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Is the price realistic?

Discussion in 'Model S' started by efusco, Apr 4, 2009.

  1. efusco

    efusco Moderator - Model S & X forums

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    Recently at the GM-Volt.com forum a few posters questioned the ability of Tesla to produce the Model S at the announced price of $57,499. They felt that production costs, R&D, battery costs, and the luxury accessories are likely to force the price up prior to production.

    I really don't know a lot about the actual cost to build a car, but it seems to me that even if the battery cost $17,499 of that total that building a car with a simple electric motor, simple gear box/transmission, and then the chassis and interior features for the remaining $40,000 seems quite doable to me.

    Any insight/input? Will Tesla be building at a loss until sales start to improve and production ramps up or will they be able to build it for a profit at the current price point?
     
  2. doug

    doug Administrator / Head Moderator

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    I don't know any details, but both the price and the time line seem rather aggressive to me.
    I'll be happy to see them pull it off.
     
  3. Palpatine

    Palpatine Banned

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    With a gov't guaranteed loan and super low cost of money, there is really no telling what the cost will be per Model S. Tesla is eligible for so many tax breaks at the federal, state and local level that they have a huge advantage in building the Model S.

    The car itself (without counting the electric motor, controller, batteries, etc) could easily be around $30,000 to $35,000.

    I know that 40 kwh of batteries is likely going to cost about $10,000 at the volume that Tesla will be buying. But that cost will likely fall about 20% by 2011 or 2012.

    I am not sure what their electric motor and PEM cost to produce.

    I think $57,000 is likely close to a breakeven price for Tesla. They will make their money on people doing optional upgrades. The upgrades on the Tesla Roadster are clearly priced for a lot of profit.
     
  4. vfx

    vfx Well-Known Member

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    #4 vfx, Apr 4, 2009
    Last edited: Apr 4, 2009
    I just watched a televison segment on the 2010 Prius.

    They listed the upgraded Motor and Engine, faster 0-60 times, better speeds, lighter bigger interior / exterior and better economy, Now with adjustable seats and steering wheel, LED headlights (!!!), Dynamic cruise control (!), Intelligent Parking feature, backup monitor, lane change alert,
    Options include Solar roof for cabin cooling, voice activated NAV.

    "The sweet spot for us with this car is still $24,000, $25,000," says Ed La Rocque, small-car marketing manager for Toyota Motor Sales USA.


    Transcript of nonexistent video (I saw it on PBS)
    It's the car that started it all. Back in 1997, Toyota introduced the original Prius, which was the first ever mass-produced hybrid-electric vehicle. The cars name is a Latin word means to go before — in this case denoting a car that was the first in what the forward thinkers at Toyota thought would eventually become the norm. Twelve years later, Toyota is rolling out its third-generation Prius, redesigned for the 2010 model year.

    For the most part, Toyota is still building upon the basic Prius concept. The car still has a quirky hatchback design, its still powered by relatively basic nickel-metal hydride batteries, and performance numbers will likely discourage enthusiasts.

    But there are a number of solid improvements and clever new features that will serve to bolster the cars following and potentially lure new customers. These include a moonroof with solar panels, four driving modes, Intelligent Parking Assist (IPA), and steering wheel touch controls. A multi-information display panel that monitors fuel and energy consumption is also standard.

    The first-generation Prius was rated 41 EPA mpg, and the second-generation model pushed that figure to 46 mpg. The 2010 model marks another significant incremental improvement to 50 miles per gallon (combined city/highway).

    A larger and more powerful 1.8-liter Atkinson-cycle, four-cylinder engine powers the car. Contrary to what one might think, the larger engine actually helps improve highway mileage. By making more torque, the new engine can run at lower average rpm on the highway.

    An electric water pump and a new exhaust gas recirculation system also boost efficiency. Furthermore, the engine has no belts under the hood, resulting in better fuel economy and less potential maintenance. The new transaxle and inverter are both 20 percent lighter, reducing the cars overall weight.

    Weight was also saved through use of aluminum in the hood, rear hatch, front suspension axle, and brake calipers. Lighter steel is used in the rocker inner, center pillar, and roof reinforcement.

    The new Prius will offer three alternative driving modes. EV-Drive Mode allows driving on battery power alone at low speeds for about a mile, if conditions permit. There is also a Power Mode, which increases sensitivity to throttle input for a sportier feel, and an Eco Mode, which helps the driver achieve the best possible mileage.

    Other energy-saving features include available LED low beams and taillights, a more efficient air conditioning system, and a unique ventilation fan that promises to reduce the need for air conditioning in the first place.

    The air circulator — which is powered by solar panels — prevents the interior air temperature from rising while the vehicle is parked. This, in turn, makes cool-down time shorter when the driver returns to the vehicle.

    The air-conditioning system is also capable of running with the engine off, so the driver can adjust the interior temperature for comfort before getting in the car — an industry first.

    Toyota says it listened to customer feedback, and sharpened handling, reduced road noise, increased interior volume, and improved acceleration. The zero to 60 mph sprint takes 9.8 seconds now — an improvement of over one second. Disc brakes are now used on all four corners, replacing the front disc/rear drum brakes in the current model.

    Interior space has increased considerably, both by making the car larger and making the cabin design more efficient. The car is 0.4 inches longer and 2.2 inches wider. The battery cooling unit also takes up less space, providing more room for passengers. Rear legroom is further improved thanks to thinner front seats.

    Dynamic Radar Cruise Control system is now an available option. The system also enables Lane Keep Assist, which helps the driver stay safely within the lane, and the Pre-Collision System, which retracts seatbelts and applies the brakes in certain conditions when a crash is unavoidable.

    The next-generation Intelligent Parking Assist features simplified settings to help guide the car into parking spaces. A backup monitor, which provides a view of rear obstacles when reverse is engaged, is available with an optional voice-activated navigation system. Safety Connect, Toyotas first safety and security service, will be available a few months after launch.
     
  5. stopcrazypp

    stopcrazypp Well-Known Member

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    It seems aggressive to me too. Although probably the 160 mile pack does help save some costs I wouldn't be surprised if it ended up in the mid-60ks. The CLS starts at $70k (sports coupe-sedan like the Model S) and the XJ8 with aluminum body like they plan in the Model S, starts at $66k so it seems it might end up near there.
     
  6. TEG

    TEG TMC Moderator

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    The car shown so far I think is like a "Signature Series" with all planned options.

    The base model car, with the 160 mile pack, might not be so "decked out".
    I bet for ~$57K you don't get the giant moonroof, maybe not even those wheels. Does the 17" haptic control panel come on the base model? We shall have to wait and see what they end up doing to meet their projected base price.
     
  7. Cobos

    Cobos S60 owner since 2013

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    I'd say you're probably right on the sunroof and the wheels. The 17'' screen though they should include on every model. Otherwise they're going to have to make some buttons as well. I know in car applications it's a novelty, but a quick search gives me 17'' touch-screens as low as $400 to end-users. Commodity electronics are so cheap it's scary, I'm actually pretty sure they almost save money compared to regular buttons as they probably need to interface with computers anyway. And they would have to have some navigation option in a $50k car regardless.

    A big sunroof might be nice, especially in California, but it's not a standout feature, a 17'' touchscreen is. In a bad way like the BMW iDrive if it's badly done or in a very good way if it works :)

    Cobos
     
  8. TEG

    TEG TMC Moderator

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    Our last new car shopping experience was the Hybrid Highlander.
    You could get different options packages that started with manual (knob/button) HVAC controls and basic CD player, then pay more to get some screen with limited info, then on the top model you get touch screen HVAC + touch screen radio controls + DVD NAV + 6 CD changer.

    For 'S', the screen itself may not be the optional part, but some of the electronic features behind it could be... Would the "3G" be standard? Bluetooth handsfree? Backup camera? Full NAV? Premium audio?

    It is probably rather premature for us to start debating exact options packages though. I gather that sort of thing would get decided much later.
     
  9. vfx

    vfx Well-Known Member

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    Worth pointing out though that some of the comments car buyers have been complaing about in this bad economy is the auto manufactures practice of bundling. Forcing buyers to get big grouped packages of accessories even if you only want one-I had to get the special rims and all sorts of unrelated crap because I wanted NAV. Buyers are saying enough on this now.
     
  10. TEG

    TEG TMC Moderator

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    #10 TEG, Apr 5, 2009
    Last edited: Apr 5, 2009
    Yeah, same for me too. To get the NAV we had to get all sorts of other odd things. I didn't really want fake wood trim. I could have lived without the seat heaters. I didn't need "homelink" universal garage door opener controls, etc.
     
  11. efusco

    efusco Moderator - Model S & X forums

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    In a day and age when a decent window mounted/dash mounted GPS will run you $200, it's a bit tough to swallow some of the bundles they sell just to get the fancy OEM GPS units. It costs $250 just to update the data disk for the GPS in my Prius.

    But these guys are sneaky, they bundle some feature "you can't live without" along with the GPS... Smart key or something like that.
     
  12. Kevin Harney

    Kevin Harney Active Member

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    Along these lines I am tempted to say that everything should be standard equipment. No options to choose except your battery size. That is the way I buy my cars anyway. Loaded. I understand the flip side but my main point of things for this car is that it is a LUXURY sedan. And NO COMPROMISES. My only hesitation is that many people will not be able to afford it loaded and in fact I may be one of them. If the price comes in a little north of 50K AND most things are options I might not be able to afford the car. If I can't afford it loaded I will probably have to wait for Bluestar. I just like all of the bells and whistles so I will buy a cheaper car loaded before I will buy a nicer car with the basic package.
     
  13. Cobos

    Cobos S60 owner since 2013

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    Of course the current price estimate of the Model S is like you right there on the line for me, so I'm not exactly unpartial to this. I really want this car, but definately not at the same time.

    So having said that I kinda agree with you Kevin on that the Model S should be loaded, but that might put the car too high in price and hence you loose a significant amount of your customers.

    So my idea of a good compromise would be that the car have options but even without any it still feels like a luxury car. So at the lowest price point they are not selling a bare bones model, but a modestly equiped one. That way they can pull both of these off, but of course lots of equipment on the base model will eat into their profits...

    Cobos
     
  14. iknowdoyou

    iknowdoyou Member

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    I agree with this 100%.
     
  15. efusco

    efusco Moderator - Model S & X forums

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    Sorry, I have to disagree. Someone who lives in an area w/o 3G isn't going to want/need that feature. Someone who only drives the car to church and the grocery store doesn't need or want GPS. This isn't about compromising luxury, it's about paying extra for unnecessary/unwanted features. Further, if you load it up and price out the market you're likely to lose any fleet sales and people on the cusp as to whether they can afford it or not. The point is to sell as many as possible, to do that the options need to be as flexible as possible to attract the widest possible audience.

    I dare say that there are few or no luxury cars that one can't choose the features they want.
     
  16. Kevin Harney

    Kevin Harney Active Member

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    Evan,

    I see it both ways and completely agree with you too. That is why I am conflicted.
     
  17. vfx

    vfx Well-Known Member

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    All options should be available individually a la carte.
     
  18. TEG

    TEG TMC Moderator

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    #18 TEG, Apr 6, 2009
    Last edited: Apr 6, 2009
    One way car companies cut costs is to limit your a la carte options.

    For instance bundling them in a few different "package" levels.

    Also, when we got the Highlander the brochure showed something like 10 colors choices, but we inquired they said "they are only making it in green right now, but if you wait a while they will switch to a different color".

    So a company that builds to order a la carte is going to have trouble competing (on price) with a company that builds in batches in a more standardized way.
    For instance, if they can keep the paint room humming with the same color they save money on the downtime to switch colors, and probably some waste of unused paint in the previous color.
     
  19. efusco

    efusco Moderator - Model S & X forums

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    You got lied to re: the highlander paint colors. But your point is taken. We'd all like to "have it our way" and order each little item a la carte. But that increases the chance for errors in ordering, in production, and thus time and expense by the manufacturer. Plus they end up having to charge more for individual items making getting a 'loaded' even more expensive.

    I understand the quandry on both sides. I'm hoping that one day we'll all be able to order everything we want online, it goes into a computer and is built by a machine with little or no human intervention.
     
  20. TEG

    TEG TMC Moderator

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    #20 TEG, Apr 6, 2009
    Last edited: Apr 6, 2009
    Well I did see that all the hybrids were green at all the local dealerships for a while when we got ours. The non-hybrids were coming in different colors, but not the hybrids. The previous months of hybrids had been primarily gold. (This was a couple years back)

    The dealer said they could do a search of other distant dealers and try to locate a different color and do some sort of trade that would add cost. Maybe just certain regions were getting batches of the same color?
     

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