How will Tesla make their next-gen sedan even cheaper?

[ZeApelido]

Elon has hinted a few times recently that there is a next-gen more affordable vehicle in the works. Assuming this vehicle is sold with a base around $25k to $30k, how do you think Tesla will be able to manufacture it to keep costs down far enough to extract a decent margin?

Some guesses, I really have no idea about manufacturing costs so I could be way off:

Smaller car with smallish battery (with future drop in pack costs) to get ~ 200 miles. Battery pack cost < $5,000.
Cheaper power train / electronics.
Less color options.
Cheaper manufacturing methods derived from Model 3 / Y experiences (i.e. reduced wiring)
Perhaps based margins will be low with expectation that EAP/FSD will have a high take rate.

Thoughts?

 

[AviP]

Cheaper than the $35K M3? Defintely! I think it will be the ML at $25K. Initial production will start at over $40K though. Same old bait-and-switch tactics! Give me you money now! Oh but the company is dying so I need to produce expensive cars first. And the ML stands for Model Lies!

Frustrated inline reservation holder!

 

[Uncle Paul]

Most car companies expand their line ups by adding additional models to both the high and low end.

A $25,000 could be easily achieved by making it a two seater hatch with a smaller battery pack. Would be perfect for Urban travel. Easier to park, lighter, plenty of range, nimble and eco. Could probably charge up over night with just a regular 115V plug.

This is probably far away as Tesla is already working on the Model Y (less expensive than the Model X) The Truck and Roadster 2.

Right now they are concentrating on making the most profitable vehicles to get some cash in their bank.

 

[ratsbew]

I am a HUGE advocate for a $25,000 base model. The base version should be available from day 1.

• Smaller motor, less performance/weight/expense
• No AWD option = large frunk, perhaps larger trunk (lower floor)
• No performance model
• Smaller
• Ligher
• Hatchback
• Hyper aerodynamic for highway range (0.21Cd)
• ~250 mile range at 70mph & 200Wh/mile (50kWh pack)
• Model 3 style interior with quality but basic materials
• Slot vent, with manual louvers
• Non-motorized charge port
• No gas struts on frunk or trunk
• Manual seats
• Less complicated headlights (still LED)
• Steel wheels with aero caps
• No AP hardware if you don't buy at time of purchase (that stuff is expensive!!)
• Simpler door handles (mechanical inside and out)
• Less glass
• Simplified construction allowing simpler production (<50% man hours of Model 3)

The car should be designed (obviously) with upscale trim packages and features in mind that push it up to about $40,000 if you check all of the boxes (FSD, PUP).

I really do think that $25,000 with profit is possible. As long as they style it like a Tesla then it will turn heads and sell regardless.

 

[Swampgator]

But you took out too many things that make a Tesla cool, which is uber important.

• Smaller motor, less performance/weight/expense (Needs to still be fast. 0-60 under 6 seconds)
• No AWD option = large frunk, perhaps larger trunk (lower floor) Agreed
• No performance model WHY?
• Smaller Agreed
• Ligher Agreed and inevitable
• Hatchback (Fastback like Model s)
• Hyper aerodynamic for highway range (0.21Cd) (only possible with a fastback design. Econobox designs have too much drag)
• ~250 mile range at 70mph & 200Wh/mile (50kWh pack) Agreed.
• Model 3 style interior with quality but basic materials Agreed
• Slot vent, with manual louvers Why? extra engineering cost when they already have the problem solved
• Non-motorized charge port Agreed
• No gas struts on frunk or trunk Maybe
• Manual seats Agreed
• Less complicated headlights (still LED) Agreed
• Steel wheels with aero caps NO!!
• No AP hardware if you don't buy at time of purchase (that stuff is expensive!!) NO!!
• Simpler door handles (mechanical inside and out) Same outside as 3. simpler inside agreed
• Less glass Agreed
• Simplified construction allowing simpler production (<50% man hours of Model 3) That will come with Model Y innovations

 

[tander]

Probably the biggest thing is if it's a cheaper car, that means even more volume than model 3. And with high volume, pretty much everything costs less and becomes easier to make. The other thing is once self driving is done, they have that mobility plan to allow people to rent their cars out. This should allow people to make money off their cars, effectively making it cost less.

 

[david_42]

I'm inclined to agree with ratsbew right down the line, but I do want adaptive cruise control and emergency braking.

I need enough power to merge into the 84 with a 100 meter on-ramp with four people in it, not blow off someone's Fit. Cars are transportation for a large percentage of us, not toys.

 

[islandchick]

I am skeptical that there will be any less expensive Tesla model any time in the near future.
Yeah, gotta keep their minds on the real profit making items, like the flamethrower and surfboard.
Yep, the frustration continues to grow

 

[Lasairfion]

I think we'll see a super-compact eventually. Particularly for the Urban US and European markets. I think that they'll be able to easily achieve a decent price simply based on the technological advances such as the reduced wiring loom in the Model 3, and the reduction in pack price of the batteries. Likewise I'm sure we'll see large reductions in the costs of other parts as the production amounts increase and technology prices (ie touch-screens) reduce for what is currently cutting edge.

 

[RDoc]

The main things for lower cost are manufacturing cost and batteries. Perhaps with larger volumes and more manufacturing capacity the cost of the batteries will come down, although I'm not sure how significantly. Manufacturing cost though seems to me to be amenable to serious cost reduction by analysis and simplification of the design and cleaning up their automation and procedures. Whether that will require a new model or just simplifying the model 3 depends on what they find.

 

[AceSkywalker]

Steel wheels are a nonstarter. Even a cheap base model Honda Civic has alloy wheels.

 

[_ACX]

At some point the powertrain of an EV is going to become cheaper than all the junk involved with an ICE. A $25k EV will be easier to tack bells and whistles to than the equivalent ICE, and there are plenty of decent features in a $25k car today. You won't have to cut much.

 

[Beltsbear]

Smaller motors don’t really save a lot of money. The difference between a nine second car and a six second car is not that much once you’ve gone electric. Getting faster than six seconds starts to cost money. I agree that steel wheels aren’t going to happen. I also think the cameras will be retained.

This car could have an even smaller battery like a 45 and still have over 200 miles of range.

 

[Buckminster]

[URL="https://electrek.co/2018/10/12/tesla-patents-structural-cable-easier-robots-automate-production/"]Tesla patents new type of cable easier to manipulate by robots in move to automate production[/URL]
Alien dreadnought remains the objective, just a little behind. Cost will fall away without folk making them.

 

[islandchick]

You all are assuming that lower cost to manufacture = lower cost to buyer. Ain't necessarily so.

 

[Emmexx1]

Keep it to a two door coupe as a complement, at the lower end, to the Roadster, like the 3 is to the S. Less overall material, less weight, less cost. Drop the battery pack to 40 giving a range close to, but probably under 200 miles at current battery chem, while also cutting cost.

A five star safety, 25k car the parents can let lil Sara or lil Johnny take out on the weekend and parents can know their every move.

 

[Uncle Paul]

Might also need to produce it in a place like Mexico to get the benefits of cheaper labor.

Most of the major auto manufacturers are currently ceasing production of small compact cars as they have turned out to be unprofitable.
They are very much in demand, and the volumes are high, but the profits are elusive.

Currently better to produce higher value vehicles with significant profit values. Making an aspirational vehicle, that can command a higher price is a far better path to sustainability.

Sergio asked people to not buy his small electric Fiat 500e. Said he was loosing a ton of money on every one they sold.

China will be producing cheaply made small electric vehicle for their own market. Only a matter of time till they reach our shores.

 

[AceSkywalker]

Might also need to produce it in a place like Mexico to get the benefits of cheaper labor.

Most of the major auto manufacturers are currently ceasing production of small compact cars as they have turned out to be unprofitable.
They are very much in demand, and the volumes are high, but the profits are elusive.

Currently better to produce higher value vehicles with significant profit values. Making an aspirational vehicle, that can command a higher price is a far better path to sustainability.

Sergio asked people to not buy his small electric Fiat 500e. Said he was loosing a ton of money on every one they sold.

China will be producing cheaply made small electric vehicle for their own market. Only a matter of time till they reach our shores.

I wouldn't hold my breath for those cheap, small Chinese cars. It'd be pretty expensive for those manufacturers to develop something that would pass US crash safety laws, federalize it, market and distribute them in the US. They would also have to probably create a new brand name for the NA market since there's a stigma against Chinese brands among the typical American consumer.

 

[Emmexx1]

Not to mention the tariffs and such now.

 

[david_42]

Another option would be to use the Model 3 front motor, saving development costs.