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Lux Research says Gigafactory will reduce price of Gen 3 by only $2800.

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Well, the fact that no one had ever heard of "Lux Research" before they published their silly paper tells you all you need to know about it. These kind of poorly research papers are routinely sent out with the hopes of tanking stock prices - luckily Tesla has enough volume now that these types of attacks won't move the needle.
 
Well let us do a little look a Lux statements from the past and current:

Lux says batteries will cost $397 per kwh in 2020. (Date 2012)

Green Car Congress: Lux Research forecasts Li-ion EV battery pack costs to decrease to $397/kWh in 2020

2 years later in 2014 Lux is saying Tesla is at 274$ per kwh and will get it down to $196 per kwh

Tesla Motors’ Gigafactory Will See More Than 50% Overcapacity in its Li-ion Production | Lux Research


So not only did Tesla beat their prediction, they beat it 6 years ahead and by a large margin.

I think they are stuck up on their prediction that EVs will be 1% of sales in 2020

The Cutting Edge News


But Lux is adding protection for their failed prediction by putting a more conservative projection as optimistic case.

Lux-Research-Graphic_9-3-14.jpg
 
Just to toss in here... I believe the price target of $35,000 as quoted by Elon was something along the lines of "in today's equivalent dollars". So given a few years of inflation between the statement and the actual introduction, that price could edge closer to $40K and still be on-track.
 
Too many unknowns to be able to make a realistic analysis.

Based on comments at the last earnings call, it seems logical that they are looking at weight reduction, especially in the pack. This could involve different format cells, better passive cooling reducing the amount of temperature management hardware, etc.

With an overall weight reduction, model 3 could perform as well as an S60, if not better, but with a 45kwh pack. IMO, this would have a larger impact on cost than pretty much anything else they could do.
 
I think a lot of writers have presumed Elon Musk meant 'equivalent dollars'... But I think he has drawn a line in the sand and won't go beyond it with the base Model ≡. He knows that option packages and higher capacity battery packs will sell at higher amounts and bring the average margin per car upward. As long as they can match or surpass the claimed industry average of 6% margin on a car that is perhaps $34,900 for the base version, everything will be fine.
 
Just to toss in here... I believe the price target of $35,000 as quoted by Elon was something along the lines of "in today's equivalent dollars". So given a few years of inflation between the statement and the actual introduction, that price could edge closer to $40K and still be on-track.

you know I said the same thing but I believe during one of their Q&A sessions or quarterly shareholder meetings this exact question was asked and the response was no that that's their target price in 2017. now as to which meeting or presentation they said this, I really don't remember.
 
you know I said the same thing but I believe during one of their Q&A sessions or quarterly shareholder meetings this exact question was asked and the response was no that that's their target price in 2017. now as to which meeting or presentation they said this, I really don't remember.

Ah well, if I've passed on inaccurate info, my apologies... I can't find a source for what I had thought I had seen/read so I may very well be in the wrong...
 
Well they could release it as 34,900 in 2017 and then less than a year later up the price like we saw happen with the Model S.

If they have to put Honda Civic type Seats and Wheels on the base Model ≡ to get it to $34,999 and 3% margins in 2017 dollars then that is what they should do then upgrade the base price and specifications on 2018 Model ≡ . The year long positive press vs year long negative press on achieving that goal is worth it IMO.

The Average Selling Price on a new car in the USA should be approaching $35k in 2017 vs $32k today.
 
Lux may be right in saying that the gigafactory's contribution to price reduction is not enough to achieve the sales goals Tesla has set out.

But Model 3 is not a Model S with a cheaper battery, there are a lot of opportunities for cost savings without compromising the quality of the car. It won't be as big or as luxurious, and I expect a significant amount of cost savings to come from there.
 
When Elon Musk was repeatedly misquoted in a conference last year, he said that they could offer a car that cost half as much as the Model S 60. He said that part of the cost reduction would come simply from the reduction of materials to build the car, since it would be 20% smaller. He said the rest of the reduction would come from paying less for batteries. That makes perfect sense to me.