Attempting to price out options for Model 3

[dsvick]

In my mind this is simplification. Sure they are base options, but once you "level up" to a larger battery, it's assumed you want the other two options, so they're no longer options, they're just included.

Right, it is much easier for them to schedule production, parts, and other things if they know that the next batch of cars they build all have larger batteries, which also means dual motors, and the SC enabled. As opposed to 300 with larger batteries, then 500 with dual motors, then 200 with both, then some with batteries and SC but not dual then dual motors and SC but not ...

That's a big factor in why you get a package discount over the ala cart pricing.

 

[ccutrer]

Your definition of decent sounds pretty different from mine. What part of the base car do you think wont be decent?

Right? One good thing about Tesla is that a lot of things other manifacturer's charge for are included in the base. Automatic Emergency Braking? Check. Remote "start"? Check. Navigation? Check. Bluetooth? Check. Power locks, windows, mirrors, seats? Check. Parking camera and sensors? Check.

(Yes, some of these are becoming more standard for other manufacturers, but not all of them from any single manufacturer).

 

[ummgood]

Many of the options that'll be available are not technology-based. What exactly are you missing out on with getting the S seats now vs 2 years ago? Do they kill the cow more humanely now? Did new thread technology come out that will last 10x longer? Why would you expect to pay considerably less for an option like that unless the quality was worse on the M3? same for panoramic roof, wheels, etc. Costs on items like this have little reason to come down. AP is constantly updated --cost of this will not likely come down as it is a constant investment.

Could retail battery costs become cheaper?...sure. but what is the benefit to Tesla? Their top electric competitor already costs more and is frumpy as all hell and tesla's factory is maxed out on manufacturing capacity. They are entirely more likely to wait for luxury cars to make competitive cars in the electric market and when the desirability of another electric car matches tesla, they will offer more battery or technology for the dollar.

To think that a company will just give you a discount because they decide they are profiting enough when people are purchasing their product hand over fist is naive. The only way I could see option pricing lower on most things is if they want to push people towards certain packages which will make manufacturing cheaper for them.

In a way you are right but in a way you aren't. EVERYTHING not just tech drops in price the more you buy and this includes leather seats. The cow portion of the seat is a small part. Honda can equip leather seats cheaper than Tesla. Why is that? Maybe it is the quality of the leather is less but there is something to be said for buying in large quantities.

the last new car I bought that I went to a dealer (ford) and picked the specific options I wanted, had packages that were something like "Convenience" (extra illumination, heated mirrors, upgraded mats, leather shift boot and steering wheel, etc), "Sport" (upgraded wheels, upgraded seats, bright sill trim, different suspension/steering, etc), "Sun & Fun" (sunroof - apparently it's fun enough on it's own) then individual options like leather, ABS, etc and a particular car could have any combination of packages.
Personally, I think I'd rather be able to pick the specific parts and pieces I really am interested in and skip the others that may be adding cost that I'm not interested in, but if packages bring down prices as a while, I am all for them if they combine things as most people would (IE an interior package with decor/leather/tech)

Yeah I agree we all what we want and none of the extras. For example my wife's van is a Touring Elite. I wanted HID lights and blind spot detection. I didn't want the wide screen rear DVD or the vacuum built in. Honestly the HID lights and blind spot cost me about 2k more for the upper trim level after negotiations and if I would have special ordered a car I would have probably paid the same or more. With Tesla it is different because of the ordering model. I do think to keep the 500k pipeline going after a couple years they'll need to have some inventory cars and having packages would make that easier to manage. This is just my humble opinion.

This is why other automakers do packages. Sure it may make manufacturing a bit easier, but they simply don't know what the actual customer wants, and it would be impossible to stock every variation. I feel that packages just complicate the process of custom ordering. For evidence, go through the history of the X forum at the outcry from "so much" being bundled into the premium package, or how many things require SAS. Or the S forum right now because you can only get Ultra White seats with a P model.

True but these are also people buying 90k+ cars (I know there are some less but most of them are at least 90k). If you look in that price range most of the car companies (BMW 7series, Mercedes S class, etc...) all have tons of options. When you go less in price you start getting into cars with packages or trim levels. It just works better and allows someone to get a loaded car for a more affordable price because it simplifies things and allows for more profit because putting something in ever car reduces cost.

 

[ummgood]

Except that many (most?) of the options for the TM3 are not available in the ICE, including the biggest option of them all: EV

This is where I differ from many on this forum. The vision of Tesla is for EV's to replace ICE. While EV is a new thing and has many bonuses over the equivalent ice it still needs to be considered to be just another choice. For example if one manufacturer has a V6 with some power level and another has a turbo 4 with some power level at the same price then you check out the pros/cons and choose what car you want. They both have the same power, similar economy. With an EV in order to take on the masses it cannot seem like a much larger cost or people won't buy it. Tesla is doing well because their cars are awesome and are EV's. Why isn't the Leaf or the Volt doing as well? If you compare it to a similar ICE car the price is DRASTICALLY more expensive. I think the leaf is similar in class as a Nissan Versa. Cost is probably close to 10k more. Volt is similar to Chevy Cruise (sp?). Once again 10k more.

I think a good thing is when the electric cars can be the same or slightly more cost than the equivalent ICE car so it really is a no brainer. I think if Tesla over charges for options then they alienate a lot of potential buyers including myself. I am willing to put up with the limitations of an EV if it is in the same ballpark as the competition but not if it costs 10k more than the competition. The limitations I am thinking about is long range driving (I know you can supercharge but it isn't as convenient here where I live) and having to pay 1k to have electric service installed in my house.

 

[PtG62901]

Wouldn't it be great if the $35k M3 was a great driving car, great acceleration, interior space, good cornering, low center of gravity, reasonable range, EV, quiet, and a completely stripped down driver's car? No leather, no wood, AM radio, air, just basic nice. That is what I hope it will be for $35k.

 

[alseTrick]

It sounds like just to drive a usable Model-3 you are going to be at a 20k premium at a minimum; that's without anything fancy just the basics everyone would want and expect. That's not a 35k car, then it's a 55k car.

What are you talking about? What are the "basics" that the Model 3 doesn't offer?

 

[Model 3]

Elon needs to change his mind on this. A main purpose of the Model 3 is to make a market for behavioral advances that reduce emissions. Robot car parking, and specifically charging, garages make the number of people who can/will use a BEV much larger. The capability needs to be ubiquitous.

A high capability standard feature set delivers 10 times more value to society than a stratified pricing/option approach. Tesla will net a significant fraction of that value.

It would be amazingly short sighted to kill the goose by balkanizing capability.

Most of this arguments could be used on most of the options.

I'm on the other side here - I do not want to pay for any options that I do not want. And accurately - I do not want AP. I love to drive, and the roads I drive is not fit for AP anyway. TACC maybe, but no big deal. So I rather start with an $35000 basic car and add options to that from what I want and can afford, and not to start with a $38000 basic car (that the car would cost with AP) with AP which I neither want or think I can afford. I rather put those $3000 into the "D" or a bigger battery.

Or are you thinking that you should get your option of choice for free?

I'd love a package with a larger battery, dual motors, and SC baked in.

Sounds like the "P" package

 

[SageBrush]

I think a good thing is when the electric cars can be the same or slightly more cost than the equivalent ICE car so it really is a no brainer. I think if Tesla over charges for options then they alienate a lot of potential buyers including myself. I am willing to put up with the limitations of an EV if it is in the same ballpark as the competition but not if it costs 10k more than the competition. The limitations I am thinking about is long range driving (I know you can supercharge but it isn't as convenient here where I live) and having to pay 1k to have electric service installed in my house.

'Taking on the masses' is a straw-man. The Model 3 is taking on the entry-level luxury compact sedan market, beating it in performance and probably not beating it when it comes to things like leather and assorted bling.

This generation, the electric drivetrain remains more expensive than the ICE drivetrain.

 

[JeffK]

This generation, the electric drivetrain remains more expensive than the ICE drivetrain.

Not when you factor in costs incurred during the lifetime of the car.

 

[22522]

Or are you thinking that you should get your option of choice for free?

This is less of a "me" issue and more of a cost to society issue.

Automatic parking and charging solves a lot of problems with EV adoption. The Model 3 should present a significantly large market. Large enough for businesses to make an investment.

If cars can park and charge themselves, the world changes. And Tesla will make more contribution dollars if they include automatic parking on every one they sell, without raising the price at all.

... And generally Tesla would further differentiate from BMW if they did offer option of choice for free - at least for a whole category of preferences. Getting diametrically opposed to the customer by arguing about money - particularly when the customer does not have the money - is bad business practice. You end up painting people into classes in a way that creates bad experience. It is just petty.

The transaction should go, "$35K is a lot of money. Thank you for considering a Tesla. What do you want on it? Here you go."

 

[Model 3]

Automatic parking and charging solves a lot of problems with EV adoption.

Automatic parking solves a lot of problems with *car* adoption. It has nothing to do with EV's. And quite frankly - do we really need more car adoption? More people been less worried about using their car in the city centers?

... And generally Tesla would further differentiate from BMW if they did offer option of choice for free - at least for a whole category of preferences.

That seems like a clear "YES" to my question.

The transaction should go, "$35K is a lot of money. Thank you for considering a Tesla. What do you want on it? Here you go."

Oh no? You don't only want your option of choice for free, you want them all for free? :O

 

[22522]

Automatic parking solves a lot of problems with *car* adoption. It has nothing to do with EV's. And quite frankly - do we really need more car adoption? More people been less worried about using their car in the city centers?



That seems like a clear "YES" to my question.


Oh no? You don't only want your option of choice for free, you want them all for free? :O

It seems we are diametrically opposed. $35K is a lot of money. That is not for free. Because you do not respect that I came to the table at all. I will ignore you. Best in your endeavors. My attention and money that follows are out.

 

[Model 3]

$35K is a lot of money.

Correct. And that sum is what Tesla has calculated that they need to get from every buyer of the basic Model 3 to pay for the cost to them to build that car, and give them enough margin to make it worthwhile to make it in the first place. And to please the investors. And to expand and build more car models like the Model Y, the buss, the semi, the truck...

Building additional options to the car cost Tesla more money, and will lower their margins (or make them negative) if they do not get extra paid for them.

Yes, it is a lot of money to me also, and I will have to stretch a bit to make it, but I can. Ni, I can't take all the options I could want, but that is just how it is. I hope to be able to get the few that is most impotent to me.

I will ignore you.

Do as you please if you cant handle that anyone do not agree with you on everything.

 

[SageBrush]

Not when you factor in costs incurred during the lifetime of the car.

That remains to be seen. I'd love for it to be true but the good ICE cars like Honda and Toyota have set a very high bar of ~ 20 years useful life. Do you think that the battery will last 20 years ?

 

[Az_Rael]

Why isn't the Leaf or the Volt doing as well? If you compare it to a similar ICE car the price is DRASTICALLY more expensive. I think the leaf is similar in class as a Nissan Versa. Cost is probably close to 10k more. Volt is similar to Chevy Cruise (sp?). Once again 10k more.

I don't know about the Leaf, but a Volt IS drastically better than a Cruze having driven both. A Volt is like buying a "sports" version of a Cruze since the low-end torque of the EV motor makes it super-peppy. I would say that if people test drove them back to back, there is no way people would pick the Cruze over the Volt for driving comfort, performance, etc. I chose the Volt over a Lexus, actually (fun to drive, very nice interior, AND I get 68mpg? It's a hybrid that doesn't drive like one - I'm in!)

The only reason the Volt doesn't do well is GMs own poor marketing. When you ask about them at a dealer, you get blank stares, sighs, or directed to the ICE cars instead. Even today I often meet people who think the Volt only goes 40 miles and that it is a city BEV. All GMs fault there.

 

[JeffK]

That remains to be seen. I'd love for it to be true but the good ICE cars like Honda and Toyota have set a very high bar of ~ 20 years useful life. Do you think that the battery will last 20 years ?

Let's look at performance engines do do a proper comparison:
The Chevy LSX Engine LSX 454R Crate Engine - Race Engine | Chevrolet
$24,000 for the engine, this doesn't count the transmission, fuel, and maintenance.

when Tesla meets $100/kWh then a 100 kWh battery costs $10,000 We don't know exactly what the motor, gearing, inverter costs. My guess is it's less than another $14k with enough to spare for nearly a lifetime of electricity.

 

[melindav]

Using 20 years, my ICE's fuel mileage, my local fuel costs and my average miles driven per year, my fuel cost would be $39,000 for 20 years. Using the Model S calculator and my current home electricity cost, the same mileage over 20 years would be $7,920 (not counting in any SC usage or upfront costs or maintenance on either - just gas vs home electricity)
So Tesla would save me $31,080 over 20 years over ICE.

 

[SageBrush]

Using 20 years, my ICE's fuel mileage, my local fuel costs and my average miles driven per year, my fuel cost would be $39,000 for 20 years. Using the Model S calculator and my current home electricity cost, the same mileage over 20 years would be $7,920 (not counting in any SC usage or upfront costs or maintenance on either - just gas vs home electricity)
So Tesla would save me $31,080 over 20 years over ICE.

IF the Tesla lasts 20 years.

I figure ~ 300,000 miles useful life to a great ICE car, and about 30 mpg for most people's car choice. That works out to 10,000 gallons of liquid fuel and ~ $22,000 at today's prices.

Grid electricity varies from as low as ~ 9 cents to as high as ~ 30 cents a kWh and most Tesla drivers end up around 3 miles per kWh. I'll take the low end and use 4 cents a mile, so 300k miles costs $12,000.

These numbers are why I am skeptical that a model 3 can compete price wise with an ICE TCO. As I said, I'll be delighted to be wrong and the jury is certainly still out.

 

[PtG62901]

IF the Tesla lasts 20 years.

I figure ~ 300,000 miles useful life to a great ICE car, and about 30 mpg for most people's car choice. That works out to 10,000 gallons of liquid fuel and ~ $22,000 at today's prices.

Grid electricity varies from as low as ~ 9 cents to as high as ~ 30 cents a kWh and most Tesla drivers end up around 3 miles per kWh. I'll take the low end and use 4 cents a mile, so 300k miles costs $12,000.

These numbers are why I am skeptical that a model 3 can compete price wise with an ICE TCO. As I said, I'll be delighted to be wrong and the jury is certainly still out.

It is interesting isn't it? If it is much better then a Honda Accord 4 banger, for this reason and that, the cars will move. They pick up their 10% of the market, and everything is great. If we decide Florida is going underwater from global warming, and/or Government mandate cleaner transportation they will do great. If they can't get the batteries right, or if global warming suddenly reverses, then they will have to compete. But, once you drive one, if you can afford one, why would you buy a ICE?

I see your number of 300,000 miles for an ICE. I wonder how many cars really hit that before being trashed? I know of just one car that has been driven that many miles, of the thousands of cars I have been around in my adult life. How about you?

 

[Az_Rael]

I see your number of 300,000 miles for an ICE. I wonder how many cars really hit that before being trashed? I know of just one car that has been driven that many miles, of the thousands of cars I have been around in my adult life. How about you?

Here in super-commuter CA, lots of people drive cars to that mileage. But when you drive 25k miles on a year, it doesn't take that long to do.