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Need Lottery for Limited 2018 Sales of Standard Battery Model

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The following is the text of a letter I sent by snail mail to Elon last week. I need help in getting my suggestion in front of him. Who knows the way to have this idea come to his attention? Thanks.

Dear Mr. Musk

I manage a portfolio of clean energy investments in which Tesla is one of our largest holdings. I am committed to the long-term success of Tesla and, as an investor, understand and approve of your strategy of offering only the long-range battery and premium interior at this point in time.

In addition to being a Tesla investor, I also am a Model 3 reservation holder whose reservation has matured making me eligible to order my Model 3 immediately. However, as customer, I am disappointed that I am told that the Standard Battery will not be available for another three to six months. That will be after the expiration of the $7,500 tax credit, and I really had planned to be driving my Tesla months ago.

This is a suggestion for a compromise strategy that would, in my opinion, significantly improve goodwill with the hundreds of thousands of would-be Model 3 owners who have placed deposits on the vehicle. I suggest that Tesla begin production of a limited number of Standard Battery Vehicles with standard interiors to more closely approximate the $35,000 to $40,000 price range that has been promised for so many years. If these were offered to those whose reservations have matured—possibly by way of some sort of lottery to give more prospective customers hope that they will have a Model 3 before the end of 2018—that will increase the visibility of the Model 3 on highways, demonstrate that Tesla is following through on its promise to make all electric long range vehicles affordable, and a be a good thing overall for the company. Please consider directing the production staff to start manufacturing a given number of standard battery vehicles and formulate some sort of system that would give customers like me a ray of hope. Thank you for your time and attention to this important matter.


Very Truly Yours,

Roy D. Wasson
 
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First, they've already said that they can't produce SR cars until production has reached certain minimum levels (5,000 per week), to do so earlier (especially for a limited number) would needlessly complicate things, slow production for everyone, and reduce their profits. Right now they are selling every single one they can produce, to reduce that number would certainly not "increase the visibility of the Model 3 on highways".

Secondly, a lottery would be a horrible idea. If they were to make them in limited numbers then the first people that should get them would be the people that waited in line on day 1.
 
This isn't going to be popular but I'd be surprised if Tesla releases the SR before 2020, if not 2021... Why? So long as they can continue to make MR/LR/P3/P3+ at a rate that doesn't exceed demand, why would they sacrifice margins and profit? Perhaps the demand for the SR is much higher than I realize but this feels very much like the S40 situation...

Jeff
 
Lots of people want the $35,000 Model 3. With a $10,000 reduction in net cost from Fed and State grants, they are getting a magnificant brand new Model 3 for only $25,000.

While this configuration would be one of the best no-brainer economically for budget consumers, the car is worth much more than that.

Selling thousand of base price cars would kill the hard fraught profit the company has just reached.

Tesla has some loans that soon need to be paid back. They need to generate profit to pay them off, so the base priced car will need to wait until Tesla can figure out a way to both make them and make a profit.
 
I don't believe the engineering is complete for the 35k car. Then you have to get suppliers on contract, source parts, get them on dock. Also have to either stand up a line for the 35k car or add it to an existing line. If existing line, you are slowing down the production of all vehicles since you are introducing a significantly different configuration to the mix.

Tesla has already given you your compromise car, the MR.
 
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I think the energy people spend on trying to get the SR at 35,000 would be better spent on side hustles to cover the difference and get the MR now.

The only fair way to allocate Model 3s, Model Y or anything else is by total dollar spend with Tesla.

Lots of Roadster 1, founder S and founder X owners that would be in front.

If you disagree, you are a communist. :)
 
I think the energy people spend on trying to get the SR at 35,000 would be better spent on side hustles to cover the difference and get the MR now.

The only fair way to allocate Model 3s, Model Y or anything else is by total dollar spend with Tesla.

Lots of Roadster 1, founder S and founder X owners that would be in front.

If you disagree, you are a communist. :)

Also people should focus on total cost of ownership instead of the list price. Factor in tax credit, state and local incentives, and gas savings (note: gas prices could go up significantly depending on the what happens with Saudi Arabia), and you're looking at a TCO roughly equivalent to a $25,000 gas car.

Tesla Model 3 Total Cost of Ownership Estimate — Crushing It | CleanTechnica
 
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The Standard battery isn’t even available yet. It’s a different config from what I understand from the LR ones that are currently being used in the MR (less some cells). Also understand that Panasonic will be creating a new production line at the Gigafactory and assume that is to make those. Just not ready.

I’m sure there’s also going to be differences in wiring (no PUP so fewer connections needed) which will help get the price down to $35K, as well as other parts that won’t be included such as the PUP speaker system...but new speakers and wiring will need to be supplied and placed.

As others have tried to show it’s way more complicated than maybe you realize and why it’s not going to happen until all the things line up to make it happen.
 
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Let's put it this way. You are selling cellphones, a $100, a $500, and a $1000 phone. You've got 10,000 people in line waiting to buy one. Which ones do you want to sell first? You've invested about $5M in buying the phones and the load comes due in 3 days.
Which phones do you want to sell first. Are you going to try to upsell the phones? Or do you want to start with the cheapest ones first.
 
This isn't going to be popular but I'd be surprised if Tesla releases the SR before 2020, if not 2021... Why? So long as they can continue to make MR/LR/P3/P3+ at a rate that doesn't exceed demand, why would they sacrifice margins and profit? Perhaps the demand for the SR is much higher than I realize but this feels very much like the S40 situation...

Jeff

Any remaining demand is for the cheaper model. Looks like Tesla has gone thru most of the high end market in north America. Europe will be filled quickly and the China market will be small with the duties on American cars. By spring 2019 Tesla will be forced to produce mostly SR non PUP models.
 
Any remaining demand is for the cheaper model. Looks like Tesla has gone thru most of the high end market in north America. Europe will be filled quickly and the China market will be small with the duties on American cars. By spring 2019 Tesla will be forced to produce mostly SR non PUP models.

That’s part of the short thesis and it’s just plain wrong. It’s a fallacy to assume that everyone who wants to buy a Tesla is ready or able to buy one right now. The reality is that most people buy a car when their current car’s lease is up, their current car breaks down or has an imminent major repair or service required, or when they have a life event (new baby). And this has little or nothing to do with price. Tesla can sell $50k+ Model 3 cars for quite a while. I have friends who definitely plan on buying a Tesla but they’re stuck in their existing lease for a couple of years. Or they absolutely need the additional space of the Model Y. Whether the price is $35k or $50k is less important than timing and availability.
 
Mid Range gets pretty darn close. Not sure how feasible it is to get a Mid Range RWD before end of year.
It might be (especially if it's the same hardware and is just software limited).
You'd get longer range and premium interior for $10k over a "STRIPPED Short Range, Non Premium Interior with Less Tax breaks".
Tesla made the best business decisions they could make.
We want them profitable so they will be around to support our investments.
 
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