Canuck
Well-Known Member
Yeppers. That's why I said "you need to compare the final price when it comes to class and it will blow away any other vehicle in that price class."
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Yeppers. That's why I said "you need to compare the final price when it comes to class and it will blow away any other vehicle in that price class."
Which, I doubt.
I suspect they'll pull the something like what they did with 40 kWh Model S and also raise the price (ala 2013 Model S Price Increase | Tesla Motors). Remember, the Model S was supposed to be just under $50K, after tax credits and look what happened to that?
Trev Page
Member
It's different this time. Technology has progressed and Model 3 is about economies of scale. Tesla has said they will meet that price come hell or high water, even if it means taking a hit on margins. However, don't fool yourself, with options Model 3 will surely push ASP into close to $60k territory. It's aimed straight at the BMW 3 series so if you want a real idea on the final costs I'd suggest everyone go and configure a 3 series.
MassModel3
Member
Completely agree. Tesla will have a very hard time converting ICE owners to go electric if people feel that in order to get a Model 3 they have to give up all the features they're accustomed to in a comparably priced ICE vehicle. Tesla can't stop at just making a magnificent electric vehicle with a flashy console and no cup holders. They have to give people what they're used to driving, and oh-by-the-way, it's electric.
Canuck
Well-Known Member
If you take $35k and subtract gas savings and rebates you really don't get a lot of ICE car for your money. Tesla will be offering way more but it will be more of an ipad on wheels, than creature comforts on wheels. I predict a whole lot of ICE owners will be converting when they see what they can get for their money from Tesla vs. ICE.
A lot of people said the ipad and tablets will never replace notebook computers too since people had to give up many features they are accustomed to. The sales have said otherwise.
MassModel3
Member
You can't take rebates into account when you compare Model 3 and ICE vehicles. Yes, you can absolutely take gas savings into account, but the rebates will not last forever and should not be taken into account when comparing comparably priced vehicles. Initially, the rebates are a bonus for the buyers that should weigh heavily in Tesla's favor, but when the rebates run out, if buyers are looking at a $35K Tesla and seeing the comparable amenities of a $25K ICE vehicle, that's going to be a huge problem for Tesla.
I heavily disagree here.
Just look at all the people driving 80 mile econo-EVs today. The total sum of these individuals are equivalent to the number of Tesla vehicles on the road today.
Econo-EV drivers, unlike Tesla drivers, do have to make significant compromises compared to an ICE driver (for example, as a Leaf owner there are a number of non-routine local trips I have to plan for). I have to worry about things like substantial winter range drops for local travel.
While savings isn't not a reason I bought a Leaf, it's also the reason why I went with a Leaf despite lease costs being three times higher than that of my old gas car.
My Leaf doesn't cost that much less than a base Model 3, too, so I feel these comparisons are much more valid than an EV that costs $40k more at a minimum.
Canuck
Well-Known Member
I don't think so. Again, it's tablet vs. notebook -- clean and sleek vs.buttons galore. Instant torque vs. gears. Tons of people pay a lot more for an ipad when they can get a notebook computer -- which allows you to plug in USB, sd cards, increase ram, swap out batteries, etc., etc. But it's a change of mindset and the masses convert surprisingly fast once exposed to it. I sat in a new Porsche Cayenne recently and couldn't believe the "busy-ness" of it. It was like sitting in a cockpit with buttons everywhere, and pockets, holders, cubbies, etc. I much prefer the minimalist philosophy of a Tesla and I think people won't look at lack of amenities as a downside (except for cupholders and power outlets - Tesla needs to more of both!).
70% of current Model S owners never owned a car worth more than $60K before buying the Model S. That's a lot of people upsold from more basic transportation than the types the Model S competes in. The typical Model S buyer isn't moving sideways from a $100L BMW or Mercedes, they are moving up from something much more basic. As a result, Tesla gets criticized by people used to the amenities in $100K vehicles, but most people actually buying Teslas find the creature comforts might even be a step up from what they're used to.
The Model 3 will be compared to the BMW 3 Series and there will be some cross over, but the bulk of buyers will be either moving up from econo EVs and Hybrids or will be moving up from $20-$40K ICE cars. They won't expect opulence because their current car doesn't have it.
One problem with the statistic you're quoting - I read it, too - is that I don't believe it. In the interest of full disclosure, I am one of such persons, but there is no way that 70 percent of either other owners whom I have met or - and I think I have a pretty good understanding here - of those who frequent this forum, would make that cutoff.
On the other hand -
"I know it's true....I read it on the internet."
True not a scientific sample. 70% might be high, but I think the number of people who are being upsold is significant. I also think the number of people who will be upsold into a Model 3 will be significant. My SO currently drives a Subaru Impreza and she would get a Model 3 if she has the money when they come out even though it would likely cost twice what her Impreza cost. I personally know quite a few people who would spend the extra for a Model 3. One friend said her only choices in cars is to drive an old beater or a Tesla, nothing in between.
Err... (before tax credits) $57,400... which became $59,900. As for "nobody", well, Tesla claimed 4%, but that was before they really gave it a chance since they started shipping the most expensive units first.
Toyota sold/leased all ~2600 ~40 kWh Rav4 EVs. All the rest of the non-Tesla EVs don't even have 40 kWh capacity. The most popular EV in the world and US only has a 24 kWh battery (well, until the 2016 Leaf SV and SL).
Margins or not, hope you realize that TSLA is still losing money, despite whatever margins they have. As I posted at Statistical poll of the drive unit issue - Page 7, at the time, Tesla Motors had accumulated ~$1.381 billion in losses.
Two more (money losing) quarters have passed, so if you continue to add those negative profits (see net income figures at TSLA Income Statement | Tesla Motors, Inc. Stock - Yahoo! Finance for quarters ending Jun 30, 2015 and Sep 30, 2015), their accumulated losses are now up to almost $1.8 billion.
Canuck
Well-Known Member
Does the $1.8 billion include the costs of the battery giga factory? I thought that alone was going to come to ~$5 billion but I know not all of those costs will have been spent until it's complete. So if this number does include those costs, it's going to go a lot higher before they can start chipping away at it -- and it will be imperative they do that with the Model 3 sales income.
Looks like only a small part of that went towards Gigafactory but I'm no accounting expert and have not been tracking this. I recall Tesla selling bonds to help fund it.
For reference, net loss for quarters ending June 30, 2015 and Sep 30, 2015 were ~$184 million and ~$230 milion, respectively.
Announcement was Feb 26, 2014: Gigafactory | Tesla Motors. The slide deck link there mentions Tesla will directly invest $2 billion.
Some snippets from their latest SEC filings for the quarter ending Sept 30, 2015 (when searching for Giga) at Tesla Motors - Quarterly Report
Re: accrued purchases, I see a figure of ~$154 million for the quarter ending Sep 30, 2015 in the table preceding that statement.
Someone who is more well-versed on Gigafactory funding and expenses, please chime in.
There is a difference between losses coming from fixed costs being too high and losses from capital expenditures. GM went bankrupt because their fixed costs were too high. Tesla has consistently lost money because they have huge capital expenditures.
This is an area where Tesla is following the path of a tech company, not a typical car company. Up until a few months ago Amazon never made a profit because they plowed all their profits back into the company. If Tesla wanted to turn a profit, they could cut back on the capital expenditures and they would be making money. However that would be sacrificing the future for short term gain. Tesla's capital expenses include Model 3 development, up until the end of last quarter it included Model X development, it also includes ongoing R&D on the Model S and X which is relatively small, expanding the supercharger network, building the Gigafactory, purchasing their supplier in Michigan, and other miscellaneous R&D. That's a staggering amount of R&D for such a small company.
Going on forward Model X development is tapering off and the will become and income source in the next year. If they reach their sales goals for 2016, the cash bleed will slow down considerably. The plan all along was for the Model S to fund the Model X development and sales from both to fuel the Model 3. That timeline changed a bit, but they are still on that plan. The Gigafactory was not anticipated and the Model X took more time and money to develop than in the original plan. Tesla has consequently bled more money than originally planned.
As for 40KWH cars selling. I believe the 40KWH Tesla didn't sell well because larger batteries were available. For a little more money you could have a 60KWH battery which gave you more reasonable range. There are no larger batteries available for other EVs so we can't know for sure if the larger battery versions would kill off the entry level battery size.
To add to earlier Gigafactory expenses, snippets from their SEC filings spanning the entire year of 2014 (Gigafactory announced Feb 2014) at Tesla Motors - Annual Report
My total cost of 2-year lease on a 2013 Leaf SV w/both packages was a couple grand short of $10K. The used '13 Leaf SV w/premium package (built 5/2013) I got in June 2015 w/under 24K miles was only $9,325 + tax and license. To each his/her own re: "a little more" money.
Tesla canceled the 40 kWh Model S on March 31, 2013 (Tesla Model S Sales Exceed Target | Tesla Motors). Who knows if things would've turned out very differently if they actually gave it a fair chance and were still offering a Model S for "under $50K" (after tax credits)?
Yes, larger battery capacities were available. Originally, it was $10K bump up for each successive increase and that held true for the price increase at 2013 Model S Price Increase | Tesla Motors. $10K or $20K a "little more"... ok, I guess.
My total cost of 2-year lease on a 2013 Leaf SV w/both packages was a couple grand short of $10K. The used '13 Leaf SV w/premium package (built 5/2013) I got in June 2015 w/under 24K miles was only $9,325 + tax and license. To each his/her own re: "a little more" money.
True, but FWIW, ~40 kWh California-only compliance car Rav4 went on sale end of Sept 2012 (Toyota All-Electric 2012 RAV4 EV Rolls into California | Corporate).
Tesla canceled the 40 kWh Model S on March 31, 2013 (Tesla Model S Sales Exceed Target | Tesla Motors). Who knows if things would've turned out very differently if they actually gave it a fair chance and were still offering a Model S for "under $50K" (after tax credits)?
dhanson865
Well-Known Member
Give up what features?
Compare a Toyota Prius or Nissan Leaf. What do I lose to step up to a Tesla Model 3?
Don't think that is a reasonable comparison?
It's my progression, real world
2005 Prius
2012 Leaf
201x? Model 3
We'll never know, but it's worth remembering that:
a) it wouldn't have had Supercharging
b) performance would have been worse than the S60.
dhanson865
Well-Known Member
By the time the rebates run out they'll have already sold the first half million Model 3 cars. I'm not worried about rebates running out when they'll apply to hundreds of thousands of Model 3.
Similar threads
