Shouldn't the "Gen3" car really have come before the Model X?

[carrerascott]

I understand that pushing the Gen3 out means Tesla should have more working capital, and learn more from the S -- but putting the model X in the mix, IMHO, might not be the best decision. I'm only slightly interested in the X -- until we know price/range/etc it's hard to know. But assuming it's a similar price range and driving range to the S, I will likely pass -- as will many others. Will the X be the best SUV out there as the S is probably the best sedan out there? I kind of doubt it. And $100k for a utility vehicle... sure there are some out there, but not sure how big that market is.

Yet if the next car was a smaller 4 door, 5 seater, topping out at $60k (starting at $35-40k) -- I would have at least a reservation down for sure. I know that's what my wife wants. You know it would be fast. It could outperform most smaller sedans in that price range. Maybe have a coupe and a convertible, too. Wow.

I'm just not sold on the idea that the X will be a huge success. Maybe I'm wrong. I just hope if the X doesn't do well, it doesn't kill the company before the Gen3 "smaller/cheaper model S" comes out...

Just my thoughts...

 

[ElSupreme]

The real reason why the X is on the way is it is such a small cost to develop. It is based on the S platform, so no battery development needed. The RWD version will be the same drive train wise as the Model S. The suspension will be mostly the same. The drive software, and interface will also be mostly the same. It is just much easier, faster, and cheaper to put a different body onto an existing car platform. The Gen III vehicle will require much much more Engineering and testing than a Model X.

 

[vfx]

Making variants (SUV, Truck, Convertible. etc.) on an existing platform is the most cost effective way of producing "new" products.

The SUV is the largest selling segment. They are targeting women on X sales.

 

[carrerascott]

True. I just don't know what the market is for a $100k semi-capable SUV. Hopefully Tesla knows. I guess it would compete with the Porsche Cayenne Turbo as opposed to a true utility vehicle. (More Sport than Utility)

The real reason why the X is on the way is it is such a small cost to develop. It is based on the S platform, so no battery development needed. The RWD version will be the same drive train wise as the Model S. The suspension will be mostly the same. The drive software, and interface will also be mostly the same. It is just much easier, faster, and cheaper to put a different body onto an existing car platform. The Gen III vehicle will require much much more Engineering and testing than a Model X.

 

[ElSupreme]

It should also be brought up that the Model X is supposed to be built on the same line as the Model S. So no serious CAPEX to start production. I would hate to know what equipment costs would be for a 100k/year auto line would be.

 

[Zzzz...]

I understand that pushing the Gen3 out means Tesla should have more working capital, and learn more from the S -- but putting the model X in the mix, IMHO, might not be the best decision. I'm only slightly interested in the X -- until we know price/range/etc it's hard to know. But assuming it's a similar price range and driving range to the S, I will likely pass -- as will many others. Will the X be the best SUV out there as the S is probably the best sedan out there? I kind of doubt it. And $100k for a utility vehicle... sure there are some out there, but not sure how big that market is.

Yet if the next car was a smaller 4 door, 5 seater, topping out at $60k (starting at $35-40k) -- I would have at least a reservation down for sure. I know that's what my wife wants. You know it would be fast. It could outperform most smaller sedans in that price range. Maybe have a coupe and a convertible, too. Wow.

I'm just not sold on the idea that the X will be a huge success. Maybe I'm wrong. I just hope if the X doesn't do well, it doesn't kill the company before the Gen3 "smaller/cheaper model S" comes out...

Just my thoughts...

1) X uses same drivetrain/battery packs as S. So it is much easier/cheaper to launch.

2) Tesla need time to develop a lot of extra tech. There are claims on this forum that ppl would not buy an S because of lack of adaptive cruise control, blind spot detection, park assist etc. etc. From non-EV crowd point of view, $70k car should be at least equipped on par with cars that come with $25k pricetag.

3) Supply chain should be expanded. It is not a matter of just assembly plant. Getting 50k units a year would require substantial investments into supplier tooling, expansion of supply chain. Li-ion cells for example Tesla gets from two suppliers. But they might need to qualify more, or/and probably let current battery cells producers to expand their factories. Or build a new ones.
So it is much easier to get production rate to 50k -70k units per year first then jump right away to 200k.

4) AWD option that part of X development would be very useful/popular for S in Canadian/Norwegian markets. And not only there. More money/better gross margins/more financial stability.

 

[thelastdeadmouse]

I think it wouldn't have been possible to produce the Gen 3 successfully imediately after the Model S for a number of reasons.

- Capital investment - building a car that will be produced in 3-5 times the quantities of the Model S will likely also come with tooling and productions costs significantly higher than the Model S as well, and it will probably take a few years of profitable sales to get to that point.

- Brand Recognition - Selling 100,000 units a year is going to require much more brand recognition amoungst the general public and trust in the brand. 25k Model S's and 100k Gen III's would put them at about the same annual sales as Porsche and without nearly the brand recognition.

- Waiting on Tech - The more cars Tesla produces and the longer they wait, the better and cheaper batteries, motors, controlers, ect get in the meantime.

Producing the Gen III isn't really possible for another 3-4 years anyway, and producing a Model X helps with some of these issues in the meantime.

 

[carrerascott]

OK gotcha. Here's hoping the X is a success then!

 

[Raffy.Roma]

Of course everybody would like Gen III to come as soon as possible but as other people wrote the X has got to come first. And I think that the experience which will be done on AWD with the X will be very useful both for Model S and Gen III.

 

[Al Sherman]

They are targeting women on X sales.

My wife watched the Model X rollout video which I think was under 20 minutes. She sat quietly, and when it was over she turned to me and said "I want one of those."

 

[Doug_G]

The reason is simple: battery technology isn't quite there yet.

 

[Rodolfo Paiz]

Why do so many people keep referring to the Model S and the Model X as $100K cars? That's simply not true in the general usage of the terms: it is possible to configure these cars to reach a $100K price point, but that's like calling a BMW 5-series sedan a $100K car because a tricked-out M5 can go as high as $107K. The reality is that both the 5-series and the Teslas have base pricing in the $50's, and will sell for average pricing in the $60's or $70's. That's how they should be compared. And while a $100K SUV is not going to sell very many copies, a car that can be treated as either a "luxury minivan" or "luxury SUV" depending on the buyer's persective and costs -- on average -- between $60K and $80K has quite a market. It competes with product offerings from every major manufacturer and all of those cars are currently selling quite well.

So we know it's got a market opportunity open to it. And the costs of developing the Model X, as others have mentioned, are very low compared to the costs of developing Gen III. So it makes perfect sense for Tesla to make that move. The technology of today can create a Gen III car, but not at the price point Tesla thinks they need to hit. More time will allow for battery technology (read, energy density) to improve and for costs to come down.

My better half reacted exactly like Al's wife: she watched the rollout video for the X and said "The sedan looks cool and all, but that is something I want to reserve."

 

[Volker.Berlin]

The reality is that both the 5-series and the Teslas have base pricing in the $50's, and will sell for average pricing in the $60's or $70's. That's how they should be compared. And while a $100K SUV is not going to sell very many copies, a car that can be treated as either a "luxury minivan" or "luxury SUV" depending on the buyer's persective and costs -- on average -- between $60K and $80K has quite a market.

To be honest, I don't know what "the reality" is. It would indeed be interesting to know what the average price point for a Model S is (or will be for the Model X). There have been some guesstimates to that end, based on a variety of observations, including the numbers from the latest quarterly report. Most seem to agree that currently the average price for Model S is far north of 80k, indeed more like 95k. The average price is certainly going to come down a little as the early adopters can be assumed to have a tendency to order more options, including Signature and Performance flavors, than the general public. Personally, I doubt that it will come down as low as you suggest, I expect a long term average in the order of 80k. 40 kWh and 60 kWh variants are clearly in the minority.

As for the Model X, personally I expect it to average even more than the Model S. To achieve the same range as the Model S, it will need an even larger battery. The 40 kWh its ruled out for the Model X, and the 60 kWh is questionable. That puts the 85 kWh into the base model position, and a battery that archives 300 miles in a Model X will likely be 10k on top of that. The Model S is designed to compete with the Q7, and that will also be its price range and target audience...

 

[ElSupreme]

Most seem to agree that currently the average price for Model S is far north of 80k, indeed more like 95k. The average price is certainly going to come down a little as the early adopters can be assumed to have a tendency to order more options, including Signature and Performance flavors, than the general public. Personally, I doubt that it will come down as low as you suggest, I expect a long term average in the order of 80k. 40 kWh and 60 kWh variants are clearly in the minority.

Yes this may be true. But operational costs are also much lower than your typical $60,000 car. After tax breaks I feel that my $86k (take $12.5k off for tax breaks and get $74k) compares favorably with close to base 528 at around $55k. I drive ~20,000 miles a year and save about $3.5k a year. Over about 5 years I am close to break even. Over 8 years I am way out ahead.

Tesla (and Nissan, and everyone else) is going to have a HUGE hurdle about pricing. People see a LEAF price and immediately say what a waste. But operating costs are so much less. Leasing can really help this, but there is going to have to be an education campaign on TCO when EVs are really trying to compete.

And I wouldn't even think twice about a 538 after driving my mom's last week. No comparison between my Tesla and her Bimmer. The Model S is in a whole other league. Not to mention that $70 tank was brutal!

 

[carrerascott]

Why do so many people keep referring to the Model S and the Model X as $100K cars?

Personally I couldn't live with the 40kwh car and the 60 would be very limiting. The 85 is just right, and really not enough (Going roundtrip to DC and back is pushing the limit for us). On the east coast, with no superchargers, you're looking at an $80k car with no options. $90k with options. $100k for the top of the line. So, $80-90k car. There is a market, sure. But the market for the $50k car is MUCH bigger.

Reality: Until there are superchargers all over, the car will be a relatively niche product. For Californians, you are seeing a different world than everyone else. You could probably live with a 40kwh car since there are SC's around. On the east coast, you'd be toast unless you used your $60k+ car as solely a commuter or an "around town car."

 

[ChadS]

you'd be toast unless you used your $60k+ car as solely a commuter or an "around town car."

This gets brought up a lot, but I fail to see why it's an issue. It doesn't work for everybody, but it does for most - commuting and around town is where most driving is done.

Sure, a 40kWh car won't work for everybody; but Tesla can't make nearly enough cars for everybody so that point is moot. Even if all they made was 40kWh cars, they would just have to find enough two-car families that could drive the BEV most of the time, but take the gas car on long trips.

Families already do that all the time; one person will drive the Miata back and forth to work, the gym and friends' houses, and they will both take the Miata out to dinner or on a weekend pleasure drive; but if they have to go to Costco or drive to the other coast, they take the minivan/SUV/station wagon. It's really easy to do.

My wife and I both have long-range BEVs now, but for years we lived with a short-range BEV and it was absolutely no issue at all. 60% of US households have multiple cars AND a garage; the vast majority of them could trade one of their cars for a short-range BEV with no issue. Although I do agree that convincing them that it's easy to do is another matter; and that is yet another reason why putting off Gen3 while they sell more limited models now makes sense. It takes time to get people used to the idea of seeing other people making an EV work and to realize that they can do it, too.

 

[ElSupreme]

On the east coast, you'd be toast unless you used your $60k+ car as solely a commuter or an "around town car."

Remember the 40kWh won't be able to Supercharge so it doesn't matter where it is.

This gets brought up a lot, but I fail to see why it's an issue. It doesn't work for everybody, but it does for most - commuting and around town is where most driving is done.

Exactly. I took logs of over a year of driving and only once did I drive more than 110 miles in a single day, and even the 85kWh car wasn't going to be fun on that trip. And most of the half dozen or so 100 mile days I had parking in my garage time. An "around town car" is really all I need. And really what about 80% of the country needs. Sure some of the larger cities you run into needing more range even for a 'around town car'. This is the only reason I don't have a LEAF. But the 40kWh could pretty much handle any size city.

I have in about 8 weeks of ownership (1 on vacation) have driven over 40kWh twice. Once just because I could, on a nice drive in the mountains. The other on 3 trips across town on a single day (across town is 40 miles in Atlanta) and I decided driving 90 was the best way to do it. I also passed on some daytime charging at my house that day. I guess my parking at the airport was also over 40kWh due to vampire load. But if they have sleep mode done before 40kWh deliveries it would be a moot point, and I also could have parked at a 120V outlet if I wanted to pony up for 'covered' parking at the lot I used.

 

[Rodolfo Paiz]

To be honest, I don't know what "the reality" is.

My primary point is that people talk about the BMW 5-series (or any other ICE series) as "starting in the low 50's" for example, even though a fully-loaded fire-breathing performance variant goes for well over $100K. But then they talk about the Model S, which has the exact same pricing characteristics, as "a $100K car." That comparison is both factually inaccurate and perceptually skewed in favor of the ICE.

Whatever the average selling price actually ends up being is another matter. But again, and as someone already said, for most people even the 40 kWh car is just-fine-thank-you in terms of range. It's always true that there are some who need more, but statistically they are less than 10% of the population.

- - - Updated - - -

Personally I couldn't live with the 40kwh car and the 60 would be very limiting. The 85 is just right, and really not enough (Going roundtrip to DC and back is pushing the limit for us). On the east coast, with no superchargers, you're looking at an $80k car with no options. $90k with options. $100k for the top of the line. So, $80-90k car. There is a market, sure. But the market for the $50k car is MUCH bigger.

Mostly agreed... but. First, Tesla isn't going after a "much bigger market", they only need 20K to 25K Model S sales each year. And then also, comparing even the 40 or 60 kWh Model S to the BMW line, you can't fairly compare the Tesla to the 528 since even the slowest Tesla offers performance superior to what the 535 or 540 can deliver. If you care about performance and are in the 95%+ who don't drive over 100 miles per day and/or have a second car for long-range trips, then the Model S is a screaming deal compared to a BMW.

 

[wraithnot]

True. I just don't know what the market is for a $100k semi-capable SUV. Hopefully Tesla knows. I guess it would compete with the Porsche Cayenne Turbo as opposed to a true utility vehicle. (More Sport than Utility)

At least in California, the market for luxury SUVs is huge. Build a luxury SUV that has access to the carpool lane and that doesn't require stopping at seedy gas stations every couple of days and you will have a hit on your hands.

 

[brianman]

Why do so many people keep referring to the Model S and the Model X as $100K cars?

It's simple.

Aggressive supporters: "It starts around $50K." (No additional details.)
Aggressive rejectors: "It's $100k." (No additional details.)

People in the middle offer more specifics like the battery choices and the tax-related part of the equation.