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Tesla Ludicrous: Will You Be Able to Afford It? (TSLA)

Author: Michael Smith

Tesla Motors Inc. (Nasdaq: TSLA) has made its new Ludicrous Mode performance upgrade relatively affordable for the Tesla Model S P85D. If you can afford the Tesla Model S to begin with, you can probably afford the performance upgrade, too. While the Tesla Model S, with an average sales price of approximately $120,000, is out of reach for the average American, even with the qualified electric vehicle tax credit, most people who can afford a new $120,000 car can also afford the $10,000 upgrade.

Improve Your Car as You Go

Tesla has taken an interesting approach to solving the potential problems created by its own rapid technological improvements. Potential buyers may worry that the Tesla model they buy today may be obsolete when next year's model is unveiled. However, Tesla offers upgrades to existing vehicles as the company develops new, improved technology. Through this practice, Tesla helps buyers avoid feeling like their model is outdated, avoiding the costly expense of trading in their current Tesla for a new one. Tesla essentially offers the option of continual upgrades to bring each model into line with the latest technological advances in electric powered vehicles.

The Ludicrous Mode Option

The Ludicrous Mode option is an acceleration performance upgrade. The increased acceleration comes from a newly designed fuse capable of handling the extra power surges. Through the innovation, Tesla managed to ramp up battery power from 1,300 amps to 1,500 amps. The P85D models already have a selectable Insane acceleration mode, which enables the car's 0 to 60 time to be decreased from the standard 4.2 seconds to 3.1 seconds. The new Ludicrous Mode reduces the 0 to 60 time to 2.8 seconds. Tesla's CEO, Elon Musk, describes the new acceleration level as being "faster than falling" and "like having your own rollercoaster." The time to the Model S top speed of 155 mph is reduced by 20%, and the car's quarter-mile time improved to 10.9 seconds.

In the past, Tesla has offered software upgrades for free to existing Tesla owners. The new Ludicrous Mode option is a hardware upgrade, however, so it doesn't come without a cost. New Tesla buyers have to pay an extra $10,000 for the Ludicrous Mode as an option, but existing Tesla owners can get the upgrade for half price – $5,000 – at least for the first six months following its introduction in July 2015. The affordability question is tied to the basic question of whether a car buyer can afford a Tesla in the first place. If the answer is "yes," then it's likely that the buyer can also find an extra $5,000 lying around to pay for the Ludicrous upgrade.

Is Ludicrous Worth the Cost?

As to whether it's worthwhile for either new Tesla buyers or existing owners to get the Ludicrous Mode option, that's purely a matter of personal choice, just like with any other automobile option. It all depends on how badly a Tesla owner wants to be able to go from 0 to 60 in 2.8 seconds. Some car buyers consider a $1,000 stereo upgrade option neither worthwhile nor affordable, whereas other buyers find it perfectly reasonable. Since performance is one of the main factors driving consumer demand for Tesla cars, many Tesla owners who want the highest performance level possible will likely opt for the upgrade.

Making Tesla More Affordable

With the Model S selling for more than twice the 2015 U.S. median household income of approximately $52,000, the car is out of the price range for most Americans. Tesla has also announced a new, lower-priced model S 70 that will only cost $70,000, bringing it within reach of more car buyers.

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