Full Self Driving

[R.S]

It's hard to say exactly what they will do, but a $5000 option is not likely to be very popular on a $35K car. One thing they could do is to have a reduced EAP. The competition certainly offers stop and go adaptive cruise control and lane keeping for less than $2K. Summons is something they could certainly drop from the Model 3 EAP and leave for FSD, and perhaps auto lane change or self parking. That way they could offer it at a more attractive price and still justify the higher Model S price. Other companies driver assistance packages vary by model.

Which competitor offers all of that for 2k? It is a 2k option on the Mercedes S-Class, thats true, but for the Mercedes C-Class you have to select the luxury package 4, which is $8,650. For 3k you get the blindspot assist.

 

[JeffK]

Which competitor offers all of that for 2k? It is a 2k option on the Mercedes S-Class, thats true, but for the Mercedes C-Class you have to select the luxury package 4, which is $8,650. For 3k you get the blindspot assist.

According to the Verge GM will be selling it from $2500 - $3100 depending on the Model.
Cadillac takes aim at Tesla’s Autopilot with ‘hands-free’ Super Cruise technology, available this fall

 

[R.S]

According to the Verge GM will be selling it from $2500 - $3100 depending on the Model.
Cadillac takes aim at Tesla’s Autopilot with ‘hands-free’ Super Cruise technology, available this fall

"Super Cruise won’t come cheap. Car buyers can expect to shell out $2,500 for the standalone option on luxury (base price: $66,290) and platinum models ($85,290). Also on luxury models, Super Cruise requires buyers to purchase the $3,100 driver assist package. Like I said, not cheap."

Neither luxury nor premium is the base trim on the CT6, which isn't a Model 3 competitor either.

$5,600 on a higher than base trim? Sounds like 2k to me!

 

[JeffK]

"Super Cruise won’t come cheap. Car buyers can expect to shell out $2,500 for the standalone option on luxury (base price: $66,290) and platinum models ($85,290). Also on luxury models, Super Cruise requires buyers to purchase the $3,100 driver assist package. Like I said, not cheap."

Neither luxury nor premium is the base trim on the CT6, which isn't a Model 3 competitor either.

$5,600 on a higher than base trim? Sounds like 2k to me!

Some would say the same of the Model S.

Point is that Tesla's current pricing strategy for autopilot will change when there's more competition in this space. Also if FSD is still priced at $8K for Model 3, then many buyers are going to pass on it. If buyers constantly pass on it then you'd be losing money you would have otherwise gained if it was moderately priced. They're already putting in the hardware so it's in their best interest to sell the option.

 

[gregincal]

Which competitor offers all of that for 2k? It is a 2k option on the Mercedes S-Class, thats true, but for the Mercedes C-Class you have to select the luxury package 4, which is $8,650. For 3k you get the blindspot assist.

For Audi, the driver assistance package is only available on the A4 prestige, but it's a $1800 option (on my wife's Honda CRV it was only available on the top of the line Touring model, but it was then included for free). For Mercedes C-class, the $8650 gets you a lot more than just the assistance package. I still think an all or nothing $5000 software only option is a hard sell in this class.

They might very well offer it for the same price as now on the S. They might break it up into smaller pieces, have it at a lower price with reduced functionality or lower the price for it across the board. I have no idea. It just strikes me as an expensive option.

 

[Topher]

But would you agree that 25% gross margins on a $35,000 car are less than 25% gross margins on a $70K+ car?

No. Absolutely not. 'Gross Margin' is a metric with units of percent. Those have exactly the same gross margin*. If you want to ask about profit, than the profit on two items with identical gross margins, but one with a higher price, will be different.

Thank you kindly.

* technically gross margin should only apply to the whole company, but....

 

[JeffK]

No. Absolutely not. 'Gross Margin' is a metric with units of percent. Those have exactly the same gross margin*. If you want to ask about profit, than the profit on two items with identical gross margins, but one with a higher price, will be different.

Thank you kindly.

* technically gross margin should only apply to the whole company, but....

Some call it "gross profit margin" if that makes you feel better and yes, it's a percentage... 25% of a higher number equals a higher result.

 

[alseTrick]

Tesla isn't going to keep EAP+FSD on the S/X at $5K+$3K and then sell it on the 3 for $3K+$2K (figures only for discussion's sake). That's utterly ridiculous.

Perhaps Tesla will adjust pricing on the S/X to coincide with a cheaper priced 3 version. Perhaps Tesla will offer more driver assistance packages on the 3 than the S/X. And perhaps Tesla will indeed keep the pricing the same on the 3 as the S/X.

I think Tesla will include the hardware on all 3's in order to gain even more autonomous driving data, even on vehicles that didn't buy EAP Data is king.

 

[R.S]

For Audi, the driver assistance package is only available on the A4 prestige, but it's a $1800 option (on my wife's Honda CRV it was only available on the top of the line Touring model, but it was then included for free). For Mercedes C-class, the $8650 gets you a lot more than just the assistance package. I still think an all or nothing $5000 software only option is a hard sell in this class.

They might very well offer it for the same price as now on the S. They might break it up into smaller pieces, have it at a lower price with reduced functionality or lower the price for it across the board. I have no idea. It just strikes me as an expensive option.

Maybe they just break it up into a 5k and a 3k option, just like with the S and X. Of course if you break it down, the Mercedes option isn't 8,600 just for full self driving, it is 8,600 for less than EAP, navigation a better sound system and some extra luxury features. Most of the active safety and things like lane keeping, come with the step from premium package 3 to 4, which still is a $3,200 jump.

With Audi you have to by the prestige model, which has noting more than a Premium plus A4, but self diving features. Add in an extra $1800 and you again have some $6500, for less than EAP.

But my point was that: a) there exists a $8,650 option on a 39k car and b) people are willing to pay a lot for such features.

 

[JeffK]

But my point was that: a) there exists a $8,650 option on a 39k car and b) people are willing to pay a lot for such features.

If Tesla's goal is sustainable transport and safety is a priority then the features need to be made accessible to the masses. Self driving vehicles, although they'll be a gimmick at first, really start making a difference the more that are on the road.

Pricing the feature out of average people's budgets would be mistake. I guarantee we will see this priced for the market it targets.

 

[R.S]

If Tesla's goal is sustainable transport and safety is a priority then the features need to be made accessible to the masses. Self driving vehicles, although they'll be a gimmick at first, really start making a difference the more that are on the road.

Pricing the feature out of average people's budgets would be mistake. I guarantee we will see this priced for the market it targets.

I guarantee we will see this priced for the market it targets, is my argument. Your argument is pricing everything as cheap as possible. Tesla isn't targeting Toyota, or VW, with this vehicle. It won't be a Toyota Corolla, just way better. It will be a competitor to the BMW 3 series, or Audi A4 and those aren't too cheap.

If you want a 250hp A4 with EAP like features, navigation, a sunroof and heated leather seats you are going to pay $47,700. I don't expect a similarly equipped Model 3 to be noticeably less.

 

[Garlan Garner]

Full Self Driving? I already do that.




lol - I get it...no need to respond - I was just making a funny.

 

[boaterva]

Full Self Driving? I already do that.




lol - I get it...no need to respond - I was just making a funny.

If you want to go there, there's the strict definition of auto-mobile.

 

[Topher]

25% of a higher number equals a higher result.

Yes, and at which point it is no longer 'gross margin' but rather 'gross profit'.

Thank you kindly.

 

[JeffK]

Yes, and at which point it is no longer 'gross margin' but rather 'gross profit'.

Thank you kindly.

Exactly, yet I tailor each message for the intended audience. The audience in this case kept saying the "gross margins" would be lower on the Model 3 which simply isn't true.

 

[R.S]

Exactly, yet I tailor each message for the intended audience. The audience in this case kept saying the "gross margins" would be lower on the Model 3 which simply isn't true.

No, we kept saying the gross margins should be the same, at least according to Musk.

 

[Topher]

The audience in this case kept saying the "gross margins" would be lower on the Model 3 which simply isn't true.

Actually you said:

But would you agree that 25% gross margins on a $35,000 car are less than 25% gross margins on a $70K+ car?

Which simply isn't true.

Thank you kindly.

 

[JeffK]

Actually you said:
Which simply isn't true.
Thank you kindly.

Pretty sure my meaning was absolutely clear to the desired audience. However, I'll be more explicit for you next time

Point was there's zero reason prices cannot be lower for options on the Model 3.