Prediction

[Carl_Drogo]

Tesla’s mid-range Model 3 could actually just become it's standard range car, with a bit of time and some production cost efficiencies.

Here's my logic: Tesla has been promising a 220 mile "standard range" Model 3. In the meantime they recently introduced the "mid-range" version at 260 miles. But historically they've also introduced longer range cars every couple of years (maybe less) by introducing bigger / better batteries, better software, more efficient motors, etc. They started delivering the Model 3 in July 2017 and I believe Elon recently stated in the Q3 earnings call that the "standard range" $35K version is supposed to be available in about six months (or that's their goal). By that time (assuming some buffer for "Elon time") it will be almost two years since the long range Model 3 first production rolled out at 310 miles. It might be due for an increase in range at that point. If Tesla could deliver an extra 10% of range and bump it up to 340 -- or even just a 5% bump to 325, then it might make sense for them to just rename the "mid range" to "standard range", cut costs (no more premium interior and also more efficient production & margins), and sell it for $35K.

Tesla doesn't like offering too many versions of their car and they already have the "mid range" battery in production (as well as the long range battery). So it might make sense for them to just to keep making it rather than introducing a third (smaller) size battery... or perhaps they could just software-lock the mid-range battery to differentiate between standard-range and mid-range. But either way, I'm predicting they don't make an even smaller battery six months from now.

 

[insaneoctane]

I doubt it. Many agree that the $35K Tesla is going to be hard to turn much of any profit on (others think it's impossible). Either way, to approach the average margins Tesla is after the $35K Tesla will NOT contain one single 2170 battery more than necessary.

 

[Carl_Drogo]

You may well be right. I'm not all that confident in my own prediction . It definitely has some holes. But I thought I'd throw it out there as a possibility / brainstorm.

 

[ewoodrick]

I'm not sure why everybody reads so much into the mid range car. It is quite obvious, the only reason why it exists. Take your managers into a conference room with the realization that the RWD line is producing more cars than are being bought. How do you better utilize that line and sell more cars? Drop the price. How do you drop that price? If we rework anything, that's going to cost money and time to do the rework. One manager in the corner speaks up "Put fewer batteries in the pack" and every goes "duh, why didn't we think of that"

The MR model is just a quick attempt to reduce the cost to get more RWD models out by the end of the year, and before the non-premium version becomes available. The non-premium car is a big item for Tesla, it was Elon's promise, and it has the opportunity to sale a lot of cars. It will be here, there's just a lot of fine tuning needed to get production in the position to stamp these out.