Tesla

Three Years in My Model S (12,807)

June 13, 2016 marks the third anniversary of owning and driving a Model S from Tesla. I picked it up on a warm, bright afternoon in 2013 from the Grand avenue showroom in Chicago. I boarded a commuter train close to my North Shore suburban home just before noon and pulled into Union Station less than an hour later. Yes, I took a day off work. A short cab ride put me at the glass front door of the Tesla facility.

I was beyond excited, but also a little apprehensive. I was about to transition from the familiar internal combustion vehicles into a vastly different world of transportation. Was I making a mistake? What if it would be a bust in a year, or even less? Man, that’s a lot of money for a car. A tiny voice in compartment deep inside my brain said, “leave now.” I didn’t.

Almost everything about buying, owning and driving a car from Tesla is vastly different from any other car experience I have ever had. The entire buying process was done online, including selecting options, placing the down payment and electronically reviewing and signing all the necessary documents.

Ok. The transaction details are all complete. All that’s left is to drive away. And drive away I did.

Let’s just say that there is nothing like driving a Model S. I bought the 12,807th Model S off the Fremont, California assembly line. Because I was early on I got some things included that are now options; premium lighting, headliner fabric for starters. My dash has the wood grain going vertical. Soon after they changed it to horizontal. Small items for sure, but still, my Model S stands out.

No I don’t have summon or autonomous driving. I really don’t care. I do wish I had 4-wheel drive, but I’m doing fine, even in the Chicago winters.

Gas stations, oil changes, maintenance and worry are not in my vocabulary, having been replaced with miles of smiles.

 

Tesla Motors is More like NASA than GM

5, 4, 3, 2, 1, We Have Liftoff

I never get too excited or depressed about Tesla’s stock price. Stock analysts worry, and a lot. I can’t imagine how they ever sleep at night knowing that during those hours they are completely off the influence grid. Because Tesla went public it made a new bed and as a consequence, has at least two major challenges it must constantly consider.

  • Build a new kind of personal transportation that must compete with a 100+ year old industrial age vertical
  • Fund itself through a traditional stock market model while not making what that model values as part of their mission

Disclaimer: I own a modest number of Tesla shares and have for years, but it’s not my retirement plan and never will be. For me the primary investment is the Mission of Tesla, which for now means the Model S. I’ve owned one since June 2013.

The idea that someone would have the courage (and smarts) to start a car company from scratch and be able to differentiate it from all other automakers, as well as their products in every way, was extremely attractive to me. Others have tried, Tucker, DeLorean, but they were trying to compete with essentially the same formula. That rarely works out. In this case we have disruption and not the bullying kind which is what we often see in tech sector firms.

Car Guys are Wired that Way

I was nearly born in a car. My mother used to regal me with the story of how she just barely made it to the hospital. Five more minutes and I would have emerged while in the back seat of a 1954 Chevrolet Delray. Growing up I was surrounded by relatives who raced cars, worked on automobiles, both personal and commercial, and sold them to the public. I remember sitting in my Uncle’s Chevrolet sales room in Ohio while we were visiting one summer and seeing a sign that read, “A new Chevrolet is sold every minute.” Gasoline and oil ran through my veins and I inhaled more carbon monoxide helping my dad in the garage than was probably good for me. For the record, here’s a list of all the cars my father owned. I think it was all of them. The year column indicates when the car was manufactured, not when he purchased it.

Oscar's Car Life

Yes, there’s a very big gap between 1969 and 1982. Completely unexplained. Maybe we both failed to make entries in the diary. Never mind, it’s more fun to call “slacker.” We lost my father to cancer in 1992. He would have been proud to say he preceded his latest car in death by a full year. I frequently imagine what it would be like to pull up in his driveway with my Model S and take him for a ride.

As you can see, my father’s list is heavily weighted toward U.S. carmakers, especially General Motors.The recent stories about how GM covered up defective parts for decades was disturbing to me as someone who rode in, drove and owned them as an adult. The last time I owned a GM car was 1989. I switched because I couldn’t afford to pay the maintenance fees.

 Mission Control, We are Go for Launch

NASA_spacecraft_comparisonWhen President John F. Kennedy challenged America to “land a man on the moon and return him safely” in 1961, it was the catalyst for a series of missions meticulously planned and executed by NASA. Most had doubts we could do it successfully. The ones who believed worked at NASA. They developed a phased approach with three programs; Mercury, Gemini and Apollo. Mercury set out to successfully orbit the earth, study the ability to operate in space and recover both the astronaut and his craft. Gemini’s role was to study the effects of long term space missions on astronauts, perfect re-entry procedures and give astronauts extended practice time in a weightless environment. Once these were accomplished, the third program could begin. Apollo was about landing a man on the moon and returning him safely. I was enthralled with the space program growing up. I held my breath at every launch, was glued to the television for each mission and wondered what would come next.

Palo Alto, We May Have a Problem

Roadster S and XTesla is on a similar path. They started with the Roadster as a commercial prototype that would tell them lots about the viability of an electric car. From that came the Model S, an amazing form of Personal Transportation that won Motor Trend’s Car of the Year in 2013 and was rated the safest automobile ever built in tests conducted by the National Highway Traffic Safety Administration (NHTSA) in the same year. I view the forthcoming Model X, a SUV version of the Model S, together as a stepping stone to the third stage; the Model E. A smaller, much more affordable car within reach of a large number of U.S. households. Assuming they can progress, the Model E will bring them closer to accomplishing the Tesla mission:

To accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.

The cost of the three NASA programs is hard to pin down, but many sources say that Mercury cost about cost $277 million in 1965 dollars, Gemini cost $1.3 Billion in 1967 dollars and Apollo $20.4 Billion in 1970 dollars. Obviously these number increase greatly when you convert them to today’s dollars. These missions were a stunning achievement and brought innovative technology to the private sector in numerous ways. In other words, we all gained benefit from these programs.

The point of quoting the cost figures is to bring perspective into the discussion. Today’s dollars always appear small when we look back a decade or two. The difference in these programs is that NASA was appropriated the funds from Congress, Tesla must navigate the murky waters of being a public company.

Elon Musk’s release of all of Tesla’s patents was a courageous move. He realizes that no single car company can deliver enough electric vehicles to make a real difference in the planet’s climate. The intellectual property is out there. Others can choose to assist or ignore.

BMW and Chevrolet have purchased, taken apart and reassembled the Model S in their war rooms. Why? Most likely to see how they can defeat Tesla. It’s a competitive game after all, including how Tesla sells its cars. A combined mission here, like the one NASA mounted would be an amazing feat of American collaborative engineering on a level never before achieved, this time on ground vehicles. Automakers coming together, including Tesla, could bring about a change much faster than we could even imagine. I know I’m describing a fantasy in the world of stocks and profits.

Can Tesla really do it? Well, they landed the real estate for the Gigafactory. A great start. I believe it can be done and am pulling for them to succeed. Actually more than pulling for them. I drive the car and and am an ambassador for the brand everyday. I wish them success, not just to disrupt, but to innovate on a grand scale. To change history. A chance like that doesn’t come along all that often.

Image Credits: NASA and Tesla Motors

Is the Tesla P985 D Worth the Extra Cash?

The Need for Speed

Ever since the announcement of the P85D last year, I have been bombarded with questions? Is it really that much faster? Will the autopilot work? Is it worth the extra money?

In December I had a chance to ride (not drive) in a P85D at a special event held in the Tesla Highland Park Service Center. It was a very nice event. Hors d’oeuvres wine and craft beer was available as well as four P85 D’s constantly going for test rides.

IMG_5630

I really love the Highland Park facility. They continually make updates to the building inside and out and the people who work there are super nice. I’ve gotten to know them pretty well over the last 19 months as I stop in for events or to simply chat. But back to the topic.

IMG_5640

I got into the front passenger seat and Dave, my driver, pointed to the settings on the screen and asked, “Do you want sport acceleration or insane?” Really? You’re asking me that question? Okay, how about insane.

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Dave smiled. It was one of those smiles you get when you’ve asked for something without knowing what you’ve asked for and the result will not be what you imagine, at all. He navigated to the on ramp, slowed to a stop and then pressed the accelerator all the way to the floor.

Insane is a very good description. I wouldn’t call it acceleration. It’s more like escape velocity. You are pressed back against the seat and your stomach rises up into your throat. Telephone poles go by like they were part of a picket fence. It is truly a feeling of an “other world” car. My first reaction was wow, my second was, I could really get into trouble with this car.

A Short Test Drive in a P85D. Yes it does bring a tear to your eye.

Of course one can almost never use this type of power because we drive on roads where mere mortal cars roam and of course those pesky rules of the road. If having it for bragging rights is what you’re after, then you will always win that bar bet.

The autopilot sensors were working, reading and displaying the speed limit signs on the center console; as if that mattered. The firmware for autopilot was not yet ready for production, so no deal on seeing how that worked.

One of the most attractive things about the D announcement for me was the 4 wheel drive feature. I’m doing fine in the snow here, but all wheel drive would be a much more useful add on for me and many others as well I’m guessing. When Tesla announce the D they updated their Design Studio section on their site and offered the 60kWh battery with a 4 wheel drive option for $4,000 more. If that was available when I ordered my in early 2013, I would have jumped at it. Soon after they pulled that option for the 60kWh and now offer it only on the 85kWh and PkWh models.

One other downside about the 4 wheel drive option is that it virtually eliminates the Frunk as a storage compartment. The new motor and all the technology and mechanics required to deliver it means you can probably put your brief case or backpack in the Frunk and that’s about all. I assume that will also be the deal when the Model X comes out with all wheel drive. No one will be popping out of the Frunk on any demonstrations on cars with this options.

For me, I can’t justify the extra money for a D. Tesla rates the D with a 253 mile battery range and the 85 at 270 miles. Early reports indicated that the D would be able to make adjustments in how the battery powers the car, and actually deliver more miles. This doesn’t seem to be the supported very strongly based on how Tesla specs out the cars. I would rather have more range with 4 wheel drive as a close second.

It’s so hard to answer a question like “Is it worth it?” It’s always a personal choice. If it’s important to have speed and acceleration and you have the means, then go for it. It also might just might put some 85kWh and P85’s on the used market sooner, allowing new buyers to enjoy the experience.

Falling Gas Prices: Will This Impact Tesla’s Plans?

Who would have thought that the Organization of the Petroleum Exporting Companies (OPEC) would suddenly become so irrelevant? This powerful group controlled the production and price of a barrel of oil for decades and as you can see by the chart below they are under enormous economic pressure as well as, for the first time, significant competition for production.

Oil Price Chart 2

The United States, once so oil-dependent, is now emerging as one of the top producers of crude oil in the world. The price of a barrel of oil has fallen over half since July. As a result we have falling gas prices, which for most people is good news. Many of us are dependent on our cars to get us to work, school, run necessary errands, even take vacations. Gas has been a significant line item in the household budget. It’s now taking less of a bite out of that take home paycheck.

One of the big attractions of an electric vehicle is the owner never needs to buy gas. It was indeed a big factor in my total cost of ownership spreadsheet analysis when I decided to purchase my Model S. So how will what we might call “cheap gas” impact Tesla’s plans and how do I feel about that as a Tesla owner?

Tesla is more interested in eliminating carbon emissions, not necessarily saving people money at the pump. Their mission statement includes the following.

Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.

Current Model S buyers are not cash constrained and don’t watch the pump price as they drive their current cars. The Tesla Model S and others on the drawing board is about a completely reimagined version of the automobile. Disruption of the old guard of car manufacturing and built in Silicon Valley.

Clearly the Tesla Model S and the forthcoming Model X will only attract high end buyers. The success of these cars as well as the Gigafactory which will mass produce batteries at a much lower cost, are required before the Model 3 can become a reality. The Model 3 will be much more affordable and, if successful and in the target price zone car-buyers need, it will be the game-changer needed to propel electric vehicle adoption.

Tesla’s work means they are light years ahead of any typical gas car manufacturer when it comes to EV’s. No internal combustion car company could make the Tesla. It’s much harder to change than it is to start from scratch when it comes to innovation. That’s why Sears could never have become Amazon. They are simply not even on the same planet. The Tesla car is a design marvel and great design always wins. Think Apple over Microsoft.

History has shown that when consumers can save at the pump they don’t automatically spend the difference somewhere else. It’s also important to remember that despite less money being spent on fuel, the cost of maintenance, both economic and in time remains unchanged. EV’s require little to no service.

This change in gas price is so dramatic that I believe consumers who are right now looking at their 2015 budgets, might just entertain the concept of holding off to the side a fund for the Model 3.

Do lower gas prices make my economic analysis less compelling today than when I did it two years ago? No question about it. But my buyer’s remorse matches my emissions output; zero.

 

Car Dealers Should Fear the Tesla Model

I’ve written at length about the American Automobile Dealers Association’s displeasure with Tesla’s business model of selling direct to consumers on a dedicated page on my blog. At this point the reasons for the fight are old news just like the dealer network and way of doing business is from a long-gone era. The dealers are tone deaf to the way consumers shop for and ultimately purchase products. The dealers have a number of stated reasons that Tesla should not be allowed to sell their cars. These are the ones most often stated.

Consumers Won’t get the Best Price

Tim Doran, president of the Ohio Automobile Dealers Association recently said, “If you have a manufacturer that is selling vehicles direct to the public and they are the only source for that particular vehicle, there is no competition for the price.”*

As a sound byte that seems logical. We know from experience that single providers veer away from consumer good and toward corporate profits. However, that happens even when there are multiple makers and suppliers of products and services. For years we only had one telephone company. If you wanted dial tone there was only one place to go, Ma Bell. The Bell System monopoly was broken up by federal mandate in 1982 as part of a consent decree. Certainly it opened up competition by MCI and Sprint for long distance service and eventually to the cellular phone network. It accomplished the goal of offering the consumer choice. Pricing is an altogether other thing. The plans that were made available were impossible for the average consumer to understand. Local rates, long distance rates and my favorite, local-long distance. Then there was the slamming. Calling a consumer and promising low cost phone service and then switching them whether they agreed or not. This strategy is a time-tested one. Offer non-customers a low rate for a fixed period of them them raise the price and they won’t even notice. Built-in price increases without having to publish the price.

Certainly there is an acquisition expense for the company that must be recovered as they calculate their lifetime customer value (LCV), but it lacks transparency and is full of unexpected surprises for the customer. A lower price up front always means it will be made up in some fashion over time. It requires consumers to put considerable effort in understanding the total cost of being a customer for that company and their product or service. Very few of us practice this economy.

Tesla is fully transparent. They don’t make or sell a car. I argue it’s not a car at all. It’s personal transportation. The likes of which has never been seen before. Tesla doesn’t tell consumers they are the lowest cost provider. All options and pricing are right up there on their web site for anyone to see. Configure your Model S and you know exactly how much it will cost when you pick it up. Here’s the real difference. The pricing on car manufacture’s sites have almost no connection with what you will pay when you finally cut your deal. Missing from the car builders’s sites are all the things that dealers will try to sell you and charge you for over time. And it’s estimated that dealers add up to $1,500 to the cost of a vehicle.

My suspicion is the real reason dealers don’t like Tesla is they make a transportation choice that they are unable to compete with. There is very little difference between most internal combustion engine (ICE) cars. Certainly they have varied feature options, designs, technology, etc., but the concept is the same. Thousands of moving parts, burn fossil fuel and carve out your time and money to keep it on the road each year. Dealers have to create promotions and gimmicks to get attention because shopping at Ford is no different than shopping at Chevrolet or Toyota or Honda. It comes down to which car fits your driving preferences and fits within your lifestyle. Not only is the shopping no different, the driving isn’t either.

Dealers are dealers and the experience is essentially the same. Saturn made a run at breaking that paradigm with their fixed price, no negotiation approach. It was groundbreaking and in some ways it worked.

The Model S is an entirely new approach to what goes into a car. That means first cycle technology which always costs a bit more at first but will get better and chapter over time. Trying to win on price is largely for commodity items, like milk and gas-powered cars.

Safety Will Be Compromised

Another item cited as a reason to continue the ban on direct sales of cars to consumers is safety. I’ve read numerous news reports and claims by car dealers that say they make cars safer for consumers. So let’s look at the stats. 22 million cars were recalled in 2013. GM alone has recalled 30 million in 2014. In General Motor’s case the recalls represent a shift toward a more accountable culture. Decades of covering up problems in the name of profit are perhaps seeing at least a peak of sunlight these days, but not without federal action.

My question to the dealers would be, what action did you take to demand safer cars? When Toyota had their unexpected acceleration issue, did you threaten to stop your orders until it was fixed? When customers flocked to your service bays did you band together with your fellow dealers and forcefully demand more facts and change? I’ve not read anything even close to that.

Recall service is paid for by the manufacturer, which means dealers can make money on them. I’m not suggesting dealers want to see people hurt or killed, but for minor things that are not mission critical to safety, they probably don’t mind much. In fact they have changed the word recall to “product update.” When I bought an ICE car for my wife in January of this year, not a word was uttered about safety or taking me through the history of recalls and what was being done to ensure that was a thing of the past.

All Car Manufacturers will Start Selling Direct

Of all the reasons offered up, this one strikes me as the most lame. GM has so many self-made distractions these days, figuring out how to sell direct cannot possibly be high on their radar. First of all having a dealership is only mildly about selling cars, it’s really about selling service. It’s a system designed for customers to come back again and again to open their wallet to “maintain their vehicle in top working condition.” Why would Toyota or Honda or Ford even want to scale up for that? Perhaps I’m wrong and of course I don’t know the P&L implications, but this would likely require a huge investment.

Please remember ICE car makers build ICE cars. Tesla makes electric cars. They are on different planets. The Model S does not require anywhere near the service level that ICE cars require. Imaging having an ICE car and realizing that the only thing you had to remember to do was put gas in it and maybe replace the tires? No oil changes, tune-ups, timing belt replacements, transmission service, et… How many more new ICE cars would be purchased if that was true?

What you Don’t Have to Worry About with a Model S

Mr. Doran concedes that the Model S is “a pretty nice car,” but he says he wouldn’t buy one because there isn’t enough of an infrastructure for parts and service. So let’s make a list of some of the parts you find on an ICE car that you don’t have to worry about with a Model S because it doesn’t need them.*

Parts List

I can see how Mr. Doran is so concerned about needing easy and fast access to parts. With so many of them and that display of a lack of confidence in their reliability, he needs peace of mind. As far as “infrastructure” is concerned, the only one really needed is electricity which is already in ample supply across the country. Charging stations are numerous. ChargePoint, the service I use frequently has over 18,000 stations in the United States. As a quick comparison, there are 14,000 McDonald’s restaurants.

Let’s compare the power plants of an ICE car engine and a Tesla Model S motor.

Engine comparison

Tesla uses a brushless AC induction motor consisting of a rotor and a stator. The only points of contact in the motor are the bearings. It puts out 290 kilowatts and delivers 100% instant torque at any speed and does it using a single gear; drive.

Software as a Service

Tesla is a Silicon Valley company. True, there are issues with how these guys behave these days, but what you get is an entirely new experience and level of performance. When the first iPhone was released in 2007, it was either $499 or $599. Who would ever think that spending that much on a cell phone made any sense? After all, you got your new cell phone free from your provider (after signing a new subsidized 2 year contract of course). Apple sold 6.1 million of their first generation iphones in the first five quarters. It was groundbreaking.

Before I purchased my Model S I test drove a Mercedes Benz S Class. The salesman told me the navigation system was amazing and I could get map updates as well. I asked how that worked and he said I would schedule a service visit, bring in the car and they would update them for about $300. My Model S receives over the air updates and they push new versions of Google Maps to me free of charge. Another stark example why dealers don’t want Tesla’s model anywhere near them.

 

Ford was founded in 1903, General Motors in 1908, , Chrysler in 1925. Tesla was founded in 2003. They have taken the time to reimagine what transportation should be for consumers. Considered the environment while making them. Building in deep safety measures, and breaking the belief that along with car ownership comes the burden of parenting it with repeated maintenance and expense.

* Quote taken from The Columbus Post Dispatch, September 30, 2014

Tesla Service Provides a Best in Class Experience

 

Tesla-Highland-Park-Service-Area

Having hit 6,000 miles on my Model S it was time for a tire rotation. I called the Highland Park service center. The person who answered the phone said they were very busy and could they get back to me later on. Not long thereafter I received an email that offered me several dates available for the service request. I countered with a different date. The reply came quickly and indicated that day would be fine. They would valet my car to the service center, perform the tire rotation and return it to me.

From that initial phone call they captured my cell phone number and matched it to my information on file. They knew my home address and had already lined up potential service bulletins that might apply to my specific car.

Exactly at 8:30 am last Saturday, as promised, my doorbell rang. My car was driven away and I went on with some gardening chores I was looking forward to doing. About three hours later my iphone rang. They were all done and leaving the service center.

In less than twenty minutes my Model S entered my driveway and was driven directly into my garage, exactly where I park it. The gentleman who drove it emerged from the car, plugged it in and handed me the key.

The tire rotation had been performed along with a couple other minor updates. My Model S had been vacuumed and hand washed, including tire shine. All of this at NO charge.

I’ve had dozens, perhaps a hundred or more service experiences with other car makers. None of them, absolutely not one compared to the experience Tesla provided.

Tesla continues to get things right. They’re not perfect, but in ten short years they have an amazing product and it seems they have the energy and determination to keep advancing.

A Scientific Lifestyle

It’s not unusual for people who have a strong attachment to something to form clubs in hopes of meeting like-minded people. It’s been happening for centuries. Tesla is no different. There are a lot of communities, forums and information sites out there that are Tesla related. A couple of months ago I came across a very interesting one, Teslarati.

Teslarati Logo

Teslarati’s goal is to be the number 1 source for Tesla lifestyle news, product reviews, aftermarket upgrades, and accessories for the Tesla Model S, Model X and Roadster.

The site is very modern and keeps with the current design trend by making things easy to find. Content at a glance. It takes on a diverse collection of topics and does it with a mix of auto industry pros and journalists. They have global connections and a significant amount of their readership comes from outside the United States.

Recently they reached out to me after reading my blog and asked if I’d be interested in contributing. Needless to say I was honored and after a phone conversation with Gene, the founder, it was clear to me that these guys were the real deal. Gene had never met a Tesla owner outside California before talking to me. The site was started as an experiment to try to capture and communicate the Tesla lifestyle. They are growing fast.

I’m happy to report my first post for Teslarati was published yesterday. I conducted an interview with Gino Bernardi who is the only licensed livery driver in Chicago that drives a Model S on the job. You can check him out, and order a ride from his web site Watts on Wheels. Below is Gino’s Tesla on the tarmac of an executive airport waiting to pick-up a client.

 

Model S on Tarmac

 

Although the Model S is now registered in all 50 states, the greatest concentration is of course in the Golden State. But Chicago has a strong Tesla following as well as car ownership. I will be reviewing aftermarket products on Teslarati as well as providing my personal perspective on what it’s like to drive the car in the Chicagoland area. I believe in time that the EV can seamlessly integrate into most people’s driving lifestyle. As the technology gets cheaper and more advanced, millions will be able to afford one in a few short years. Change is always hard and slow. One of my goals is to help people learn, get comfortable with and clearly see the benefits of driving electric.