Should I buy a Tesla now or wait for a newer version?
Image Credits: Tesla

Should I buy a Tesla now or wait for a newer version?

Should I buy a Tesla now or wait? Will a larger battery be on the market soon? Is there perhaps even a price reduction or is the equipment changing? How does the technical development continue and what is coming soon? You can never be sure if new features will not be released soon. In fact, you can be unlucky and buy a Tesla at a time just before prices are reduced or just before technical improvements to the vehicle “hardware” are integrated into production. Since there are no model years at Tesla, improvements are continuously flowing into production. Nevertheless, now and then there are major adjustments, which usually go into production immediately and unannounced, such as the Model S facelift in April 2016 or the new MCU2 computer for operating the screens of Model S and Model X in March 2018.

In this article I write about my thoughts on the current situation and what will or might be coming soon. This can be useful for a purchase decision and simultaneously gives an overview of the current technical development.

 

The current status in March 2020

Tesla’s difficulties, which were known from the Model 3 production and the “Service Hell”, seem to be overcome. The demand for the Model 3 remains high in all markets. The share price has known no bounds since the end of 2019 and has quadrupled within a few months. Today it can be said that Tesla has production under control. Since the introduction of the Model 3, not much has changed in terms of design, but the model has simply been on the market for too short a time. In contrast, Model S and X will be in production in spring 2019 with the Raven models. Apart from the new engines, the new air suspension and the standard CCS support, some technical details were introduced. But there was no optical facelift. Corresponding rumors were denied by Elon Musk again and again.

As far as the variety of options is concerned, Tesla has massively simplified the Model S and X in recent years. Where you used to be able to choose between different options such as Tech Package, sunroof or winter package, over time everything has been reduced to a handful of variants such as colors, rims and range. As a result, Tesla has of course been able to further simplify production and presumably further increase the yield per vehicle.

Surprisingly, production of the Model Y started earlier than planned. As Tesla announced in its report on the quarterly figures for Q4/2019 in January 2020, Model Y production has already started and the first vehicles will be delivered in the US in March 2020. Technically speaking, the Model Y is very similar to the Model 3. For cost reasons, it is important to simplify production as much as possible.

 

What’s next this year? Should I buy a Tesla now or wait until an upgrade is available?

The release of the plaid powertrain is planned for Model S in 2020. Besides higher motor power (three motors) and probably better efficiency, a larger battery capacity has been announced. How high the capacity will be, is not yet known. It also remains open whether the existing battery cells in the 18650 format will continue to be used, whether there will be a change to the 2170 format of Model 3 or whether it will even be a completely new cell format.

Those who have bought the FSD option and own a vehicle with the FSD computer (AP3) will gradually get additional autopilot functions. Currently, Tesla is writing on the website:

Coming later this year:

  • Recognize and respond to traffic lights and stop signs.
  • Automatic driving on city streets.

However, this information was already listed on the website in 2019. So you should not be too precise when announcing such dates. However, new functions will be delivered bit by bit due to further development. This first in the US and then in Europe. If in Europe, the Permission of the regulatory authorities is necessary, it sometimes takes a little longer. The authorities in Europe are somewhat stricter in this respect. With new functions FSD will probably become more expensive. Buying FSD together with a new car is a bet on the future and on features that you will get one day as long as you still own the car.

New battery cells: With the acquisition of Maxwell, Tesla has purchased technology expertise in battery research. As Tesla announced on “Battery Day“, a new type of battery cell will enable a 54 percent higher range overall.

Otherwise, the year 2020 will of course clearly revolve around the Model Y. It is necessary for Tesla to grow and continue to make profits. For Europe, delivery of the Model Y is planned to start in January 2021, but that would definitely not be vehicles from the Gigafactory Berlin. Production there is not scheduled to start until summer 2021. Who knows, maybe this will be postponed and Tesla will later deliver the Model Y in Europe only from German production for cost reasons. We will see.

 

What comes in the medium term?

FSD computer successor (AP4?)

With the FSD Computer AP3 (Autopilot Hardware 3), Tesla has already been producing a computer 21 times more powerful than its predecessor AP2.5 since spring 2019. Nevertheless, on Tesla Autonomy Day in April 2019, it was already announced that work is underway on a successor to the FSD Computer that is to be three times more powerful. But I don’t think that this computer can be expected in 2020. The announced performance increase would be too massive for that. Those who know Tesla for a little longer may remember the AP2 (October 2014) and AP2.5 (August 2017), but the performance of these computers is not much higher than the AP2. It then took until spring 2019 to jump to AP3, but this was partly because Tesla developed the AP3 completely by itself and the AP2 was a purchased product from Nvidia. So far there is no information if we can already expect the AP3 computer successor this year or next year.

MCU3 Computer?

Currently, the MCU2 computer, which has been installed since March 2018, still seems to have sufficient performance. But whether this is permanently the case, remains to be doubted. We know it from mobile phones and PCs. Over the years, new software also requires more powerful hardware. At some point, owners of a vehicle with MCU2 will have the same problem as the owners of MCU1 currently have. New functions, such as the sentry mode, will not be available there and generally the MCU1 is much slower to operate. It could also be that there will be apps that can be installed on the MCU at some point. This would require additional device power. If and when MCU3 can be expected is not known yet.

Other new vehicles

As far as the model range is concerned, Tesla has already announced many vehicles. But the next-generation Roadster, the Cybertruck or the Semi are still rather dreams of the future in the medium term. In 2020, the Semi is to be produced with limited volume (after the start of production has been postponed), but battery cells are likely to be a limiting factor here too. With the ramp-up of Model 3 and Model Y production, many battery cells will be needed. However, due to the large sales volume in this price segment, these vehicles are essential for Tesla to be able to grow further. The Semi, on the other hand, will require relatively many battery cells per vehicle. Without the additional battery production capacities of other Gigafactory, the Semi is unlikely to be produced in large quantities. As far as I know, the Gigafactory in Shanghai is not yet producing battery cells. But this is planned. If Gigafactory Berlin should really be finished in 2021, it could also support the battery cell production from 2021 on.

The Cybertruck production start was announced for the fourth quarter of 2021. Apparently, the Cybertruck could be a resounding success for Tesla, as it can be produced very cost-effectively. However, I don’t see this vehicle as a top priority because of the lower demand than Model Y. It could well be that the start of production will be postponed even further. The huge number of orders is partly because only 100 USD had to be paid on account and the reservation can be cancelled again free of charge.

The new Roadster was originally announced for 2020, but was also postponed to later. This is understandable, since Tesla’s profitability is primarily dependent on Model 3 and Model Y. In addition, the technical specifications of the roadster are likely to be very high. The announced 200 kWh battery and the sales price starting at 200’000 USD will also require a low battery cell price for a corresponding margin. So, the longer Tesla waits, the more profitable the roadster can be sold. Moreover, it is simply a niche product and probably not the priority. The roadster was also used as a bonus for the previous referral program. This means that at some point Tesla will have to give eighty roadsters as rewards to the customers concerned free of charge. One more reason to wait a little longer.

In any case, cell production is essential for bringing new models to market. It is not for nothing that Tesla is currently building its fourth Gigafactory and there are already rumors of a fifth factory in Texas. Until new battery cell production is productive compared to the current situation, I don’t think that roadster, semi and Cybertruck are a priority at the moment. The cells are needed for the Model Y.

 

Should I buy a Tesla now or wait?

Model 3

It is not yet known whether new features will be added with the start of production of Model Y, which will also be included in Model 3. It can be assumed that with the start of production at Gigafactory Berlin, the Model 3 and Y prices will decrease in the future, as soon as vehicles for the European market can be produced directly in Europe. Whether the planned start of production in July 2021 can be kept, however, depends strongly on how quickly Tesla can build the Gigafactory in Brandenburg despite all environmental regulations and problems.

It is not yet known when exactly the new battery cells announced on “Battery Day” will enter mass production.

Update from 17th October 20: With the “2021 refresh” the Model 3 was revised. From this point of view, now is probably a good time to buy it, as no further innovations are expected in the short term.

Model S and Model X

For the Model S and Model X the announced plaid drive should be interesting. I assume that with the new plaid drive also the price for the vehicle will increase. It is unclear whether the old 100 kWh battery will still exist parallel to the new battery capacity. The same procedure was used earlier with the Model S. The smaller 90 kWh battery was then removed from the range and replaced by the more expensive 100 kWh battery. So, there could be a price increase here.

It is not to be expected that Tesla will offer the “old” Model S and X then still. Once the plaid is available, the old configurations will probably not be produced from one day to the next. This has always been the case with such conversions. If you had bought shortly before, or whose vehicle was already produced, you were unlucky (even if it hadn’t been delivered yet). Those who had already ordered the old specification, but whose vehicle was not yet produced, got the new model at the old cheaper price and were lucky.

I don’t think it’s likely that a facelift for Model S or X will come in the foreseeable future. Elon Musk also denied this. One should not forget that Tesla absolutely must continue to become profitable. As Elon Musk also said on Twitter, Model S and X play a subordinate role for Tesla’s future and are rather niche products due to the smaller sales volume. The cost to completely redesign the models would probably be very high. But there will always be small changes.

The new cell type is also expected for Model S and X. The 100 kWh battery in 18650 formats has been the highest capacity in the Model S and Model X for years. With the new Long-Range Plus version something seems to be happening already now and soon a 110 kWh battery will also be available.

 

Conclusion about the question “Should I buy a Tesla now or wait?”

But I really want a Tesla! Should I buy a Tesla now or wait?

On average, the efficiency of Tesla’s vehicles increases by three percent per year. So one could argue that it is better to wait a few years before you buy a Tesla. But technological progress never stands still, so waiting doesn’t really help.

Just think back to the first flat screens and plasma TVs. Every year, new models that were better and cheaper came onto the market. This is absolutely normal and unavoidable in the development of technology. You could always wait for something better. But at what price? If I had not bought my Model S two and a half years ago, I would not be part of this “electric revolution” today and you would not read my articles here. 🙂

And the view of the competition? In my opinion, only Tesla currently offers the coherent overall package of great inspiring vehicles with good everyday range and its own uncomplicated supercharger network. I hope my thoughts were helpful for your purchase decision. You are the only one who can make this decision: “Should I buy a Tesla now or wait?”

You’re new to Tesla? Then you will find here a short overview of Tesla vehicles.