Poll: Model 3 Dissuasion?

[T34ME]

lets face it if we could afford a s, or x we would buy one of them. I can't so modle 3 here I come

I could afford to buy an S/X but they don't fit my needs! I want a nicely equipped TM3 because it appears to meet all my criteria.

 

[McHoffa]

The Model 3 won't be a Model S, but currently the only "good" EV out there is a Chevy Bolt, and the Model 3 beats it in every way except maybe cargo space... and 3 starts $2500 less.

I'm not going back to gasoline after driving a Leaf for the past 9 months, so it would take something absolutely terrible to make me cancel my reservations

 

[Garlan Garner]

the 'anti-selling' approach tells me they are (or have been) worried about potential S/X buyers reserving a Model 3 instead of ordering a S/X and they likely are seeing a canabization trend much greater than expected. (Even though there have likely been a significant number of Model S/X sold to Model 3 reservation holders). IMO it's much more about current quarter sales than anything to do with the Model 3. Go back and watch the reveal - I am sure Elon is still as excited about the Model 3 being a great car as he was that night.
It will be interesting to see how the narrative flips 6-9 months from now when the anti-selling campaign stops and Model 3s are being delivered.

I understand your point about Tesla being worried about potential S/X buyers reserving a Model 3 instead.

However, I have another potential thought maybe we here in the forum can discuss if it makes sense.

My thought is this.....

I don't know how much in actual to-the-point dollars that Tesla makes on the Model S/X. However I would assume its a very nice dollar.

Now, I wonder how much Tesla is going to make on the sell of each Model 3. I would speculate that its significantly less.

In other words.......The Model S's P100D's price of over $150K compared to the price of the base Model 3 of $35K.

Question: If you owned Tesla....which car would you want to sell if you had a choice? IMHO there is absolutely no way on earth that the P100D costs over $150K to make.

The price point of the Model S/X is so much higher. I wonder if Tesla feels that the making of the Model 3 will eat into S/X sales to the point where Tesla will have to claim even more losses as they have been selling Model S/X's like hotcakes while making a large profit compared to the profit they are going to make with the Model 3.

Just a thought so don't crucify me.

 

[Tam]

...Just a thought so don't crucify me.

Thanks for your thought and I think it makes sense:

Model S: Low volume, high price, high profit margin.

Model 3: High volume, lower price, low profit margin.

 

[AnxietyRanger]

@Garlan Garner 's speculations sounds absolutely correct to me.

Thanks for your thought and I think it makes sense:

Model S: Low volume, high price, high profit margin.

Model 3: High volume, lower price, low profit margin.

I would only add one more thing that may explain Tesla's worry:

Mode 3 before fully ramped up (Q3-Q4/2017 at least?): Low volume, lower price, even lower profit margin.

This, here, I think is their biggest worry. They may not be able to make enough Model 3 from the start and those early cars will cost them more to make anyway. So the worry would not be not what happens when Model 3 is selling 500k (just to use some example figure, don't get caught on it) a year, but how will they make it to that point, what they need to be able to sell in addition to the Model 3 before that...

 

[rjhoskins]

I could afford to buy an S/X but they don't fit my needs! I want a nicely equipped TM3 because it appears to meet all my criteria.

I am in the exact same boat. However, once the specs of the Model 3 are released, if my senses aren't aroused, I'll just pony up and get a P100D Model S.

 

[Wolverinegeoff]

I understand your point about Tesla being worried about potential S/X buyers reserving a Model 3 instead.

However, I have another potential thought maybe we here in the forum can discuss if it makes sense.

My thought is this.....

I don't know how much in actual to-the-point dollars that Tesla makes on the Model S/X. However I would assume its a very nice dollar.

Now, I wonder how much Tesla is going to make on the sell of each Model 3. I would speculate that its significantly less.

In other words.......The Model S's P100D's price of over $150K compared to the price of the base Model 3 of $35K.

Question: If you owned Tesla....which car would you want to sell if you had a choice? IMHO there is absolutely no way on earth that the P100D costs over $150K to make.

The price point of the Model S/X is so much higher. I wonder if Tesla feels that the making of the Model 3 will eat into S/X sales to the point where Tesla will have to claim even more losses as they have been selling Model S/X's like hotcakes while making a large profit compared to the profit they are going to make with the Model 3.

Just a thought so don't crucify me.

No crucifying here! I thought the goal for Model 3 gross margin was above 20%. For Model S, I believe he said on the call it's 27% (please correct me if I'm wrong). Model 3 will obviously take awhile to get there, as he said before, but 20% would be an amazing margin on a car. I think Ford/Chevy/etc make a lot less, especially once you cut in the dealer. I'm sure the P100D has a ridiculously high margin, since it's just a fancier inverter added to the 100D.

 

[Garlan Garner]

No crucifying here! I thought the goal for Model 3 gross margin was above 20%. For Model S, I believe he said on the call it's 27% (please correct me if I'm wrong). Model 3 will obviously take awhile to get there, as he said before, but 20% would be an amazing margin on a car. I think Ford/Chevy/etc make a lot less, especially once you cut in the dealer. I'm sure the P100D has a ridiculously high margin, since it's just a fancier inverter added to the 100D.

I hear what you are saying.

Even with those numbers I can't see how they are making 20% on a 35K car.

I can see how there is a 27% markup on the Model S at double the price of a Model 3.

 

[zenmaster]

No crucifying here! I thought the goal for Model 3 gross margin was above 20%. For Model S, I believe he said on the call it's 27% (please correct me if I'm wrong). Model 3 will obviously take awhile to get there, as he said before, but 20% would be an amazing margin on a car. I think Ford/Chevy/etc make a lot less, especially once you cut in the dealer. I'm sure the P100D has a ridiculously high margin, since it's just a fancier inverter added to the 100D.

Musk wants 25% gross margin on the Model 3.
Telsa is already getting roughly 22% on the Model S.

 

[Garlan Garner]

Musk wants 25% gross margin on the Model 3.
Telsa is already getting roughly 22% on the Model S.

There is absolutely no way he's going to get 25% on the Model 3.

$7K per car? 2.8Billion@400K reservations ? Good luck with that Tesla. I just don't see that.

 

[S3XY]

I hear what you are saying.

Even with those numbers I can't see how they are making 20% on a 35K car.

I can see how there is a 27% markup on the Model S at double the price of a Model 3.

I'm sure the 20% he states is the average margin he expects for all Model 3's sold. It doesn't mean that every car sold will make 20%. The higher optioned cars will make more than that and the base ones will make less.

 

[Garlan Garner]

I'm sure the 20% he states is the average margin he expects for all Model 3's sold. It doesn't mean that every car sold will make 20%. The higher optioned cars will make more than that and the base ones will make less.

I suppose we will see in about 6 months as they start selling them.

 

[S3XY]

I suppose we will see in about 6 months as they start selling them.

It's going to take longer than that to find out. In 6 months there probably won't be any AWD's being sold yet and there definitely won't be any P's. These will be the configurations that will push the margins up.

 

[Garlan Garner]

It's going to take longer than that to find out. In 6 months there probably won't be any AWD's being sold yet and there definitely won't be any P's. These will be the configurations that will push the margins up.

I'm just wondering what the margins are with any version of the Model 3. It doesn't matter to me which version Tesla uses.

 

[JeffK]

I'm just wondering what the margins are with any version of the Model 3. It doesn't matter to me which version Tesla uses.

The article on Electrek Tesla’s gross margin on the Model 3 could be a game changer in the auto industry
said that at least one analyst predicts margins around 25%

I bet we will see AWD in six months... Elon predicted 6-9 months from March. This means Sept - Dec timeframe.
I'm not sure how many people from March 31st, 2016 are going to want AWD, but the tweet:

Seems like they could have produced a significant quantity of AWD models by the end of Dec.

 

[gregincal]

I am in the exact same boat. However, once the specs of the Model 3 are released, if my senses aren't aroused, I'll just pony up and get a P100D Model S.

Drop the P off the Model S and that's me. I'll have had my Model S for 5 years come January and am ready for a new car around then. I have a day 1 Model 3 reservation and have specced out what Model S I might order. At this stage I'm just waiting to see a final Model 3 in person to decide between them.

 

[Garlan Garner]

Drop the P off the Model S and that's me. I'll have had my Model S for 5 years come January and am ready for a new car around then. I have a day 1 Model 3 reservation and have specced out what Model S I might order. At this stage I'm just waiting to see a final Model 3 in person to decide between them.

I'm in for all of the letters and the highest number.

Will they have a P7000DD? If so...I would order it.

 

[JeffK]

Will they have a P7000DD?

All I can imagine right now is an old Nikon P7000 camera and a bra...

 

[david_42]

Anyone who expected a $35,000 car to be better than a $65,000 car was fooling themselves. Musk promised the best car in its price range, not the best car ever built. The only way the Model 3 beats the Model S is affordability.

 

[JeffK]

Anyone who expected a $35,000 car to be better than a $65,000 car was fooling themselves. Musk promised the best car in its price range, not the best car ever built. The only way the Model 3 beats the Model S is affordability.

I'd expect the Model 3 to be better built than those first Model Ss and Xs off the line... you know with tighter tolerances and less part failures.