During last week’s conference call with analysts, Elon Musk was asked a question by Joseph Spak of RBC Capital Markets:
“As it relates to Autopilot — where this is clearly stage one and you could add sensors over time — how do you [manage] the brand and the vehicles when that happens? Because as the sensor suite changes, it can create two potentially different experiences. The reason I think it’s a little bit more of an issue for Tesla is just you don’t have the strict sort of model year nomenclature.”
Spak’s question comes down to this. Tesla has eliminated annual model year changes, so how does someone who is considering buying one know when the best time is to act? The Model S still looks the same as it did when it was introduced in 2012. So far as anyone knows, no significant changes to the body are planned. Tesla has also pioneered over the air software upgrades that allow any car ever built to have its technology systems updated at any time. Finally, Tesla is striving to make powertrains that never wear out. In theory, a Tesla owner could drive one for 20 years and still have a car that looks and drives pretty much like one that rolled out of the factory last week.
Elon Musk gave Spak a very revealing answer, using his own well known brand of fractured syntax:
“Okay, I think that’s a pretty open-ended questions, but – we have a philosophy of just continuous improvements, so every week there are approximately 20 engineering changes made to the car. So it’s not nearly as discrete as you’re alluding to. With other manufacturers, they tend to sort of bundle everything together in a model year. In our case, it’s a series of rolling changes, so model year doesn’t mean as much. There are cases where that step change may be a little higher than normal as, for example, with having the Autopilot camera, radar, and ultrasonics.
“But we try to actually keep those step changes as small as possible. [T]he common questions that I get is from friends. They say, ‘When should I buy a Model S?’ and my answer is always, ‘Right now.’ [A]nd they say, ‘Well, aren’t you going to make a better one in six months?’ I’m like, ‘Yeah, of course.’ But if their goal is to only buy a Model S when there aren’t significant improvements happening, then they will never buy one.”
There have been two major hardware changes to the Model S since it was introduced. One involves making dual motors standard on all cars, which caused a lot of consternation in countries with long winters, like Norway. The other is the addition of the camera, radar and ultrasonic sensors that make Tesla’s Autopilot system possible. Owners of earlier cars simply cannot experience Autosteer and Autopark without that hardware installed.
But here is some balm to ease their pain. Because of the way Tesla does business, the resale value of its cars is higher than almost any other manufacturer. That means a Tesla owner can change cars any time without taking a huge hit for depreciation. Musk is right. If you are in the market for a Tesla, the best time to make the move is right now.