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If Customer Confusion Hurting Tesla, Too: Best Option to Fix?

Discussion in 'Tesla Motors' started by 22522, Aug 29, 2016.

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How do you offer & communicate about the Model 3 in a way to freeze all auto sales, except Tesla's?

  1. Price the Model S closer to the Model 3 (This communicates about the S, not the 3)

    1 vote(s)
    14.3%
  2. Take status out of the Model 3 by limiting super charger access to 4 trips a year, via coupons.

    4 vote(s)
    57.1%
  3. Take status out of the Model 3 by not having a Signature Series (Elon may have said this?)

    0 vote(s)
    0.0%
  4. Price a ludicrous mode Model 3 at essentially the same price as a ludicrous mode Model S

    1 vote(s)
    14.3%
  5. Do not offer options on the Model 3 using the base price as reference. Use the S equivalent price.

    2 vote(s)
    28.6%
Multiple votes are allowed.
  1. 22522

    22522 Member

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    Benchmarking demand for the Model 3 as done was genius. It gave people a change to express a preference for EVs with some visceral appeal. It also took money off the market for ICE products (and products with limited visceral appeal). The fact that, if a car is owned, it is pretty easy to postpone a new purchase, even for years, only helped.

    The question is, if the Model 3 event caused hesitation for those who would have purchased a Model S, as well, "What is the best way to quell that hesitation?"

    What communicates about the Model 3 in a way to freeze all auto sales, except Tesla's?

    Pick any two.
     
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  2. BluestarE3

    BluestarE3 Member

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    I don't understand the poll question nor any of the options listed.
     
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  3. hckyplyr

    hckyplyr Member

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    Chocolate Chip cookies and Pumpkin Pie
     
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  4. N5329K

    N5329K Member

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    #4 N5329K, Aug 29, 2016
    Last edited: Aug 29, 2016
    One word: plastics.
    But if you are trying to ask, "How can Tesla prevent the Model 3 from cannibalizing Model S sales," then one answer is, "they can't" and the other answer is "but they don't have to worry about it, either."
    I doubt BMW frets that every 3 Series sale is cannibalizing customers away from their more expensive products. They probably think- justifiably so- that they're creating a stylish onramp for buyers to move up the product line.
    Robin
     
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  5. 22522

    22522 Member

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    Sure. Business folks will say that product should be sold at market price. What is the market price for a car that gets to 60 in 3 seconds? $120K.

    The Model 3 price with a 3 second zero to 60 time should be announced as $116K as soon as possible. That starts to explain the last two, by using ludicrous mode as an example. Battery range and unlimited super charger access would be $76K. Kind of mating the model S, announced immediately.

    1 and 3 are things Tesla has already done.

    The coupon book for the Model 3 super charger access gives people freedom of motion without destroying the value of the charging network for Model S owners. Each model 3 comes with 12 charging coupons. Unlimited is the $76K model with the bigger battery.

    The S buyers should be unfrozen. Demonstrating that market price is stable will unfreeze them. Right now they are waiting for a sale in the form of the model 3.
     
  6. 22522

    22522 Member

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    Cannibalize means someone eats. Freezing sales means nobody eats. It is like faking someone out on a football field. If signals are confusing, the defender (read purchaser whose action must be triggered) is frozen. There is no trigger. The adjective list looks like this:

    Tesla Autonomous Super Charger Network Ludicrous Right Sized $27,500 Zero Emissions Beautiful Fast $35K Clean Safe Soon Better Best

    The only points of differentiation most customers see between the S and the 3 are size, price and time. And there is ambiguity on all thee of those.

    "How much smaller?" "About a foot." "What does that mean?"
    "How much less expensive, for the 3 second car - the fast one?" "Oh, way less expensive." "Really?"
    "When can I get a three?" "Production in 2017." "Oh,..."

    ... --- ...

    A clear credible gradient between the two products would help:
    Seats 7 Seats 5-6?
    Ludicrous price difference?
    Predicted delivery: A vs B
    Long trips per year: Infinite vs 2.
    How many super chargers are there?

    Right now, in most people's minds, the 3 is an S in all respects, except a foot shorter and... a year of tuition at the best college in the country less expensive.

    I am not sure that view is accurate. In March there were 611 super charging stations with 3,600 individual plugs.
    Is this infrastructure going to work for everyone? Is the network over sold? Even if I buy an S?

    Some sales tools that credibly spell out the differences for both S and 3 customers would make a big difference in the Tesla stock price. Today.
     
  7. Neohippy

    Neohippy Member

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    Making the Model 3 has made me a Tesla customer. I have always wanted to be one but refuse to pay 100k for a car. This problem of cannibalization is with many brands. The Cayman vs 911 is a great example. Porsche had to be careful there. There will always be a buyer for the Model S so I doubt it will hurt the sales. Look how many MS owners are buying M3. That equals sales
     
  8. deonb

    deonb Active Member

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    Me neither. Then I realized who it was posted by. It never had a chance.
     
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  9. 22522

    22522 Member

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    If you are a stock holder, you want demand for the S and the X to be robust, no matter how much you may long for the 3.

    The question is: What steps can Tesla take to assure demand for the S when there are 400,000 people waiting for the 3?

    Telling people that "The 3 will never happen" is not the answer. How do you tell people, in a credible way, that the S and the X are better than the 3?

    Or better, how do you make sure that the S and the X are in fact better than the 3?

    Maybe the abbreviation will help?
     
  10. ecarfan

    ecarfan Well-Known Member

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    That is because the Model 3 is not yet for sale and we haven't seen the configuration web page to know what options are available, their prices, and we haven't seen the detailed specifications of the car.

    Once the Model 3 can be ordered and configured all those ambiguities go away. I am certain that it will be obvious what the "points of differentiation" are, and I am also certain that -- just like every other car company -- Tesla has put a great deal of thought into ensuring that the Model 3 and the Model S will be clearly differentiated in a way that justifies the higher price for the S.

    Remember that Elon said a few months ago that the S and X would always get the most advanced features and options first, before the Model 3 and whatever lower prices cars Tesla might make in the future.
     
  11. 22522

    22522 Member

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    I think the stock performs better (Tesla is healthier) and more EVs are sold, if some versions of the Model 3 are priced 10/195 (5%) less than the roughly equivalent Model S.

    The sooner this is coherently communicated, the better all our futures will be.
     
  12. deonb

    deonb Active Member

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    Do you really consider yourself an authority on coherent communication?
     
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  13. 22522

    22522 Member

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    I am an authority on the drawbacks of incoherent communication. Pattern recognition says the results look kind of like this:

    image.jpeg

    Note: I think Tesla is the best managed company in a generation.
     
  14. deonb

    deonb Active Member

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    I have no problem believing that.
     
  15. RobStark

    RobStark Active Member

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    That is ridiculous.

    Model S almost all aluminum. Model 3 mostly steel.
    17" touchscreen vs 15" touchscreen.
    Standard SC access vs not standard.
    Model S is ~20% bigger.
    The list will grow once configuration page is open.

    3 Series and C Class are not priced within 5% of equivalent 7 Series and S Class.
     
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  16. Alketi

    Alketi Member

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    Looks like I picked the wrong week to stop sniffing glue

    I literally don't understand a single word in the poll or any of the follow-up explanations. How is that even possible? I'm questioning my existence at this point.

    What problem are you trying to solve? That the 3 is cannibalizing S sales?
     
  17. 22522

    22522 Member

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    These folks are talking about it. Attempting to price out options for Model 3

    There are apparently 3/4 series BMWs that go for over $100,000. Don't know about the equivalent 7 series.
     
  18. 22522

    22522 Member

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    You are not alone. I am not sure glue sniffing has to be deliberate...

    Anyway, the problem we are trying to solve is cash flow/demand for the Tesla Model S between now and the introduction of the 10,000 th Model 3. Particularly the impact on stock price, see graph above, and the somewhat correlated ability to raise money needed to complete the introduction of the Model 3.

    Cannibalization only happens if actual sales are happening. There will be no 3s sold for over a year. The 3 is not cannibalizing Model S sales. It is freezing Model S sales. Or better said, ambiguity about what the Model 3 is and how "it" will be priced is freezing Model S sales. ("It" includes super charger access).

    Your question does produce a few answers: Tesla can reach out to have others expand the super charger network, to keep it from being over sold. (Maybe not Tesla branded super chargers... to keep the Tesla Model S chargers exclusive.) This will assuage concerns about about super charger access that might be freezing Model S sales. It will also free cash for making the 3 work. That is obvious useful work they can farm out. And it promotes immediate sales.

    The other unintelligible stuff just says, "price the high optioned versions of the model 3 at market." This is pretty standard market support behavior. As long as the entry level 3 is a great car and has enough super charger access to meet use models for most customers, and home charging is trivial, all Tesla visionary goals are met.

    You don't have to trash the market for high end cars to sell 500,000 model 3s at $35,000.

    The people that constitute the market for Model S vehicle cannot predict Tesla's behavior on the 3. The investment does not look as safe as it once did. Tesla needs to make that investment safe, again.

    I am pretty sure this did not help, and the problem is not there.
     
  19. RobStark

    RobStark Active Member

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  20. Alketi

    Alketi Member

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    I'll give it a shot --

    - Demand for S/X seems to be strong enough that it's pushing Tesla to record production levels (2,000/2,200/2,400) cars / week as we approach the end of the year. I don't necessarily agree with your thesis.

    - People who want the 3 but can afford the S won't be waiting for the 3. The two cars are addressing different markets.

    - Tesla also released the 60/75 to address any of the wealthier 3 reservation holders who don't want to wait

    - If there is a freeze, as you call it, I think it's more than likely coming from the anticipation of AP 2.0. You can read the threads asking whether or not to wait for it. Tesla needs to put the AP 2.0 hardware into S/X as soon as possible.

    - The 3 should be priced at whatever price allows Tesla to make an acceptable profit, at every option level.

    - Tesla needs to focus like a laser beam on Model 3 production. Everything is riding on it.
     

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