Model 3 Performance Gross Margin

[ValueAnalyst]

I expect sales mix to remain favorable in the coming months, as potential buyers reach up to take delivery by year-end in order to qualify for the $7500 federal tax credit. Model 3 Performance delivery time is "less than 2 months" vs. 2 to 4 months for other variants. This upcoming phenomenon is why the following question is important:

At an ASP of $77,000, including high take rates for EAP/FSD after Version 9, where do you estimate Model 3 Performance gross margin?

 

[ValueAnalyst]

Munro & Associates estimated gross margin of $55,000 LR+PUP at 38%

Model 3 Performance will soon command an ASP of $77,000 with Version 9 introducing FSD-exclusive features

Assuming an incremental per-unit cost of $5k to $8k, the Model 3 Performance gross margin would come out to 43 to 48 percent

ValueAnalyst on Twitter

 

[Cattledog]

I just upped our second Model 3 order to a P AWD from a standard AWD. Trying to contribute to the cause while enjoying the fruits of the contribution!

 

[omgwtfbyobbq]

I'm going with 50+%, mostly because I think the incremental per unit cost is at or below $5,000. UBS put the cost of the SRM powertrain in the 3 LR at $4,500, so my guess for the FWD AC induction motor/inverter is one or two grand less. That difference will be offset by the larger wheels/tires, braking, and suspension upgrades, but all told I think the incremental per unit cost is still at about $5,000.

Having said that, with free Supercharging and what I'm guessing will be higher warranty costs from the car being driven harder, I think the Performance cars will cost Tesla a little more in the long run, although even that shouldn't be a substantial difference.

 

[Heimdallr]

I expect sales mix to remain favorable in the coming months, as potential buyers reach up to take delivery by year-end in order to qualify for the $7500 federal tax credit. Model 3 Performance delivery time is "less than 2 months" vs. 2 to 4 months for other variants. This upcoming phenomenon is why the following question is important:

At an ASP of $77,000, including high take rates for EAP/FSD after Version 9, where do you estimate Model 3 Performance gross margin?

Hard to say. I picked 40-42% for Q3 2019 when they finish the Model 3 ramp and are much more efficient than today. Now it's less than 30% due to low labor productivity but then it could be anywhere from 40-50%. A year from now, there will be even more EAP/FSP uptake with Version 10.