The Ultimate Guide to Buying a Tesla


Special offer until July 31, 2018:  Receive FREE unlimited supercharging if your purchase a new Tesla Model S or X through a referral link.

Welcome!  I'm a Model S owner, TSLA investor, the editor of TeslaWeekly.com (a weekly newsletter with over 3300 subscribers), and an active member at teslamotorsclub.com with my own thread of articles.

Tesla doesn't have any commercials or print ads, so they rely mostly on word-of-mouth.  However, sometimes it's difficult for some to find information about how it's really like to own and drive a Tesla.  So, here's my own guide and I hope it's helpful in your journey.

Regards,
Dave


Limited time offer:  From now until July 31, 2018 you can receive FREE unlimited supercharging if your purchase a new Tesla Model S or Model X through this referral link.  Click here for $1000 off a new Model S or X.*

*link will open the Design Studio at teslamotors.com with a $1000 discount coupon applied.  Direct link: http://ts.la/david7556.

Discount FAQ:

How do I get FREE unlimited supercharging?
The current Model S/X Referral Program runs until July 31, 2018. Anyone who orders a new Model S or X during this period using the referral link of a Tesla owner will get FREE unlimited supercharging.   I am offering my referral link above.  Simply click on the link and you'll be taken to Tesla's Design Studio with the $1000 discount applied.

If you're placing an order in store, give the sales associate the $1000 discount code "david7556".

Why is Tesla giving this discount?
Rather than spending money on advertising, Tesla is encouraging Model S/X owners to spread the word and Tesla is passing on the savings directly to the new buyers.


Update: if you're a California resident, you maybe eligible for a $2500 rebate on your new Model S or X.  See here for details.


1. Why driving a Tesla feels different
Once you buy a Model S it’s difficult to go back to an ICE (Internal Combustion Engine) car.  First, since the Model S is an electric car the driver has access to instant torque from a standstill.  The result is that the car launches like a rocket from a stop sign.  It’s simply something that an ICE can’t do.

Also driving a Model S feels much more connected than driving an ICE.  You’ve got instant torque for acceleration and when you’re not accelerating the car is using its regenerative brakes to slow down and recapture energy.  It takes a little bit to get used to (maybe 10 minutes of driving or so) but most people strongly prefer the added control that the regenerative brakes give.  When I drive an ICE now it feels like the car is a bit out of control, especially as the car glides/coasts.  Driving a Model S is by far a superior driving experience and one that almost every Model S driver will note.

Another differentiating factor is the Model S cabin is quiet since there is no motor noise.  All you hear are the tires on the road.  It almost feels like the car is off but you’re driving; it’s that quiet.  After driving a Model S, most owners comment how loud driving an ICE car is.

Overall, I compare the Tesla Model S to the iPhone and other cars as pre-iPhone phones.  The Tesla just drives better, feels more connected, gives you more control, is quieter, and feels like a car from the future.

Tesla owners are generally very, very happy with their purchase.  Sometimes owners decide to sell their cars for various reasons. As a result, I’ve been monitoring the used car market fairly closely for the past few years. I’ve often emailed or called people who are selling their Model S’s to ask why they were selling and what their next car would be. Out of the dozens of people I’ve spoken to I did meet some that preferred a different car (i.e., smaller car or smoother, etc). However, the vast majority of Model S sellers were looking to upgrade and buy another Model S. Also, the used car market for the Model S remains incredibly strong.

I’ve also monitored owner satisfaction over time. The key is to watch whether owners grow to like their car more over time or if they like their car less over time. This is important because if they grow to like the car less over time they will have little incentive to become product evangelists. I’ve talked to probably over 100 owners personally regarding their satisfaction over time, and the vast majority are enjoying their car more and more.

In my personal experience there’s something about a stellar product, especially a product so stellar that you enjoy it more and more over time. The Model S definitely fits into this category.


Update: Did you know you can be eligible for a $7500 federal tax credit with a purchase of a new Model S or X?  See here for details.

2. Technology that keeps improving
Since Tesla doesn’t need as much mechanical engineering as other ICE auto makers (EVs don’t need an engine or complicated transmission), Tesla is able to use that attention and direct it toward software and electrical engineering in such areas as:

a. Battery management
In order to manage the thousands of 18650 battery cells, Tesla has developed an advanced system of thermal management that relies on software. I look at the Tesla battery pack as a computer that monitors each individual cell and makes sure they don’t overheat, are used efficiently, and are charged safely.  Prior to Tesla releasing the Model S many people thought it was impossible for Tesla to use 18650 cells in a manner that would be safe and efficient. For Tesla they were able to choose the cheapest and highest energy density form factor available and overcome the challenges of safety and cell management through their software implementation.  Since other companies don’t have the software expertise of Tesla, they tend to look at the 18650 implementation for an auto battery pack as overcomplicated and not worth the risks. But for Tesla, software is one of the main reasons why they were able to release the Model S with the range it has and at a competitive price point.

b. New features via software updates
Now some people think of Tesla’s software updates as just infotainment updates. However, if one looks deeper they’ll discover that Tesla can update quite a few features via software updates and it shows how integrated and advanced the car is.

One example is Tesla’s release of hill hold via a software update. Adding hill hold is not just a simple infotainment feature. Hill hold (where the car remains in braked position for a second before pressing the accelerator when on an incline) is very advanced feature to add since it deals with the core accelerating and braking features of the car. In other words, via a software update Tesla was somehow able to add a feature where it can detect if the car is on an incline (perhaps this was already being monitored) and then if the car is on an incline to keep applying brake pressure (or somehow keep it from going backward down the hill) for a second before the accelerator is pressed.

The hill hold feature shows me that Tesla can update core driving functions (i.e., accelerator, brake, etc.) via software updates. This is interesting since from a safety standpoint, typically one would design the car where the core driving functions can’t be touched/updated by an over-the-air software update since it introduces a lot of complexity and potential safety concerns. But somehow Tesla’s intent was for the Model S to be updated not just with infotainment features but also for software updates to adjust even core driving features. This is quite remarkable, and probably something that other auto markers will have a difficult time justifying since they don’t have the software expertise and it’s probably not worth the risks to them.

Another example of a new software feature was the ability to adjust air suspension at different speeds. For example, a software update a while ago allowed users to keep the Model S at the lowest air suspension setting at all speeds or the owner could decide at what speed they want the suspension to lower. This is another example of how software updates aren’t just updating infotainment features but are updating core driving features, including air suspension settings.

This is not to discount Tesla’s implementation of their infotainment center console, which I think is roughly 5 years ahead of the competition. However, adding and modifying core driving features via software updates is in a whole other league and existing auto makers will likely find this one very challenging to match. It just goes to illustrate Tesla’s software advantage.


c. Continuous Feedback
Another brilliant move by Tesla was the release of the connected car (i.e., the car always having an internet connection). This allows the car to give feedback to Tesla (i.e., # miles, major problems, etc). It gives Tesla a sort of continuous feedback that Tesla can use to figure out where reliability issues are (in conjunction with info from service centers, etc.) and try to fix them quickly.

When a car pulls up and connects to a Supercharger, I’m also guessing that Tesla is gathering information on how the cars are charging and their state of charge, and using that information to improve Supercharging. Again, it’s continuous feedback. Usually with a typical car, you drive it off the dealer lot and it’s sayonara to the dealer and car company until you take it in for service some day in the future. However, for Tesla it’s different. They actually want continuous feedback, and they’ve built it into the system so that they can use the data to make improvements. Another example of this is when a Model S is involved in a serious accident it appears that the car alerts Tesla and Tesla is able to reach out to the owner to see if they can be of assistance but also so Tesla can investigate the cause of the accident, if needed. This allows Tesla to quickly fix any potentially dangerous issues.

Many tech and software companies today understand the important of a tight and quick feedback loop. By having a tight feedback loop, companies can quickly identity/solve problems and they can iterate to make their products better. Often a tight feedback loop is the difference between a company succeeding and failing.

Another area of Tesla’s software expertise is their internal software. Tesla is able to accept orders online and then follow the customer’s entire experience through purchase and post-purchase. Also, Tesla has developed their own software to manage many internal processes as well. This will help them become more efficient over time.

Now I’m not saying that other auto makers won’t be able to add some software expertise to their companies. They are already doing this. However, the question is whether existing auto makers will be able to move as fast as a software company in the field of software. In order to do so, existing auto makers are going to have to radically restructure their companies and I don’t see that happening. 

Tesla’s advantage is that their CEO understands software (his first two startups were software startups) and they’re headquartered in an area where many of the best software engineers live. As a result, Elon and his team have infused Tesla with a value and ethos to respect and integrate software deeply into their company. This value and ethos simply doesn’t exist at existing auto companies. And as a result, existing auto companies will likely be playing catch up to Tesla in the area of software for many years to come.


Update: Did you know your might be eligible for aggressive state incentives/rebates for a purchase of a new Model S or X?  See here for details.

3. Autopilot: a new driving experience
Tesla has rolled out new Autopilot software to Autopilot-enabled Model S cars that allows for automatic lane steering. When combined with the existing adaptive cruise control, drivers can now let the car drive itself for long stretches of highway driving. 

Here’s why I think Tesla’s Autopilot is a very big deal.

First, autonomous driving is truly the biggest disruptive change in the auto world in our lifetime. Sure, the electrification of the car is a big deal as well, but it doesn’t fundamentally change the driving experience as much as autonomous driving does. It’s true that Autopilot isn’t completely autonomous, but it’s a great start and a huge leap forward.

When driving a non-Autopilot Model S people usually point out how smooth and responsive the acceleration is, how quiet the cabin is without any engine noise, and how excellent the handling is with the low center of gravity. Basically, they’re saying “this car drives better than other cars”. However, the Autopilot experience (and eventually autonomous driving) is saying “this car drives fundamentally differently than other cars.” In other words, the driving experience is completely different. For one, the car is in charge (for the most part) of keeping speed, keeping in the lane, and avoiding hitting nearby cars. The driver becomes more passive and relies more on the car telling them when their attention is required.

In fact, I would venture to say that with this past week’s release of Autopilot this is the first time in history when the driver’s role can truly shift from active driving to passive driving. Sure, there have been a handful of cars that have had features like adaptive cruise control with lane assist or lane keeping, but their implementation has been severely lacking and didn’t instill a ton of confidence in drivers to truly give up active driving in favor or passive driving. With Autopilot, Tesla got it right. They’ve implemented the system in a way that truly has amazing potential and can instill confidence in the driver to become more passive.

The biggest reason for Autopilot’s success will be the network effect and continuous learning of the system. All Autopilot-enabled cars are feeding data into a central server and the algorithms that drive Autopilot are being updated and improved on a continuous basis. In other words, the car is learning to drive better and better as more people drive and teach it.

Simply by driving (and allowing the data to be processed by Tesla’s servers) all Autopilot-enabled Model S owners (and Model X owners in the future) are contributing to build the brains and know-how of Autopilot. It sounds like something from the far-out future, but it’s really happening today.

As Autopilot gets better and better, Model S/X (and eventually Model 3) owners will get more confident to trust their cars to do most of the driving. Sooner rather than later driving will become increasingly passive. And eventually, with the advent of truly autonomous driving, driving will become completely passive. Just jump in the car and you won’t need to touch the steering wheel or pedals.

Elon Musk is claiming that the technology to enable truly autonomous driving is about 3 years away. That could be true; but it could be a bit optimistic as well. Regardless, truly autonomous driving is coming, whether it will be in 3 years or in 6 years. And with truly autonomous driving the entire world of transport will be turned upside down. Want to take a vacation to the mountains? Just jump in your car, watch a movie, and let your car take you there. Want dinner from Chipotle? Order on your app and have a driver-less car deliver your food for you. Needless to say, autonomous driving is going to change the world radically.

However, one doesn’t get to truly autonomous driving by just wishing or dreaming. It takes steps and it takes great execution. This is why Autopilot is so exciting. It’s because it’s the first big step to autonomous driving and gives us a taste of what’s coming in the future. 

In a way, one could say that Autopilot (and eventually autonomous driving) is an almost living system. In other words, as people drive it processes the data in a central server and learns. It corrects mistakes and improves the algorithms that drive Autopilot. Some of the learning processes might be manual (i.e., engineers manually analyzing data) but probably the vast majority of the learning processes of Autopilot is automated by scripts/code that analyze data and add improvements to the system automatically. So, even when the engineers go home and are sleeping at night, the system is learning and is getting better. 

It’s going to be difficult for other auto companies to catch up to Tesla’s Autopilot, simply because other auto companies just don’t have the software expertise to create a crowdsourced self-learning driving system. Tesla’s competition in this space will likely be other software tech companies like Google, Apple, etc.

Tesla’s Autopilot will likely help Tesla to grow demand for the Model S/X over time. There are millions of people around the world who commute long distances to and from work. Autopilot has potential to revolutionize their lives right now, and Autopilot is only getting better. So, Autopilot in 6 months is likely to be a whole lot better and compelling than it is now. This is bound to attract a lot of people to gain interest in Tesla’s cars.

All in all, Tesla has made history this week. They’ve shipped a truly revolutionary product, Autopilot. And it’s the beginning of a snowball that will lead to truly autonomous driving.


4. Is the Tesla Model S reliable?
Even though Tesla is a relatively new company compared with existing auto manufacturers, the Model S is a fairly reliable car.  There have been some fit and finish issues with early models (especially 2012 and 2013 models) and Tesla had some drive train issues where Tesla has had to replace them for owners.  Some of these issues resulted from Tesla pushing the envelope with new technology.

The great thing about owning a Tesla is that Tesla directly owns its own service centers and the experience at those service centers is  usually very good.  The service center tends to charge reasonable rates and often many fixes are covered under warranty.  (Note: Tesla has a 8 year and infinite mile warranty on the powertrain and battery pack on all new cars).

I’ve only taken in my Model S a couple times and it was for minor issues (i.e., slight sounds from loose trim).

Tesla has strong control over the issues customers face, and they have their team of engineers involved in addressing and finding solutions.  In an earnings conference call Elon shared details on his weekly Product Excellence meeting:  “Every week I have a product excellence meeting which is a cross-functional group, so we’ve got engineering, service and production and we go over all the issues that customers are reporting with the car and the action items that have to be addressed to get the car ultimately to the platonic ideal of the perfect car.  That’s what we’re aiming for, because although I think we’ve got great service, the best service is no service. That's really what we want, is a car that never needs to be serviced. And I think we're getting there quite rapidly.”  He also shared his aspiration to have the Model S (and other Tesla cars) have a quality unmatched by other cars:  “Our aspiration is an order of magnitude better quality than any other car, and we will keep at it unrelentingly until we get there.

It’s impressive that Tesla’s CEO is hands-on in addressing quality control issues and he exudes a vision of quality that is quite inspiring. On top of this, Tesla is able to assemble a cross-functional group to lead this effort since Tesla owns all their service centers and is also an engineering-driven company. This allows engineers the freedom to innovate and iterate on solutions, then for service centers to try those solutions out, and if the solution works then for production to immediately incorporate the changes into the production line.

The key to all of this is the speed at which a company can address a quality control issue. By bringing in key cross-functional personnel under the direction of the CEO, Tesla is able to quickly address issues that crop up. The result is the car gets better and better at a faster rate than any other car on the market.


5. How to take long distance trips
Tesla currently has over 1000 Supercharging stations around the world and they are constantly adding more.  You can drive a Model S across the U.S. by just using Superchargers.  And they’re conveniently located near shopping and restaurants.


Now there are pros and cons to Supercharging (versus filling up with gas).  The pro is that Supercharging is free.  Tesla doesn’t charge.  So you can go literally from West Coast to East Coast and not pay anything for fuel/energy/gas.  The con is that it does take longer to fill up than a gas station.  Typically you can recharge 150 miles or so in about 30 minutes (sometimes shorter, sometimes longer).  So if you’re taking a long road trip, then you need to plan extra time for stops. 

However, the place where the Model S shines is with daily driving.  Since you normally charge the Model S in your garage overnight, you literally spend no time waiting.  And you don’t ever have to go to a gas station.  Most people rarely use a Supercharger since they don’t take long road trips often.  I often take day trips where I travel 120 miles each way (for a total of 240 miles).  I don’t need to use a Supercharger because I charge overnight in my garage.

Tesla has also upgraded the software in the Model S to include a Trip Planner.  It will let you know when you need to stop by to charge and will also tell you if you have enough battery to get to the next Supercharger or not.  Many Model S owners also use EVTripPlanner when preparing for a long road trip.


6. Which battery and which options to choose?
Here’s my simple suggestion:
a. If you’re super rich, go crazy and buy whatever.  Fully loaded everything.  
b. If you’re not super rich then choose something between the 75 or 100 kWh battery packs.  Basically if you have a short commute (under 200 miles a day) and you don’t take many road trips, then choose the 75kWh battery.  If you have a long commute and/or take frequent long road trips then consider the 100 kWh battery.  Same thing goes with rear-wheel drive vs AWD.  If you need AWD or like the added performance that AWD, then go for it.  Otherwise the rear-wheel drive car is not bad.

The best value IMO is the 75kwh RWD car with just Autopilot as an option.  However, most people like to add additional options, and those options add up quickly.  It’s really too bad that the power liftgate isn’t standard or part of a cheaper package, since the power liftgate really is useful.  Also, a lot of the other options are great to have like sound, air suspension, interior upgrades, etc.  But they really aren’t necessary and it's more about if you have the extra money to afford the options or not.

The best performance for the best price is the 100D.  Many users have posted that they are seeing 0-60mph times under 4 seconds.  That’s incredible.  I have a P85 and I get 0-60mph in 4.2 seconds.  It’s insanely fast to me and I rarely floor it because it’s jarring.  I don’t know what I’d do with a P100D.  But some people love that extra speed.  It’s truly like a rocket and if you need it then by all means a P100D is great.  But I think most people looking for performance will do fine with a 100D.  It’s less expensive, yet it will give you riveting power and performance.


7. Buy new, CPO or used?
I think the way to go is to buy new or CPO.  When buying used, it can be time-consuming finding the right car at the right price.  There’s also the option of buying an “inventory car” from Tesla.  Tesla has cars that haven’t been titled to owners and count as new cars so buyers can get federal/state tax incentives for them.  Tesla usually keeps them as showroom cars or service loaners and then after a few to several months they sell them.  To find an inventory car, call up or visit your local Tesla store and ask for one of the sales people to help you locate a good inventory car.

A good site to check the current Tesla CPO inventory is http://ev-cpo.com.  Sometimes you can find a good deal.  It also helps to have a store sales person look out for good CPO deals for you.

Overall though, buying new gives the least hassle, and the $7500 federal tax credit and possible state incentives help.


8. Can I afford a Tesla?
The big question really is whether one can afford a Tesla or not.  Tesla has innovated (and is continue to innovate) so quickly that in the luxury sedan market, there really isn’t a car that comes close to the Model S (the same will be true with the Model X and the SUV market).

A big consideration is that luxury cars tend to depreciate quickly.  They are not investments, rather they are items of consumption.  So this is definitely something to be aware of.

I suggest not stretching too much to buy a Tesla.  Even though it’s the greatest car in the world, it’s not worth the added stress and anxiety and stretching your finances too far.

The best way to buy a Tesla is to lease a Tesla through a company you own.  That way you can deduct the lease payments as expenses and the cost of ownership for a Tesla will be significantly less than purchasing it outright or taking out a loan (in most cases).

If it’s too much of a stretch to buy a new Model S, then consider buying a CPO.  You might be able to find an older Model S (w/o Autopilot) for around $30-40k.  And if that’s still too pricey, then you might need to wait for the Model 3 (base price starting at $35k, but probably won’t be in mass production until 2018).


9. Should I wait to buy a Model S?
Tesla is constantly improving the Model S, so it could be a good idea to wait until there’s a big upgrade (i.e., bigger battery pack, newer Autopilot, or even an updated redesign of the exterior).  However, it's all about your personal preference and needs.

If you’re in California, then you should research state rebates but I hear that they might end for Tesla buyers at the end of 2015 (at least for certain income limits).  So, it’s possible that buying now will make you eligible for the $2500 California tax rebate.  Add to that the $1000 off my referral link gives you.  That gives you $3500 off.  And if you order quickly, you might be able to get it before Christmas.

Overall, I’ll close with a few words on why I think the Tesla Model S is such a great car.

Tesla’s product excellence begins with high standards. This is probably the attribute that distinguishes Tesla the most and is best seen in Elon’s unrelenting focus to deliver a stellar product in all aspects.

It’s difficult to exaggerate how good of a car the Model S is. It handles well, accelerates fast, looks good, has ton of cargo space, great range, can go across country with supercharging, and can even get better with over-the-air software upgrades or eventual battery upgrades/replacements.

However, in order to make the Model S as good as it is, Tesla had to go through a process where they looked at almost every aspect of the car and had to ask themselves how it could be better and come up with creative solutions to bring each aspect of the car closer to ideal.

In recent years IDEO and other companies have pioneered and propagated a concept called Design Thinking. Design Thinking is where one uses creativity and out-of-the-box thinking to solve problems and make products better. A good example is the company OXO and their kitchen products. OXO has reinvented dozens if not hundreds of kitchen utensils and food prep items. They take a typical potato peeler, as an example, and ask if a typical potato peeler is peeling a potato in the best possible way or if there’s anything they could do to redesign the potato peeler to make peeling potatoes better. This is a surprisingly arduous process that takes a ton of brainstorming, iteration and experimenting. Eventually, with a lot of focus and execution, the result is the potato peeler redefined. Or simply a better potato peeler.

Bringing this back to Tesla, Tesla has enacted Design Thinking (creativity, user empathy, out-of-box thinking, problem solving, etc.) to redesign many concepts/functions while making the Model S. They took out all the buttons and replaced it with a huge touchscreen that can be updated over-the-air. They made the car fast with long range. They made a car that looks great but has a super low drag coefficient. They simplified the driving experience by allowing the driver to start the car by simply pressing the brake and pulling a lever. They reinvented the car purchase and order experience. They reinvented the long-distance charging experience for electric vehicles. They are trying to reinvent the service experience. And there’s a ton of other aspects where they’re trying to reinvent but we don’t have access to (i.e., internal processes, production methods, insourcing products, etc).

Elon and Tesla remind me of the user empathy found in some of the greatest companies/innovators of our time. Steve Jobs had a deep user empathy where he detested things that would complicate and overwhelm the typical user, thus the iPhone/iPad is remarkably simple to use. Google had a deep user empathy where they wanted to deliver the best and fastest search results to the user, while other search companies at the time (in the early days) cluttered their home pages with a million links and didn’t care much about the quality of the search results.

Often, companies lose sight as they focus more and more on making money, bringing in revenue, achieving growth, and delivering on earnings. The customer becomes just a means to reach a profit/revenue goal.

However, for visionaries like Steve Jobs and Elon Musk, the company only exists to bring value and make the lives of people better, and to the extent that they can accomplish that the companies will be rewarded financially, although financial goals aren’t the most important goal. Rather, the more important goal is to make the lives of people and the world better by providing amazing products/services that are far better and deliver greater value than what’s already out there.

This value of user empathy is not easily copied or imitated, since it’s a deep internal value. What Tesla has going for it is it’s been inseminated with this value of deep user empathy from Elon and his team, and this value guides the company to not only make the best products/services they can but also to make the right decisions going forward.