Elon: Model 3 production will start at the end of 2017

[RobStark]

I like everyone else am eagerly waiting for the Model 3's debut. That said, I think the mission of the 3 is different, and if Tesla is smart, that there should be no such thing as a "Signature" model. It is the antithesis of what the car is supposed to be. I don't think you should be able to click all the buttons when ordering and break $50K.

That would be dumb and leave too much profit on the table and leave many customers who want more disappointed.

There will be at least 20k people that want to spend at least $75k on Model 3 in 2018 and Tesla should let them.

Funding the transition to sustainable transportation will be expensive and Tesla should just not leave all that cash on the table.

Also, people that are stretching their budgets from an Accord V6 to a base Model 3 will not be forgiving of initial bugs and fit & finish flaws. They will scream bloody murder here,on Consumer Reports, and everywhere else.

People that have a Signature Model S and Signature Model X in the garage will be much more forgiving. These are,by and large,friends of the company committed to its mission statement.

These folks should get the first Model 3s until Tesla can sort things out on the production line and get quality up to the standards expected by Accord and Camry owners.

 

[Zybane]

The Model X chassis is extremely different structurally and functionally than Model S. Elon admits going overboard on Model X.

Uh no, the chassis are very similar. The Model X just has extra bracing for the rear for the towing requirement. The whole point of going with a common platform was to be built on the same assembly line (which they are). Only the bodies that sit on the chassis are very different.

As for Elon going overboard, he was referring to the silly falcon doors and huge windshield. Everything else is pretty standard fare

 

[HankLloydRight]

* grabs popcorn *

 

[AWDtsla]

I like everyone else am eagerly waiting for the Model 3's debut. That said, I think the mission of the 3 is different, and if Tesla is smart, that there should be no such thing as a "Signature" model. It is the antithesis of what the car is supposed to be. I don't think you should be able to click all the buttons when ordering and break $50K.

Just some thoughts.

A car that starts at 35k isn't quite "the peoples car", forget speculation about what it tops out at. That's basically A4/3 series pricing.

 

[Camera-Cruiser]

A car that starts at 35k isn't quite "the peoples car", forget speculation about what it tops out at. That's basically A4/3 series pricing.

Well no, $35K is not quite an econobox for a starving college graduate, but it is in a the budget of many career people. Hell, you can easily drop $50K+ on a pickup truck.

Do I want Tesla to make money? Why yes, of course. That is what the S and X are good for. The 3 should be profitable, but the buyers, or early adopters should not be dinged an extra $10 to $20k for the privilege of owning it first and getting some extra red stitching and brake calipers.

Obviously, we are all speculating and attempting to "run" Tesla from the comfort of our respective abodes. We may or not be proven right in March.

Should be fun, because no matter what comes of it, everyone will start saying what Tesla should have done differently. Oh, and Hank Loyd, well he'll still be enjoying his popcorn. That's really all that matters.

Well, no. Fixing the NAV is all that matters, and the HVAC, seat heaters, the stupid toy car, flat graphics, clocks, temperature locations, SIRI integration, Spotify, no Spotify, and slow CPU to just get the ball rolling.

 

[DavidM]

If the Chevy Bolt comes at the end of 2016 (as advertised) and the Model 3 only starts production late 2017, Tesla is one year behind. That's significant. Given Tesla's track record of not keeping deliver date promises, it might be even worse. Who is winning? The end user and the environment!

The Chevy Volt was released at least a year before the Model S. What happened? Model S sales have far exceeded the Volt at more than twice the price. It makes no difference when the Bolt starts shipping. By then, Tesla will already have more than 100,000 deposits on the Model 3. The Bolt will initially ship into limited markets anyway, and GM only plans to ultimately sell 20K to 30K units per year. I believe the Bolt will get more buyers to take a look at the Model 3.

 

[Breezy]

The Chevy Volt was released at least a year before the Model S. What happened? Model S sales have far exceeded the Volt at more than twice the price. It makes no difference when the Bolt starts shipping. By then, Tesla will already have more than 100,000 deposits on the Model 3. The Bolt will initially ship into limited markets anyway, and GM only plans to ultimately sell 20K to 30K units per year. I believe the Bolt will get more buyers to take a look at the Model 3.

The Model S just caught up to the Volt in December in terms of total sales. It helps to have a head start. Monthly sales are far exceeding the Volt now, you're right.

It works both ways. The Model 3 will get more people to take a look at the Bolt, too. Competition is good for the consumer, the industry and the environment.

 

[HankLloydRight]

. Competition is good for the consumer, the industry and the environment.

And that's Elon's goal -not to sell more Teslas, but to sell more EVs overall.

 

[doctoxics]

A car that starts at 35k isn't quite "the peoples car", forget speculation about what it tops out at. That's basically A4/3 series pricing.

If you live in California and are not in the top income brackets, the base model costs 35,000 - 7,500 - 4,000 = 23,500. $23,500 is "affordable" for most new car buyers. The market for the Model 3 is bigger than Tesla will be able to satisfy for more than a decade.

 

[Camera-Cruiser]

If you live in California and are not in the top income brackets, the base model costs 35,000 - 7,500 - 4,000 = 23,500. $23,500 is "affordable" for most new car buyers. The market for the Model 3 is bigger than Tesla will be able to satisfy for more than a decade.

Ah yes, that's if your assuming normal pricing by a normal company. Tesla always seems to quote their cars prices after incentives, including 5 years of anticipated gas savings. You go to the configuration page and the big number on top is always after the incentives have been subtracted. I really wish they would stop this - especially the gas savings.

So the $35k Model 3 is really $42k to 50K prior to incentives. I hope I am wrong and your right.

 

[Breezy]

Tesla has been clear that it's $35k before incentives.

 

[dhanson865]

And there's still no way they will ship in 2017. Model X was over 2 years late and the entire chassis was lifted straight from Model S. Model 3 is a whole new car with new materials. Even 2018 is a long shot for production at any kind of scale.

X was late in part because demand for S was stronger than they expected and they decided to defer X to ramp up production of S.

I say in part because after they turned attention back to X they delayed and delayed and delayed again but there was a year in there when X got put on the back burner to concentrate on S.

 

[Camera-Cruiser]

Tesla has been clear that it's $35k before incentives.

:smile:

 

[Todd Burch]

Main reason X was late was that it involves a whole bunch of new engineering challenges: Gigantic windscreen, falcon wing doors, single-pedastal middle row seats, ultrasonic sensors that don't require cutouts in the vehicle's skin, etc.

Elon has already said that he recognizes the importance of getting the 3 out without significant delays, and that he learned his lesson--that he realizes he bit off more than he could chew in a reasonable amount of time with the X.

 

[dhanson865]

If you live in California and are not in the top income brackets, the base model costs 35,000 - 7,500 - 4,000 = 23,500. $23,500 is "affordable" for most new car buyers. The market for the Model 3 is bigger than Tesla will be able to satisfy for more than a decade.

and if you live in Tennessee the base model costs $35,000 - ???? + tax + delivery. We don't make enough to get $7,500 off federally (maybe half that) and there is no state or local rebate.

 

[AWDtsla]

If you live in California and are not in the top income brackets, the base model costs 35,000 - 7,500 - 4,000 = 23,500. $23,500 is "affordable" for most new car buyers. The market for the Model 3 is bigger than Tesla will be able to satisfy for more than a decade.

Tax credit will be gone by that time, if not during the first year of production.

 

[stopcrazypp]

Tax credit will be gone by that time, if not during the first year of production.

This is a myth that someone illustrated nicely with numbers that is not true (unless Republicans kill the tax credit directly). The credit ramps down after Tesla hits 200k, it does not end abruptly.

I couldn't find the post, but found a thread that illustrates how that happens:
http://www.teslamotorsclub.com/show...al-tax-credit-once-Tesla-reaches-200-000-cars.

According to Inside EVs, as of end of 2015, Tesla has sold about 65k EVs in the US cumulatively.
http://insideevs.com/monthly-plug-in-sales-scorecard/

 

[dgpcolorado]

^ A reprise of a post of mine in another thread:

The tax credit phases out for a year and a quarter after Tesla USA sales hit 200k. My guess is that Tesla USA sales won't hit 200k five quarters before the Model 3 launches. If so, the first cars should be eligible for some of the tax credit.

The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

Internal Revenue Bulletin - November 30, 2009 - Notice 2009-89

My take on this:

Q0 USA sales hit 200k
Q1 Full credit available, $7500
Q2 50% credit available, $3750
Q3 50% credit available, $3750
Q4 25% credit available, $1875
Q5 25% credit available, $1875
Q6 no credit available

 

[dhanson865]

Tax credit will be gone by that time, if not during the first year of production.

Gone by when exactly?

The current rate has them selling more than 20,000 in the US for 2015. Ramping up Model X and production in general might trigger the 200,000 mark in 2018? I figure it'll be a Model 3 that is the 200,000th sold in the US (or at least Model 3 sales will be under the 200,000 mark and contribute to the total).

The phase-out period stretches over one year, beginning in the second calendar quarter after the quarter in which the manufacturer hits the 200,000 vehicle US sales mark. From there, all qualifying vehicles sold by the manufacturer are eligible for 50% of their specified credit for the first two quarters and 25% of the credit for the next two quarters.

For example if a manufacturer sells its 200,000th vehicle in the first quarter (Q1) of 2018, the credit amounts for all of that manufacturer's eligible vehicles would phase out as shown in the table below.

Tax Credit Phase-Out Schedule Quarter Credit
Q1 2018 Full amount
Q2 2018 Full amount
Q3 2018 50% of full amount
Q4 2018 50% of full amount
Q1 2019 25% of full amount
Q2 2019 25% of full amount
Q3 2019 No credit

It's entirely possible that it will trigger sooner and run out sooner but the important concept is that it doesn't go away immediately and when it starts going away it diminishes slowly not all at once.

If Tesla is pumping out 10,000 plus a month in 2018 they could easily sell 50,000 or more with the full tax credit. They could then be selling double that amount in the next 6 months with half tax credit. And then double rate again with 1/4 tax credit. All in all hundreds of thousands of Model 3s could be sold with federal tax credit.

Keep in mind Tesla can game this slightly by focusing on overseas deliveries of Model S and Model X the month they are going to roll over 200,000 US deliveries. If that rolls them into the next quarter it extends the tax credit by 3 months no matter how many they sell after that.


Now to update the current totals at end of 2015 would be

US running total Tesla Sales vs 200,000 for federal credit phase out trigger
2011 end 1,900
2012 end 4,550 (2,650 for 2012 + prior year)
2013 end 22,200 (14,650 for 2013 + prior years)
2014 end 39,500 (17,300 for 2014 + prior years)
2015 end 65,414 (25,914 for 2015 + prior years, Model S and Model X)

Do the math if Tesla is doing ~25,000 a year US in 2015 how many years will it take to hit 200,000 US sales? They'll ramp up S and X production but there will still be plenty of discounts on Model 3.

Lets say 75,000 US for 2016 and 100,000 US for 2017, and maybe some of the tail of 2017 are founders/signature Model 3. Then in 1Q 2018 they open the floodgates and a ton of production Model 3s come out, in 2Q 2018 a ton of regular model 3s come out all with full tax credit. Hoorah, look at this again

Tax Credit Phase-Out Schedule Quarter Credit
Q4 2017 founders Model 3 with full credit
Q1 2018 signature Model 3 with Full credit
Q2 2018 production Model 3 with Full credit (will they be making 10,000 a week by then? Maybe 12 weeks worth is 100,000 Model 3s with full credit?)
Q3 2018 50% of full amount (maybe 100,000 Model 3s with half credit)
Q4 2018 50% of full amount (maybe 100,000 Model 3s with half credit, with extra production going outside the US)
Q1 2019 25% of full amount (maybe 100,000 Model 3s with quarter credit, with extra production going outside the US)
Q2 2019 25% of full amount (maybe 100,000 Model 3s with quarter credit, with extra production going outside the US)
Q3 2019 No credit

all in all they might get out 100,000 with full credit, 200,000 with half credit, and another 200,000 with quarter credit. I'd hardly call 500,000 Model 3s in 2018/2019 the same as your version of none of them getting the credit.

Shift that back a quarter and 100,000 less cars get a full credit, shift that forward a quarter and 100,000 more get a full credit. Just depends when they can start cranking out Model 3 en masse.

It'll definitely be phasing out before the backlog of reservations are filled. But even then tons of them will get full or partial credit.

 

[Cebe]

It'll definitely be phasing out before the backlog of reservations are filled. But even then tons of them will get full or partial credit.

Still, can you imagine the shitshow when somebody writes and article how all these rich people, dropping $150k on a Model S got the credit in the past, and now a hard working family, just scraping together enough to get a $35k car and help the environment, gets nothing?