Tesla Model S demand exceeds expectations, 40-kWh model nixed
04-01-13 | 07:20 PM
#1
Tesla Model S demand exceeds expectations, 40-kWh model nixed
Tesla Model S demand exceeds expectations, 40-kWh model nixed
Elon Musk has promised he will make an "exciting" announcement tomorrow, but Tesla Motors issued two bits of news late last night to add to whatever we'll learn about on Tuesday. First off, sales of the Model S have "exceeded the target provided in the mid February shareholder letter" by 250 units. Second, sales of the low-end 40-kWh Model S were so low that the model has been scrapped.
In February, Tesla said in a shareholder letter that it expected "about 4,500 deliveries in
Q1" of 2013. It has instead sold 4,750 and it is thus "amending its Q1 guidance to full profitability, both GAAP and non-GAAP." The company is now delivering 500 vehicles a week, up from 400 not too long ago. We now have to wonder it the original estimate of 20,000 sales in 2013 will also change.
It was just about two months ago that Tesla started delivering (what had been) the mid-level Model S, which has a 60-kWh battery. The top-of-the-line version uses an 85-kWh pack. As of this writing, the 40-kWH model remains listed on the Tesla website, but apparently, "only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version." What about those four percent? They will get a 60-kWh model that "will be software limited to 40 kWh. It will still have the improved acceleration and top speed of the bigger pack, so will be a better product than originally ordered, and can be upgraded to the range of the 60 kWh upon request by the original or a future owner." Originally, the 40-kWh model was supposed start deliveries in the middle of 2013.
Lastly, Tesla revealed that every 60-kWh Model S – where Supercharging was supposed to be an optional upgrade – has the Supercharging hardware built in. The company calls this a "small Easter egg" (it is based in Silicon Valley, after all) and says it "is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade and receive unlimited, free long distance travel for life. Even for those that never drive long distances, this will improve the resale value of their car to people that do." This means that every Model S out there will have Supercharging, and Tesla has already said all future vehicles will have the fast-charging technology as well, so it is a technology the company believes in.
Tesla Motors announced today that sales of its Model S vehicle exceeded the target provided in the mid February shareholder letter. As customers who note their Model S serial number this weekend will realize, vehicle deliveries (sales) exceeded 4,750 units vs. the 4,500 unit prior outlook. As a result, Tesla is amending its Q1 guidance to full profitability, both GAAP and non-GAAP.
"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," said Elon Musk, Tesla Motors co-founder and CEO. "I would also like to thank our customers for their passionate support of the company and the car. Without them, we would not be here."
Also being announced today is that the small battery option for the Model S will not enter production, due to lack of demand. Only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version. Customers are voting with their wallet that they want a car that gives them the freedom to travel long distances when needed.
The customers who ordered this option will instead receive the 60 kWh pack, but range will be software limited to 40 kWh. It will still have the improved acceleration and top speed of the bigger pack, so will be a better product than originally ordered, and can be upgraded to the range of the 60 kWh upon request by the original or a future owner.
Tesla is also revealing a small Easter egg today: all 60 kWh cars have been and will be built with Supercharger hardware included. Tesla is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade and receive unlimited, free long distance travel for life. Even for those that never drive long distances, this will improve the resale value of their car to people that do.
"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," said Elon Musk, Tesla Motors co-founder and CEO. "I would also like to thank our customers for their passionate support of the company and the car. Without them, we would not be here."
Also being announced today is that the small battery option for the Model S will not enter production, due to lack of demand. Only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version. Customers are voting with their wallet that they want a car that gives them the freedom to travel long distances when needed.
The customers who ordered this option will instead receive the 60 kWh pack, but range will be software limited to 40 kWh. It will still have the improved acceleration and top speed of the bigger pack, so will be a better product than originally ordered, and can be upgraded to the range of the 60 kWh upon request by the original or a future owner.
Tesla is also revealing a small Easter egg today: all 60 kWh cars have been and will be built with Supercharger hardware included. Tesla is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade and receive unlimited, free long distance travel for life. Even for those that never drive long distances, this will improve the resale value of their car to people that do.
04-01-13 | 08:44 PM
#3
Lexus Test Driver
Joined: Mar 2003
Posts: 1,243
Likes: 0
From: Maryland
Very slick cars. There's a Tesla service center right down the road from where I live, which probably explains why I've seen so many of them in my area the past year. Understood on dropping the 40 kWhr model for production viability reasons, but if somebody has reached the range limits of 40 kWhr but really has a 60 kWhr battery just "software limited", is it really ethical to limit range like that? How exactly is this achieved? Will it just cut them off and potentially make the car a safety risk being stuck in the middle of the road even though it actually has hidden power left? Sounds screwy....
04-01-13 | 09:40 PM
#5
Congrats to Tesla. Beautiful vehicles. There are 7 I consistently see where I live, which is roughly about 30miles away from the Nummi plant in Fremont
at the very least make it 50 or something. Cutting off at 40 when it's 60 is plain silly IMO.
Very slick cars. There's a Tesla service center right down the road from where I live, which probably explains why I've seen so many of them in my area the past year. Understood on dropping the 40 kWhr model for production viability reasons, but if somebody has reached the range limits of 40 kWhr but really has a 60 kWhr battery just "software limited", is it really ethical to limit range like that? How exactly is this achieved? Will it just cut them off and potentially make the car a safety risk being stuck in the middle of the road even though it actually has hidden power left? Sounds screwy....
Thread
Thread Starter
Forum
Replies
Last Post
