Unless you’ve been buried under a rock for the last few weeks you’ve heard a lot of news about the D option and the new safety features and future autopilot capabilities. Like many existing owners I drooled over some of the features like the dual motor all wheel drive (“D” option) and the automatic cruise control (ACC).
Some misguided owners are upset that they just got their car x days/months/years ago and “just” missed the availability of those features. They need to get over it. Technology advances continuously (especially with Mr. Musk at the wheel) and you make your choices and decisions when you buy your car. If you didn’t think carefully about that $100K purchase, I have a bridge to sell you.
Beyond complaining or wanting the upgrades for free, what would the cost of the D upgrade really be?
The first question every owner asks is whether these options could be retrofitted into existing Model S’s. Tesla’s official answer is “No” — and that is not going to change. The changes are large and invasive and need to be done when the car is getting built. While you can add some options to the Model S after delivery (dual chargers, for example), there are many (like premium lighting) that you cannot add after delivery due to the complexities and costs involved.
You cannot retrofit these new features into the Model S.
Over in the Tesla forums TeslaTap.com estimated what it would cost if someone were to try to retrofit a Model S with these new options. The number is a staggering $67,000.
Retrofitting a Model S (if Tesla allowed it and if possible) would cost upwards of $67K.
It is much cheaper to add options while you’re building the car than to take the car apart, add the options and put it back together again. You can also add them in a logical and simpler order and avoid many other complexities from doing the upgrade after delivery.
From a financial perspective a retrofit doesn’t make sense and is likely why Tesla does not offer it. They also have very few service centers that are already overloaded and that would also have to factor in.
There is a healthy secondary market for most high end vehicles. So far the one for Tesla has been tiny, but, thanks to this announcement, it just doubled in size and will continue to grow. As Tesla introduces new features and models that you can’t retrofit they’re creating an early secondary market with relatively low mileage cars as impatient owners trade in and get the latest and greatest. This is more likely with the early adopters that go for the newest gadgets and features than with later buyers. This enables people who couldn’t afford a new Model S to get into one at a lower price.
So what is your car worth? Reportedly the math goes along these lines using the numbers from my car assuming I trade my car in 4 months from now when the 85D is available:
While I didn’t ask Tesla for a quote, several people are doing just that and posting those results in various forums. On average I saw the effective costs in the $30K to $40K range. My trade in value is really low as i’m a high mileage driver with 15K miles on my car in 6 months of ownership and would add another 10K miles between now and the D availability.
If this “loss” of over $48K in 6 months of ownership seems steep to you, it is. There are a few reasons for it. First, your car loses a lot of value the instant you drive it off the lot. Second Tesla, in jump starting a secondary market, is putting a hefty amount of room in the price to incent the dealers. Why flip BMW’s for $10K a pop when you can flip Tesla’s for $20K a pop?
The trade number tells you about what value you’ll get from Tesla on a trade, but you could possibly do better selling to a private party. Just beware that many owners are trying to do just that right now and you may want to wait for the initial rush to settle down.
Tesla changed some prices around when it added the new options. I configured a car very similarly to my own with the only additional feature of the dual motors. The equivalent sticker price for that car would be $98,140 or about $4,000 more than my original car.
You may be eligible for another Federal tax incentive of $7,500 and in my state of Massachusetts there’s a new incentive in place now of $2,500. Depending on your state and the timing of these transactions you’ll likely need to pay taxes again on the new car and you’ll also need to pay the registration fees. The total cost of those taxes and registration for me would be about another $6,000.
Between the taxes, registration and incentives it nets out to about zero. So the main cost is the lost value of your car from the trade.
The Cost of the D
If I went crazy and traded in my Model S and bought a similarly configured 85D, the cost to me would be $48,473.
The cost of a D upgrade for me would be about $48K.
This cost is less than the estimated retrofit cost from above with the added benefit that i’d have a car 10 months newer that didn’t have odd bits retrofitted in after it was manufactured. I’d also be starting back with an odometer reading of zero etc. The value of having a newer car without the wear and tear is already reflected in your trade in value so no more fancy math is needed.
While the number will vary for each owners unique situation the cost of trading up to the D is likely to be $30,000 or more for most. For new owners, its “just” a $4,000 option.
Are the AWD and (future) autonomous driving features worth $48K? Not to me for sure. I’d love to have them but I love my Model S as it is.
I love my Model S as it is.
Unless my new tires don’t get me through the New England winter i’m sticking with what I have and cranking on the miles and hoping for some free upgrades through software updates along the way.