Model 3 roll-out speculation

[Sunlight]

I was speculating how Tesla will handle the Model 3 roll-out over the near future and these are my 'conclusions'!

I imagine that Tesla will show a full-on top of the range model at the unveiling at the end of the month so that it looks fantastic and has all visual 'extras' (rather like Alfa did recently with the new Guilia).

They will then have a string of orders to process.

Then Tesla will roll out cars from late 2017 (or whenever – Tesla calender!?) BUT they will start with super high-spec cars at the top end price range in direct competition with the equivalent BMWs; Audis; Mercs etc. Basically order a lower spec car and you will wait (for the bottom end of the range, maybe til 2019-ish)

This will optimise Tesla's income and keep up the mystique. The cars will also be much more impressive than the lesser models.

Of course Tesla can claim that the Model 3 can be bought from $35k (as 'promised') – you'll just have to wait for these (maybe a long, long time!). Once the battery costs are down; the faults ironed out; production ramped up etc, Tesla could start rolling out the 'cheaper' versions at an appropriate time (and maybe at more than $35k as it is now a 'better' and 'non-budget' car!)

To stave off the bears, Tesla could (if needs be.....!) sell a small portion of 'budget' $35k cars even if initially with minimal/zero/negative margins.

What do you out there think? Speculate on for the next few weeks (months?)

 

[Bimbels]

Based on what has already been said by the company, I do agree that low spec-ed versions will have to wait, but (also based on what Elon has said) I disagree they will show a jacked version on 3/31. I think we'll see what the car would look like (to an extent - because there could be changes between now and launch) but not all the features will be revealed. I think we will hear about range (which will be 200+ REAL WORLD miles but honestly I think that will be a lowball number since battery technology has been improving so quickly) and features that are shared with the S/X. I think they will emphasize safety, Autopilot, etc. and maybe a "new" technology which will soon after roll out to existing fleet. But other goodies will be saved for later.

 

[Sunlight]

Yeah I agree that a lot will be kept under cover and only the main titillating pieces will be revealed.

I just feel that a 'concept/high end' version at release will appeal more than the $35k 'Camry'/family/sensible style.......

Conceivably Tesla may never need to sell any/many base versions which would help the financials! One can easily imagine a $60k Model 3 but a similarly priced Bolt (however spec'ed!)? - unlikely so there is Tesla's margin on its 'cheap/family' car.

And by the time Tesla want (or have to) churn out heaps of lower spec cars, the whole EV world will be different (2020?). I think Tesla have deliberately slowly crept down the price ladder and I can't see the jump from MS/MX price brackets to a $35k car as their main product.

 

[MrBoylan]

What do you out there think? Speculate on for the next few weeks (months?)

If we go by past events, the Model X, when first shown in 2012, had Falcon Wing Doors and a Panoramic Windshield, but things like Auto Pilot, Bioweapon Defense Mode, Auto-Opening front doors, etc. were not spoken of, possibly not even conceived. Most of that stuff was not revealed until the official "launch" event in September of 2015. Pricing of the production Model X wasn't even revealed until much later (late November, 2015) when the first non-Signature depositors got access to the design studio. But the design of the Model X in 2012 was really close to what Tesla delivered in the final version (except for second row folding seats and video side view mirrors).

So on 3/31, we'll see the Model 3 design, we'll hear that the pricing starts at $35,000 and that it will have over 200 miles of range in the real world. We may hear that it will get "Auto-Pilot 2.0" with an upgraded sensor suite. And *maybe* AutoPilot 2.0 will be able to take you from origin to destination (instead of just highway driving). But this may be premature for an announcement/promise of true autonomous driving.

I believe they will mention some of what is included in the base model, and that Auto Pilot, Supercharger access, a larger battery with greater range, and dual motor options will be available for an additional cost. But I doubt that they will announce any pricing above and beyond the base price. So really, I think it will be more of a "here's how it looks and it's real!" kind of thing, but details on pricing and options will be light.

 

[rnelsonee]

I agree with the other responses - we already know Tesla is going to send out the higher-specced cars first, because this means more profit for Tesla and helps pay for all the tooling and machinery needed to make the Model 3. It's what they've done in the past, and what they've told shareholders what they're going to do again. I would expect a year's worth of non-cheapo Model 3's to come out first, so if you buy the $35k base version, I wouldn't count on a 2108 delivery. I don't need AWD, but I might order it just to get the car earlier (and up the chances of the tax credit in the US).

As for the reveal, keep in mind half the stuff they want for Model 3 probably hasn't even been developed yet. We're 1.5-1.75 years away from the first one being assembled, so I'm sure they don't know what "little things" are going to be offered, and they certainly don't know the price yet, as the actual costs of the batteries (which are likely not the same 18650's used now) drive a good portion of the cost anyway.

 

[James Anders]

It's one thing to process high-end spec cars of an already high-end model. But I'm not convinced Tesla will be able to stall modestly equipped Model 3 cars for very long without incurring media nitpicking and feigned outrage.

The Model 3 has always been about the $35K price point and the masses.

 

[Steepler2k]

Will be interesting to see if someone maxes out a model 3 within months of production release if they'll jump in front of modest spec March 31 reservations.

 

[TSLAholic]

All we kept hearing back in 2011 was that a 300 mile range sedan was coming, which would start at $50k. Last I checked, its ASP was roughly double the originally announced starting price. Hence Model S has not been referred to as the "$50k sedan" since its release. The 40 didn't take long to be dropped from the lineup once buyers showed a complete lack of interest towards the bare bones model. So, it is therefore reasonable to assume that Model 3 will have an ASP that is nowhere near its starting price, and will likely never be referred to as the "$35k car for the masses" once released.

 

[MrBoylan]

All we kept hearing back in 2011 was that a 300 mile range sedan was coming, which would start at $50k. Last I checked, its ASP was roughly double the originally announced starting price. Hence Model S has not been referred to as the "$50k sedan" since its release. The 40 didn't take long to be dropped from the lineup once buyers showed a complete lack of interest towards the bare bones model. So, it is therefore reasonable to assume that Model 3 will have an ASP that is nowhere near its starting price, and will likely never be referred to as the "$35k car for the masses" once released.

I think the Model 3 is different from the Model S in that this $35K price point has been consistently repeated by Musk since it was initially announced and is one of the car's three core features (EV, 200-mile range, $35K). The $50K Model S never came out (price hikes and discontinuance of the 40 KWh battery) but I think a $35K Model 3 has to come out at some point, even if the first batch of delivered Model 3s are all significantly more expensive.

It's an important part of Musk's "secret master plan" to deliver that affordable EV. Again, it comes back to a car like the BMW 3 series. It starts at about $33K, but I'm sure the ASP is much higher than that. Fully optioned, it can go up over $60K. Is it still a "$33,000 car?" It can be, so yes.

 

[TSLAholic]

I still believe the fully optioned cars will be north of $70k at release time. They'll have the task of making up for the low margins of the $35k bare bones cars being sold by offering high profit options. It isn't much different from the formula applied to the Model S, except this time they are hoping for a lot fewer naysayers screaming how they'll never be able to afford one. I think a lot of the excuses will still apply as well such as "but the competitive ICE cars at this price range have [insert common/overrated/useless feature(s) here]".
Let's keep in mind that once the fanbois (us LOL) have their cars, Tesla, i.e. the owners - the real sales people, will be left to deal with the herd of sheep a.k.a. the general public. No offense to the general public, but there will need to be a lot more public explaining/rumor/myth control. Elon is already at a point where he flat out refuses to answer certain media questions, saying that his words will just get twisted out of proportion.
Now imagine everything you learned about EV's vs. ICE since Tesla caught your attention, and you can see how much schooling will be in order for the car to be accepted for consideration by the typical $20k budget ICE market segment. Tesla college, anyone?
This is why I believe that the high ASP of the M3 will help and hurt the reputation of the brand at the same time. I can just see trying to answer questions about my car to someone who has never heard of it before and saying something like, "This one is $73k because I got it fully loaded, but if you really want one, it starts at $35k." Next question will undoubtedly be "What do I not get with the base car?"
Don't get me wrong, I'm wishing and hoping the M3 would have a healthy amount of features, but the task of selling them as owners may not necessarily become easier just because the starting price is (currently) half that of Model S.

 

[Bimbels]

I still believe the fully optioned cars will be north of $70k at release time. They'll have the task of making up for the low margins of the $35k bare bones cars being sold by offering high profit options. It isn't much different from the formula applied to the Model S, except this time they are hoping for a lot fewer naysayers screaming how they'll never be able to afford one. I think a lot of the excuses will still apply as well such as "but the competitive ICE cars at this price range have [insert common/overrated/useless feature(s) here]".
Let's keep in mind that once the fanbois (us LOL) have their cars, Tesla, i.e. the owners - the real sales people, will be left to deal with the herd of sheep a.k.a. the general public. No offense to the general public, but there will need to be a lot more public explaining/rumor/myth control. Elon is already at a point where he flat out refuses to answer certain media questions, saying that his words will just get twisted out of proportion.
Now imagine everything you learned about EV's vs. ICE since Tesla caught your attention, and you can see how much schooling will be in order for the car to be accepted for consideration by the typical $20k budget ICE market segment. Tesla college, anyone?
This is why I believe that the high ASP of the M3 will help and hurt the reputation of the brand at the same time. I can just see trying to answer questions about my car to someone who has never heard of it before and saying something like, "This one is $73k because I got it fully loaded, but if you really want one, it starts at $35k." Next question will undoubtedly be "What do I not get with the base car?"
Don't get me wrong, I'm wishing and hoping the M3 would have a healthy amount of features, but the task of selling them as owners may not necessarily become easier just because the starting price is (currently) half that of Model S.

I do agree Tesla has some work to do re: perception when it comes to what the car costs - I know people think we paid significantly more than we did for our 70D because they don't understand the whole smaller battery/no P/no L concept.

Elon has said he would be open to advertising once the Model 3 rolls out. Perhaps after the initial glut of orders, or once they gauge the questions the stores/galleries are fielding - I think an inspiring, educational, exciting ad campaign would help a lot. Maybe just go all in and kill it with an amazing Super Bowl ad next year.

 

[doctoxics]

Let us not forget that JB Strauble said that people will be surprised by the number of features included in the base price. I expect autopilot, supercharging and at least 220 EPA miles of range. Unlike the roadster, S and X, the Model 3 is being built to be affordable, not a cash cow like the others. Lower margins may be acceptable to reach the production goals.

Also, of interest is the battery pack in the prototype to be test driven by the media on the 31st. Are the batteries the new chemistry that is to go into the production version of the Model 3? If the battery pack is new, what are the costs and energy density? If they improvise a battery pack from S/X for the Model 3 prototype, then we will have to wait until next year to get the facts.

 

[Twiglett]

Let us not forget that JB Strauble said that people will be surprised by the number of features included in the base price. I expect autopilot, supercharging and at least 220 EPA miles of range. Unlike the roadster, S and X, the Model 3 is being built to be affordable, not a cash cow like the others. Lower margins may be acceptable to reach the production goals.

Also, of interest is the battery pack in the prototype to be test driven by the media on the 31st. Are the batteries the new chemistry that is to go into the production version of the Model 3? If the battery pack is new, what are the costs and energy density? If they improvise a battery pack from S/X for the Model 3 prototype, then we will have to wait until next year to get the facts.

make no mistake - while the base Model 3 will not be a cash cow, all of the higher range versions will be and these are what will be the norm.
This is the norm of the auto industry. Just look around and see how many base model Audi A3/A4 or BMW320 you see around. The vast majority are optioned up with mid to high range power etc.

 

[MrBoylan]

Let us not forget that JB Strauble said that people will be surprised by the number of features included in the base price. I expect autopilot, supercharging and at least 220 EPA miles of range. Unlike the roadster, S and X, the Model 3 is being built to be affordable, not a cash cow like the others. Lower margins may be acceptable to reach the production goals.

I don't think it's likely that autopilot or supercharger access will be included in the $35K base price. These things have real monetary value and if they're charging $2500/$3000 for Autopilot on their luxury models, how could they possibly afford to give it away for free on the entry level model? The sensors and cameras may be included but you'll have to pay extra to enable the software. People will want the feature and will be willing to pay for it. And while supercharger access is a competitive differentiator (and is what enables long distance travel), no one but Telsa has it, so it's not a requirement on a $35K entry-level model in order to be competitive. If an extra 100,000 cars all got Supercharger access in late 2017/early 2018, without the incoming revenue to fund new superchargers, how crowded would the supercharger stations get? I think you're right about the range (220 EPA seems about right), but it would be fiscally unsound for Tesla to give away Autopilot when people are willing (and expecting) to pay for it.

And if they include Supercharger access in that base $35K price, I will be surprised, and a bit concerned about supercharger overcrowding. If they charge $2000 or even $2500 for lifetime supercharger access, that would easily pay for itself for those who travel a lot in their Tesla. And that revenue can go directly into building out the supercharger network. And those who only need their Model 3 for local driving or commuting won't have to pay for it. Lifetime charging at superchargers has only been promised to Model S and Model X owners, not to Model 3 buyers. Hopefully we'll know more on March 31.

But keep in mind that the current Model S 70 sells for $70,000. Cutting that price in half is a huge engineering and design challenge. I know the car will be smaller, lighter and have lower range. And I know that battery technology will be better/lighter/cheaper by the time it is ready. But it's still a big challenge. And we want Tesla to be profitable so they will be around for a long time to service their customers. Include what's essential; charge for the options.

Also, of interest is the battery pack in the prototype to be test driven by the media on the 31st. Are the batteries the new chemistry that is to go into the production version of the Model 3? If the battery pack is new, what are the costs and energy density? If they improvise a battery pack from S/X for the Model 3 prototype, then we will have to wait until next year to get the facts.

Batteries will be current chemistry, I'm guessing in a 55 kWh or 60 kWh pack, depending on weight and aerodynamics of the car. The cells that will be used in the production Model 3 packs probably have not been invented yet, at least not in final production form. Jeff Dahn from Dalhousie University starts his long term research partnership on battery technology with Tesla this June or July. I think the next real breakthroughs in Tesla's battery technology will come when he's part of the research team.

Of course, it's all speculation at this point. I expect some (but not all) of these questions will be answered in two weeks. But it's really unlikely we'll know the actual option pricing details until late next year or early 2018 when the first deposit-holders get access to the design studio. That's how it was with the Model X.

 

[MrBoylan]

make no mistake - while the base Model 3 will not be a cash cow, all of the higher range versions will be and these are what will be the norm.
This is the norm of the auto industry. Just look around and see how many base model Audi A3/A4 or BMW320 you see around. The vast majority are optioned up with mid to high range power etc.

I agree, and this is why I expect AutoPilot and Supercharger access to be options which will drive up the ASP. Neither option changes the physical cost of the materials in the car (assuming sensors and cameras are in all cars, like they are on the S and X), but charging for them will make Tesla more profitable and will allow them to invest in infrastructure like more stores/service centers and more superchargers, which they will desperately need as the volume of Teslas on the road increases.

 

[gregincal]

Will be interesting to see if someone maxes out a model 3 within months of production release if they'll jump in front of modest spec March 31 reservations.

As a comparison I put a reservation for a Model S in October 2012, after signatures were already shipping. I received my car in February 2013, before people who had reserved years earlier but ordered cars without the smart air suspension (which started shipping over a month later).

 

[T-Will]

After you get invited to customize your car, does Tesla indicate an estimated delivery date at that time? Or do you just have to sit back and wait?

I'm wondering if I get an early reservation, get invited to customize early on, order a base model, but later find out it will be years until base models are manufactured, could I add an upgrade at that time that causes me to move to a sooner production date?

 

[MrBoylan]

After you get invited to customize your car, does Tesla indicate an estimated delivery date at that time? Or do you just have to sit back and wait?

I'm wondering if I get an early reservation, get invited to customize early on, order a base model, but later find out it will be years until base models are manufactured, could I add an upgrade at that time that causes me to move to a sooner production date?

I can only speak from experience on the Model X. When the design studio opened to me, it said that P90D would begin to be delivered in early 2016, 90D mid 2016, 70D mid to late 2016. But the 5-seat option for P90D and 90D also pushed estimated delivery to mid 2016. Some options like the carbon (dark grey) wheels and the lack of a "Premium Upgrade Package" seem to have pushed production back a bit (at least it delayed people getting VIN assignments), but Tesla had no note about this in the design studio.

It looks like Tesla might actually beat some of those estimates (apparently some 90Ds are being delivered this month, at least to local CA buyers). But Tesla never gave specific date estimates in the design studio for specific options.

I expect something similar will happen with Model 3. E.g., 60 kWH battery ETA late 2018, 80kWh mid 2018, P80D early 2018. Or something like that (and no, I don't know exactly what size batteries they'll offer on the Model 3).

Some folks have reported that they were told that if they switched their Model X reservation from 5-seat to 6-seat, it could get their 90D delivered a month or two sooner. And I'm guessing Tesla doesn't charge for changes like that when they make that kind of offer (normally a change after you confirm your order results in a $500 change fee, if approved). Here's a screen shot of the Model X design studio so you can see what I mean.

When production started picking up on the Model X, those with confirmed orders started to get better estimates of when their cars would be delivered and some were told that upgrading (e.g., from 70D to 90D) would allow them to take delivery much sooner.

 

[T-Will]

Thanks, that really clears up my questions. I didn't realize Tesla provided an estimated delivery date in the design studio before finalizing the order.

 

[Az_Rael]

Let us not forget that JB Strauble said that people will be surprised by the number of features included in the base price. I expect autopilot, supercharging and at least 220 EPA miles of range. .

I think he was referring to the Model 3 in general, not the "base" model 3. The quote I found says: “I think it will surprise people with the level of features it includes”.

Unfortunately I haven't seen a video to get the full context of the quote, so I assume he wasn't referring to the base model, but the model line as a whole.


Supercharging and 220 mile range may indeed be included in the base model, however autopilot would be VERY surprising since they charge for it now.

Sigh, I tend to maintain lowered expectations on this stuff with Tesla. I really hope the $35,000 car isn't like the 40kW Model S. By that I mean, its just there so that their marketing statements would be true ($35k Tesla!!), but it ends up being a car no one really wants.