Based upon Elon’s statements (dangerous assumptions), will the upcoming standard battery be 35k ?

[creekcrosser]

Two tweets in question:

(May 20):


“With production, 1st you need achieve target rate & then smooth out flow to achieve target cost. Shipping min cost Model 3 right away wd cause Tesla to lose money & die. Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.”


Quote from I believe in previous board meeting:

“Yes. We will definitely offer a $35,000 version of the Model 3. And probably at the end of this year is when we will be able to make a smaller version of the battery pack, and get into volume production of $35,000 version in Q1 next year. We would definitely honor that obligation, and we would do so right now if it were possible,” Musk said.”

 

[MD70]

Recent tweet re design of the roadster:
Production design will be better, especially in details. We are dying to do this, but primary focus must remain on making affordable version of Model 3 & bringing Y to market

 

[creekcrosser]

Recent tweet re design of the roadster:
Production design will be better, especially in details. We are dying to do this, but primary focus must remain on making affordable version of Model 3 & bringing Y to market

Saw that tweet, but that doesn’t contribute to the question really.

Talking about time frame.

When standard battery becomes available does it seem reasonable to assume that the 35k version will be released then ? The two quotes posted seem to favor the hopeful conclusion, but looking for further insight.

 

[BluestarE3]

When the standard battery version first comes out, I suspect it will come packaged with the PUP, as is the case currently with the LR battery. We haven't seen any Model 3s with the standard trim yet. I also think we'll see non-PUP LRs before we'll see the non-PUP SR ($35,000 model).

If so, based on the second quote, SR models (presumably with PUP), may show up by year-end and the $35K model by 1Q? All conjecture at this point.

 

[MXWing]

When the standard battery version first comes out, I suspect it will come packaged with the PUP, as is the case currently with the LR battery. We haven't seen any Model 3s with the standard trim yet. I also think we'll see non-PUP LRs before we'll see the non-PUP SR ($35,000 model).

If so, based on the second quote, SR models (presumably with PUP), may show up by year-end and the $35K model by 1Q? All conjecture at this point.

Tesla doesn’t make it unless

1.) Short burn of the century happens.
2.) They go private.

They get damned if they don’t make it. They get damned way worse if they do make it.

Market manipulation calls Elon a liar because he didn’t make it.

When Elon makes it, Tesla is now officially dead because demand for cars that have positive gross margins is gone.

The latter statement is obviously false as Tesla can ship P3 world wide than ship SR domestically if it came down to it.

I don’t think Germany has the United States federal tax incentives to buy an EV.

Anyone who cares for Tesla’s longevity should just wait patiently and not pressure them to make a car that makes them give up valuable FCF when they need it the most.

35K Model 3 worthless with no superchargers active or warranties to support it.

As I tell my kids, NO now does not mean NO forever.

 

[Roy Wasson]

My reservation has been called and I can order but I am waiting until the standard battery is available. If it is available by 12/31 I should have the full tax credit, right? Because my reservation is ripe I should be able to place my order immediately (meaning during 2018), right? I am a Tesla stockholder and want the company to make as much money as possible as soon as possible, but I hope to get a car below $50K before year end.

Roy in Miami

 

[Fudd]

My reservation has been called and I can order but I am waiting until the standard battery is available. If it is available by 12/31 I should have the full tax credit, right? Because my reservation is ripe I should be able to place my order immediately (meaning during 2018), right? I am a Tesla stockholder and want the company to make as much money as possible as soon as possible, but I hope to get a car below $50K before year end.

Roy in Miami

You have to take DELIVERY by 12/31, not place the order.

 

[NathanielHrnblwr]

I would be surprised if any significant number of SR cars are delivered before EOY.

 

[alloverx]

There will be very few SR cars delivered by 2019 July.
Ironically the quality of the 35K cars delivered in 2019-Q3 will be higher than the more expensive versions being delivered now.

 

[MXWing]

There will be very few SR cars delivered by 2019 July.
Ironically the quality of the 35K cars delivered in 2019-Q3 will be higher than the more expensive versions being delivered now.

My more expensive version will be out of warranty and not get support in Q3 of 2019?

 

[Mo City]

I don't expect the $35K version until late Q2, maybe Q3 2019. IMO, it will be explosively popular and Tesla won't introduce it until they are well past 5,000/wk production.

Elon Musk said the cost of increasing output from 5K/wk to 10K/wk is minimal and at some point in between the $35K car should be profitable.

By next summer or shortly thereafter, a light bulb will go off in the collective consciousness of America about EVs. The fact Tesla will be the only maker capable of (1) mass production of (2) affordable EV here will turn things upside down.

Get out your popcorn and enjoy the theater.

 

[alloverx]

My more expensive version will be out of warranty and not get support in Q3 of 2019?

I was referring to the initial build quality.
This assumes Tesla gradually increase the production rate in a slow and controlled manner.
-which remains to be seen but hopefully they have it down by then

This would also apply to other car makers in general. i.e. safer to get a 2nd year of a brand new model than than the 1st year.
Naturally there are no guarantees of course

 

[boriszima]

My reservation has been called and I can order but I am waiting until the standard battery is available. If it is available by 12/31 I should have the full tax credit, right? Because my reservation is ripe I should be able to place my order immediately (meaning during 2018), right? I am a Tesla stockholder and want the company to make as much money as possible as soon as possible, but I hope to get a car below $50K before year end.

Roy in Miami

If you counting on getting $7,500, consider ordering very soon as mentioned take delivery before 12/31 now official time is 2-4 months, but if you look at the excel and all around, many cases are in matter of weeks if you get lucky with color and location. As others said, $35 is far down the line IMHO, maybe Q2 of 2019 and even than will it be $35K, bare bone or SR with PUP and or AWD?

 

[drj3]

Here is my guess on the SR roll out.
late 2Q 2018 or 1Q 2019 SR, AWD, PUP becomes available to order, 2-4 months order to delivery, also P3D becomes available in select international markets
2Q 2019 SR RWD, PUP available for order in US, supply constrained, 3-6 months for delivery, wider international availability of more expensive trims
3Q 2019 non-PUP SR finally available at 35K in US, but remains supply constrained as manufacturing prioritized to keep premium trims available in <3 months from order to delivery. Could be very long waits for 35K version depending on demand

As each new option becomes available, reservation holders will have about a week to put in orders before they are opened to everyone. This allows Tesla to adjust the production mix to maintain reasonable cash flow and profit margin. Also, there may be some expense involved in adjusting production lines to make cars without PUP.

 

[suwaneedad]

Here is my guess on the SR roll out.
late 2Q 2018 or 1Q 2019 SR, AWD, PUP becomes available to order, 2-4 months order to delivery, also P3D becomes available in select international markets
2Q 2019 SR RWD, PUP available for order in US, supply constrained, 3-6 months for delivery, wider international availability of more expensive trims
3Q 2019 non-PUP SR finally available at 35K in US, but remains supply constrained as manufacturing prioritized to keep premium trims available in <3 months from order to delivery. Could be very long waits for 35K version depending on demand

As each new option becomes available, reservation holders will have about a week to put in orders before they are opened to everyone. This allows Tesla to adjust the production mix to maintain reasonable cash flow and profit margin. Also, there may be some expense involved in adjusting production lines to make cars without PUP.

I agree with the logic of your predictions. That said, I don't believe the $35k SR will ever be opened up to non-reservation holders. Or if it is, it should only happen for maybe 24 hours at most. Tesla committed to selling Model 3 for $35k, and a lot of people placed $1000 reservations based on that commitment from Tesla. Those who didn't place a reservation are not owed a shot at a $35k Model 3. Further, my expectation is that the price of the base Model 3 will go up instantly, once reservation holders have been given a brief opportunity to convert their $1k reservations to $3.5k firm orders, without apology being needed from Tesla.

If I were a US reservation holder awaiting a $35k Model 3, I would be thinking 2020 at this point. There are so many higher priority permutations of the Model 3 that generate more than $35k in revenue (and far more gross margin %), that the US buyer awaiting that base black, 18", non-PUP, SR Model 3 is going to be waiting a really, really, really long time. 2019 ain't happening for this $35k buyer, imo. If I'm even close to correct, this reservationist is better off configuring the LR on offer today, knowing that the federal government is nearly paying for the LR battery upgrade, and the $5k PUP works out to 'pennies a day' over the life of the vehicle given that there is some native value to PUP (leather seats for example). Anyone expecting Tesla to cut pricing by $7500 over time as the federal tax credits go away is imo dreaming/smoking/etc. That's the pricing tactic that inferior offerings such as the Bolt/Volt/xolt will eventually resort to, if GM doesn't first fold up its EV tent once Model 3 SR reduces GM EV sales to zero.

Above thoughts are with a US/CN focus; I haven't spent the brain cycles to think about ROW deliveries/timing/pricing.

 

[S5S5G6]

Interesting timing as I just reconfigured my 7/28/18 order (no res) and saw the line items on my agreement change...looks like I’m getting one of those 35k ones with a few changes.

 

[MXWing]

Unpopular but the economically correct solution is to give Tesla's early backers first crack at $35K Model 3s once they are made.

Look at the specs of the 2012 Model S and how much it cost. 2012 Money is more valuable than 2018 Money.

NO AP
NO Parking Sensors

 

[Vitold]

Until Tesla can sell higher margin product at current production rate Tesla should not release 35k model unless it offers similar margins.

So we are either looking at very cutdown version of 35k M3 or availability in mid 2019

 

[hmerrill3]

Here is my guess on the SR roll out.
late 2Q 2018 or 1Q 2019 SR, AWD, PUP becomes available to order, 2-4 months order to delivery, also P3D becomes available in select international markets
2Q 2019 SR RWD, PUP available for order in US, supply constrained, 3-6 months for delivery, wider international availability of more expensive trims
3Q 2019 non-PUP SR finally available at 35K in US, but remains supply constrained as manufacturing prioritized to keep premium trims available in <3 months from order to delivery. Could be very long waits for 35K version depending on demand

^^^ This ^^^
Though I don't necessarily agree with the timeline I concur with the logic of the sequence.
Logically they are going to have production lines optimized for producing PUP vehicles in RWD and AWD configurations (they are doing that now), the only variable then is the battery pack. Stands to reason then that you optimize the SR pack so it's cost effective/profitable to build and plug it into the already configured production lines.

My prediction then is that you will see SR PUP vehicles delivered in late 2018. Non-PUP configurations remain a long shot because of the additional manufacturing set-up costs.