If Tesla continues to follow this route it will have lasting implications for the automotive industry. Instead of replacing" your car every 5-10 years you can "Upgrade" keeping existing chassis but replacing enough to make it "Like New" (Refurb vs Replace) Automakers sell a completely new car just to make a few thousand dollars every 5-10 years and that's only if the customer stays loyal (Also why some car companies have loyalty incentives) in this case Tesla can still make that income and the customer is locked in as a bonus this will help to keep resale values high since there will be less cars on the market because owners upgrade instead of selling.
Now more then ever I wish I bought Tesla stock before it went through the roof.
>If Tesla continues to follow this route it will have lasting implications for the automotive industry.
No it won't.
This upgrade concept has been tried in many consumer products over the years and it hasn't caused any ripples let alone waves. The fact is that people like buying new products. It's an opportunity for them to re-evalute their product choice. They like the experience of having something different. Many reasons that aren't simply financial/practical.
And it especially doesn't work with cars. The interior of a car wears over time in a way that is impossible to make new unless you replace it. And many of the newer technologies e.g. autonomous require massive changes to the internal system. Add it all up and it becomes very cost prohibitive to upgrade rather than simply replace.
Every part of the car interior can be replaced if it is designed from the ground up with that purpose of retrofitting. For instance you look at a dress shoe and think that the shoe has to be thrown once it is worn out, but Allen Edmonds shoes can be re-crafted once they are worn. They look as good as new. If something as tightly coupled as a shoe can be re-crafted, the interior of a car surely can be.
Also - with an electric motor most of the complexity is in the software - which can be easily upgraded. Autonomous driving - needs massive changes to the internal system ? Like what ? From what I can see - the physical changes needed are in the steering department - that's about it. Rest is all software.
I can bet any money that one day Musk will upgrade a Model S into a driverless car. Perhaps in the next 5 years.
> but Allen Edmonds shoes can be re-crafted once they are worn.
As someone who only wears Allen Edmonds shoes, there is a limit to recrafting. I have a pair of shoes that I absolutely love, and they have been rebuilt once. But I fear that the insoles are quickly approaching the point of no return, such that Allen Edmonds won't/can't rebuild them.
Everything can be rebuilt, but there is a point of depreciating returns with things like car interiors.
Even on your standard car seats can usually be swapped out in under an hour (Four bolts per seat, disconnect one power cable - Reverse to reinstall) carpet + seats takes longer but still only a 3-4 hour job when I've done it in the past. Usually dealers will charge an insane markup replacement parts though "bundling" them into an upgrade package (for less then the sum of purchasing individually) seems to make sense.
Can you give an example of where the upgrade concept has been tried before?
I can see it having difficulty operating on small or even medium sized purchases, but a car is a very different thing. Why make a large purchase when you don't have to. People already know new cars loose so much value the second they are driven off the lot, why would you subject yourself to that if you can upgrade your existing car.
From an environmental standpoint, isn't upgrading an existing car much more friendly to the environment that digging up new metals.
As far as things like the interior wear, why not be able to upgrade a new interior. Why trash an entire car just because part of the interior is worn. So you need a new headliner, get just that. You don't need to throw away the whole car.
I'd agree that large scale changes like completely autonomous control may be difficult to retrofit, but probably not impossible as many cars are being built with park assist which means autonomous control could be mostly a software change rather than hardware. At the same time, how often do we see massive technology changes like that in the automotive space. More airbags could be tacked on to older cars, brakes upgraded to ABS could have happened. Basically, anything that has happened in the automobile in the last 50 years could probably have been a minor hardware upgrade. Even carburator to fuel injection could be an upgrade.
I also think we're experiencing a cultural shift in why and how people buy. I think the idea of just buying something new, is becoming an outdated. I know I don't want to buy just to buy, I don't go "shopping", but I definitely did in my younger days.
Lastly, can you please not state as fact what is clearly your opinion. To say "No it won't" is a very abrupt and I'd say rude response and seems to attempt to shut down discussion rather than saying "I don't believe it will have implications because..."
Upgrading the Interior is going to be expensive, to the point that no one will want to do it. The older parts are going to be more expensive, because someone has to keep them in inventory; and then they are going to be much more labor intensive to install than they were originally; since the car is actually put together.
Modern cars are getting harder to repair (smaller spaces, closer quarters) than in the past.
I also think the entertainment electronics are getting much more tightly integrated. When I was in high school 15 years ago it was pretty common to replace your stereo (and get a CD player!); but now the whole system is so integrated into the look and feel of the car anything aftermarket will just look out of place.
I think you're looking at this with the 'innovators dilemma' problem of expecting cars not to be designed with the idea of upgradability in mind. Maybe Tesla has been thinking this way all along.
Upgrading an interior probably has too much diverse meaning to meaning (does it mean dashboard? seats, console? etc), so let's leave that one for now, but I think the rest of the issues you mention have possibly already been addressed.
Older parts don't have to be more expensive, because we'll be able to 3-d print metals, or assuming we're talking about an electric car, there are less mechanical parts anyway and a company could decide on a modular design that they stick to for efficiency purposes. For instance, Toyota could decide on a shape and size of their batter pack. Then as battery technology inproves, they don't have to create a bunch of stock to upgrade old cars, as the old cars would use the same design as the new.
I agree with you regarding smaller spaces and closer quarters, but technology is also constantly shrinking too, so I think it might be possible that replacement/upgrade parts could be smaller than the one they are replacing, so as long as they share a mounting structure, it won't cause a problem.
You are right about entertainment systems, previously there was a standard (I think it was called DIN) size and there was only one size. Then they added 1.5x and I think 2x sizing. But upgrading your entertainment system used to mean getting an aftermarket system, not a system from the same manufacturer. Now, it seems to me, that manufacturers use the same or a very similar system across their brands. They aren't stocking 100s of different systems, they are stocking 5 or 6 and those are used across all of their designs.
If upgradability is thought important from the design stage, I think all of this is possible, and more.
Automakers lock consumers into rebill programs via debt, i.e. a car loan. Tesla locks consumers into rebill via equity, i.e. a nice car, conveniently iteratively upgradeable. Thus Tesla gains capital advantage because it has no liability after disposing of a car asset, while automakers generate debt liability. For every car manufactured, automakers create a liability for themselves, while Tesla creates an automated income stream. Consequently cash flows better in Tesla than in its competitors. Relative to that of automakers, Tesla cash flow increases exponentially. Tesla is competing on a different level. The automakers will be lucky to earn a spot on Tesla's platform. At the very least, Tesla has a first-mover advantage in a surprisingly new market.
Is there any evidence what so ever that the financing arm of automakers is causing a systemic problem in their business ? Because I haven't seen it. And if it was a problem they would simply spin off a company like BMW does (BMW Financial Services).
And it's a bit early to be taking about how fantastic Tesla's cash flow situation is when they have been losing so much money in recent years. And they have so much cash locked up in a Supercharger network that has a questionable future (proprietary standard, embrace/extend model, no interest from other automakers).
The interest from other automakers is irrelevant, because that's expected. No car maker is going to cooperate with any other in a way that makes the other look good. BMW electric car owners could desperately want to use the supercharger network, but there is no way in hell BMW would ever let them.
They would if the basis for all of it were open standards. Many car components are standard sizes and can be used regardless of manufacturer. However because it is a proprietary standard and Tesla leads in adoption car manufacturers would be susceptible to the embrace and extend tactic. They would never stand for that.
Sure they do, but someone who bought a Roaster in 2008 surely has it paid off by now. However unlike every other manufacturer that forgets about the vehicles it used to make (unless there's a recall), Tesla is improving existing products.
I have a 2004 SUV with a 7" satnav in it and some god-awful software package. Does Acura offer an upgrade path for this? Other than a way to update the roads database, no. Buy a new SUV.
The new-for-old replacement cost of an iPhone 1 is peanuts compared to an SUV. Pinot makes a legitimate point that some car components could be made upgradeable by their manufacturer -- like entertainment units -- but they don't, and they're missing out on those aftermarket dollars as a result.
I've owned a number of cars for which I would have spent thousands of dollars with the brand upgrading them if options were available.
Do the automakers still finance car loans directly? I know GMAC turned into Ally and is no longer owned by GM. I'm not so familiar with the other automaker's financial arms.
In my experience buying a VW and a Mazda, the financing I've been offered has been through another company. I don't remember who the VW bank was (financed through my credit union at the time), but the Mazda financing is a co-branded Chase loan.
According to Wikipedia[1] Ford is the only one of the big three Detroit manufacturers to still have it's own financing arm. As you noted, GMAC spun off into Ally, and Chrysler Financial was bought by TD Bank.
Not disagreeing (edit: well maybe I am, a bit) but with a Tesla the "upgrade" is pretty much mandatory as the battery packs have a limited life. So even if you don't need to upgrade to get the extended range, you still need to replace the battery pack every so often. Also other components on the car will wear: brakes, suspension, interior. A lot of people trade/replace cars even if the car is still running and reliable, just because they are tired of them, the interior is worn or falling part, the seat springs are flat, etc. Or they just want something different, bigger, or with different utility.
You could take most cars of the last couple of decades, and a complete interior update, engine/transmission replacement, and suspension rebuild would still be cheaper than a new car. But few people do that.
Keep in mind dealers are not the ones who offer the Update/Upgrade you are dependent on aftermarket services which tend to be more expensive (It's easily more expensive to restore a "normal" car then buy a new one) However in Tesla's case they can roll the restore into a easy to perform upgrade because of their limited number of models and prior engineering of things like battery swaps to be quick/easy. While it might take a hundred hours to do a restore of a normal car Tesla can swap a pack, some body panels, electronics and interior in a days labor.
>While it might take a hundred hours to do a restore of a normal car Tesla can swap a pack, some body panels, electronics and interior in a days labor.
Any source for this?
I spend some time on the Tesla forums. There are threads of people get into minor collisions and receiving estimates of 100+ hours of labour to replace some front end parts and paint, along with bills over $20,000[1][2].
So, I don't think it's as simple to replace these parts as you suggest.
Replacing undamaged body parts is orders of magnitude easier then replacing something that's been in a crash. Most bumpers or fenders can be removed in under an hour and install time is similar. (Source: I worked at a body shop while I was a teenager and I used to build AutoX/Drift/Rally cars after that) You can charge insurance insane amounts for parts if the value of the car is high enough that it's not going to be a total loss. That "cost" is separate from the actual cost of the parts/labor. Along the same lines MRIs really don't have to cost $10,000 regardless of what your hospital puts on the bill. When you can go to the phone book and get the same MRI for $500 from many sources.. but you're not going to be price shopping when you're in the ER with a broken leg. What's the real market rate?
I do agree that if, as seems to be the case, Teslas are designed for upgradability, that is a key difference. However I still maintain that from a purely financial perspective it's cheaper to maintain an old car than buy a new one, especially when you account for depreciation. You can keep an old car going almost indefinitely if you do the maintenance. Most people don't WANT to keep their old car forever though, and I don't see any clear reason why Teslas will be any different in that regard.
Kudos to joesfresco for originating this idea[0], but after observing Tesla for the last couple of months, they're really developing car hardware, as though it was software, and it's continually winning me over as a better automobile "development" cycle.
No car company has ever existed quite like Tesla, and I think this is almost the automobile 'iPhone' in the making. They've done three incredibly important things in this press release, that has taken me a bit to fully appreciate.
First, they're the first car company that I know of that has offered serious vehicle improvements as a service, ever. Tesla is offering 40%-50% improvement on range. Imagine Ford coming out tomorrow and saying anyone can bring their cars in and we'll improve your MPG by 40%-50% for a few thousand. That's unreal.
Second, to do this, they HAD to have looked at the possibility of just releasing a new and improved Roadster, with no upgrade kit. However, they not only actively made the decision to not do that, but to offer it as an "update" simply because they saw it as a bigger benefit to their users. This is a move on par with Tesla shipping the new hardware with cars coming off the assembly line, and then activating that hardware once it was announced [1].
Third, by doing this, Tesla, is training it's customers to recognize that Tesla's are a long-term investment. It's literally a punch right in the face of modern car manufacturers, letting them know that a new car every year is not the way we do business. They're saying that this car is not a product of a year of development, but a product of years of innovation and development.
Suddenly, $70,000 for a car is a lot more justifiable if I know the manufacturer will be updating and improving my vehicle in 4 years still.
Nothing new. You can go the you Audi, BMW, Mercedes Dealer and "upgrade" your car with some features as long as no new hardware is required.
It is quite common for some time, that a number of features are just a bit flip in the settings if it is enabled in your car or not. That is the reason why there is a whole industry around, which do things like "chip tuning". They just reverse engineered those things.
May be you can't go to a dealer in the US. But that is related to a different market situation. I learned, in the US you buy that car that the dealer has in his show floor available. In Europe, especially in Germany I order my car to my like. I can also go to that dealer and "add" features afterwards.
I think you missed the key point the parent was making: what other manufacturer offers to upgrade your car's hardware (without it being part of a safety recall!).
They'd rather you buy a new car with the better battery pack, vs. just upgrading that component.
I think this is super awesome. The fact that range is up from 265 miles to 400 is a great accomplishment. I look forward to seeing what the Tesla team will be doing in the upcoming years.
That's actually pretty significant. I doubt anyone would want to drive more than 400 miles in a day. You can almost get between any two points in England with that range.
400 miles wouldn't even get me to my brother's place in the next state over.
More than 400 miles in a day is common in US roadtripping. On the other hand, breaking up those long driving days with a reasonable recharging period would be more than OK.
I think for many Europeans it's easy to forget just how big USA and Canada are. I've been on vacation (we just call it holiday) where we've driven SF -> Yosemite -> Las Vegas -> Arizona -> LA, and on another trip DC -> Virginia -> Charleston -> Savannah -> DC, and both times I've forgotten just how long it takes to get anywhere. I suspect this is why so many people fly domestic?
>Don't you love government regulation of the market until it affects something I want to buy?
Precisely. Would Tesla even exist today without government subsidies? Nope. For that matter, neither would GM or Chrysler.
Why are the majors seen as "evil", and Tesla as "good"? I don't understand that narrative whatsoever. I just want good electric cars, and couldn't care less who produces them.
Because in almost any market, incumbents do everything they can to prevent newcomers from establishing a foothold in the market. A current example of this is the proxy war the established automakers are fighting against Tesla via their dealerships, who are pressuring their local politicians to ban Tesla from selling directly to consumers in various states.
>>I just want good electric cars, and couldn't care less who produces them.
The world would be a better place if people cared about who is producing the stuff they buy, and how.
"The original Roadster had a drag coefficient (Cd) of 0.36. Using modern computational methods we expect to make a 15% improvement, dropping the total Cd down to 0.31 with a retrofit aero kit."
I wonder how's this going to affect the generated downforce (=> and, as a consequence, the aerodynamic grip). Cd for a F1 car is around 1.
'Cd is a coefficient. It reflects the aerodynamic efficiency of the car relative to an equivalent frontal area oriented vertically [i.e. a brick]. An F1 car achieves efficiency by having a small frontal area and effectively directing drag forces. 0,5 square meters with a 'Cd of 1.0 creates less force than 2.0 square meters with a 'Cd of 0.3.
Is aerodynamic grip really relevant for a road car? Is anyone really turning at a speed fast enough for it to matter? If you want to improve grip for your road car, you tune the suspension and buy some nice tires.
Lowering the Cd will definitely improve your milage, however.
In the case of Tesla you mean? One look at the Lotus Elise and you'll see they weren't exactly going for aerodynamics. Tesla barely survived the launch, so it wasn't going to happen back then.
This is one of those "in hindsight" kind of things that never get fixed. The fact that Tesla is doing it says a LOT positive about them.
> But, yeah, expensive purpose-built race cars have little in common with road cars
I wouldn't say little.
Many F1 technologies have made it into production road cars and the future of the sport will see this technology sharing increase. That's why there was the big engine change last year. And it wouldn't surprise me if their split turbocharger design that was responsible for Mercedes success makes it into their road cars.
It absolutely does make sense. F1 cars have high Cd because they need lots of downforce. An A6 does not need as high Cd as a sports car. So if a roadster's Cd goes down then the question arises: will it affect it's aerodynamic grip or not?
Since you're asking a math question the answer is "yes of course." However having owned an Elise and driven a Tesla Roadster I will confirm that strapping the equivalent in weight of an entire F1 car in batteries to the bottom of one removes aerodynamic handling from the bigger equation at play.
They're fun as hell and also uncomfortable as fuck. 400 miles is more of an endurance test for the driver than the power supply. (Also, loved every second inside both of them!)
> ... we can achieve a predicted 40-50% improvement on range between the original Roadster and Roadster 3.0. There is a set of speeds and driving conditions where we can confidently drive the Roadster 3.0 over 400 miles.
That has been the range where I'll even begin to consider a car of that sort. I'm seriously rooting for Tesla.
It seems you are stuck in a go till empty mentality. You don't drive an electric car until the battery is empty and then recharge. You plug it in at home and wake up to the battery charged to the same level every day. You'll actually save time not spent at a gas station in everyday use.
It doesn't matter all that much what your average daily drive is, if you have several road trips a year where an EV's range is prohibitive. That is, of course, until the EV saves you enough money over a full-time gas car that you can afford to buy or rent a spare gas car for your road trips. Or until charger or battery hot swap stations are everywhere.
This is a good point. Early model range was still too low (I have days where I end up driving a couple of hundred miles on little advance notice). But given a realistic (not some next-to-impossible "ideal") 300-400 mile range, in most cases when I need more than that I know about it far enough in advance to arrange a rental. That also assumes that total cost of ownership is lower by enough that it's practical to use rentals as a "second" vehicle and still come out ahead.
I don't drive 400 miles daily, but at the same time, I don't want to have one car for short distance commutes and another one for long distance travels.
People who actually own Teslas are, on the whole, less fanatic than you are about range. If you can charge in your home garage, then you start every morning with a full battery. How many days do you drive more than 265 miles? And for long trips, there's the supercharger network, and the first battery swap station is in beta along the SF/LA route.
Not sure why this is downvoted. What you've stated are the magic numbers for widespread electric car use. 400 mile range with sub-hour recharge. Shouldn't really be a controversial point.
Shame you were downvoted when everyone that replied to you is pretty clueless about how most of the world lives.
Most people don't have powered garages. And most of the world doesn't have power points on street parking or in apartment/work parking lots. So this "I will just refuel every day" concept really falls apart if you're trying to scale out your product.
Tesla desperately needs to get from this early adopter phase into targeting the mass market. And that means catering for people such as yourself that expect a range comparable to their previous car.
"Most people don't have powered garages. And most of the world doesn't have power points on street parking or in apartment/work parking lots."
Most of the people have an electric network already installed on their house. If you have already a garage, putting a 5 meters cable is not such a big problem.
You will need a new installation anyway, because you will need more power.
Most of the world ALREADY HAVE power points on apartment-parking lots. It is called Street lighting, not used during daylight, and designed for when LED lighting did not exist. You can replace 1000+ Watts old bulbs with a 100W LED one easily today.
I have an electric car that I use a lot. Most of the fear I had when I bought it was non sense.
> Most of the people have an electric network already
I meant most people don't have powered garage suitable to support an electric car. And likewise there is no solution for street parking or people who live in apartments.
> Most of the world ALREADY HAVE power points on apartment-parking lots.
No they don't. Show me where there is individual or even shared power points available for public use. The fact is that most parking lots will require expensive modifications in order to support electric cars.
You can argue the points but the fact is that for electric cars to be successful you need to address these issues. Not just put your head in the sand and pretend they aren't real. Range IS critically important to Tesla's success (or failure).
Most parking lots have power run throughout - in parking garages, there's lighting wiring which can be dropped. In most large outdoor lots in the US, there are street lights. And when those aren't present apply, this still isn't exactly an enormous investment, and it can be rolled out piecemeal. We're not prepared for everyone to have an electric car right now, but that's because not everyone has an electric car, and there's a bit of a chicken and egg problem. With demand will come solutions.
Street parking is an issue, but I imagine that we'll see a solution to that before too long.
Basically, I think you're making a big deal out of a minor speedbump.
I wouldn't think that a roadster is the correct vehicle for LRR tires. I had them on my 1st gen Insight and they are terrible, terrible things from a performance point of view.
Agree. We have them on our 2012 Camry hybrid and they are terrible. Tread is almost gone at 24000 miles and road grip is the worst. The tires squeal while reversing because of the turn radius. Maybe there is a better tire brand but I will be opting out of LRR when we have to replace the tires.
Tesla is a very good example of making good PR without anything specific new. They say, that they offer a performance package for an old model. But what is the real truth behind?
1. Improved battery performance:
Everybody knows that batteries degrade over time. Batteries have to be replaced after some time. Batteries have a memory effect including Lithium Ion, even when the industry wants to tell a different story.
Tesla is still offering replacement batteries for the Roadster. Because, if they would not, they would have a marketing problem. Tesla now decided to source the new cells in those battery packs. Which is a normal business decision, because the original battery pack was engineered at 2005/2006. That is almost 10 years ago. As such it is a normal business decision to source the new cells instead of sourcing the old cells with lower demand (increased prices).
Reminder: any carmaker supports their car models >10 years.
2. Improved tires:
Tires are improving year by year. The tires are not from Tesla. They are sourced from Godyear, Pirelli, Conti, or alike.
I have to replace my tires every 3 to 4 years as they are loosing their condition and are not fit for the roads anymore. Of course, I always choose the latest the version with the latest technology. That is a thing of ongoing business.
3. improved body (CW):
That is something you normally buy from some third party supplier, like AMG or Brabus for Mercedes, Alpine for BMW, …
There is no such thing for Tesla, so Tesla made it himself.
Disclaimer: electrical engineer with contacts from within the different carmakers and other industrial markets.
Now more then ever I wish I bought Tesla stock before it went through the roof.