Gen III Range & Pricing Speculation

[Lokolo]

This was a Google translation from German so there is that too...

My friend translated it as

‘For which the buyer should not pay more than US$30,000, at least based on today purchasing power ...’

So your original translation is pretty spot on. I am assuming (unless its something new I didn't learn about Elon) the interview was in English so we can always hope it's released as English transcript somewhere.

 

[ipdamages]

Will be interesting to have the "No more than $30k". As he has learned, people would rather pay more for better battery. If he has $30k but only 160 miles, would they cancel it like they have done the Model S 40 if demand is hugely low?

I would rather pay $40k-$50k and get a 350-400 mile battery and performance than a $30k base spec 160 mile battery.

I agree with all the comments here, with the general idea that it will open Tesla to a much wider market if they can offer a car at the $30K base price (net price, today dollars, stripped car, and all the caveats). Then they are going to grab Leaf, Volt, and other buyers. In that price range you get to MANY more people than the market for even a car with a $10K higher price. If Tesla can do that ($30K base car with 200-mile range, and do so profitably, they will kill it (meant of course in a positive way - that's my "cool" way of saying sell a lot of cars and make profits, so my daughters can understand me). As Elon says, doing that profitably with cost cuts is the key. Subscribing to the old "lose money on every car but make it up in volume" theory is a loser.

Tesla wrote in its prospectus than an important part of its business strategy was to sell about $25K of options on the Model S. And so far, I think the data show us that they have done that and more. I suspect they will similarly be able to do that (on a smaller scale) with the Gen 3, so that the average dollars to Tesla on Gen 3 sales will likely exceed $55K. E.g., $37,400 base price + battery step up average of $8K + options of $8K + charger/accessories/destination of $3K = $56,400 (not including tax). Like the 3-series. Base price is $33,445 for the bottom level model, but the average out-the-door price is far higher.

New 2013 BMW 3 Series Price Quote w/ MSRP and Invoice

Many posters on this forum are more likely to choose a more optioned car (perf, etc.), so Tesla will likely do well on such cars (as does Porsche, with lots of high-priced options). But there is an interesting game of being able to hit a base price and then upselling a buyer once they are specing out the car. So while I am, and we are, more likely to choose a high-range, perf-like model with options, that is likely not the greater market - at least at initial perception.

I suspect that the 40 kWh Model S is no longer offered because Tesla found that they would not make a good profit on that car at that price. The fact that early adopters and sigs all bought high-end cars is not surprising, but those cars are in many cases over $100K all in. Getting a 40 kWh version for about half that price would be attractive to some folks, I'm sure, but discontinuing that version was a business decision. So it will be interesting to see how well Tesla handles that issue on Gen 3, given that Elon has trumpeted the $30K net price today dollars so loudly.

 

[Iz]

Getting a 40 kWh version for about half that price would be attractive to some folks, I'm sure, but discontinuing that version was a business decision. So it will be interesting to see how well Tesla handles that issue on Gen 3, given that Elon has trumpeted the $30K net price today dollars so loudly.

It is possible that a $30k Gen III in the 160-mile range might face similar sales results as the 40 kWh Model S. Having had my MS for 2 months now I've heard countless times that a $30k/200-mile semi-loaded GEN III will attract a large number of buyers. 200-mile range appears to be the point that many would consider an EV. This also assumes vampire loads have been addressed. The price is important because at $30k there will be far less people saying it is too highly priced. This is another psychological threshold not unlike the 200-mile range.

 

[aronth5]

I am in the same boat on this one. I am budgeting 50k for Gen III. That being said, a 30k car with a true 160 mile range would sell very well, and that low starting price point will get alot of people in the door, even with they end up buying the more expensive variant. The advertised 50k price on Model S go me in the door, as I would have never even taken an interest in the vehicle if the starting price was 70k. Granted I ended up cancelling my reservation, but I will eventually be a Tesla owner. There are alot more people who can afford a 40-50k car than there are who can afford a 60k+ car. There are WAY more people who can afford a 30k car. The starting price point on Gen III is right on the money.

Rifleman, completely agree with your assessment. I am also expecting to pay around $50k.

 

[anticitizen13.7]

I agree with all the comments here, with the general idea that it will open Tesla to a much wider market if they can offer a car at the $30K base price (net price, today dollars, stripped car, and all the caveats). Then they are going to grab Leaf, Volt, and other buyers. In that price range you get to MANY more people than the market for even a car with a $10K higher price. If Tesla can do that ($30K base car with 200-mile range, and do so profitably, they will kill it (meant of course in a positive way - that's my "cool" way of saying sell a lot of cars and make profits, so my daughters can understand me). As Elon says, doing that profitably with cost cuts is the key. Subscribing to the old "lose money on every car but make it up in volume" theory is a loser.

At the 30-50k price range, I have no doubt that people will be lining up to put down deposits on a BlueStar. At that point, TCO of BlueStar could be similar to that of a mid-size ICE, depending on how gasoline is priced in the 2017 time frame. I ask myself: what to people want to own: the Tesla with rocket-like performance and stunning interface, or the Toyota Camry?

I just hope that Tesla is able to ramp up its product delivery and support infrastructure to handle a huge jump in user base. I think it is possible that demand for the product could easily overwhelm both.

 

[ipdamages]

At the 30-50k price range, I have no doubt that people will be lining up to put down deposits on a BlueStar. At that point, TCO of BlueStar could be similar to that of a mid-size ICE, depending on how gasoline is priced in the 2017 time frame. I ask myself: what to people want to own: the Tesla with rocket-like performance and stunning interface, or the Toyota Camry?

I just hope that Tesla is able to ramp up its product delivery and support infrastructure to handle a huge jump in user base. I think it is possible that demand for the product could easily overwhelm both.

I completely agree. They will do very well if they deliver a car comparable to a 3-series for even 40k after federal rebates. But if they get it to 30k and it isn't more Leaf than 3-series, the sales will grow exponentially. Then they become an option as a first car, and for so many other people.

And I agree on the ramp up and production issues. It will be like drinking from a fire hose. Cost and quality control will be paramount.

I share others' concerns. Please don't make mass market such an important criterion that along the way the car becomes boring. Or at least offer options to keep us enthusiasts interested. I view the Model S as a compromise of style (though many are quite fine with it). Franz has said he wants to make the Gen 3 more interesting. I hope he gets his way, though I see winds pushing in the other direction, with Gen 3 just being a smaller Model S.

I think the Mini is a good example of an inexpensive car with style. And the 3-series. And there are others. So low price and style are not mutually exclusive.

 

[gregincal]

I think the Mini is a good example of an inexpensive car with style. And the 3-series. And there are others. So low price and style are not mutually exclusive.

Style is an individual taste, but I find it surprising you imply the Model S is sort of boring, and then hold up the 3 series. In my view the 3 series is nice, but fairly generic and a shrunken Model S would blow it out of the water style wise.

 

[ipdamages]

Style is an individual taste, but I find it surprising you imply the Model S is sort of boring, and then hold up the 3 series. In my view the 3 series is nice, but fairly generic and a shrunken Model S would blow it out of the water style wise.

As I wrote, there are many who find the Model S to be beautiful; I'm just not one of them. I don't think it looks very aggressive, but rather it is more aerodynamic, and it looks a lot like other cars.

Has anyone noticed how similar the Model S resembles the Jaguar XF | Forums | Tesla Motors

Of course, I think that some others have imitated the Model S, but the fact remains that it isn't IMO hard to confuse it with a Nissan Altima (the blurry picture above, as well as the third pic - the dark car side view) or Jaguar XF or Hyundai Sonata.

As for the 3-series, there are enough of them on the road that I wouldn't say they stand out very much, but I think it can be optioned in a way that gets one's pulse to jump.

I think Car and Driver said it best:

The Model S is a big car, 196 inches long, or almost exactly the same length as a Jaguar XF, to which it bears more than a passing resemblance. The Model S is significantly wider, though, at 77.3 inches compared to 73.9 for the Jag. Actually, that width is not only significantly wider than the Jag, but significantly wider than a Mercedes-Benz S-class and most anything else on the market that doesn’t have off-road pretensions.

...

Despite being electric, the Model S looks like a conventional car, with a long hood capped by a blacked-out snout that gives the impression of a large radiator grille.

...

Chief designer Franz von Holzhausen says the Model S has a conventional “face” and proportions—never mind that freakish width—to make customers who might be cross-shopping the car against a BMW or an Audi more comfortable with the Tesla. Once the brand is established, he hopes to push the design more to take advantage of the unconventional powertrain, and “expand the notion of what a car is supposed to look like.”

As I have said elsewhere, I would prefer a smaller version of a Model S to the one currently for sale, and I would/will buy a smaller version of the S if that is what Tesla does with the Gen 3. But I would prefer something without the Model S's front end and nose cone, and hopefully with a little more snarl - even if it means an aero compromise.

 

[JRP3]

View attachment 21601

I've always thought the S was a tweaked Aston Martin Rapide

 

[aronth5]

I wonder if Elon has put himself into a corner when he states Gen3 is the car for the "masses" and at the same time targets the BMW 3 series? If you ask the average person where I live if the BMW 3 Series is a car for the masses they will likely going to say no. Too expensive. I'd rather Elon refer to Gen3 as the car for the mainstream car buyer.

 

[gjunky]

I wonder if Elon has put himself into a corner when he states Gen3 is the car for the "masses" and at the same time targets the BMW 3 series? If you ask the average person where I live if the BMW 3 Series is a car for the masses they will likely going to say no. Too expensive. I'd rather Elon refer to Gen3 as the car for the mainstream car buyer.

Perhaps if you are a billionaire, a 3 series IS a car for the masses :biggrin:
(hold the comments, I am just joking)

 

[mattjn]

I would agree, a car that has sales of around 100K in the US isn't exactly the car for the "masses".

 

[dsm363]

I wonder if Elon has put himself into a corner when he states Gen3 is the car for the "masses" and at the same time targets the BMW 3 series? If you ask the average person where I live if the BMW 3 Series is a car for the masses they will likely going to say no. Too expensive. I'd rather Elon refer to Gen3 as the car for the mainstream car buyer.

I think he means more available to the masses. Many people buy cars that start over $30k (Toyota Camry with options, Avalon, Volvo S60/80....etc) but a true car for the masses would be about $15,000. I don't think Tesla will be targeting that anytime soon if ever.

 

[gregincal]

Has Elon really said "a car for the masses"? I believe the term he's used is a "mass market car", which is somewhat different.

 

[jandkw]

I glanced through this tread earlier and want to share one major cost factor here and that is the fuel (electricity) cost since majority of the members has been focusing on the initial cost of Gen III . I owned the Model S for 3 months now and when I compared my electric bill for the past 2 months against my last year's, I paid $7 less. This is due to the newly installed TOU meter which has off peak hour starts at 9pm in my state. My KW usage is almost doubled but the bill remains relatively the same (granted, we took advantage of the off peak hours for laundry/dryer and others along with the electric cost in my state is relatively low). My monthly fuel cost spent on my MS is ZERO. This compares to my weekly bill of $50-$60 using my BMW X3 (still there), I save about $3000/year. Let's say the average Gen III will cost $45K with no tax credit by 2016/2017 and the BMW 328i costs the same and both ownerships are 8 years (let's assume both cars' maintenance cost, $/G cost are the same for argument sake), isn't that the Gen III will come ahead by $24K or true cost of $21K in 8 years?

 

[ipdamages]

I've always thought the S was a tweaked Aston Martin Rapide

You aren't alone. I've read of others who thought that too.

 

[JRP3]

I would agree, a car that has sales of around 100K in the US isn't exactly the car for the "masses".

The average vehicle purchase price last year was $30K, so I think that qualifies.

 

[aronth5]

Has Elon really said "a car for the masses"? I believe the term he's used is a "mass market car", which is somewhat different.

Good point and you are probably right. Unfortunately, it appears to have been taken out of context by some in the media.

 

[JRod0802]

Interestingly, we had a very similar conversation to this in 2011:

They say that bluestar will be for the masses, but they also say it'll rival the 3-Series BMW. What kind of average Joe owns a 3-Series BMW? I agree that bluestar should be a 3-Series competitor, but I also hope that eventually they really do make a vehicle for the masses, maybe starting at $15,000, not $35,000.

What kind of average Joe buys a 3 series BMW? It's the biggest selling saloon/sedan to private buyers in the UK.

Showing a major difference between the UK and the US; the top-selling sedans here are all <$25k.

From this thread:
If Tesla Motors created a sub-brand, what would it be named?

 

[mattjn]

Yes, but the $30K base price is factoring in the 7500 tax credit, how many people that regularly buy cars 30K and below have enough tax liability to take full advantage of that credit?