Musk: $35,000 Model 3 would cost $38,000 to make right now.

[SpiceWare]

If the SR turns out to have (as some predict) a lower quality interior; lower quality sound system, no roof glass, and an electronic system with fewer amenities .... then Tesla will be "off the table" for me. I wonder how many others feel the same way?

It's been known for a long time that those features are part of the $5K Premium Upgrade Package, commonly referred to as PUP. At the moment PUP is a required option, you're not able to select/deselect it and the $5K is already rolled into the displayed price.

A base Model 3 that starts at $35K will not include PUP, so if you want those features be ready to pay $40K. Likewise once the base Model 3 is available I would imagine that MR and LR would be available w/out PUP for $5K less than today.

PUP info from Everything you want to know about the Tesla Model 3

 

[mike123abc]

I reason that the MR is basically identical to the LR, except for a smaller battery.
Why wouldn't the SR be like the MR, except with a still smaller battery?

At this point ..... the MR makes far more sense to me that any other option.
But I haven't read many post from buyers of the MR.

What they have essentially said is that the MR is using the LR battery pack with some actual cells taken out of the modules to save money (and of course cut range since fewer batteries).

But, on several occasions it has been mentioned the the SR (estimated at 50 KWH) battery will be a new design to save money. It makes sense if you are going to be making a lot of SR battery packs that you have a new design that has fewer modules to save money rather than removing batteries from modules which saves some money but, you still pay for the battery packaging.

Also they could cut more weight by redesigning the pack to be smaller, and cut more batteries to achieve the same EPA range.

 

[timk225]

People want a $35K 3. No matter how you present it, a $35K 3 that costs more than $35K is not a $35K 3. Any amount of forced options ruins it. The very word "option" implies you have a choice. If you MUST buy something extra, it is no longer an option.

See the 3 reveal video on YouTube. Elon did not say "$35,000 but you must buy $10K in extra options". He said $35K. Maybe I'm crazy but to me, $35K means $35K.

 

[Mod3forMe]

People want a $35K 3. No matter how you present it, a $35K 3 that costs more than $35K is not a $35K 3. Any amount of forced options ruins it. The very word "option" implies you have a choice. If you MUST buy something extra, it is no longer an option.

See the 3 reveal video on YouTube. Elon did not say "$35,000 but you must buy $10K in extra options". He said $35K. Maybe I'm crazy but to me, $35K means $35K.

If the "$35K" model comes out a year or so from now and you correct from inflation it will be a $38K+ car as it inflation rate since the announcement has already pushed it up a fair amount.

 

[Mod3forMe]

This thread is somewhat disheartening. The only thought that "keeps me in the game" is there appears to be a great deal of opinions and speculating. It will be great to eventually learn the REAL story.

The speculators seem to be suggesting that the SR M3 will be unlike the LR and MR M3 in features and accessories.
I had hoped the SR would be not significantly different from the MR and LR, except it would have a smaller battery and consequently shorter range.
I keep reading about a large number of buyers that are waiting for the SR.
If the SR turns out to have (as some predict) a lower quality interior; lower quality sound system, no roof glass, and an electronic system with fewer amenities .... then Tesla will be "off the table" for me. I wonder how many others feel the same way?

My hope is ..... such talk is uninformed speculating.
I reason that the MR is basically identical to the LR, except for a smaller battery.
Why wouldn't the SR be like the MR, except with a still smaller battery?

At this point ..... the MR makes far more sense to me that any other option.
But I haven't read many post from buyers of the MR.

You should get out now as they have already said the cars they are selling now include the premium upgrade package. This is one the reason I bought now as I have not interest in the basic interior and would be selecting the premium interior main the SR more expensive.

 

[MXWing]

This thread is somewhat disheartening. The only thought that "keeps me in the game" is there appears to be a great deal of opinions and speculating. It will be great to eventually learn the REAL story.

By no means is it meant to be discouraging or mean in any way. It's just the truth, so people will know the reality and can make their choices accordingly.

At this point ..... the MR makes far more sense to me that any other option.
But I haven't read many post from buyers of the MR.

There's not much to be said about the MR. Lower range and half a second slower - its still the complete Model 3 experience.

Factoring in the 3MR gets more expensive by 3750 all other things being equal Jan 1st it’s really unwise to not pull the trigger IMO.

 

[BluestarE3]

This thread is somewhat disheartening. The only thought that "keeps me in the game" is there appears to be a great deal of opinions and speculating. It will be great to eventually learn the REAL story.

The speculators seem to be suggesting that the SR M3 will be unlike the LR and MR M3 in features and accessories.
I had hoped the SR would be not significantly different from the MR and LR, except it would have a smaller battery and consequently shorter range.
I keep reading about a large number of buyers that are waiting for the SR.
If the SR turns out to have (as some predict) a lower quality interior; lower quality sound system, no roof glass, and an electronic system with fewer amenities .... then Tesla will be "off the table" for me. I wonder how many others feel the same way?

My hope is ..... such talk is uninformed speculating.
I reason that the MR is basically identical to the LR, except for a smaller battery.
Why wouldn't the SR be like the MR, except with a still smaller battery?

At this point ..... the MR makes far more sense to me that any other option.
But I haven't read many post from buyers of the MR.

As others have pointed out above, don't conflate the $35,000 car with the Standard Range (SR) battery. The amenities that you're seeing in all the Model 3s to date have included the Premium Upgrade Package (PUP). No one outside of Tesla has seen a Model 3 without the PUP yet.

I was holding out for the SR battery, but I also wanted the PUP, so that would have been a $40,000 car. For the $35,000 car, it will have the SR battery, but not the amenities listed for the PUP. That information was on the comparison charts on the website from the very beginning.

 

[roblab]

....People want a $35K 3.

And they want it with all the amenities and fancy stuff, like good range (whatever that is) and lots of power (whatever that is) and nice interior (whatever that is). They will be mighty unhappy to get a lower powered, minimum range, inexpensive (hey, we already got that) interior M3. Sure, they want a Tesla 3, but they don't want it to look cheap.

Here in CA, most everybody knows who buys the cheap cars.

Hey, I just saw an ad for a RAV4EV for $250!

 

[ebmcs03]

The "high end" M3 is selling very very very well.

No it’s not. The couldn’t get rid of the $49k Long Range. So had to make a mid range. Now they have so much inventory they can guarantee delivery within one month.

Sounds to me they have excess inventory.

 

[MXWing]

No it’s not. The couldn’t get rid of the $49k Long Range. So had to make a mid range. Now they have so much inventory they can guarantee delivery within one month.

Sounds to me they have excess inventory.

Sorry but you are wrong in a huge way.

Tesla is constrained by battery production. Can't sell a car without a battery. GF1 worked all through Thanksgiving while Fremont assembly was able to take time off.

By making the MR versus LR, Tesla can squeeze out 20% more cars.

Why they can guarantee delivery is every car produced for the next 10 days or so is just headed east. After that, they can fulfill all the West Coast orders fresh from the factory. 1000 cars a day is roughly 28,000 more Model 3s produced before the year is out.

If they hit 25,000 even - that is very productive.

 

[Stirfelt]

Thanks for all of the above comments. Tomorrow I want to read each carefully, and understand what has been said.

Not that anyone cares .... but from day one I have planned on a SR with PUP, plus a color other than black .... fully understanding it would add up to more than #35k.

 

[ebmcs03]

Sorry but you are wrong in a huge way.

Tesla is constrained by battery production. Can't sell a car without a battery. GF1 worked all through Thanksgiving while Fremont assembly was able to take time off.

By making the MR versus LR, Tesla can squeeze out 20% more cars.

Why they can guarantee delivery is every car produced for the next 10 days or so is just headed east. After that, they can fulfill all the West Coast orders fresh from the factory. 1000 cars a day is roughly 28,000 more Model 3s produced before the year is out.

If they hit 25,000 even - that is very productive.

Sounds like they have more cars then buyers to me.

 

[Mod3forMe]

Sounds like they have more cars then buyers to me.

The Model 3 is number 2 in sales for Luxury Vehicles (most on the top 10 are SUV's) and number 1 for Luxury Sedans. They had a very good 2018, despite not being able to produce enough cars to meet demand.

Being able to deliver cars in 10 days, is not a sign of lack of demand, it is just they are now operating like a real car company an able to actually have some innovatory to send to car buyers in a reasonable amount of time.

They also have nearly 200,000 reservations for versions of the M3 so they should have a decent run for a few years. After that I have a no clue.

 

[Drizzle]

This thread is somewhat disheartening. The only thought that "keeps me in the game" is there appears to be a great deal of opinions and speculating. It will be great to eventually learn the REAL story.

The speculators seem to be suggesting that the SR M3 will be unlike the LR and MR M3 in features and accessories.
I had hoped the SR would be not significantly different from the MR and LR, except it would have a smaller battery and consequently shorter range.
I keep reading about a large number of buyers that are waiting for the SR.
If the SR turns out to have (as some predict) a lower quality interior; lower quality sound system, no roof glass, and an electronic system with fewer amenities .... then Tesla will be "off the table" for me. I wonder how many others feel the same way?

My hope is ..... such talk is uninformed speculating.
I reason that the MR is basically identical to the LR, except for a smaller battery.
Why wouldn't the SR be like the MR, except with a still smaller battery?

At this point ..... the MR makes far more sense to me that any other option.
But I haven't read many post from buyers of the MR.

Lower quality interior? There's not much to throw out lol...

Sound system? Yeah, a base and deluxe sound system for $$$ is typical for most cars at this point.

All glass roof? Also a higher grade option.

Electronic system with fewer amenities? Not sure what that one means. There is only one screen and there aren't many amenities to get rid of besides something like heated seats - also typically an upgrade option.

 

[David_Cary]

I believe the $35k price was talked about in 2015 and it was referred to as "today's dollars". If we ignore 2015 and just factor in the 3 years of inflation from 2016-2018, you get $37,400. I think it would be fair to add in the destination charge and you get somewhere around $38,500 as the base price of a model 3 SR.

Power seats can be deleted. Seats can be cheaper - and cloth. Connectivity can be charged day 1 for $10 a month. There could be a tech package for $2500 that gives you nav/homelink/parking sensors etc.

Just looked - a $35k BMW 3 series does not include the following - moonroof (glass roof being the closest here), power seats, heated seats, Homelink, dimming mirrors, comfort access keyless entry, lumbar support, nav.

It costs $5k to get the above - plus Sirius/XM and something called "storage package" in a BMW 3 series.

So you can decontent a model 3 and save some money without being ridiculous. I imagine that BMW does not sell too many base cars.

Heck - they could take away the AP sensors on the base car. The question becomes - is it worth it to decontent the car that much to reach a price point.

 

[neroden]

It sounds to me like they're going to have to cut manufacturing costs by about 30% to make their profit targets. That's a pretty big number. So big that I wonder how profitable the Model 3s they are making can be.

Given how much of the cost is fixed in the production line equipment rather than variable, if they can speed up their production lines from 7000/wk to 10000/wk, that *is* a 30% cut in costs.

Since some of the costs (maybe half?) are variable, they probably have to find some additional cost cuts, but the revised battery pack probably accounts for most of that.

 

[electracity]

Tesla is constrained by battery production. Can't sell a car without a battery. GF1 worked all through Thanksgiving while Fremont assembly was able to take time off.

Musk was talking about planning for the pickup when he made that comment. They said explicitly in the last earnings call that the model 3 was not cell constrained.

If Tesla is theoretically cell constrained on future production it is only because they can not make the deal they want with battery manufacturers. The reason they can't make a deal is capital and risk, not because there is some manufacturing reason more cell production can't be implemented.

 

[electracity]

No it’s not. The couldn’t get rid of the $49k Long Range. So had to make a mid range. Now they have so much inventory they can guarantee delivery within one month.

Sounds to me they have excess inventory.

You are not suppose to point out the obvious here

Tesla has given us a precise snapshot of north American demand at the current price points. While that demand is less than ideal, its still a heck of a lot of expensive electric cars being sold.

 

[ItsNotAboutTheMoney]

I know I missing lots of background, but why even bother building the $35K version or in the least don't worry about rushing it? The "high end" M3 is selling very very very well. It is now the top of the mid/small size luxury car. SUV style vehicles are way better market so worry about the Y and the Pick-up truck market is huge - focus on those.


So what is the obsession with making a cheaper, less profitable vehicle?

Because the market for the cheaper version would be significantly larger than the market for more expensive versions. ASP on entry-level premium, the largest part of the premium market, is about $42k.

Also, the ability to sell a $35k SR has cost reduction implications both for higher margin on the other models and, in the future, ability to compete with other companies in the same space.

Finally, Tesla's mission is crucial to the goodwill it has. A lot of the interest in Tesla comes from its mission, and a lot of the tolerance for its quality and service issues comes from its mission. Choosing not to sell the most affordable version, for any reason other than the survival of the company, would go against the "affordable" part of the mission, make it meaningless and lose goodwill.

 

[ItsNotAboutTheMoney]

I believe the $35k price was talked about in 2015 and it was referred to as "today's dollars". If we ignore 2015 and just factor in the 3 years of inflation from 2016-2018, you get $37,400. I think it would be fair to add in the destination charge and you get somewhere around $38,500 as the base price of a model 3 SR.

Power seats can be deleted. Seats can be cheaper - and cloth. Connectivity can be charged day 1 for $10 a month. There could be a tech package for $2500 that gives you nav/homelink/parking sensors etc.

Just looked - a $35k BMW 3 series does not include the following - moonroof (glass roof being the closest here), power seats, heated seats, Homelink, dimming mirrors, comfort access keyless entry, lumbar support, nav.

It costs $5k to get the above - plus Sirius/XM and something called "storage package" in a BMW 3 series.

So you can decontent a model 3 and save some money without being ridiculous. I imagine that BMW does not sell too many base cars.

Heck - they could take away the AP sensors on the base car. The question becomes - is it worth it to decontent the car that much to reach a price point.

They can't take away the AP sensors. They're used for their safety systems.