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Blog Musk's Favorite Analysis of Model 3 Says Material Cost is $18K

Discussion in 'Model 3' started by TMC Staff, Jun 1, 2018.

  1. TMC Staff

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    Tesla CEO Elon Musk called the work of a German teardown company the “best analysis of Model 3 to date.” German magazine WirtschaftsWoche talked to a rep from an engineering firm that bought a Model 3 with the intent to rip it apart to study its parts and construction. Best analysis of Model 3 to...
    READ FULL ARTICLE
     
  2. Kingdragon8

    Kingdragon8 Member

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    Seriously! That is just about the cost of the battery alone! At about $225/KiloHour and 75 Kilo/Hour battery pack is just over $18,000. Model 3 will certainly enjoy some "Early Adopter Premium" dollars for many more months (not years) and as such higher margins...but the overhead and fixed costs will never show the vehicle profitable over its life cycle.
     
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  3. thx1139

    thx1139 Member

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    $10K for labor costs. $100 per hour that is 100 hours per car. 1000 cars per week that is 100,000 man hours per week. 5,000 cars per week is 500,000 man hours per week.

    Doesnt that seem inflated?
     
  4. adaptabl

    adaptabl Member

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    500,000 / 40 per week = 12,500 people. 3 shifts = 4166 workers per shift. Not sure how close that is? That is all workers from those at the factory, the battery plant and any other sites to work on parts for the cars.

    That materials cost does seem pretty low. Maybe without the battery.
     
  5. JeffK

    JeffK Well-Known Member

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    Meh, if they really are getting the battery costs to under $100/kWh at the pack level, then you're talking, what, $7600 for the battery.
     
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  6. techmaven

    techmaven Active Member

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    So you just make up numbers and throw them against the wall to see what sticks?

    Model S/X pack all in costs were less than $190/kWh. At scale, the Model 3 pack should be well under $140/kWh. The base model's pack cost is therefore closer to $8,000 each and that includes the cost to make it.
     
  7. techmaven

    techmaven Active Member

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    Likely this includes supplier labor... not just assembly labor.
     
  8. thx1139

    thx1139 Member

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    Supplier labor would be in material cost. Invoice has the cost of the product which includes the labor to produce the product.
     
  9. thx1139

    thx1139 Member

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    Has anyone seen a teardown for similiar ICE vehicle? Since EV car is simpler with less moving mechanical parts the costs should be lower then an ICE car for everything besides the battery.
     
  10. Kingdragon8

    Kingdragon8 Member

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    Accuse me of inventing numbers..."should be" and "are" simply are not the same !? Regardless, the analysis is stunningly in error....labor, material,ugh! Seems a little self serving to me. At $200/KH that's still $15,000 for JUST THE BATTERY!
     
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  11. JeffK

    JeffK Well-Known Member

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    #11 JeffK, Jun 1, 2018
    Last edited: Jun 1, 2018
    According to Elon the Tesla packs for Model 3 are the highest energy density and the lowest price / kWh in the industry. Logic dictates that if the old packs were "below" $190 / kWh at the pack level in early 2016 then it stands to reason that current packs are even less. Keep in mind at the same time early 2016 GM was getting $145 / kWh at the cell level from LG.

    GM also sells the replacement 60 kWh bolt pack to suppliers for $10-11k which includes a markup.

    We also know that currently VW is writing contracts for around $124 / kWh (as of March 2018)
     
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  12. TT97

    TT97 Active Member

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    The cost of the batteries (whatever that may be now) is for the battery pack and not just the material. As Tesla produces their batteries in-house, the cost of the batteries includes labor so as a percentage of the cost of the car, you need to evaluate it as a percentage of the $28k, not the $18k.
     
  13. Kingdragon8

    Kingdragon8 Member

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    That's technically true....however, typically an assembly shipped to an assembly plant is considered "In-House Purchased Material Cost" and includes all the labor, overhead, materials, capital, etc.,, and many times a "market type" markup to make the In-Housed supplied parts a profit center.
     
  14. azred

    azred Active Member

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    Nice analysis. Why not publish it in Seeking Alpha?
     
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  15. ilg

    ilg Some guy on the Internet.

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    Let's see, now...

    $225/KiloHour x 75 Kilo/Hour = [cancel out the Kilos, multiply the Hours...] $16875/Hour^2

    Costs are accelerating exponentially! Tesla is dooooomed! Doomed, I say!
     
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  16. Fusion

    Fusion Member

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    So we are way over paying? haha har har
     
  17. SageBrush

    SageBrush 2018: Drain the Sewer

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    #17 SageBrush, Jun 1, 2018
    Last edited: Jun 1, 2018
    That is the bloated retail cost.
    Look at the battery upgrade costs for the Tesla Semi to get a closer idea of Tesla manufacturing costs.

    A What ? Getting your units straight might help in your cost analysis.
     
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  18. Electroman

    Electroman Active Member

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    If you want to just make up a number, I suggest make it big.. like $528/KiloHour or something. That way even the performance versions will not be profitable. Go big or go home.
     
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  19. SageBrush

    SageBrush 2018: Drain the Sewer

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    I'll play. $3000 per GigaGoogle !
     
  20. Electroman

    Electroman Active Member

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    #20 Electroman, Jun 2, 2018
    Last edited: Jun 2, 2018
    Actually I like this unit. Like $225 per 1000 hours. I believe thats the rate for child labor in Congo to mine Cobolt. Yes, I read that in Seeking Alpha. Now it all makes sense.
     

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