Normally, I grace these pages with mildly interesting political and social analysis. Occasionally, I venture into movies, religion or sports. But at heart I’m kind of a car nut. And lastweekend, Tesla announced a lease program, which had me really close to pulling the trigger.
I love looking at cars, and buying cars. To some it’s torture but to me, it’s fun. Since I was a teenager, I’ve owned countless vehicles. Okay, technically not “countless.” In truth, I have a very accurate count of all of them.
I’ve owned everything from a Ford EXP (eww!) to a 1984 Honda Accord with 12″ subwoofers that I ran out with over 350,000 miles, to an underpowered 4-cylinder fire-engine red Jeep Cherokee in 1992, to various models of Acuras over the years. And that’s by no means even an overview of the comprehensive list.
I had to see the Model 3, because it seemed like I could finally afford one.
My son and I galloped to the Tesla showroom about 2 miles from our home and were waiting when they unlocked the doors at 10 a.m. sharp Saturday morning. There were a few others on the sidewalk waiting with us. We were excited to take a test drive, as the website indicated we could reserve one or just come on in.
Welp, you can’t just “come on in” like the website indicated. That was our first disappointment. We did sit in a showroom Model 3 and pester the clearly-stretched staff member with questions. To take a test drive, sadly we had to schedule it for later in the day–5 p.m., the only slot I could fit into my flexible schedule and their full one on a busy Saturday. I was determined to scratch this itch and even go all the way if the financials could work.
Tesla Motors has always intrigued me, because Elon Musk is a man who understands vision, mission, and followthrough. He does not give up on his dreams, even if it costs him his family, his sleep, and (some say) his sanity. That’s commitment. He’s not afraid to bet his company and his fortune on his own determination to succeed.
I really want Tesla to succeed. After my experience, I believe the company needs to work harder to win people like me as buyers. Tesla needs to up its game, because I’m a serious cheerleader and I didn’t get the car despite wanting an EV.
However, I had to behave like an adult this time.
My first second childhood occurred in the early 2000’s. I bought a Mustang GT convertible, to which I promptly added a K&N cold air kit, new instrument cluster, and new fuel-air mixture chip. While testing said modifications on a piece of straight road in Georgia, I had just entered third gear, kneepad strapped to my thigh, calibrating my new tachometer in “diagnostic mode.” I think I had hit 100mph when I saw the officer. It was an interesting conversation, to say the least (no, I didn’t land in jail, mostly because the cop was laughing too hard).
Then marriage, then kids. Since 2009, I’ve owned nothing but Subarus. In my opinion (and NHTSA’s), they are the safest cars on the road. I reverted in a two year homage to mid-life crisis and bought an Impreza WRX STI in 2011. More conversations with semi-amused police officers. But my wife refused to ride in it longer than three minutes (she doesn’t drive a stick), and my pastor nearly fainted when I took him for a spin. My STI is tearfully gone because it sat in the garage way more than it ever ate up miles of dirt track.
I think electric vehicles are an idea way too far in the back of the world’s carmakers cabinets. I remember watching “Who Killed the Electric Car” and feeling outraged when I learned the General Motors crushed every single one of them. If companies like Volkswagen had spent half the effort on designing batteries and electric motors that they spent on cheating emissions tests, we wouldn’t have to rely on one man–Elon Musk–to supply the vision and capital to move real carmaking into the electric age.
I have followed Tesla’s foibles, good and bad, for years as they executed Musk’s plan step by step: the Roadster, the Model S, the Model X, the Gigafactory and then the much awaited Model 3–the first useful range all electric performance vehicle within a price range most Americans can afford.
(Disclosure: I own a very small amount of Tesla stock, not enough to bother me if the company craters. I consider myself slightly bearish on $TSLA, but not one of the company’s stock shorting bettors. I don’t own enough shares to short anything in any case.)
I believe Tesla announced the lease program to further “pull forward” weaker than forecast demand in the Model 3 and to deliver some inventory in Q2 before government incentives decline again. Currently, Tesla’s vehicles receive a $3,750 incentive until June 30, when it falls to $1,875 for the remainder of 2019. Compare this to BMW, Ford, Chevrolet, Hyundai, Volkswagen, Nissan and Mercedes, all of which receive $7,500. Tesla is at a bit of a disadvantage there after using its pent-up demand as a cash-raising machine.
The Model 3 Standard Range Plus sells for $39,500 according to Tesla’s website. Although the price shows up as $31,450* (asterisk included) unless you look down to the “cash” price. The asterisk means Tesla has already figured in the incentive, and estimated fuel savings (which are higher than my actual fuel purchases). This is just one of the little “gotcha” misleading or outright falsehoods on Tesla’s website–like the one about coming in for a test drive without scheduling it online.
In order for my Tesla deal to work, I’d need to order a basic Model 3 Standard Range Plus, with no options. That means black color (other paint colors cost more), black interior (white costs more), regular wheels (which I like), and no fully autonomous autopilot. The website says the lease payment is $504/month, though it insists on trying to force the $446* after savings number down my throat.
I figure Tesla buyers are a fairly analytical and intelligent crowd. Forcing an “after savings” number on this kind of buyer is a bit of a hammer for a company that purports to respect its customers. To me, it’s off-putting. I do my own analysis, as I believe most people who enter the Tesla showroom do.
The reason I’d need to keep things basic is that my wife an I are on a budget. We pay a certain amount on the loan for my wife’s Subaru Outback, which has a good amount of equity. That amount, plus my fuel savings from driving an EV on my 42-mile round trip work commute in Atlanta metro would need to be in striking range of the Tesla expense. To make it work, I couldn’t get all fancy.
At 4:45 p.m., my whole family was back at the Tesla showroom. I checked in with the friendly staff and gave them my driver’s license, then clicked on a “I will be a good driver and follow all traffic rules” button on a tablet device they handed me. I was told my “co-pilot” would be out soon.
In the meantime, my kids played with the Teslas in the showroom. My oldest quickly asked how to make the Tesla vehicles fart and proceeded to quality check every possible option for that “feature.” Then he found the quarry of classic video games built in to the interface and settled into Asteroids and Missile Command.
I must say that the Tesla showroom staff was helpful, knowledgeable, and not in any way pushy. The person I worked with (who I won’t name because I didn’t ask to use his name or tell him I was going to write about this–in fact I wasn’t even planning on writing anything at the time) was very transparent about the website being a bit hit-you-over-the-head with estimated numbers that aren’t the real ones you pay.
Eventually my co-pilot–the same guy I peppered with questions that morning–came out and handed me a credit card-sized “key” to take my test drive. My wife and two sons rode in the back while he sat in the passenger seat.
About the Model 3 itself: I wrote a tweet thread about the whole experience. The unroll is here. I’ll summarize.
It’s a nice car. It’s fast (5.3 seconds 0-60), quiet, responsive, and fun to drive. There is no reason I’d not want to drive it every day on my work commute.
That being said, there are some definite quirks, some rather frightening. The “PRND” shift stalk with a “push stalk end button” to go into Park reminds me of the Mercedes GLK class. My co-pilot said that’s exactly where it came from. I didn’t like it in the Benz either.
The only instrument in the vehicle is the 15-inch touchscreen positioned between the two front seats. There is no instrument cluster, even an LED/LCD cluster like the Model S or Model X. Nothing but a big iPad-looking thing. It’s the odometer, battery monitor, speedometer, turn signal indicator, rear view camera, navigation display, and every other control in the vehicle. It’s the Model 3’s god-pad.
To be honest, it’s a bit over the top. Want to change the steering wheel position? Use the touchscreen plus the little roller ball things on the steering wheel. Move the mirrors? Touchscreen and roller ball. Radio? Autopilot settings? Touchscreen.
Want to OPEN THE FREAKING GLOVE BOX? Touchscreen. C’mon Tesla. Stop. It’s too much. In engineering, we call this a “single point of failure.” I don’t want to bet my entire car on the functioning of a single 15-inch touch display. Nothing is that reliable.
I also don’t like having to look to the right to see my speed. It should be right in the field of vision over the steering wheel. In the Model 3, it’s not. How much could it have cost to put a little LED speedometer in the dash above the steering wheel?
Some other complaints: the rear-view mirror came off a go-cart. It’s tiny and cheap. The sun visors were stolen from a no-options 2008 Toyota Yaris. Why?
During the drive, my co-pilot kept summoning the rear-view camera on the touchscreen. It was distracting, but I think he did it to show me that I didn’t need to depend on the iddy-bitty mirror on the windshield. Yeah–no.
Some other things I wasn’t crazy about. The much vaunted Tesla supercharger network isn’t really free. It’s $6 for a partial charge and $12 for a full charge. Hardly a full tank of gas, but certainly not fully truthful of “savings” on the website since you either pay for the electricity at home, always glom off hotel or retail slow chargers, or pay Tesla for a supercharger.
The data service that the car requires for navigation and other critical functions is not free either. It’s $100/year after the first year. Seems petty and nothing more than a tax to me because you really can’t do without it. The over-the-air (OTA) updates Tesla is always promoting? That happens using your WiFi, which the car gladly uses.
And don’t even think about using Tesla data service for your Internet. There’s no hotspot option–paid or unpaid–in the car. Even my 2019 Subaru Forester has a $250/year AT&T unlimited 4G LTE data service and in-car hotspot.
Finally, the $39,500 Standard Range Plus Model 3 has autopilot, but not the full self-driving capability, which includes “summon” in parking lots (a cool feature for sure, that other high-end brands are touting). So essentially you get enhanced lane-keeping and adaptive cruise–a bit better than Subaru Eyesight, but not necessarily safer.
The full autopilot costs $5,000 on order, or $7,000 if you get if after delivery. Since it’s just a software unlock, this is nothing but the equivalent of a full Nelson from Tesla to extract your money.
A few more nits and I’m done. The center console, where you plug in your phone USB connectors, takes a gentle touch to close. If you slam it, it pops back open. It took me three tries to close it. My test drive co-pilot showed me how to do it slowly, while pointing out the warning on the touch display to close the console slowly.
Can I ask the question: if you’re going to spend the money to hook up a sensor to the console that knows if you’re closing it too fast, why not just engineer the freaking thing properly in the first place? It burns me up.
That plus the staffer telling me that the custom 90-degree bend phone charger cables that tuck neatly into channels on the bottom of the console cover so only the connectors stick through the place where you keep your phone–those cables are no longer included with the car. Just run your own cable through the hole.
And you do need your smartphone, because a lot of features on the Model 3 require the app. That plus the big beautiful touchscreen display does not support CarPlay. So I can’t use Waze on it and must have my phone somewhere that I can see it. Again, my Subaru Forester has CarPlay. Why doesn’t Tesla? It’s stupid.
You also don’t get a “key” or a fob. You get a credit card thing (I think it’s included but not sure) for valets and such. To use your Model 3, you better hope your smartphone is charged because that’s your key.
Despite all the negatives, I did like the car.. My family liked it. It was comfortable. But let’s get to why I didn’t get it.
In the end, it came down to numbers.
I’d have had to install a 40-amp NEMA 14-50 plug in the garage, easy since the panel lives there and there’s spare slots for breakers. But it was an additional expense just the same. Not a deal-breaker.
The lease itself was problematic. To order the car, I’d have to pay $2,500 sight unseen before delivery. Then at delivery, I’d have to pay at least $6,000-6,500 minus the $2,500 order down payment. Tesla wants their upfront cash even for a lease WITH NO RESIDUAL BUY OPTION. It’s an expensive lease.
The salesperson showed me all the financing details on his laptop after the test drive, while my kids ran rampant around the showroom some more. The lease money factor, etc. are on the screen for the Tesla employees, who scrolled through it, but I can’t find it on the website. No matter, Tesla wants you to pay all the sales tax, delivery, first month lease, acquisition fee in addition to down payment at delivery.
An aside: The Tesla employee had trouble signing into the company’s own web-based systems to bring this information up for me. It took about 10 minutes for that to resolve itself. Clearly, Tesla is running things right at the bleeding edge of what’s possible, changing things on the fly, without breaking things.
I asked about delivery. He said it depends on what cars are in local inventory. But the public website doesn’t show Model 3 inventory (it does show Model S and Model X). Only Tesla employees can look at Model 3 inventory, and even then it’s not entirely accurate. Cars “in transit” show up as local, so every car needs to be physically checked to see if it’s “really” there. The website simply says “less than two weeks.”
The salesperson make a point to tell me about the Model 3 Standard Range for $35,000. It is not available on the public website but can in fact be ordered. There’s none in inventory and no delivery dates available. Some analysts believe the $35,000 car doesn’t even exist. Given that federal incentives expire on June 30, the staffer agreed that it’s probably not a good bet to order that and get it in time.
Having seen some horror stories online, I asked what Tesla does with vehicles returned during the seven day return period. He said they “go away” into some unknown place. But I’m assured the company never tries to sell a returned vehicle as a new one to another customer. Because, ahem, that would be illegal.
If you search #TSLAQ on Twitter, you’ll see numerous claims that Tesla is doing exactly this. You’ll also see a litany of horrors from Tesla owners who’ve experienced problems getting spare parts, shoddy customer service, poor build quality, you-name-it. But I think most people love their Teslas in general, so this could be the bullhorn crowd, squeaky wheels, outright fake news, or other manipulation. I just don’t know unless I talk to someone directly.
After seeing all the costs, I thanked the employee, who told me he’d email me the details and follow up. That was Saturday afternoon. No email has come yet and it’s Sunday night.
When I got home, I finished my research. The costs were within reach, and we liked the vehicle, weirdnesses and negatives notwithstanding.
Insurance was the killer. The Tesla is simply way more expensive to repair (when parts are even available) after any kind of accident, even a small one, than a Subaru. At $500 deductible, my monthly insurance payment would go up $100 (every month). That’s a lot of cabbage just to drive an EV.
My agent said why not increase the deductible, so I asked for quotes with deductibles of $1k, $2k and $5k. That was still more than my Outback at $500, by hundreds a year. And Tesla’s lease terms requires $2,500 deductible anyway. That’s $400 extra dollars a year.
I don’t want a $2,500 deductible policy when I know for a fact Tesla parts are expensive and hard to come by. It’s a bet I don’t want to make.
That leads me to the point of leasing in the first place. See, I don’t want to buy a Tesla because the company’s financial risk is too great. How do I know there will BE a Tesla Motors in 5 or 6 years, to take a 72-month loan? Unless I’m rich and it doesn’t matter (in which case I’d buy a Model X like so many I see on the roads in Atlanta), I could end up in deep trouble if the company fails.
I figure a lease is the best way to hedge the risk there won’t be a Tesla within the next 3 years, and all those people who scraped up $5,000+ and a 72-month loan would be screwed. So the lease was attractive to me as a good way to drive the car, help the company, and still protect myself against Tesla’s risky future.
But alas the numbers didn’t work out.
After doing the math, it’s not worth me spending a ton of money, investing all the equity in my Outback, risking $2,500 in any accident (which in Atlanta metro is a serious risk), breaking even on fuel and lease, plus spending $40-50 extra a month in insurance just to drive an EV.
I do care about the environment and do believe electric is the future, but I’m not a “save the planet today from impending climate change” freak. Maybe that’s Tesla’s core audience but if that’s true then why not make a $50,000 vehicle and improve the mirrors, trim, instrument cluster, controls, sun visors, and a bunch of other things. People who want to save the planet will pay for that.
Why not just make a Model S slightly lower-end instead of this rowboat version?
I think Elon Musk is the answer. He was determined to be THE electric car market maker.
In his quest to make EV’s affordable for everyone, he engaged in his own version of World War II’s Operation Market Garden–a bridge too far. The Model 3 is a stripped-down version of the Model S battery tech and software. But it’s no Model S or Model X.
For instance, the semi-transparent semi-opaque roof is just caulked to the body like a windshield. If that fails, you get very wet. The door openers from inside are a button. The window controls are cheaply made. So essentially the Model 3 is a big battery pack and four wheels.
It’s not luxury. It’s a nice car, but not a bet-the-company car. It’s not clear whether Tesla can sell enough of these to survive to make the Model Y, which may be the one that wins. But Musk has to get Tesla to the finish line of the Model 3 to even start leveraging the Model Y.
The lease option appears to be another gambit to bring in cash–to “pull forward” demand.
Personally, I am more and more convinced that Tesla would have been better off had Musk not announced the Model 3 at all. I think it’s his albatross, to mix another metaphor. Now he has to deliver or Tesla is done.
If there was no Model 3, Tesla could have focused on annual improvement and expansion of the Model S line–better equipment, better service, better logistics, leading to less expensive versions. As newer versions came out, people of means would buy then and the used market would pick up more than it has.
It’s obvious Model 3 sales have cannibalized the Model S. It’s also obvious that the Model 3 was intended to open the global market for Tesla, especially in China. But the China strategy isn’t going as well as the company would like. If Tesla had focused on the U.S., and let the Model S and Model X mature, without that massive growth and capital requirement, the Model 3 might have truly been a world winning car.
To me, it was a close thing. I could have enjoyed driving it, as long as I didn’t have one of the myriad day-ruining issues I see on social media.
But the Model 3 just didn’t make the cut, even with the lease. I don’t think I’m the only potential buyer who will come to that conclusion. So when Q2 ends, and Model 3 demand doesn’t rebound, this could be a terrible spiral for Tesla. Or it could just be a temporary blip.
Depending on whose analysis you believe, either could be true. Just like for me, for Tesla, the Model 3 is a close thing. I do know this however. People will not buy a car they can’t get parts for. They won’t buy a car insurance companies loathe to insure. They won’t buy a car from a company that doesn’t trust its own customers.
Tesla needs to up its game if it wants to win more buyers. I do want them to succeed, and I hope someone at Tesla reads this.