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

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.

https://twitter.com/x/status/1002270980755013632

The firm said materials used in the Model 3 cost around $18,000 per vehicle. Estimating $10,000 in labor costs, the total price to build a Model 3 would be $28,000. Retail price for the Model 3 is expected to range from $35,000 for the base model to $78,000 for the performance version.

“If Tesla manages to build the planned 10,000 pieces a week, the Model 3 will deliver a significant positive contribution to earnings,” the test engineer said.

When asked on Twitter if the Model 3 cost to build could come down to $28,000, Musk said “Definitely.”

The article also suggested that Tesla may have a competitive advantage with its battery design. Lab results reported by the magazine showed that Tesla’s 2170 cells for the Model 3 consisted of 2.8% cobalt, 65% less than the industry average of 8%.

“Tesla has obviously succeeded in significantly reducing the share of the notoriously scarce metal cobalt in the batteries of his new Model 3,” the report said. “That would be a significant competitive advantage for Tesla. Cobalt is currently very difficult to get on the world market.”

 

[Oldschool496]

$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?

You must remember its more hours then just construction at the time of build, Conceptual costs(years of development) that I hope are factored into the $10,000.

 

[thx1139]

You must remember its more hours then just construction at the time of build, Conceptual costs(years of development) that I hope are factored into the $10,000.

Yet that goes down with each car that is produced. Past costs also dont factor into future revenue and profit.

 

[Oldschool496]

Yet that goes down with each car that is produced. Past costs also dont factor into future revenue and profit.

Not down too far yet, because really in the big picture here the amount of cars built is very little thus far. You must factor in these hours when dealing with the actually time and cost of a given product or your short sightedness will do just that, leave you short. You are talking about profits, this thread is not about profits, its about hours cost of the product, actual cost.

 

[Moderatefan]

So we are way over paying? haha har har

I didn't see analysis on cost of factories/equipment in them and costs in the services department including all those S loaners that everybody enjoys once they come there.

 

[scaesare]

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)

What's more, if you read between the lines (so to speak) when Jeff Dahn, in his excellent presentation video on the battery research work he's doing with Tesla (which I can no longer find online), is asked about battery costs, it seems that $100/KWh was either not far off, or had already been achieved.

Now that's likely cell, not pack, level costs. But that was also a year or two ago.

I suspect the Model 3 pack (excluding included electronics, like charger, DC-DC, etc...) at volume could cost much less than many folks realize...