Model 3 dual motor AWD optional

[Red Sage]

Did I not mention I have argued both sides? The same data supports both arguments. It's only a matter of perspective. Because I have no doubt that the base Model ≡ would be profitable at $35,000 if it hand single or dual motor configuration.

 

[MartinAustin]

Tesla wants to have a certain level of profitability in each car, and it's not 0.1% profit at the minimum because there is always a range of actual profit that you end up with, after accounting for all the unexpected things that happen in the auto business. (starting with a target of 0.1% profit, you could end up taking a loss on each car if certain circumstances arise) Tesla might want the profit margin to be, say, 15%.

If as Elon has said, the base model will be single-motor, then that is clearly because it would still be profitable if it were dual-motor, but it isn't profitable enough. It's single-motor because that achieves the profit they want.

 

[TimV]

Having a RWD entry level Model 3 will likely drive up the ASP. Those people that want AWD are probably also willing to pay for it. Why give something away when you can make it an option and get another $3-5K?

 

[nwdiver]

Having a RWD entry level Model 3 will likely drive up the ASP. Those people that want AWD are probably also willing to pay for it. Why give something away when you can make it an option and get another $3-5K?

I don't think anyone here is suggesting it would be 'given away'... but if the sales ratio of a $35k RWD 3 vs $38k AWD 3 is 1:20 then Tesla won't be offering the RWD 3 for long... sure, they'll lose a few sales from people that can't afford the extra $3k but that loss will be made up for by streamlined production and increased AWD sales. The same thing will happen to the RWD 3 that happened to the S60.

 

[Red Sage]

nwdiver: Precisely.

TimV: Look at it the other way around... Why spend the time to engineer the front end of the car twice? Then you must stock replacement parts for both the AWD and RWD versions at all Service Centers. You might save more in R&D and inventory control than you might ever earn by optioning up. Consistency of the drivetrain has its benefits.

MartinAustin: Absolutely. But if it is the difference between build costs calculated as...

$35,000 ÷ 1.15 = ~$30,435

or

$35,000 x 0.85 = $29,750

...then why not go ahead and include AWD standard? You'll end up with more people spending dough on additional options anyway.

 

[MassModel3]

Look at it the other way around... Why spend the time to engineer the front end of the car twice? Then you must stock replacement parts for both the AWD and RWD versions at all Service Centers.

So it's been mentioned in the forums that there are less than 30 moving parts in the drive train of a Model S. It's those moving parts that present the highest likelihood of wear and tear and eventually needing replacement. If we take the less-than-30 for the rear, then add another less-than-30 twice for the front (far less than 30 for a non-motor version), it's still not that many typically replaced parts when compared to ICE vehicles and typical dealership repair centers. Okay, multiply that times the number of variants (S, X, 3) and you've still got a reasonable number of parts to deal with. Then the seldom used parts will simply be ordered from the factory, or perhaps local warehouses.

But I don't know if I agree with the assumption that stocking of parts will come into play when Tesla makes these decisions. Still undecided on the issue, but currently leaning against it.

 

[TimV]

If the sales ratio is really that much in favor of the AWD (20:1 or more), then the RWD may not last long at all. All I'm saying is that the RWD version allows Tesla to more easily achieve the entry level price point of $35,000. Personally, I think a lot of Model 3 customers will be more price sensitive so the RWD version will sell just fine.

Also, they wouldn't have to engineer the front of the car twice, they would do it once and design it to work for both options (RWD or AWD). This really wouldn't take much more effort than designing it for only one way (RWD) or the other (AWD) since they are designing it with the option from the beginning (unlike Model S).

 

[Red Sage]

I guess my point is that I get your point. ;-)

People who play dominoes are fond of saying, "Not all money is good money!" Idea being that sometimes it is better to block a potential play by an opponent than score yourself.

It could be easier for Tesla Motors to guarantee a particular profit margin by allowing the base Model ≡ to be rear wheel drive. If that means a car that would be sufficiently profitable at $30,000 can be offered at $35,000 instead, shareholders certainly wouldn't object. I'd rather that if this was the case, the RWD would be $30,000, and the AWD $35,000. I guess the question is whether the profit margin goal is a specific number of dollars or a percentage of the whole.

 

[MassModel3]

With the PowerWall, Tesla is initially introducing it at close to cost, fully expecting that when the Gigafactory is up and running battery prices will drop, but the cost of the PowerWall will not. When that happens, that's when Tesla will begin to realize a favorable profit margin for the devices.

Is it not reasonable to assume that the same ideas could come into play for the Model 3? They could introduce vehicles at close to cost just to hit the promised $35K, knowing full well that when the factory gets fully ramped up, economies of scale really start to kick in, and battery costs drop, they will make their profit margins. Maybe that's not how your typical car company does it, but Tesla is far from your typical car company.

 

[TimV]

So it's been mentioned in the forums that there are less than 30 moving parts in the drive train of a Model S. It's those moving parts that present the highest likelihood of wear and tear and eventually needing replacement. If we take the less-than-30 for the rear, then add another less-than-30 twice for the front (far less than 30 for a non-motor version), it's still not that many typically replaced parts when compared to ICE vehicles and typical dealership repair centers. Okay, multiply that times the number of variants (S, X, 3) and you've still got a reasonable number of parts to deal with. Then the seldom used parts will simply be ordered from the factory, or perhaps local warehouses.

But I don't know if I agree with the assumption that stocking of parts will come into play when Tesla makes these decisions. Still undecided on the issue, but currently leaning against it.

The drive train of the Tesla is simple enough such that the components (motor, gear reducer, transaxles) are likely designed to last the life of the car. That doesn't mean that there won't ever be a failure. It does mean that they won't require any regular maintenance such as timing belt replacements, valve adjustments, fluid replacements, spark plugs, etc. Once in a while you might hear of someone needing a replacement motor or gear box but the vast majority of owners will never have to touch the drive train. Ever.

 

[MassModel3]

The drive train of the Tesla is simple enough such that the components (motor, gear reducer, transaxles) are likely designed to last the life of the car. That doesn't mean that there won't ever be a failure. It does mean that they won't require any regular maintenance such as timing belt replacements, valve adjustments, fluid replacements, spark plugs, etc. Once in a while you might hear of someone needing a replacement motor or gear box but the vast majority of owners will never have to touch the drive train. Ever.

Exactly! Which leaves even fewer parts that need to be stocked. That's precisely why I don't think stocking of replaceable parts will be a deciding factor in what gets built. What's going to sell and what people will be willing to pay for -- that's what will be considered.

 

[JRP3]

I'd rather that if this was the case, the RWD would be $30,000, and the AWD $35,000.

I expect Tesla is going to have a tough time hitting the $35K mark with RWD. I'll be happy if they come in under $40K for the base model.

 

[omgwtfbyobbq]

I think the $35+k is in 2014 (or whenever it was announced) dollars. So it could be 37k in 2014, and $40k+ in 2018.

 

[EVNow]

I think the $35+k is in 2014 (or whenever it was announced) dollars. So it could be 37k in 2014, and $40k+ in 2018.

Well, Musk is still talking about $35k. He is not saying $35k in 2014 (or whenever it was announced) dollars.

 

[Model 3]

I think the $35+k is in 2014 (or whenever it was announced) dollars. So it could be 37k in 2014, and $40k+ in 2018.

No, it was $30K in 2012 dollars.

 

[JRP3]

I seem to remember that being updated to "$35K in today's dollars" at some point.

 

[Model 3]

I seem to remember that being updated to "$35K in today's dollars" at some point.

I think you are mixing the memories. It was "$30k in today's dollars" (in 2012), then "$35k without any tax-breaks", and no "in today's dollars" if I recollect correct.

 

[JRP3]

Could be, I can't find any links stating "$35K in today's dollars".

 

[stopcrazypp]

Digging back to old threads, he did mention $30,000 plus inflation before (although that was before the government incentives talk):
http://www.teslamotorsclub.com/show...ulation/page22?p=301933&viewfull=1#post301933

Although from here, it appears he does sometimes reference to "today's dollars" even when talking about the $35k number.
http://www.teslamotorsclub.com/show...culation/page7?p=375286&viewfull=1#post375286

 

[Model 3]

Although from here, it appears he does sometimes reference to "today's dollars" even when talking about the $35k number.
http://www.teslamotorsclub.com/show...culation/page7?p=375286&viewfull=1#post375286

That's not how I read it. He can of course assume that "+ inflation" is implied, but why he specified this so carefully when he talked about the price of "$30k in today's dollars" and not after it was adjusted to $35k? I am assuming that the $5k difference is the excepted inflation from 2012 to 2017/2018. Well, anyway we will get the definitive answer when the Model 3 is released