Tesla recently announced another record breaking quarter. Along with that announcement came the much anticipated (particularly by yours truly) updates to the Model S and X. A little while back I wrote about how “The Tesla Model S Value Proposition is Astounding.” Although this new update to the Model S comes with a $10K price hike, the astonishment over its value remains. In light of this recent update, I am updating my article on the Model S value proposition by shamelessly “Mad Lib-ing” the old article with the new information.
To fully appreciate how significant the current Model S value proposition is, we need to go back in time to 2012 when the Model S first came onto the automotive scene. Back then, $80K ($77,400 to be precise) bought you a base Model S with the 85 kWh battery, which was the largest battery option available at that time. The car was rear-wheel-drive, had an EPA-rated driving range of 265 miles, and had a 0–60 mph time of 5.6 seconds.
There were a few additional options that could be added for additional cost. The “Technology Package” for $4,500 was widely viewed as a “must have” option and included a broad bundle of functions, such as:
- Convenience Lighting
- Automatic Keyless Entry with Auto-Present Door Handles
- Homelink for garage door opening
- High Definition Back-Up Camera Display when in reverse (no parking path lines yet)
- Xenon Headlamps
- LED Cornering Lights
- Fog Lamps
- Power Rear Liftgate
- Turn-by-Turn Navigation
- Chrome Accent on Rear Diffuser
Other options available at additional cost included:
- Smart Air Suspension
- Panoramic Roof
- Upgraded (Nappa leather) Seats
- Premium Sound
- Etc., etc., etc.
Parking sensors would not become an option until the end of 2013 (for $500). First-generation Autopilot hardware would not show up in the cars until autumn of 2014, with functionality that would lie dormant until the eventual over-the-air software update activated the first Autopilot functionality in the cars about a year after that. All of these options, in the aggregate, would increase the price of the Model S 85 by several thousand dollars to the ~$90K range.
Now let’s look at the current “base” Model S that you can buy today for $79,990. It is all-wheel-drive, has an EPA-rated driving range of 412 miles (~155% more range than its 2012 predecessor), and has a 0–60 mph time of just 3.1 seconds — 2.5 seconds quicker than its 2012 predecessor (which is a huge difference in the world of automobile acceleration). It also has a higher top speed of 155 mph — 30 mph more than the original S (for those who care about such things). On a side note, it’s wild to think that 3.1 seconds 0–60 mph is now considered the “slow” version of the Model S. To put into perspective how remarkably quick this is, if you wanted acceleration like that a few decades ago, you would have had to pony up a cool $1M for a McLaren F1 hypercar.
On top of these massively improved performance specs, the list of additional (extra cost) options that I listed for the 2012 Model S 85 (that in the aggregate tacked several thousand dollars onto the price) are now standard — and vastly improved upon — in today’s Model S. Also, the tech hardware and overall refinement (e.g., the seats) found in the current Model S are far better than its 2012 predecessor. That is in addition to other standard features on the new Model S, such as:
- Stalkless yoke steering wheel (Knight Rider fans, rejoice!)
- Ventilated front seats (hot sweety people, rejoice!)
- Surgical room–grade HEPA air filtration system (allergy sufferers, rejoice!)
- Multi-screen in-car gaming system on par with today’s newest video game consoles (gamers, rejoice!)
- 22-speaker, 960-watt immersive audio system with active noise canceling (audiophiles, rejoice!)
The $80K Model S of today is waaaay better than the $80K Model S of 2012.
Not to mention the catalogue of additional features that have been intermittently beamed to the car (and every other Tesla) via FREE over-the-air software updates through the years. The awesomeness of this can’t be overstated — each Tesla literally gets dozens of new features, for free, beamed to them every year. I like to say it’s like getting birthday presents every couple of months. This hallmark of Tesla ownership is a unique and jubilant customer experience unlike anything that has ever existed in the automobile industry so far.
On the topic of “unlike anything that has ever existed,” all current Teslas have the hardware and sensors built in to eventually reach full autonomous self-driving, pending software validation and regulatory approval. The implications of this also cannot be overstated. The arrival of full autonomy will completely redefine how we view transportation and how we value vehicles. During Tesla’s “Autonomy Day” event, addressing the topic of buying a new car that doesn’t have the self-driving hardware that all Teslas now have, Elon Musk said this: “It’s financially insane to buy anything other than a Tesla. … It would be like owning a horse.” Please take a moment to allow that to sink in. Elon’s statement is profound for a number of reasons, one of them being its implications on how vehicles will be valued moving forward.
This leads us to the Model S value proposition compared to the current gas-powered alternatives in the full-size luxury sport sedan realm. For example, the 2021 Audi S7 and Porsche Panamera S both start at over $85,000, over $5,000 more than the new Model S starting price. That’s before calculating the various cost-of-operation advantages that come with having an electric vehicle (i.e., much lower cost to fuel, much lower cost to maintain, much lower overall maintenance, etc.). Resale value for gas-powered full-size luxury sedans are notoriously awful as it is; and if you think resale value for gas-powered full-size luxury sedans are terrible now, just wait. A few years from now, trying to sell a car that is both gas-powered and not capable of autonomy will be like trying to sell a VHS tape in a Netflix world; it will be an inferior, irrelevant technology that nobody wants anymore.
On the performance-oriented end of things, back in 2013, a fully loaded Model S P85+ (which was rear-wheel-drive, had a range of 265 miles, and had a 0–60 mph time of 4.2 seconds) cost just under $130K ($128,420, to be precise). Today’s “Plaid” Model S destroys the 2013 P85+ in every metric, and for about $10K less. Even the current standard “non-performance” Model S will handily outperform the P85+, at almost half the price! Almost HALF! By the end of this year (2021), you’ll be able to get the “Plaid+” Model S for just about $10K more than that P85+. Where the Plaid easily bests the P85+ in every aspect, including being 2 seconds quicker, with a 0–60 mph time of under 2 seconds (which also happens to make it the quickest production car ever), the Plaid+ takes it even further with even more performance and double the range of the P85+ (520+ miles!). A little bit of history repeating.
What’s the trend here? You get much more for your money now than you used to when it comes to Tesla. And that’s not even taking into account inflation. The cost reduction and improved value proposition for Model S from 2012 to now has been astounding. Absolutely astounding. And Tesla’s “Battery Day” presentation gave many hints that there is much more to come in terms of cost optimization.
Please do not let this little retrospective “Osborne Effect” you into waiting years to get your first (or next) Tesla. This article is not meant to be a cautionary tale about dancing the line of pragmatic consumerism. This article is meant to be a celebration of how incredibly far Tesla has come, and where it is going. If you are in the market for a new car, then you should get a Tesla now. Don’t wait for some new design innovation to come around the corner, because there will always be a new innovation coming around the corner. That’s one of the things that’s so exciting about Tesla. Tesla will always be innovating. It will always be improving its products. It will always be driving down cost. But the great news is its products are awesome now. They can meet your needs now. They will blow your mind now. Heck, Tesla vehicles built years ago are still mind blowing compared to the current offerings from other manufacturers. If you wait for the perfect time to buy a Tesla, when they’ve become the best they can possibly be, then you’ll be waiting forever. Don’t defer the awesomeness of Tesla ownership. Choose awesomeness now, enjoy the awesomeness for what it is, and if some new “must-have” awesomeness comes out sometime down the line, then maybe consider swapping out for that awesomeness. But until that time comes, live awesome now.
Model 3 and Model Y have garnered most of the spotlight as of late because they are much more relevant to the broader auto market due their more affordable price, but it’s also worth acknowledging the amazing value that the Model S brings (and will continue to bring) to the premium luxury vehicle space. Whether your budget is $40K or $140K; the wondrous car of the future is here now, it’s a remarkable value proposition, and its name is Tesla. Viva la rEVolution!
STOCK DISCLOSURE: During my employment at Tesla from 2012 to 2019, I was granted and optioned thousands of shares of $TSLA stock at ~$5/share (post split). I am LONG $TSLA with a multimillion-dollar stake in the company. Content created is not stock advice.