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LR premium, long term value

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Many Tesla owners say to buy the biggest battery you can afford....

I'm looking to justify the LR due to this advice.

I'm concerned that while MS/MX owners see the $9k LR upgrade as cheap vs their choices, will it continue to be so?
Let's do some basic forecasting. M3 base (unicorn) = $35K / 55 kWh = $636/kWh, but LR = $44K / 80 kWh = $550/kWh. So we only pay $9K / 25 kWh = $360/kWh for the added range. The extra battery is almost half $/kWh as the base car... Is this good? How long before it goes down? Well the semi reveal gives us some data....the semi is $180K / 900 kWh = $200/kWh. That includes the truck! Seems like the LR upgrade that costs $9K today should cost around $5K around the time Tesla is mass producing semis. That is cheaper, but still 2 to 4 years away.

While this was an interesting and very basic analysis, it actually helps me justify my LR purchase today. Also, Tesla's track record with post delivery battery upgrade options isn't good.
 
Other things that help justify LR:

Considerably fewer charge cycles to travel the same distance. The battery should last significantly longer than the one in the SR version. This is helpful if you plan to keep the car for a long time. And it should be helpful to resale once the market understands this.

More power.

Significantly reduced travel time for long distance trips. Fewer Supercharging stops, and faster charging at each one of them. Adding 200 miles of range at a Supercharger will be much, much faster with the LR battery (64% of capacity) than with the SR one (91% of capacity).

In terms of value at the end of the day, my personal opinion is that the LR battery is the only way to go. If you plan on keeping the car for lots and lots of miles, it will last. If you plan on selling after 5 years... the benefits of the LR battery will allow for more favorable resale. Especially if by then 220-mile range EVs are becoming a thing of the past.
 
Based on Tesla's history of the cheapest MS offering ($49,900 after tax credit for the 40 kWh battery in 2012), I speculate that Tesla will follow the same path with the 3 as they did with MS. Tesla never made a 40 kWh battery, but instead gave those few buyers of the MS40 a software-limited 60 kWh battery. It made sense for Tesla because it streamlined production with fewer parts to design and manufacture (2 battery sizes instead of 3). Likewise, I expect that for the next year or more, Tesla may produce 100% of the 3s with the 80'ish kWh battery. They'll go through their 400k reservations and only sell the Long Range (LR) until they exhaust demand for it, and then open up the 220-mile option by software-limiting their LR battery. This keeps production simple and efficient (only needing to design and manufacture a single 3 battery at first), while also helping extend the battery life because it's best to never use the top 20% of the battery.

For example, my 2013 Chevy Volt and my 2014 Cadillac ELR both have a 16.5 kWh battery; yet GM software limits their daily "use" to 10.5 kWh. By not charging up the top 36% of the available battery capacity, this preserves the battery life. My Volt has 93k miles and is rated for 38 battery-only miles; but after 5 years of driving, I'm still able to obtain an average of about 40 miles (even hit 50 last fall w/o heat or AC). So extend that logic and real-life result to Tesla providing an 80 kWh battery in the 3 (310-mile rating), but software limit it to 220 miles; so only 71% of the capacity is used. That'll greatly reduce Tesla's battery warranty issues and keep customers very happy ten years down the road when they still can drive 220 miles on their "cheaper" battery. And yet Tesla could still raise additional revenue in the future by offering to unlock the battery's full potential for, say, $5k. Everyone wins. Or they just gain awesome PR during the next Florida hurricane by unlocking the 220-mile 3s that need extra range to escape to the north (as Tesla brilliantly did for MS60s that were unlocked for a couple weeks to full 75 kWh capacity).

The real issue the OP asked about, however, is a cost justification. That's easy. Buy LR now for $9k before the $7,500 federal tax credit goes away (okay, it actually first reduces in half), so the real net cost is only $1,500 for those extra 25 kWh ($60 per kWh). Even though battery costs keep improving (dropping per kWh due to economies of scale and technology advancements), they will eventually hit a minimum (well above $60/kWh) because of the costs of raw materials, energy for production, labor, etc. So the LR option for those who can configure by mid-year seems like a no brainer (if you really want the 3 and can afford it). I personally wanted the cheaper battery option on my 3 (for local use, since I have other vehicles for trips), but Tesla's new announcement that it's not going to be available to order until AFTER Tesla hits 200k US EVs sold (thus, $7500 tax credit ends) is messing up my best laid plans as a Day 1 reservation holder (who just put my configuration on hold). I was going to sell my MS85 for $40-44k, and then hopefully buy a blue 3 with EAP and PUP for about the same $40k net after tax credit. Now that's not possible. So if I load up a 3, it'll end up being $60k all in (a 50% premium over my perfect MS)...so now I must re-think everything. Maybe just keep enjoying my MS after all? Decisions, decisions!
 
There's no way that the SR will be a software locked LR. The S40 saw very little demand and was a high-end luxury car. There's lots of demand for the SR and the 3 costs a lot less. If you order an SR it will have a small physical battery. You can only believe the SR will be a limited run model if you also believe Tesla lied about the reason it axed the S40 (no demand).
 
I'm a little uneasy with how the math is the initial post is working, how the comparisons are being made, and the conclusions drawn after lumping in the whole vehicle price when doing the per kWh average.

I'm going to mull it over a little more before posting full thoughts on it but as a starting point to help others consider it here is some data, historical and projected Li battery pack prices.

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That suggest that $360/kWh includes pretty good margin for Tesla but may not be the full picture. Is it known if the LR pack is simply 40% larger in size or is it roughly the same space with tighter packing/higher density (that could be more expensive per kWh to build)?
 
Based on Tesla's history of the cheapest MS offering ($49,900 after tax credit for the 40 kWh battery in 2012), I speculate that Tesla will follow the same path with the 3 as they did with MS. Tesla never made a 40 kWh battery, but instead gave those few buyers of the MS40 a software-limited 60 kWh battery. It made sense for Tesla because it streamlined production with fewer parts to design and manufacture (2 battery sizes instead of 3). Likewise, I expect that for the next year or more, Tesla may produce 100% of the 3s with the 80'ish kWh battery. They'll go through their 400k reservations and only sell the Long Range (LR) until they exhaust demand for it, and then open up the 220-mile option by software-limiting their LR battery. This keeps production simple and efficient (only needing to design and manufacture a single 3 battery at first), while also helping extend the battery life because it's best to never use the top 20% of the battery.

For example, my 2013 Chevy Volt and my 2014 Cadillac ELR both have a 16.5 kWh battery; yet GM software limits their daily "use" to 10.5 kWh. By not charging up the top 36% of the available battery capacity, this preserves the battery life. My Volt has 93k miles and is rated for 38 battery-only miles; but after 5 years of driving, I'm still able to obtain an average of about 40 miles (even hit 50 last fall w/o heat or AC). So extend that logic and real-life result to Tesla providing an 80 kWh battery in the 3 (310-mile rating), but software limit it to 220 miles; so only 71% of the capacity is used. That'll greatly reduce Tesla's battery warranty issues and keep customers very happy ten years down the road when they still can drive 220 miles on their "cheaper" battery. And yet Tesla could still raise additional revenue in the future by offering to unlock the battery's full potential for, say, $5k. Everyone wins. Or they just gain awesome PR during the next Florida hurricane by unlocking the 220-mile 3s that need extra range to escape to the north (as Tesla brilliantly did for MS60s that were unlocked for a couple weeks to full 75 kWh capacity).

The real issue the OP asked about, however, is a cost justification. That's easy. Buy LR now for $9k before the $7,500 federal tax credit goes away (okay, it actually first reduces in half), so the real net cost is only $1,500 for those extra 25 kWh ($60 per kWh). Even though battery costs keep improving (dropping per kWh due to economies of scale and technology advancements), they will eventually hit a minimum (well above $60/kWh) because of the costs of raw materials, energy for production, labor, etc. So the LR option for those who can configure by mid-year seems like a no brainer (if you really want the 3 and can afford it). I personally wanted the cheaper battery option on my 3 (for local use, since I have other vehicles for trips), but Tesla's new announcement that it's not going to be available to order until AFTER Tesla hits 200k US EVs sold (thus, $7500 tax credit ends) is messing up my best laid plans as a Day 1 reservation holder (who just put my configuration on hold). I was going to sell my MS85 for $40-44k, and then hopefully buy a blue 3 with EAP and PUP for about the same $40k net after tax credit. Now that's not possible. So if I load up a 3, it'll end up being $60k all in (a 50% premium over my perfect MS)...so now I must re-think everything. Maybe just keep enjoying my MS after all? Decisions, decisions!

I disagree on a couple of points.

First, the SR battery pack will have fewer cells based on vehicle weight data. The SR will weigh less than the LR version according to published specifications.

  • Curb weight:
    • 3549 lbs. (Model 3)
    • 3814 lbs. (Model 3 Long Range)

Second, the ELR uses a deeper depth of discharge than the Volt. We added 13.8 kWh of energy to our ELR a few days ago after it’s maiden voyage home. Cadillac wanted to keep the same EV range, which required more energy since the ELR is less effficient than the Volt due to its larger tires and increased weight.
 
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Based on Tesla's history of the cheapest MS offering ($49,900 after tax credit for the 40 kWh battery in 2012), I speculate that Tesla will follow the same path with the 3 as they did with MS. Tesla never made a 40 kWh battery, but instead gave those few buyers of the MS40 a software-limited 60 kWh battery. It made sense for Tesla because it streamlined production with fewer parts to design and manufacture (2 battery sizes instead of 3). Likewise, I expect that for the next year or more, Tesla may produce 100% of the 3s with the 80'ish kWh battery. They'll go through their 400k reservations and only sell the Long Range (LR) until they exhaust demand for it, and then open up the 220-mile option by software-limiting their LR battery. This keeps production simple and efficient (only needing to design and manufacture a single 3 battery at first), while also helping extend the battery life because it's best to never use the top 20% of the battery.

Beside the much different curb weights on the spec sheets released so far suggesting this isn't happening; The SR M3 is a much different situation than the Model S 40kWh. First off the SR has a much higher functional range. Even if you only ever run the SOC between 85%-20% (by setting the charging limit and not driving out the battery), even after factoring in -5% capacity typically seen in a number of years of service, you'll have nominally 215mi * 0.95 * (0.85 - 0.2) = 133mi. That's just a hair below the MS 40's nominal range of 139mi fresh off the factory line, and well above the MS 40's longterm functional range that was well below 100mi (although I assume with the MS 40 owners could use a lot more of the nominal battery capacity w/o risk of heavy battery degradation?).

This means the SR will see a much higher % demand than the MS 40 did, because it's got usable range that is acceptable to a much larger % of people than the MS 40 did. Add to that the scale of the M3 production overall is much higher and those forces that drove Tesla to do what they did with the MS 40 don't stand up.
 
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There's no way that the SR will be a software locked LR. The S40 saw very little demand and was a high-end luxury car. There's lots of demand for the SR and the 3 costs a lot less. If you order an SR it will have a small physical battery. You can only believe the SR will be a limited run model if you also believe Tesla lied about the reason it axed the S40 (no demand).
"There's no way" equates to 0% chance. My speculation is that there is "some chance" (and perhaps even a good chance, at least initially) that this could happen. I'm not saying "Tesla lied"; rather they used marketing and psychology to initially advertise the MS at a key price point ($49,900) that would get the auto world's attention. Many folks could afford $49,900 for a luxury EV; but in the end, a loaded LR MS cost almost double (even triple, with ludicrous speed). Tesla found enough rich buyers to focus on that lucrative segment so they'd make enough profit to ultimately produce the 3. Tesla simply did what any for profit, publicly traded company does...they focused on where the most profitable EV was that had enough buyers to match.

But for years Tesla has captivated the dreams of hundreds of thousands of Tesla reservation holders with their $35k promise on the 3 (that must compete with the Bolt, Volt, and many future EVs coming online). Many not-so-rich Tesla buyers hoped for a net price below $30k due to state and federal tax credits. But because demand (400k+ deposits) for the 3 greatly exceeded supply, Tesla is able to now only sell their $50k+ LR 3 through mid-year when the $7500 starts to go away (I estimate on 6/30/18, but maybe Q3 if we're lucky). My speculation is that there will be some period during this crossover from LR to SR where Tesla's management might do the software lock on the LR battery so they maximize 2018 deliveries of S/X/3. After Steve Wozniak (owner and lover of two MSs) goes on the record and states he cannot believe anything Elon says, I say that Tesla will want to prove the world wrong in 2018 and do everything possible to avoid any preventable slowdown on their 3 production line, especially mid-year. One way to do that is to have only one battery pack for the 3 (at least in the near-term). My speculation outlined herein simply provides a way for Tesla to (1) maximize 3 output this year, (2) minimize production constraints, (3) minimize future battery warranty claims, and (4) surprise Wall Street with a future revenue stream by being able to unlock the LR in the future for $5-10k. They may charge a $1k premium for a future unlock ($10k later vs $9k now), similar to how they charge $1k more for Full Self Driving (FSD) if not paid upfront. If Tesla's battery COST has come down to about $125/kWh, then the extra 25 kWh only costs Tesla about $3k. If they get one-third of SR buyers to later pay the $9k to unlock/upgrade to LR, then they break even. So all I'm saying is there is SOME chance of this happening. I concede that this wouldn't be Tesla's long-term plan. But Tesla already follows this business model with all the hardware they install in EVERY 3 with the hopes that most folks will splurge $5k for EAP and another $3k for FSD. That's why I started my post with "I speculate"...followed by actual history of Tesla's previous software locking of the 40/60 and also the 60/75 batteries. Time will tell...
 
"There's no way" equates to 0% chance. My speculation is that there is "some chance" (and perhaps even a good chance, at least initially) that this could happen.

There is no meaningful chance of it, for the reasons they and I gave (and more we didn't get to). 0% chance is a very solid working approximation of that. The MS40 and M3SR are very different situations.
 
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I disagree on a couple of points.

First, the SR battery pack will have fewer cells based on vehicle weight data. The SR will weigh less than the LR version according to published specifications.

  • Curb weight:
    • 3549 lbs. (Model 3)
    • 3814 lbs. (Model 3 Long Range)

Second, the ELR uses a deeper depth of discharge than the Volt. We added 13.8 kWh of energy to our ELR a few days ago after it’s maiden voyage home. Cadillac wanted to keep the same EV range, which required more energy since the ELR is less effficient than the Volt due to its larger tires and increased weight.
Do you have a 2014 or 2016 ELR? I'm not sure if/how Cadillac may have tweaked the ELR over its brief production run, but I thought my 2014 ELR was simply a fancier version of my 2013 Volt. And I thought the 20" rims on the ELR caused its 37 mile battery rating, as compared to the 17" Volt rims producing 38 miles. A different depth of discharge is news to me, as I've only been able to push 10.5-11 kWh into my ELR (and Volt for that matter). I see no real difference between the two (and love them both).
 
I speculate that Tesla will follow the same path with the 3 as they did with MS. Tesla never made a 40 kWh battery, but instead gave those few buyers of the MS40 a software-limited 60 kWh battery. It made sense for Tesla because it streamlined production with fewer parts to design and manufacture (2 battery sizes instead of 3).

Yes, that made sense for a limited production car. But it makes zero sense for a car to be produced in the hundreds of thousands. During the earnings call, Elon made it clear that its all about manufacturing efficiencies -- and making hundreds of thousands of extra large and heavy batteries is neither.
 
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Do you have a 2014 or 2016 ELR? I'm not sure if/how Cadillac may have tweaked the ELR over its brief production run, but I thought my 2014 ELR was simply a fancier version of my 2013 Volt. And I thought the 20" rims on the ELR caused its 37 mile battery rating, as compared to the 17" Volt rims producing 38 miles. A different depth of discharge is news to me, as I've only been able to push 10.5-11 kWh into my ELR (and Volt for that matter). I see no real difference between the two (and love them both).

Ours is a 2014, number 18XX. I found out about the deeper DOD in the ELR section of the GM-Volt forums. Cadillac ELR Forums
 
Ours is a 2014, number 18XX. I found out about the deeper DOD in the ELR section of the GM-Volt forums. Cadillac ELR Forums
Thanks, Big Earl. I appreciate the link and info; learned something new today. Makes sense; I had thought my similar average of 40 miles per charge (between my Volt and ELR), in spite of the 20" ELR rims, was attributed to better aerodynamics of the ELR (which I love almost as much as the MS). But now I know ;)
 
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From my sources at Tesla, they get me go SR if that's all you'll use cause the $9k is not a good value to consumers in that usage scenereo. It's really just a big added profit margin for Tesla now since they will definitely have larger batteries in the near future (opinion)
 
The $35,000 Model 3 SR will sell like hotcakes. Its perfect for current Nissan Leaf, BMW i3, Fiat 500e, etc., drivers who have done just fine for years with <100 mile ranges.
You've obviously not driven such a car ;)
Having been hobbled with the limited range of a Leaf for 3.5 years and waiting for a Model 3, there is no way I'm getting the SR.
Anyone who says all they need is <100 range has two or three cars or a free unlimited Uber account :rolleyes:
 
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