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Best Way to Honor the Intent of the Tax Credit?

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The Model 3 is a small car (as small as many would want to buy). The average price for a Honda Accord is $23,800. A lot of what pulls up the vehicle average is trucks and SUVs more capable than the 3.
Not that much smaller than the S.
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Not that much smaller than the S.
fullvcqua9kx6h.gif
Thank you. About a foot. That is a useful visual study. Cd benefits from the wide spoiler and vertical crease on the rear corner, and fewer parasitics up front. Wonder if the gap between the glass on the roof is enough to trip and get golf ball dimple effects.

This is the one you want to make a million of.
 
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Ok. But if you're using that number to make an argument, you should probably understand it and make sure it's accurate/relevant.

From a velocity perspective at one car every 30 seconds, 6 days, 2 ten hour shifts is 750,000 cars a year. Camary sold 429K

The 10 Best-Selling Cars of 2015

Average 2014 transaction price from Wards snapshot was < $21K
Average Transaction Price a Stretch for Many Consumers

Absolutely a 3 is worth more. But it is not a truck or SUV. Look at the automotive volume excluding light trucks.

750,000 car velocity happens at $26K.

I know nothing about global markets except that Elon wants to serve them with local factories. So take global demand off the table.

The base price 3 at $26K is commanding a 20% premium over the Toyota Camary average transaction. And you need to sell almost twice as many.

I am not running the 3 down. I think it is great. What I am trying to do is make sure we don't have a situation where everything goes according to plan, and we lose. The factory does not work. And Tesla is a boutique car manufacturer.

To win, the plan needs to be to sell the high quality Model 3 at $26K before options. If the math does not support that, adjust something.

What has to happen to support that?
Make that happen. Then Tesla wins.
 
From a velocity perspective at one car every 30 seconds, 6 days, 2 ten hour shifts is 750,000 cars a year. Camary sold 429K

The 10 Best-Selling Cars of 2015

Average 2014 transaction price from Wards snapshot was < $21K
Average Transaction Price a Stretch for Many Consumers

Absolutely a 3 is worth more. But it is not a truck or SUV. Look at the automotive volume excluding light trucks.

750,000 car velocity happens at $26K.

I know nothing about global markets except that Elon wants to serve them with local factories. So take global demand off the table.

The base price 3 at $26K is commanding a 20% premium over the Toyota Camary average transaction. And you need to sell almost twice as many.

I am not running the 3 down. I think it is great. What I am trying to do is make sure we don't have a situation where everything goes according to plan, and we lose. The factory does not work. And Tesla is a boutique car manufacturer.

To win, the plan needs to be to sell the high quality Model 3 at $26K before options. If the math does not support that, adjust something.

What has to happen to support that?
Make that happen. Then Tesla wins.

I say again, the car you want is the one Musk mentioned coming up years from now, the economical model, not the Model 3.

In the meantime there are shorter range EVs that cost less. The Smart ED for example.
 
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I say again, the car you want is the one Musk mentioned coming up years from now, the economical model, not the Model 3.
Yes, the 3 is targeting entry-luxury sports sedans. If Tesla wants to tap into what's popular in the world market, they need a slightly shorter (~12"-18"/30cm-45cm) version of the 3 as a hatchback as we see with the A3. That should be possible for the $26K price point.
 
From a velocity perspective at one car every 30 seconds, 6 days, 2 ten hour shifts is 750,000 cars a year. Camary sold 429K

The 10 Best-Selling Cars of 2015

Average 2014 transaction price from Wards snapshot was < $21K
Average Transaction Price a Stretch for Many Consumers

Absolutely a 3 is worth more. But it is not a truck or SUV. Look at the automotive volume excluding light trucks.

750,000 car velocity happens at $26K.

I know nothing about global markets except that Elon wants to serve them with local factories. So take global demand off the table.

The base price 3 at $26K is commanding a 20% premium over the Toyota Camary average transaction. And you need to sell almost twice as many.

I am not running the 3 down. I think it is great. What I am trying to do is make sure we don't have a situation where everything goes according to plan, and we lose. The factory does not work. And Tesla is a boutique car manufacturer.

To win, the plan needs to be to sell the high quality Model 3 at $26K before options. If the math does not support that, adjust something.

What has to happen to support that?
Make that happen. Then Tesla wins.
Your assumptions are completely wrong, so it's no surprise your conclusion is completely wrong also. Tesla targets up to 400k annual Model 3 volume *worldwide* (not US only) in the long term (~500k total volume including Model S/X).
Tesla Model 3 targets: 100K in 2017, 400K in 2018, say skeptical suppliers

The target market is the 3 series, and guess what: it is a car that starts at $33k and sells 500k per year.
BMW 3 Series - Wikipedia, the free encyclopedia
 
From a velocity perspective at one car every 30 seconds, 6 days, 2 ten hour shifts is 750,000 cars a year. Camary sold 429K
<snip>

Three things:

a) That Camry will cost you $75 per month in gas to operate. The Model 3 will cost $25. For that $50 difference you can up your loan and car price by about $3500.

b) People don't always buy the maximum car they can afford if they don't see value in it. This was clearly shown by the Model S on this forum over the last 2 years where a LOT of (I dare say most) buyers came from $35k cars before. They just never saw the point in buying a $100k Mercedes, even though they could afford one. I suspect the same effect will happen with a Model 3, pulling up a lot of buyers from the previous $25k market who were just not excited about what a $35k car offered.

Same thing happened to phones as well. Nobody saw the point in having a $600 phone. Until suddenly everybody had one.

c) Let's have this discussion again when Tesla produces a single Model 3 that is waiting on the line that they can't sell. Since the Model 3 has been the most successful and lucrative pre-launch in the world... ever... for any product, they seem to know so far what they're doing.


Finally... is this really about you being sour because you missed out on getting a reservation in time?
 
It's going to be a loooooong wait. You'll probably die angry.

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This is great. I just want the team to be successful with the factory. I don't see a lot of cost in the 3. It is well done. Frontal area and Cd are close to impossible to beat. That translates directly into battery cost for range. It is a good shape. Make a lot of those. Anything else will lose range/market or add cost.

The Model 3 is the competitive tool Tesla has. It is a good one. Use it.
 
Does no one on this thread think that the OP is a troll? He/she is doing a great job of getting a rise out of a lot of people.

There is something to that. I do think people are more likely to be successful if they are less complacent.

I want Tesla Motors and Elon to be successful.
A lot of good people doing a lot of good work.
I just think they are moving too slow in the production ramp.

Build the factory for 750K per year and try to run it flat out from day -120. Don't put anything in that won't intrinsically support that rate.
 
Does no one on this thread think that the OP is a troll? He/she is doing a great job of getting a rise out of a lot of people.
It's working because there is so much fundamental, outspoken confusion going on here: you've got a smorgasbord of faulty premises, business naiveté, bad analysis, etc. It's like a magnet for attempts at correction and helpful guidance.
 
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Sometimes incentives are abused, or gamed, which does not seem right. Is manufacturing and delivering as many cars as possible inside the credit window abusive?

The $7500 EV tax credit is there to create low cost production capacity of EVs, with the goal of competitive pricing after the incentive goes away. The behavior most consistent with that goal is to build a factory that can satisfy the entire demand inside the full rebate window. This maximizes production capability and efficiency, and is the best path to a "when we are all done" price that is as low as the credit incentivized price, say $26,000 dollars.

The goal of the program is a Model 3 that is profitably sold for $26,000 without incentives. Tesla is not supposed to just close up shop when the incentives expire. Manufacturing efficiencies are supposed to have improved to where $26,000 is the market price - cars move at that price without government help.

Tesla should be planning price reductions to match the incentive phase out schedule.

With that in mind, it is in Tesla's and the public's best interest to deliver as many cars as possible in the 2 quarter window of the $35,000 price point. They make $9K more per car than they do after they honor the price reductions implicit in the bill.

This says they produce 400,000 cars in 6 months. Then lower the price. It sounds like Henry Ford.

Does this sound right to you?
If Tesla was artificially increasing the list price by $7500 to capture the federal tax credit, that would arguably be contrary to the "legislative intent." I experienced that very situation in 2001 when I purchased a new bifuel Chevy Cavalier that was sold for list price only, when any gasoline-only Chevy Cavalier's price would have been significantly reduced with a little dickering. But in 2001 Arizona had generous alt fuels tax credits and Chevrolet wanted to capture as much of them as possible. So the original poster has it 180 degrees backwards - or is a bored troll. I am trusting that Tesla needs $35,000 out of every car irrespective of tax credits, and if so, prices should not be reduced by one cent after the tax credits expire, unless, of course, they can't sell the cars without discounting them.
 
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Nope. $35,000 (the current average new car prices) sounds right, maybe higher. As for the rest, Tesla is exactly what we want from the $7,500 incentive. EV manufacturing in the US with car the public wants.

There are also other reasons for the incentive as oil using vehicles have huge costs in pollution (climate change), imports (trade deficit) and national security (oil wars, $17T oil war debt, terrorism).

*The average price of a midsize car is $25,000
*The average price of a hybrid/alternate energy car is $26,000

Kelley Blue Book Press Releases

Actually, my math?, says they make more profit at $26K.

The factory capitalization gets smeared out over 2 to 3 to 4 times as many vehicles.

You don't seem to understand the difference between revenue and profit.