Attempting to price out options for Model 3

[SageBrush]

But, once you drive one, if you can afford one, why would you buy a ICE?

All else being equal, I prefer giving my money to my kids instead of buying a car that I view as an appliance. But then everything else is not equal in my eyes, so I'm willing to spend the money to advance cleaner transport and to drive a car that is the leading edge in safety.

I just accept that the alternative of continuing to drive my Prius (v)agon would have been considerably less cost.

 

[SageBrush]

when Tesla meets $100/kWh then a 100 kWh battery costs $10,000

I'm quite upbeat about the prospects for EVs eventually killing the ICE based on price alone. Just not this generation, and probably not the next one either.

 

[melindav]

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.

well, as I said. My numbers are from my actual MPG, Price/Gal and price per kWh for the $39k in gas or $7920 in electricity. so obviously your cals are based on a better MPG and fuel price than I get and higher energy rate than I get.

 

[SageBrush]

well, as I said. My numbers are from my actual MPG, Price/Gal and price per kWh for the $39k in gas or $7920 in electricity. so obviously your cals are based on a better MPG and fuel price than I get and higher energy rate than I get.

Yeah ... I try to avoid anecdotes. If I had used my cars the numbers would have been much worse:

Honda Fit
40 mpg
$15,500 bought new
Then 300k miles would cost $15,500 + $15,000 = $30,500 or about 10 cents a mile

Toyota Prius v
50 mpg
$26,000 bought new
Then 300k miles would cost $26,000 + $12,000 = $38,000 or about 12.67 cents a mile

Model 3 (my estimate)
Two cars to cover 300,000 miles @ $35k each = $70,000
Fuel at 2 cents a mile (PV) * 300,000 miles = $6,000
Total cost then of $76,000 for 300k miles or about 25 cents a mile.

Model 3 (over_the_top_optimism)
One car to cover 300,000 miles @ $35,000
Fuel at $6,000
Total cost then of $41,000 for 300k miles or about 13.66 cents a mile.

 

[22522]

Yeah ... I try to avoid anecdotes. If I had used my cars the numbers would have been much worse:

Honda Fit
40 mpg
$15,500 bought new
Then 300k miles would cost $15,500 + $15,000 = $30,500 or about 10 cents a mile

Toyota Prius v
50 mpg
$26,000 bought new
Then 300k miles would cost $26,000 + $12,000 = $38,000 or about 12.67 cents a mile

Model 3 (my estimate)
Two cars to cover 300,000 miles @ $35k each = $70,000
Fuel at 2 cents a mile (PV) * 300,000 miles = $6,000
Total cost then of $76,000 for 300k miles or about 25 cents a mile.

2 cars?

 

[SageBrush]

2 cars?

These are the two cars we currently own, so I know what I paid for them and their fuel economy. I was not suggesting that it takes both cars to reach 300k miles total.

 

[mhan00]

Yeah ... I try to avoid anecdotes. If I had used my cars the numbers would have been much worse:

Honda Fit
40 mpg
$15,500 bought new
Then 300k miles would cost $15,500 + $15,000 = $30,500 or about 10 cents a mile

Toyota Prius v
50 mpg
$26,000 bought new
Then 300k miles would cost $26,000 + $12,000 = $38,000 or about 12.67 cents a mile

Model 3 (my estimate)
Two cars to cover 300,000 miles @ $35k each = $70,000
Fuel at 2 cents a mile (PV) * 300,000 miles = $6,000
Total cost then of $76,000 for 300k miles or about 25 cents a mile.

Model 3 (over_the_top_optimism)
One car to cover 300,000 miles @ $35,000
Fuel at $6,000
Total cost then of $41,000 for 300k miles or about 13.66 cents a mile.

1) the Model 3 isn't positioned to compete with either a Honda Fit or a Prius. It's a whole different level of car. If you're happy with that level of car, the Model III isn't really for you. It's goal is to compete with entry level luxury vehicles like the Lexus ES 350, the 3 Series, etc.

2) two cars to cover 300k miles? Really? You don't think a Model III will be able to go 150k miles before it needs replacement? The Model S has cars that have surpassed 150k miles with zero issues. Why would a car with more advanced batteries than the 2012 Model S somehow become unusable when the older cars are trucking along?

 

[SageBrush]

1) the Model 3 isn't positioned to compete with either a Honda Fit or a Prius. It's a whole different level of car.

I agree. You missed the posts where I said exactly the same when comments about 'mass market' competition were brought up.

2) You don't think a Model III will be able to go 150k miles before it needs replacement? The Model S has cars that have surpassed 150k miles with zero issues. Why would a car with more advanced batteries than the 2012 Model S somehow become unusable when the older cars are trucking along?

And Prius has hit 500k miles. So what ? Until Tesla cars routinely last 20 years or 300 miles I'll err on the conservative side. YMMV

 

[JeffK]

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.

That's just it, today's prices will always be wildly variable. Gasoline over the last 40 years, even adjusted to the value of the current dollar, have increased more than electricity prices which are heavily regulated.

Let's look at your total tally and some more napkin math:
performance engine: let's be on the lower side and just say $15k
regular unleaded (which we know it'd actually be premium for such an engine, but whatever): $22k
Let's say we change the oil ourselves at 3000 mi at $15 per change for 300,000: $1500
Performance manual transmission: $3500
transmission fluid changes for 300,000 miles (do it ourselves): $500

Right there you're at $42K for the gas and ICE drivetrain (if gas prices did not increase with inflation and there are no wars)
That doesn't include the price of the actual car or anything in it. $$$

for $35K + < $5K for AWD + $12k of electricity assuming no solar panels or supercharging.
So for $52K you get an entire car (tires and all) including electricity for 300,000 miles and should the drivetrain fail in the first 8 years/unlimited miles then they'll replace it.

Keeping in mind the average age of vehicles on the road in the US is only 11.5 years as of 2015 and that was record breaking...

The Roadster had on average 80-85% capacity after 100,000 miles.
Model S is projected to be 92% capacity after 100,000 miles.

Based on 84 data points from the 85-kWh version of the Model S and six from 60-kWh cars, the study concludes that the Model S will retain about 94 percent of its capacity after 50,000 miles, with losses thereafter shrinking to about 1 percent per 30,000 miles.

from an older article Tesla Model S Battery Life: How Much Range Loss For Electric Car Over Time?

We already know that electric motors typically last forever and data shows the batteries can last a long time too. With the price of the Model 3 battery packs coming down so much in the next two years, I think it's safe to say the TCO for a Tesla is going to be far less than an equivalent performance ICE.

 

[ChadFeldheimer]

Already posted this in another thread, but:

Base 60: $66,000
P100DL: 134,500

Difference: 2.04

Now OP's Pricing:

Base M3: $35,000
M375DL: $78,500

Difference: 2.24

It's unlikely that the price difference will be .2 greater than with the Model S. More likely, the cost will be $71,500 for the top-tier M3...and it will include some of the options not included on the base.

Your $134,500 P100DL price includes no options while the M375DL is fully optioned. If you want to compare apples to apples, a fully optioned P100DL is 161k, making the S "difference" 2.44.

I expect a 3 will top out north of 100k. I expect the 3's option pricing will be somewhat lower than on the S/X, but there will also be some standard S/X features that are optional on the 3.

 

[ChadFeldheimer]

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.

Are you conflating cost and price? Tesla isn't far off from $100/kWh cost now, but the (upgrade) price is still $500+/kWh. I'd be shocked if the LSX engine cost more than $10k to manufacture.

 

[dsvick]

... 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."

So you're saying that they should not charge for any of the options? How then do they make the money they need to stay in business?

If someone can't afford something it is not up to the company that produces the product to reduce the price so that they can. There are tons of things out there that people can't afford that they do wiithout, why would a car be any different?

 

[JeffK]

Are you conflating cost and price? Tesla isn't far off from $100/kWh cost now, but the (upgrade) price is still $500+/kWh. I'd be shocked if the LSX engine cost more than $10k to manufacture.

They are still far off of $100/kWh for 18650s... they are closer to $190/kWh at the pack level. The reason for the price to consumers at the moment is purely a cash generating thing to prep for the Model 3. It's far beyond normal margins.

 

[JohnSnowNW]

Your $134,500 P100DL price includes no options while the M375DL is fully optioned.

No, I was comparing the base of both...that is P100D with no options and M375DL with no options.

 

[ChadFeldheimer]

No, I was comparing the base of both...that is P100D with no options and M375DL with no options.

I stand corrected.

However, I still don't understand the logic in applying the ratio of base prices from the S towards the 3. Tesla has priced the fastest production car at 135k, starting from a 66k base price S. I assume a ludicrous 3 will be worthy of the ludicrous name and thus nearly as fast. It seems unlikely to me that Tesla would opt to price a ludicrous 3 at, say, 70k just because the base 3 happens to be 35k.

To take it a step further, suppose Tesla eventually makes a 15k econobox. Would you expect them to sell a ludicrous econobox for $30k?

 

[SageBrush]

I stand corrected.

However, I still don't understand the logic in applying the ratio of base prices from the S towards the 3. Tesla has priced the fastest production car at 135k, starting from a 66k base price S. I assume a ludicrous 3 will be worthy of the ludicrous name and thus nearly as fast. It seems unlikely to me that Tesla would opt to price a ludicrous 3 at, say, 70k just because the base 3 happens to be 35k.

To take it a step further, suppose Tesla eventually makes a 15k econobox. Would you expect them to sell a ludicrous econobox for $30k?

This is why marketeers can make handsome salaries. They are expert at calculating ratios.

 

[timk225]

If Tesla is going to charge 7000 to 8000 for any battery upgrade, then I sure hope supercharging comes in that price!

 

[JohnSnowNW]

I stand corrected.

However, I still don't understand the logic in applying the ratio of base prices from the S towards the 3. Tesla has priced the fastest production car at 135k, starting from a 66k base price S. I assume a ludicrous 3 will be worthy of the ludicrous name and thus nearly as fast. It seems unlikely to me that Tesla would opt to price a ludicrous 3 at, say, 70k just because the base 3 happens to be 35k.

To take it a step further, suppose Tesla eventually makes a 15k econobox. Would you expect them to sell a ludicrous econobox for $30k?

It's certainly possible. However, Tesla has discussed the M3 as targeting vehicles classes like the 3-series, and it's a similar ratio:

BMW 320i: 33,450
BMW M3: 64,000

Difference: 1.9

If they are targeting the 3-series market, it would make sense to also target the ratio. Granted, this is a bit of a different argument.

See Also Mercedes:

C300: $38,950
AMG C63 S: $73,250

Difference: 1.88

 

[22522]

So you're saying that they should not charge for any of the options? How then do they make the money they need to stay in business?

If someone can't afford something it is not up to the company that produces the product to reduce the price so that they can. There are tons of things out there that people can't afford that they do wiithout, why would a car be any different?

"At least for a whole category" means many but not all options, although once self driving, the ability pull regenerative braking off the front axle likely pays for itself in energy and safety over the life of the vehicle. Loss to society is likely less if they all came with four wheel drive.

Tesla should do the integral and offer products that have the lowest human and lowest environmental cost.

I think people who don't have money don't enjoy playing games with it as much as people who do have money (enjoy that activity). Elon could come down on the wrong side of this cultural subtlety and kill the company. I expect he is as blind to this as many here are.

If a lot of people (depositors) choose to do without a Model 3, because Elon mistakenly believes that everyone likes to play with money the way the BMW and existing Tesla customers do, sales fall off a cliff and the company does not sell enough product to pay for the capital investment. They used to call this the crossover point. If Tesla does not make crossover, current shareholders lose their money.

Elon has already stated that Model 3 depositors are an entirely different demographic... maybe I will enter credit card information so that the analysts can figure that out, too.

People who don't have money still like choices, they just don't want to be reminded how little money they have every time they try to make a choice. May be Tesla thinks their primary purpose is to use the Model 3 options list to paint demographic differences? BMW already does that. If that is what Tesla is here for, they don't really need to exist.

 

[ModelNforNerd]

We've flogged this horse on numerous other threads, but I think we're only going to see Supercharging as its own line item on the base model.

Supercharging access will be baked in to the price of the larger battery pack(s).