Losing enthusiasm for Model 3

[lapolak]

Some slight corrections. First of all, Tesla doesn't market their cars. Their advertising budget is $0. Secondly, every time a price has been mentioned in regards to the Model 3 it has been "before federal or local incentives". This has been the case from the beginning.

Dan

I understand they don't market directly, but they do market indirectly... see Elon's twitter, car show appearances, and hyped-up reveals (like all car makers). Just because a company claims it has no marketing budget does not mean it doesn't market.

As for the tax credits, yes, they always say the price is "before tax incentives." However, these tax incentives are closely associated with the Tesla brand.

If you look at screenshots of the Model 3 Configuration Page that people have posted, you will see that it shows a "final price" of $49,000, and underneath "Prince Including Savings" of $36,416.00 which includes tax incentives. Only once you go down the page, do you see that the tax incentives are "Estimated Savings."

If you go on Tesla.com and build yourself a Model S or Model X, you will see that the first price a person sees displayed is "Cost After Estimated Savings" with the true price displayed lower on the page.

I've walked into the Tesla store in Woodland Hills, CA to view the Model S many times and been told by the sales people that "the car is actually not that expensive thanks to the Tax Credits and gas savings."

Musk himself stated he wants the Feds to end the tax credits to make EV companies more competitive... but his company DOES like to factor in the tax credits whenever possible.

All the car companies like to factor in the tax credit. I'm just trying to prove a point that when people say Tesla doesn't market (like that makes them so much cooler...) they actually do market... and they do market the Tax Incentives... that not everyone will be able to qualify for with the Model 3. It is capitalism after all, use everything to your advantage.

 

[dwharrison]

I understand they don't market directly, but they do market indirectly... see Elon's twitter, car show appearances, and hyped-up reveals (like all car makers). Just because a company claims it has no marketing budget does not mean it doesn't market.

And at any rate, those pretty Youtube videos they create aren't getting made for free. Of course they spend money on marketing.

 

[MorrisonHiker]

I'll just point out that marketing is not the same thing as advertising. Advertising is just one part of marketing.

They definitely do have a budget for marketing the cars but I don't believe they advertise their cars.

 

[dm33]

They did send an email re the delay;

Thank you again for your continued support as a Model 3 reservation holder. In the past few months, we’ve made significant progress in production and have started delivering Model 3 to customers in over twenty states.

As we work hard to meet demand, we wanted to let you know that your estimated delivery timing has been adjusted to a slightly later window. You can log into your Tesla Account to view your current delivery estimate at any time.

Thank you for your patience. We can’t wait for you to get your Model 3. Here’s what Road & Track had to say about their first test drive.
Best Regards,
The Tesla Team

I do feel like they could have left out the link to what Road & Track had to say.

C'mon, as if anyone who put a deposit on a Tesla hasn't read every single article ever.

Its a lie. My estimate wasn't adjusted "slightly later", it moved from early/mid 2018 to early 2019. Thats 9mo-1yr later. And the moved up an AWD version that hadn't even existed before.
Elon's latest estimate is 2500/wk by end of March. Here we are well into March and actual production estimates are around 600/wk. Way way off again. Another "slight delay" coming.
I got moved to the back of the line. Someone reserving today, who hasn't waited 2 years like I did, gets the same early 2019 estimate.
It doesn't show respect for people who've been waiting for 2 years to send them to the absolute back of the line because they're not willing to fork over more money for pricey versions that are no where near the $35,000 Tesla still claims on its website as the Model 3 price.

 

[MXWing]

It doesn't show respect for people who've been waiting for 2 years to send them to the absolute back of the line because they're not willing to fork over more money for pricey versions that are no where near the $35,000 Tesla still claims on its website as the Model 3 price.

Supply + demand + Tesla burns $8000 per minute

How does high school economics work again?

 

[TEG]

From 2015:
Elon Musk on Twitter

$35k price, unveil in March, preorders start then.

From 2016:
Tesla wants to build cars in China for a very good reason

The Model 3 will be Tesla's first mass-market car and cost about $35,000. The company is expected to reveal the vehicle this year, but it isn't expected to go into production until 2017.

Electric Fantasy: Will the Next Tesla Sell for $25,000?

Tesla Motors Inc. was built with one overriding objective: to bring electric cars to the masses. After more than a decade of work, Tesla Chief Executive Officer Elon Musk believes it’s just about time. The company is set to begin taking pre-orders on its next month—and by $35,000, Tesla really means as little as $25,000.

I think there was a lot of expectation from "line waiters" that there would be a $35K Model 3 by now with tax incentives still available.

 

[lapolak]

And at any rate, those pretty Youtube videos they create aren't getting made for free. Of course they spend money on marketing.

Exactly. They market, if they didn't they likely would have fewer sales. I remember a career fair at my University and Tesla had a huge line of people lined up for it... only to be disappointed when they were told they're looking for sales people and not engineers.

But regardless, I've diverged off the topic of this post. I just wanted to make it known that there are people out there who do not pay much, if anything, in federal taxes and do not realize that they will not benefit from the $7,500 tax credit like they think they will. I've had to tell many of my friends and coworkers who have placed reservations (about 6 of them) that the tax credit is not a rebate / refund... and they were visibly surprised.

I still want the car even though I probably won't get much from the $7,500 to make a significant difference in price. Hopefully I qualify for the full $2,500 CA rebate.

 

[S'toon]

From 2015:
Elon Musk on Twitter


From 2016:
Tesla wants to build cars in China for a very good reason


Electric Fantasy: Will the Next Tesla Sell for $25,000?


I think there was a lot of expectation from "line waiters" that there would be a $35K Model 3 by now with tax incentives still available.

From the first article:

It should be noted that production in China will be in addition to Tesla US production operations, not replacing it.

 

[ggies07]

Supply + demand + Tesla burns $8000 per minute

How does high school economics work again?

I'll post this again, this is why. He sounded genuine in the video, but maybe the company doesn't care anymore.....Please skip to the 12 minute mark.

 

[AustinPowers]

Interesting, Esme Es Mejor, that I get a Disagree from you for citing facts. Don't know what a reality you live in, but it must be a fascinating one.

 

[MXWing]

I truly believe with all my heart that Musk and Tesla cares.

However I'll leave you with two quotes that explains it all:

Everyone has a plan 'till they get punched in the mouth.
--Mike Tyson

Asking if Elon is overly optimistic, is like asking if the Pope is Catholic.
--MXWing

 

[Bad Horse]

I truly believe with all my heart that Musk and Tesla cares.

Asking if Elon is going to be on time, is like asking if the Pope is Atheist.
--MXWing

That is what I think you were meaning. The answer is no. Alternatively

I truly believe with all my heart that Musk and Tesla cares.

Asking if Elon is going to be late, is like asking if the Pope is Catholic, if water is wet, and does the sun rise in the east.
--MXWing

 

[AustinPowers]

I truly believe with all my heart that Musk and Tesla cares.

And I truly believe with all my heart that Musk doesn't give a sh** about his European day one reservationists who instead get pushed back and back. Early 2019 it currently is, and I guarantee you it won't stay there! I shall consider myself lucky if I get my Model 3 by Christmas 2019, after ever more 2018 US buyers get pushed in in front of us here! Someone said it shows no respect towards non US day one reservation holders, and that's exactly what it is. It's bordering on nasty, and guess what, Tesla is losing more and more of its time advantage they had on their competitors. People here were laughing when it was announced that by 2020 there will be x BEV models from legacy automakers. They said by then Tesla would have hundreds of thousands of Model 3s on the roads. Over here, we will be lucky to have more than a handful of Model 3s by 2020!

 

[dm33]

With all due respect to the commenters here that say, "If you can't wait, just buy a Model S/X!" Not all of us make mid-high six-figure incomes. Even at around $50,000, the Model 3 would be a big financial sacrifice and by far the most expensive car I've ever bought. Not everyone can just waltz in and plunk down six figures without a care.

There is often an air of superiority here. The issue isn't always if someone is able to spend such amounts. It also comes to a question, is it worth it to spend that much money.
Much to the surprise of some here, there are other people who simply don't want to plunk down that much money on transportation. There are many other things you could spend $50k-100k on. Taking time off from work, travel, vacations, boats, bigger house or make a dent paying it off, multiple cars for kids etc.
The notion that people don't have the money therefore can't afford a Model 3 is not the sole reason. Many simply don't want to spend that much.

 

[lapolak]

There is often an air of superiority here. The issue isn't always if someone is able to spend such amounts. It also comes to a question, is it worth it to spend that much money.
Much to the surprise of some here, there are other people who simply don't want to plunk down that much money on transportation. There are many other things you could spend $50k-100k on. Taking time off from work, travel, vacations, boats, bigger house or make a dent paying it off, multiple cars for kids etc.
The notion that people don't have the money therefore can't afford a Model 3 is not the sole reason. Many simply don't want to spend that much.

Currently wagging a tug-o-war in my head over exactly this. I'm fairly conservative with my money and I would never buy a brand new BMW or Mercedes, only CPO or recently used (and then expect to pay a lot for parts). I could use the money elsewhere. But man, I have always wanted a Tesla and saved up for the Model 3. ¯\_(ツ)_/¯

 

[MXWing]

And I truly believe with all my heart that Musk doesn't give a sh** about his European day one reservationists who instead get pushed back and back.

Production is abysmally limited. They don't have it together. There are logistical reasons why they prioritized deliveries to employees first, Tesla owners by Fremont first, and then Tesla owners in the US.

This group of people are more forgiving (in general) for any issues that will show up.

Bottom line is production is LIMITED. The ENTIRE study of Economics comes from the one basic question. How do you reconcile UNLIMITED WANTS, with *LIMITED RESOURCES?*

Here are my predictions on how things are going to go (while production is limited)

1.) Tesla sells AWD, LR, P, and PUP variants to US Customer base up to 200K vehicles and essentially shuts down Model 3 to the US UNTIL a run rate of 5000 per month can be established.

2.) Cars as 200K is produced is sent to Canada and Europe. Canada first because logistics.

3.) At 5000 per month, Tesla will still prioritize higher margin cars but we may see $35,000 Model 3 at this point IF and only IF the higher trim car demands have been exhausted. Tesla needs to push hundreds of thousands of vehicles while they have the credit which is based on calendar dates and not number of vehicles once 200,000 is hit.

 

[MXWing]

There is often an air of superiority here. The issue isn't always if someone is able to spend such amounts. It also comes to a question, is it worth it to spend that much money.
Much to the surprise of some here, there are other people who simply don't want to plunk down that much money on transportation. There are many other things you could spend $50k-100k on. Taking time off from work, travel, vacations, boats, bigger house or make a dent paying it off, multiple cars for kids etc.
The notion that people don't have the money therefore can't afford a Model 3 is not the sole reason. Many simply don't want to spend that much.

Assumption. There is no air of superiority. I drove a Mazda 3 forever. Wife drove a 2006 Honda accord forever. We sold 3 cars, an Audi Q5, a Honda Odyssey and the Mazda 3 to fund the Model X.

Wife never dreamed about spending that much on a car even though we could afford it and like everything - carries an opportunity cost (I'm an Economist).

It was worth every penny - Value is not how much you spend. It's what you get. Can't put a price on being in the safest SUV on the road.

Factually, a base Model 3 at exactly $35,000 is inefficient allocation of resources. Why have that AP2.5 hardware suite, NVIDIA PX2 Drive Units, 8 Cameras, etc if you arent going to spend the $5k-$8k on the software package that maximizes the vehicle.

An older Model S is superior than a Model 3 if you remove the autonomy packaging.

You can also 'disagree' all you want but I challenge you to respond with actual arguments rather than lazy mouse clicks, straw-man arguments and nonsensical arguments.

You would rather buy a boat than add in $15K to buy a vehicle? That's a headscratcher for resource allocation but can't explain consume preferences all the time.

 

[Chris350]

Based on the announcement and the original unveiling speech, one can come to the "promise" of a 35k car at the end of 2017. Nowhere is it mentioned that they will produce the most expensive version first... I get the economics of the program, but to lead someone to put down 1k for a reservation (one that someone assumes is for a 35k car in 2017) is somewhat misleading.... If I remember correctly, you aren't made aware of the timeline of production until after you put your money down. I think it should have been clear on the reservation page.

That being said, I am in for the long haul. Await I shall.... But, Tesla wasn't clear to the public until after the reservations poured in... To think one (who isn't familiar with Tesla and got excited by the hype), to be out pounding the internet for information on timelines is crazy.

For those upset with being constantly bumped and passed over by new customers buying used Teslas from private parties, I can understand the resentment. These are new customers to Tesla (and very important to the grow of the company going forward) and have been waiting for 2 years. I can understand why they are pissed.

 

[McRat]

...Can't put a price on being in the safest SUV on the road.

...

Actually you can. Each year you have about a 1:10,000 chance of dying in a crash. If you don't crash, all cars are just as safe. Driver's training, and removing cellphones, drugs, and booze from your car will save much more money.

 

[ohmman]

Actually you can. Each year you have about a 1:10,000 chance of dying in a crash. If you don't crash, all cars are just as safe. Driver's training, and removing cellphones, drugs, and booze from your car will save much more money.

It's tough to remove those things from other people's cars, though.