Musk’s Favorite Analysis of Model 3 Says Material Cost is $18K

Tesla CEO Elon Musk called the work of a German teardown company the “best analysis of Model 3 to date.”

German magazine WirtschaftsWoche talked to a rep from an engineering firm that bought a Model 3 with the intent to rip it apart to study its parts and construction.

The firm said materials used in the Model 3 cost around $18,000 per vehicle. Estimating $10,000 in labor costs, the total price to build a Model 3 would be $28,000. Retail price for the Model 3 is expected to range from $35,000 for the base model to $78,000 for the performance version.

“If Tesla manages to build the planned 10,000 pieces a week, the Model 3 will deliver a significant positive contribution to earnings,” the test engineer said.

When asked on Twitter if the Model 3 cost to build could come down to $28,000, Musk said “Definitely.”

The article also suggested that Tesla may have a competitive advantage with its battery design. Lab results reported by the magazine showed that Tesla’s 2170 cells for the Model 3 consisted of 2.8% cobalt, 65% less than the industry average of 8%.

“Tesla has obviously succeeded in significantly reducing the share of the notoriously scarce metal cobalt in the batteries of his new Model 3,” the report said. “That would be a significant competitive advantage for Tesla. Cobalt is currently very difficult to get on the world market.”

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