Model X will have the same batteries as the Model S

[FlasherZ]

Okay, so you've generated savings through advances in battery packs... do you:

1. Keep price and profit margin the same, but increase the mileage (while understanding that most owners, with exception of occasional road trips, don't *need* more mileage)?
2. Keep mileage and profit margin the same, but reduce the price of the vehicle, so that more people can purchase it?
3. Keep mileage and price the same, but reduce the cost, so that you meet your profit margin requirements?

You get one of these three. Given that most drivers simply don't have range anxiety already for their daily use, I don't understand why they'd go to #1, until it becomes a primary decision-making point for the drivers. To Tesla, right now, #3 looks the best as they need to continue generating cash to fund development of Models X and 3. #2 really isn't that great of an option, because opening up a bigger chunk on the lower end can push away customers on the upper end - you can already make a Model S the same price as a $40-50k car in terms of TCO during its life.

It's not just about max mileage... The difference between 3 and 5 hours to me is worthless - my kids have to stop every 3 hours anyway. For others, 4 hours or 5 hours may be the limit, but then you have to ask how often you do that? I take 4-5 long road trips a year, meaning 5 hours would save me about 10 hours a year bypassing a charger - MAXIMUM. To that, I say "meh". I recognize there are some customers it would really help, those who drive between two homes on a near-weekly or bi-weekly basis; but how many of them are there?

I suspect Tesla knows from their data collection and can make the best decision between 1/2/3 for their business needs.

 

[trialcritic]

My gut feeling is that

1. Initially Tesla will push up its profit margin.
2. The minute a new car is released by another brand with a good range, it will push up its range.

 

[adiggs]

Okay, so you've generated savings through advances in battery packs... do you:

1. Keep price and profit margin the same, but increase the mileage (while understanding that most owners, with exception of occasional road trips, don't *need* more mileage)?
2. Keep mileage and profit margin the same, but reduce the price of the vehicle, so that more people can purchase it?
3. Keep mileage and price the same, but reduce the cost, so that you meet your profit margin requirements?

You get one of these three. Given that most drivers simply don't have range anxiety already for their daily use, I don't understand why they'd go to #1, until it becomes a primary decision-making point for the drivers. To Tesla, right now, #3 looks the best as they need to continue generating cash to fund development of Models X and 3. #2 really isn't that great of an option, because opening up a bigger chunk on the lower end can push away customers on the upper end - you can already make a Model S the same price as a $40-50k car in terms of TCO during its life.

It's not just about max mileage... The difference between 3 and 5 hours to me is worthless - my kids have to stop every 3 hours anyway. For others, 4 hours or 5 hours may be the limit, but then you have to ask how often you do that? I take 4-5 long road trips a year, meaning 5 hours would save me about 10 hours a year bypassing a charger - MAXIMUM. To that, I say "meh". I recognize there are some customers it would really help, those who drive between two homes on a near-weekly or bi-weekly basis; but how many of them are there?

I suspect Tesla knows from their data collection and can make the best decision between 1/2/3 for their business needs.

I don't see this as an either / or. This looks like another good opportunity for options, and see what people actually buy. One example that has been discussed in this thread already is the actual range achieved in cold and snowy weather - bigger battery will help people in climates that get adverse part of the year.

Another reason people might opt for the bigger battery is for Model X and towing stuff, where the extra weight being towed will lower range.

Price the bigger battery pack high enough to maintain or increase margins, and then see how consumers vote with their wallet. What we know so far, given a choice between 40/60/85 sized battery packs, the 40 was almost ignored and the 85 gets the bulk of the volume. If we had a choice between 60 / 85 / 110 sized battery packs, what would people choose then?

 

[trialcritic]

Price the bigger battery pack high enough to maintain or increase margins, and then see how consumers vote with their wallet. What we know so far, given a choice between 40/60/85 sized battery packs, the 40 was almost ignored and the 85 gets the bulk of the volume. If we had a choice between 60 / 85 / 110 sized battery packs, what would people choose then?

Very good point. Sure that conservatively at least 20% of the buyers will go for the 110Kwh battery pack. Wonder what is the percentage break down in sales of each of their battery packs.

 

[roblab]

Okay, so you've generated savings through advances in battery packs... do you:

1. Keep price and profit margin the same, but increase the mileage (while understanding that most owners, with exception of occasional road trips, don't *need* more mileage)?
2. Keep mileage and profit margin the same, but reduce the price of the vehicle, so that more people can purchase it?
3. Keep mileage and price the same, but reduce the cost, so that you meet your profit margin requirements?

You get one of these three. Given that most drivers simply don't have range anxiety already for their daily use, I don't understand why they'd go to #1, until it becomes a primary decision-making point for the drivers. To Tesla, right now, #3 looks the best as they need to continue generating cash to fund development of Models X and 3. #2 really isn't that great of an option, because opening up a bigger chunk on the lower end can push away customers on the upper end - you can already make a Model S the same price as a $40-50k car in terms of TCO during its life.

It's not just about max mileage... The difference between 3 and 5 hours to me is worthless - my kids have to stop every 3 hours anyway. For others, 4 hours or 5 hours may be the limit, but then you have to ask how often you do that? I take 4-5 long road trips a year, meaning 5 hours would save me about 10 hours a year bypassing a charger - MAXIMUM. To that, I say "meh". I recognize there are some customers it would really help, those who drive between two homes on a near-weekly or bi-weekly basis; but how many of them are there?

I suspect Tesla knows from their data collection and can make the best decision between 1/2/3 for their business needs.

Who makes decisions based on TCO or best business case? Not ME!! Sure, I don't NEED a 110 kWh battery. I don't NEED to go 155 mph. I don't NEED a custom factory painted car ($12,000 extra hard earned dollars). I don't NEED some fancy iPhone. But I want the right to choose options.

I don't NEED someone telling me what I don't need.

 

[Nubo]

My gut feeling is that

1. Initially Tesla will push up its profit margin.
2. The minute a new car is released by another brand with a good range, it will push up its range.

Bingo.

 

[FlasherZ]

Who makes decisions based on TCO or best business case? Not ME!! Sure, I don't NEED a 110 kWh battery. I don't NEED to go 155 mph. I don't NEED a custom factory painted car ($12,000 extra hard earned dollars). I don't NEED some fancy iPhone. But I want the right to choose options.

I don't NEED someone telling me what I don't need.

Hey, I don't like it either, and I like my options too. But it's just straightforward business for Tesla. You're not going to get to take advantage of their technology advantage for free, and I suspect that the greater majority of Tesla's customers aren't going to be willing to pay an additional $20k for an additional 140 miles of range. Sure, there will be some people who have money falling out of their ears and others who will buy it just to say they have the biggest ... erm ... battery.

It's just the reality of the situation. Tesla's not hearing enough people say "you know, I'm willing to pay $20k more for an additional 140 miles range" to justify the cost of introducing that as an option. I'm pretty positive that they could find a way to make a 400 mile pack work today. But how many would be willing to pay for it is the question...

- - - Updated - - -

Price the bigger battery pack high enough to maintain or increase margins, and then see how consumers vote with their wallet. What we know so far, given a choice between 40/60/85 sized battery packs, the 40 was almost ignored and the 85 gets the bulk of the volume. If we had a choice between 60 / 85 / 110 sized battery packs, what would people choose then?

Recall that the performance only comes with the 85 as well, so if you wanted to go with any of the performance-based models, you had no choice. Not only that, but the need for 265 vs. 200 is indeed much higher than the need for 400 miles vs. 265. I know a statistically significant number of people who have a 90-mile commute where 200 miles would be stretching things. But to go beyond 265? Can't say those are statistically significant. I have met them, mind you, but they are the people who work a regional sales circuit or something similar and well, they're much fewer - and the Model S isn't for them.

I've posed this question to a lot of people at auto shows and at Teslive last year: if it were an option to purchase a 400-mile range vs. a 265-mile range for $20,000 more, would you choose that option? Very few people answer that affirmatively when I ask, they already have a challenge swallowing a $90k comfortably-configured standard model. Even less owners who have driven the Tesla for 6 months or more answer "yes". Of course, they'll take it for free - but when presented with the trade-off, other options will generally fill that $20k slot if the dollars are available -- performance, sound, etc.

You may disagree with that, and you may purchase the option if Tesla were to offer it. Surely they have someone looking at it and whether it would sell more cars or generate enough revenue vs. the cost of offering the option. The absence of such an option at this point speaks more than speculation on our part.

- - - Updated - - -

My gut feeling is that

1. Initially Tesla will push up its profit margin.
2. The minute a new car is released by another brand with a good range, it will push up its range.

I suspect this is where business pressures are taking them as well. They are well ahead of the market and as we approach 2018 we'll see competitive pressures ratchet it up a notch or two.

 

[AnOutsider]

cross-posting from the subsite thread:

aaaaaand speculate.