Elon Tweet: No 'significantly new consumer-facing technology' in Model 3

[Garlan Garner]

There is a fantastic podcast out there that I never missed called "talking tesla". There is a doctor on the podcast better known as "Mel". He absolutely loves his Tesla Model S, however even he ( a doctor) is trying to get from under a $1500 or so car payment that is plaguing his wallet. So if that car payment accompanies a Model S then its not simply a matter of whether I want a model S or not.

I just can't afford one.

 

[Garlan Garner]

I don't remember them telling initial S buyers that AWD is coming but you can't have it yet, Autopilot is coming but you can't have it yet. They did say there would be no signature 3 models, but that highly optioned models would be shipped first.

AWD wasn't even invented for initial Model S buyers.

Elon had already stated that the option was/will be available for Model 3 buyers...of which ....now ..... it won't be.

I suppose we just have to wait and see what in the world is going on once it's time to buy one. I can't keep up with Tesla's quarterly reports vs. tweets and stage speeches as they are disagreeing with one another.

 

[zenmaster]

Problem though @zenmaster.

The gap between the competition isn't widening. Its narrowing.

$35K vs. $35k
RWD vs. RWD
Instrument cluster vs. no instrument cluster
etc.....

It is naturally narrowing as expected, but in this business I trust they have a firm grasp on which features need to be included in the platform in order to sell. The feature differentiation between 3 and S models will always be subordinate to feature consideration due to competitive pressure. With so many new EVs being introduced in the next few years it's not quite as easy to make a purchase decision right now. Looks like a competitive charger network will be in place, competitive "gigafactories" will be built, and competitors will have comparable range, level 5 autonomy, and over-the-air software updates as well. But this is exactly what Tesla Motors wanted in the first place.

 

[Sonny Daze]

AWD wasn't even invented for initial Model S buyers.

That's my point. Haven't seen you here lately, glad you're back.

 

[NateB]

Lastly...concerning Elons tweets.
I'm really interested in what investors took from the tweet storm. Teslas quarterly call touted the M3 and its ramp up. NOW Elon is asking folks to strongly consider NOT buying the M3? How does that look to hardcore investors? Is there something wrong within Tesla? Will Tesla not be able to pull off the M3 the same way they touted on the call? Is the profit margin just too small?

Personally, as an investor I was not discouraged at all by this last rounds of tweets from Elon. All of the comments I have encountered so far to the effect of "Elon's making a big mistake" seem to me be expressing personal disappointment that they'll have to wait longer for their preferred option. I 100% empathize, because the wait for this car has been so long. But I haven't heard a good argument why this decision is really bad for the company. My number one worry by far is that the Model 3 doesn't launch in high volume (and adequate reliability) before the end of the year. I see a significant delay as a real possibility. There is a ton of money that has been going into both building up the gigafactory and tooling up for model 3 production. This is a big part of why Tesla has been losing money (almost) every quarter. I think that if Tesla produces over 50,000 Model 3 in 2017 (without serious recalls or widespread problems), the stock will do very well. Of course, it would be even better for Tesla's finances if they sell 50,000 Model 3 "P75DL" or whatever the top priced car will be. But if delaying the top priced models by 6-12 months simplifies tooling and quality control enough to advance volume production (or prevent delays) of the basic car by 2-3 months, then this decision is a no-brainer. "Volume production" is 5,000 per week, so a 2-3 month delay represents 40,000-60,000 cars at ~$40,000 (remember that autopilot and possibly a 75 kWh battery will be day 1 options), or $2billion in revenue! I am encouraged by anything that shows me that Tesla has learned from its Model X experience and is laser-focused on simplicity of production for the initial Model 3 release.

On the demand side, if we assume 400,000 total reservations, I imagine that about half will actually buy the car (200,000). Even if we assume that half of those 200,000 people want dual motors and/or P mode, then we still don't need to worry about demand for 2017. It's all about ramping production ASAP. It's also worth noting that the Bolt does not have AWD or performance mode. So EV-only buyers who really want these options will wait another 6-12 months. For everyone else, the Model 3 will still give you supercharger access, good performance, nice styling, and the option of the best-in-world autonomous tech (hopefully once the Model 3 comes out).

 

[Wolverinegeoff]

What part of the M3 sounds amazing? He keeps talking about what the M3 won't have. I suppose its EV...that's one good thing. 300+ miles of charging....and what else do we know for sure? The glass roof? That's a good thing I suppose.

They have already announced the killer feature. It's FSD capability. He's putting $10k of FSD hardware (rumored initial cost of Px2 units) in a car starting at $35k. Go try to build a BMW or Mercedes with this feature. From toying around with the websites, I can get a M3 with what appears to be a shittier version of AP1 for $70k-ish with no other features checked. Mercedes appears to have AP1-equivalent features starting at around $100k for their S class. This is what makes it subjectively awesome for a lot of people, but not everyone. Thankfully there are a lot more options coming down the line if that doesn't float peoples' boats!

 

[montreid]

@Nate - exactly. M3 priority is production. MS and MX were and will continue to be the glamour cars and SHOULD get the prizes first. Yes, they said priority to highly optioned, and that will probably be true once the ramp up is completed.

People clearly will be disappointed, but the goal for M3 was always to mass production as possible. Elon is trying to deliver upon this despite the huge expectations ahead of him.

As a reservation holder hoping for a base model sooner, I'm happy with this announcement

 

[Eclectic]

Here's another wrinkle to consider. If a considerable number of Model 3 reservation holders decide that they want to cancel for now, that means Tesla has to return their deposits. Imagine the effect that will have on the financial position of the company as it is trying to ramp up production...

 

[Garlan Garner]

That's my point. Haven't seen you here lately, glad you're back.

Thanks Sonny. I had to take some time off the forum.

 

[Garlan Garner]

@Nate - exactly. M3 priority is production. MS and MX were and will continue to be the glamour cars and SHOULD get the prizes first. Yes, they said priority to highly optioned, and that will probably be true once the ramp up is completed.

People clearly will be disappointed, but the goal for M3 was always to mass production as possible. Elon is trying to deliver upon this despite the huge expectations ahead of him.

As a reservation holder hoping for a base model sooner, I'm happy with this announcement

Elon said highly option model 3's would be available first. Now he's saying the opposite.

Folks can try and justify his words all they want, but he said it. Hopefully that wasn't an alternative fact.

Elon isn't just an employee or a reporter. His statements should be fact.

 

[melindav]

Here's another wrinkle to consider. If a considerable number of Model 3 reservation holders decide that they want to cancel for now, that means Tesla has to return their deposits. Imagine the effect that will have on the financial position of the company as it is trying to ramp up production...

I do believe those deposits are held separate from other funds (not an escrow, but similar concept). And remember probably 90% of Model 3 reservation holders don't hang on every word spoken/tweeted by EM or Tesla. Most will be oblivious to any potential change in delivery priority until they are invited to configure and can see on the screen that choosing x feature moves the expected build/delivery date in or out.

 

[Garlan Garner]

Here's another wrinkle to consider. If a considerable number of Model 3 reservation holders decide that they want to cancel for now, that means Tesla has to return their deposits. Imagine the effect that will have on the financial position of the company as it is trying to ramp up production...

That's only 400 million. Elon has that in his sock drawer.

 

[melindav]

Elon said highly option model 3's would be available first. Now he's saying the opposite.

Folks can try and justify his words all they want, but he said it. Hopefully that wasn't an alternative fact.

Elon isn't just an employee or a reporter. His statements should be fact.

And that comment was made months prior to the first model 3 reveal... a few things have changed since then.

 

[Garlan Garner]

I do believe those deposits are held separate from other funds (not an escrow, but similar concept). And remember probably 90% of Model 3 reservation holders don't hang on every word spoken/tweeted by EM or Tesla. Most will be oblivious to any potential change in delivery priority until they are invited to configure and can see on the screen that choosing x feature moves the expected build/delivery date in or out.

You are correct except that Elon delivers Tesla's quarterly reports. If anyone should know the company and what it's doing...it would be him. He represents Tesla. period. No one can say that his statements should be taken lightly. If Elon doesn't know....then who should?

 

[Wolverinegeoff]

And that comment was made months prior to the first model 3 reveal... a few things have changed since then.

Also could mean both interior and software options. Leather seats and sound systems are pretty easy to switch out in production, but a software switch is even easier. Uneducated guess is that people who select all the software upgrades get delivered first so they can claim that money toward the margins and make the quarter look better.

 

[Garlan Garner]

And that comment was made months prior to the first model 3 reveal... a few things have changed since then.

Elon tweeted right before Christmas that "all boxes checked" would be delivered first. He made that statement at the same time he commented that Super Charging would no longer be free.

 

[tomas]

Elon said highly option model 3's would be available first. Now he's saying the opposite.

Folks can try and justify his words all they want, but he said it. Hopefully that wasn't an alternative fact.

Elon isn't just an employee or a reporter. His statements should be fact.

It is still possible that first produced will be largest battery (say 75) and include some premium features. He just has to stay close enough to base 35k that people don't think Tesla missed that mark. I don't see anywhere in his tweets that first ones would be stripped base models. Just that AWD would not appear at first. If you look at almost every BMW or Mercedes revision, AWD typically comes out after FWD. Nothing unconventional about simplifying rollout of a new chassis and drivetrain.

 

[montreid]

@Garlan - Clearly you're disappointed. P and D and ludicrous are nice to have, but not vital to M3 success. Hitting production goals are. Tesla has the MS and MX for the high margin products.

Yes, he has had to walk the options first back. His 'all boxes checked' still can ring true. The P and D options simply will be greyed out. Will that make his statement whole?

 

[Garlan Garner]

It is still possible that first produced will be largest battery (say 75) and include some premium features. He just has to stay close enough to base 35k that people don't think Tesla missed that mark. I don't see anywhere in his tweets that first ones would be stripped base models. Just that AWD would not appear at first. If you look at almost every BMW or Mercedes revision, AWD typically comes out after AWD. Nothing unconventional about simplifying rollout of a new chassis and drivetrain.

He just tweeted Thursday ( that prompted this thread ) that RWD WILL be the first cars available and that AWD dual motors won't be available until this time 2018. I didn't and won't say anything about a base model as I'm not interested in that version at all. I'm looking at Tesla as they rolled out they unconventionally rolled out the MX with all buttons checked as first models made. Not commenting about other car manufacturers. Not really caring about them and what they do. Elon speaks for Tesla in my opinion. Oh well..... enjoy your base models.

 

[Garlan Garner]

@Garlan - Clearly you're disappointed. P and D and ludicrous are nice to have, but not vital to M3 success. Hitting production goals are. Tesla has the MS and MX for the high margin products.

Yes, he has had to walk the options first back. His 'all boxes checked' still can ring true. The P and D options simply will be greyed out. Will that make his statement whole?

Yes I am indeed disappointed.

The only thing that would make is statement true is the produce the car of his statements. No alternative truths. lol.

It doesn't matter. I can't influence Tesla or Elon. I just have to take it...no matter what happens. I can't hold Elon to his word. I'm just a regular person.

I'm ok.