 hrs. The want to get to 45 hrs soon. This is an optimistic perspective on what is really holding production of 40kwh models back. I'm sorry, I do not believe that less than 10% of active reservation holders are 40kwh. Maybe its less than 10% for active 40kwh vs all reservation since day one or running less than 10% rate for newer reservations.

Tesla has pushed customers away from the smaller battery pack with prioritization and not offering supercharging and slower performance. Their stores don't "sell" much except trying to up-sell away from 40kwh. I understand their cost dilemma and need to reach profitability. I can accept this as the excuse for further delay but not reservation percentages. At some point the good will lost will outweigh the cost savings. It appears to me we are at that point. It is time for Tesla to suck it up and honor their commitments.

mbergman | February 21, 2013

Mark K -

Not even close. What they need to do to mend fences is to apologize and then start building the damn cars now.

If I get my deposit back, I'm done with them forever.

jat | February 21, 2013

Since they don't even offer the 40kWh car outside the US, it is clear they are only offering it here because they needed to meet the price point of under $60k for the base car. I suspect that the costs of the base car are high (read the report about the parts being flown in, getting poor prices from suppliers, etc), and if they ship a number of 40s they will have horrible gross margin.

Maybe the answer would be to offer long-term 40kWh reservation holders a discount on upgrading to the 60.

Brian H | February 21, 2013

Koz;
"Not offering" Supercharging, and slower performance, is inherent in the size. SC stations would have to be much closer together for 40s to use them; away from the dense centers, even 60s will have trouble. And they take just as long to charge, on a % basis, but much longer on a kWh basis.

Speed is an inherent function of total battery capacity (more cells "pushing the cart").

What part of "city car" "commuter car" didn't you get or believe?

joehuber | February 21, 2013

Has ANYONE here asked Tesla about this yet? What are they telling you about when you'll get your 40KWH car?

Some have hoped that Tesla is reading this thread. Better to pick up the phone and try to get some real info about your particular reservation before getting too disappointed.

Chuck Lusin | February 21, 2013

@joehuber ,

Just took your advice and called, for my #8467, delivery in 4 TO 6 Months from today!

joehuber | February 21, 2013

Chuck

That's pretty disappointing. Did they give you any options for improving that like upgrading to 60 KWH or at least an offer of a refund?

Chuck Lusin | February 21, 2013

I asked about upgrading to the 60 and he said that they would call back. (We'll see). You would think that they would have more information; I did get the impression that the standard air is going to be later than expected (Sorry). I had called the Costa Mesa service center a few months back and asked about getting an extra mobile connector, and they never called back either.

HiddenGems99 | February 21, 2013

I ordered a 40KWH and switched to the 85KWH after reading the "real miles" reports on this board for the early deliveries.

Love my 85KWH.

I stand by my contention that a $70K car needs to get more than 100 miles of range. If I were Tesla, I'd work hard to upgrade the 40"s to 60's - and never make the 40 in the Model S family.

There is a market for a 100 mile car - but not at this price point.

Why would you buy a top of the line laptop if it only had 45 minutes of battery life and took 4 hours to recharge? I'd accept that in a $299 laptop, but not a $2K laptop.

Love this car, love this company, I accept the early adopter risks - they have exceeded my expectations - it's a beautiful car and I know there are quirks with it I haven't even discovered.

This is one of those situations where you have to interpret the market realities and make the correct long term decision - maybe that is what they are doing by pushing out the 40KWH deliveries. This is exactly what I would do - but allow an incentive to upgrade from the 40 to the 60.

I guarantee many people are already doing it.

(Side Note- I just recently sold my Apple Newton 2100 for $1200 - 17 years after it was released - for exactly what I paid for it. Maybe there will be a market for the Tesla 40KWH in the future as a novelty.)

joesontesla | February 21, 2013

"Only 10% of configuration are 40kwh" humm probably because alot of them are gently forced to choose 60 or wait or cancelled reservation like me

Chuck Lusin | February 21, 2013

Yes the 40 is the Tesla Lost Leader and Vaporware all at the same time. Like going to a dealer for a car, but it was sold to the owners kid, but it is still advertised, and they keep forgetting to change the advertisement.

Sudre_ | February 21, 2013

+1 joesontesla

Brian10 | February 21, 2013

I don't understand why 85kWh'ers who defend Tesla's delay of the 40kWH are posting in this thread. I suppose they are trying to make the 40kWh'ers feel better about having to wait but they do this from the position of having their Model S in their garage. If the tables were turned and 85kWh'ers where having their cars delayed in favor of other sizes, you would not see as much support to Tesla's decision to delay production.

Brian H | February 21, 2013

CL;
That's "Loss Leader". Vapourware? Getting kinda close to libelous, there. You have a "right" to be petulant, but it's pretty unimpressive stuff.

In the marketplace, there's lots of competition for 100 mile EVs. Maybe that's part of the reason the 40 is the lowest-selling. But TM has the 160 and 260-mile market to itself.

tshock | February 21, 2013

As a follow-up to Chuck's post, I spoke with a representative on the delivery information line (888-771-2505) and he confirmed that production of the 40 kWh configuration was delayed until this summer. When I pressed him for an explanation he said the sales and support teams learned of the production delay the same way the general public did - via the investor letter. After some additional conversation, he said he'd reach out to other people in the organization to get more information and call me back. Sure enough, about 10 minutes later he called back and said the reason for the production delay is the 40 kWh battery. It's not ready.

On a positive note, I thought he handled a difficult situation very well and I thanked him for his polite demeanor, patience and persistence. Unfortunately, that's where the positive notes end. Why an organization would blindside ~10% of it's customer base (approximately 1,500 people) by burying a bombshell in an investor letter is beyond me. By not preparing the organization for the fallout associated with the announcement, management placed their employees in the unenviable position of getting hammered with questions and complaints without any information or direction. It all comes off as very amateur.

At the end of the calll, I explained my position: I'm not willing to hang out for another 3 to 6 months to see if Tesla can actually produce the car that I contracted to purchase last August. He asked if I would be interested in upgrading to the 60 kWh configuration for the standard $10K price. I explained that I simply didn't have another $10K to sink into this car. I then asked if I could get my deposit back and walk away. He said he would check on that and get back to me by the end of next week.

I must say, this is a sad state to be in. I was truly excited about becoming a Model S customer; but, at this point I don't think that's in the cards. I honestly cannot abide waiting until sometime this summer to receive a car I contracted to purchase last summer. That's just not reasonable. If Tesla returns my deposit I'll walk away disappointed and dismayed but essentially intact, except for my pride. Quite a few of my friends bet me that my "car of the future" would never materialize. I guess they were right...

syddent | February 21, 2013

Tshock, thanks for some good information. That is oddly reassuring compared to "a desperate attempt to squeeze out a profit" narritive that I was expecting. I hope you can get the car at some point if you can't hold out now.

cmeyers | February 21, 2013

@tshock, I called and asked the same questions today, the answer I got about dropping out is that I would get a full refund no problem. Which is the only good news I have been told in a long time from Tesla.

What I really want is that all electric Nissan NV200 minivan, perhaps that will materialize before a 40 Tesla.

Chuck Lusin | February 21, 2013

@Brian H,

Thanks Brian, I'm glad that I still have my right to be petulant, yea thanks for the sarcastic complement.

My point is the crappy communication on Tesla's part, which caused lot's of us early res holders to make additional purchases to "Speed" up our orders.

BarryQ | February 21, 2013

Solarpowered, just out of interest, where do you live that surplus power is forfeited at the end of 12 months, and are paying $.36 per kWh?

I'm in Las Vegas, and surplus power credits never expire. (And pay $.12/ kWh)

Chuck Lusin | February 21, 2013

Also the still from the Tesla options page: http://www.teslamotors.com/models/options in the table under the 40 kWh column, Enters Production: Spring 2013, That was recently changed from Winter 2012. I see that it was changed on 1/16/2013, so why no email or phone call. And don't give me the crap that we don't want to take Tesla off task by wasting their time, they can easly use a calling machine, and send a recording, in a few hours.

trydesky | February 21, 2013

As a 60kwh owner (for just 2 weeks), I can only begin to feel the pain of all that reserved the 40kwh's. When I placed my 5K down over 2.5 years ago (p2234) I foolishly thought I was #2234 in line. When people who put down their 5K in mid 2012 got their car before me, I was seriously pissed...and missing the 2012 tax break is yet another sore point.

I'd be fine if they gave the 40's a chance to upgrade to 60, with a small break (maybe $500) as a sign of good faith.

Chuck Lusin | February 21, 2013

trydesky,

Congrats on your new car!

Since I have already installed my solar for the car, I'll just have to wait longer to get the car. But you have to think, will I really get the car, the EPA on the 60 came on schedule, and not witt the 40. How do we not know that it will be delayed again in 6 months?

solarpowered | February 21, 2013

BarryFinn:
Residential power on the island of Oahu, HI is about 36 cents/kWH. It's higher on the other islands. The utility company has set up a program where photovoltaic owners can use the electrical grid as a storage system. Surplus power generated during the summer months can be rolled over during the shorter daylight winter months. These rollover kWHs, however, have to be used within each 12 month period and cannot be accumulated beyond the anniversary of the metering agreement inception date.

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