tesla blue star

[brianman]

Interesting though that it wasn't accurate with the X.

Yah, my point about the X was to hint that projections are not final by definition.

As far as the particular issue (dropping 40 kWh), I think they learned some things (and are still paying in PR) about 40 kWh with S and made (IMO) a less-painful-longterm choice for X based on that. Of note is that the "similar to the Model S" part is essentially retained (same 60kWh and 85kWh battery options, with a reportedly slight decay in expected range),

 

[AnOutsider]

Lastly it has been suggested in another thread that Tesla do a Acura/Honda Infiniti/Nissan low end brand. I suggested it be called Nikola though Elon will probably call in Dragon Falcon or Eco X.

Personally, I think this option is best. Though it's easier to be a luxury maker and sell downmarket than it is to be a low-end maker and sell up-market (VW -> Phaeton, Hyundai -> Equus), I still think they should rebrand for specific applications like commercial/utility vehicles. I can't see them going much lower than bluestar in the market though, so they shouldn't have an issue there (BMW sits down in the 30k range as well with no problem).

 

[ElSupreme]

Just to quickly add. As with the Model X (and given the situation with the SuperCharger) I expect no 40kWh model. I think that a 60kWh model will be available at the $30k price (after the tax credit), with a range of 240-250 miles (given the smaller size). Seems like a lot to deliver, but I think this has to be their primary aim, and they are smart enough and capable enough to do this. All else will be secondary. 200,000 units a year is no small number.

I really don't see this as possible. I imagine a 60kWh pack is costing Tesla $10,000 minimum, I bet it is closer to $15,000. And that is their main warranty part, so they have to build in replacement cost in their sell cost. I see batteries droping in cost, and increasing in usability in the future. But going below $40,000 (pre rebate) is going to be tough, since it seems (espically in the Model X no 40kWh battery light) that Tesla wants all their offerings to be 100+ usable miles.

I think Nissan is selling Leafs very close to cost, because they are getting valuable R+D and driving data out of the program. And their scale is pretty large, and they already have supplier and sales systems in place. If you want to give 50% more range, and make a real profit you are going to be above $40,000 for quite some time.

What Tesla needs to do, as well as Nissan is market the car as 'prepaying' (or rolled into your monthly bill) gasoline costs. My estimated cost to fuel my GTI is ~$3,500 a year. My costs for my tesla are about $350 a year. I will save over $15,000 over my 5 year payments. Once this gets accepted, or promoted, people can pay $40,000 for a car rather than $22,000 if they plan on having it for more than 100,000 miles. It is more an education and perception problem than anything else. After 100,000 miles you need a new battery, which you can think of 'prepaying' for another 100,000 miles worth of fuel.

 

[EVNow]

I really don't see this as possible. I imagine a 60kWh pack is costing Tesla $10,000 minimum, I bet it is closer to $15,000. And that is their main warranty part, so they have to build in replacement cost in their sell cost. I see batteries droping in cost, and increasing in usability in the future. But going below $40,000 (pre rebate) is going to be tough, since it seems (espically in the Model X no 40kWh battery light) that Tesla wants all their offerings to be 100+ usable miles.

Let us say current price is $500 / kWh. BlueStar is only 3 years away - so, at best we get to $300/kWh. That puts 60kWh at nearly $20k. It would be very difficult to sell a car for $40k given that cost. A 40 kWh battery at $12k is a better proposition.

What Tesla needs to do, as well as Nissan is market the car as 'prepaying' (or rolled into your monthly bill) gasoline costs. My estimated cost to fuel my GTI is ~$3,500 a year. My costs for my tesla are about $350 a year. I will save over $15,000 over my 5 year payments. Once this gets accepted, or promoted, people can pay $40,000 for a car rather than $22,000 if they plan on having it for more than 100,000 miles. It is more an education and perception problem than anything else. After 100,000 miles you need a new battery, which you can think of 'prepaying' for another 100,000 miles worth of fuel.

You are not assigning any time value to money. It doesn't work that way. In the US people don't like paying a lot upfront (see the cell phone market).

Renault is trying that in a different way - buy the car, lease the battery + electricity. I'm not sure the idea will work well in the US - where people have set ideas about "owning" a car.

 

[ElSupreme]

Let us say current price is $500 / kWh. BlueStar is only 3 years away - so, at best we get to $300/kWh. That puts 60kWh at nearly $20k. It would be very difficult to sell a car for $40k given that cost. A 40 kWh battery at $12k is a better proposition.

I completely agree with this. And I think those numbers are pretty optimistic. I was responding about 60kWh car costing $30k. I don't think Tesla will go below the same 160 miles number they have for the Model S.

You are not assigning any time value to money. It doesn't work that way. In the US people don't like paying a lot upfront (see the cell phone market).

I agree with this statement dead on also. There is a difference. I don't think many people pay cash for their cars. Especially new cars. I am financing my Model S, so other than perception (and insurance cost) what is the difference between $350 a month on my AmEx for fuel vs $300 extra on my car payment, and $30 on my power bill?

Your typical cash buyers will be off put, but then again they tend to have a handle on their finances (or are loaded and cost isn't an exclusion) and can take the information and figuer out if it is worth financing their fuel costs.

The only thing this doesn't take into consideration is insurance costs, and a banks perception of extra purchasing power someone with an EV has over an ICE due to maintenance/fuel costs.

EDIT: Well I guess I lose out on ~500 AmEx points a month.

 

[Robert.Boston]

That Company Overview cited earlier also makes clear that the target market for Gen III is against premium sedans from BMW, Audi, etc.; they don't name models, but presumably they are setting out to compete with the BMW 3, Audi A4, MB C-class, Lexus IS and ES, and Infiniti G. This band gives them some head-room on price above $30k.

 

[EVNow]

I agree with this statement dead on also. There is a difference. I don't think many people pay cash for their cars. Especially new cars. I am financing my Model S, so other than perception (and insurance cost) what is the difference between $350 a month on my AmEx for fuel vs $300 extra on my car payment, and $30 on my power bill?

At $4/galon & 30 mpg - we need to put in 2,600 miles a month (i.e. 31,000 a year) to spend $350 a month on gas.

A typical car would be driven for about 1,000 miles a month or about $150 a month of fuel. So, we are looking at about $120 more for fuel in an ICE. Including insurance we are looking at $100 extra in monthly payment to break-even with an ICE. That is a difference of 5,000 in the price of the car at 5% interest rate.

So, a nice compact car can be about $25k after tax credit to break-even with a $20k ICE. Incidentally Leaf's was priced at $25k last year after tax credit.

 

[dsm363]

To get to the sub $30,000 price point people want along with a 40 kWh pack or bigger, Tesla would have to greatly cheapen the interior with extensive use of plastics, cloth interior...etc to even try and make a decent profit on each car. I don't think they're willing to do that at this point.

 

[EVNow]

That Company Overview cited earlier also makes clear that the target market for Gen III is against premium sedans from BMW, Audi, etc.; they don't name models, but presumably they are setting out to compete with the BMW 3, Audi A4, MB C-class, Lexus IS and ES, and Infiniti G. This band gives them some head-room on price above $30k.

But how do you get to half a million cars ? BMW sells a total of about 200k cars/SUVs a year in the US.

I think BlueStar will be priced about the same as BMW 3 series like you say - but that 200k per year volume is unrealistic.

 

[Norbert]

A typical car would be driven for about 1,000 miles a month or about $150 a month of fuel. So, we are looking at about $120 more for fuel in an ICE. Including insurance we are looking at $100 extra in monthly payment to break-even with an ICE. That is a difference of 5,000 in the price of the car at 5% interest rate.

So, a nice compact car can be about $25k after tax credit to break-even with a $20k ICE. Incidentally Leaf's was priced at $25k last year after tax credit.

The Leaf isn't a very good measurement since a) it is not what Bluestar will compete with, it competes with BMW 3-series., and b) the Leaf, as far as we know, doesn't make profit.

Saved cost of $120 per month is about $1400 per year or $14,000 over 10 years. I don't quite see how an "interest rate" would reduce that to $5k, given that most of us expect the price of gas to go up over time.

 

[Lloyd]

But how do you get to half a million cars ? BMW sells a total of about 200k cars/SUVs a year in the US.

I think BlueStar will be priced about the same as BMW 3 series like you say - but that 200k per year volume is unrealistic.

Sell cars to China!

 

[Norbert]

Sell cars to China!

Tesla's stated goal is 200,000 per year but that doesn't mean they have to start with 200,000. They can start with less and get to 200k as battery prices come down. They only need to engineer it so that they can reach that price point eventually.

 

[ElSupreme]

At $4/galon & 30 mpg - we need to put in 2,600 miles a month (i.e. 31,000 a year) to spend $350 a month on gas.

A typical car would be driven for about 1,000 miles a month or about $150 a month of fuel. So, we are looking at about $120 more for fuel in an ICE. Including insurance we are looking at $100 extra in monthly payment to break-even with an ICE. That is a difference of 5,000 in the price of the car at 5% interest rate.

So, a nice compact car can be about $25k after tax credit to break-even with a $20k ICE. Incidentally Leaf's was priced at $25k last year after tax credit.

Right I always forget I drive a whole lot. My whole family does so it doesn't ever stick out in my head. I have driven 1,600 miles in the last 30 days (no abnormal drives). And spent $270 in fuel. Looking back on 2011, I spent just shy of $300 a month in fuel ($3,500 last year) so my $350 number in my head is high. But given 1,600 miles in a month I will almost get to 100,000 in 5 years. So all my numbers I was equating 5 years with 100,000 miles, which is not good. I will be able to discount $15,000 off the purchase price.

When you buy the EV you prepay for ~100,000 miles of fuel. I would guess this is a good number for battery life in the 25-50kWh size. Bigger batteries will last longer but really are more a convenience item. For me that 100,000 miles is almost fully taken care of in my 5 year payment system so is a non issue. For someone who takes 8-9 years to get there it is really a different story. But these people will be needing Leaf type range, and I really think Tesla won't make a car with less range than the 40kWh Model S, and while I don't think there will be equivalent pricing between a $25k ICE and $25k EV until the EV production volume jumps 2-3 orders of magnitude, and it still may never make it.

The auto industry is so good at lowering cost. Because of this ICE and transmission are stupidly cheap and reliable. It will take the same to get induction motor production cost down, and inverter cost down. Purely material wise the induction motor and inverter are going to cost more. After a few generations, and hundreds of thousands of units produced, reliability will get so good where the industry can cut their margins and not have to worry about huge warranty replacement costs. I don't think people realize this 'insurance' cost on things. The only thing that can lower that cost is units produced and ever decreasing defective units.

 

[meepz11]

Phil LeBeau's Behind The Wheel - CNBC

J.P. Morgan’s Patel believes, “Tesla’s battery pack costs would probably fall prospectively about 25 percent in each of the next five years [i.e., to around $225/kWh in five years from today].” Patel adds the drop in costs could happen even sooner. He writes, “We suspect this timeframe may even prove conservative, as we have recently sensed that Tesla has already identified many of the technical changes that it plans to make to its current generation battery technology (i.e., that to be used in the S) to be able to create a 400-mile range capable vehicle.”

Given the increased volume, etc and Tesla's focus on driving down the cost of their battery packs, I would think that by the time of production they will reach this target. So at $225/kWh that is $13500. At $37500 before the tax credit, that leaves Tesla $24000 to build a decent car. I must confess I am not sure if this is a reasonable amount or not, but judging by the ICE cars on the road (in a similar category) that retail for $24000 new I would suggest it is. Remember Tesla is still a startup, that knows how to stretch a dollar and still get a phenomenal result.

If Tesla launches with a 160 mile range vehicle in a few years (with Nissan and everyone else being in the same ball park) they won't get anything like the reception they want, or need to sell the volume and increase brand awareness. I think they will be willing to sell these VERY close to break even early on for a number of reasons. First, they will need to knock this out of the park to sell 200k vehicles, a car that is merely $10,000 cheaper then the base Model S won't sell anything like those numbers. Second, it will cement them as the leader in the electric revolution in the minds of the public and put them at the forefront of the new automotive industry. Thirdly the massive increased exposure they will receive if they do knock this out of the park (think of all the press, buzz, etc) will have a massive knock on effect to the Model S, and Model X vehicles in terms of sales.

This will be the vehicle that can either make Tesla a massive player (a "real" car maker) in the new automotive industry if they knock it out of the park, or merely a player dwarfed by the current car giants EV programs. Tesla has done a lot of things that are not easy, and that people thought impossible. Given all that is on the line for them, and the volumes they are talking about, I think they will deliver once again. And mostly, I think what I suggested will prove feasible.

 

[ElSupreme]

Phil LeBeau's Behind The Wheel - CNBC

J.P. Morgan’s Patel believes, “Tesla’s battery pack costs would probably fall prospectively about 25 percent in each of the next five years [i.e., to around $225/kWh in five years from today].” Patel adds the drop in costs could happen even sooner. He writes, “We suspect this timeframe may even prove conservative, as we have recently sensed that Tesla has already identified many of the technical changes that it plans to make to its current generation battery technology (i.e., that to be used in the S) to be able to create a 400-mile range capable vehicle.”

I really hope that is possible. But that means in 5 years today a current pack costing $10,000 would cost $2,373 in 5 years. I just don't buy it. I think we will probably be in the $6,000-$7,000 range at best (~8% drop for 5 years straight). It isn't like Li-Ions are new. A lot of production cost is already removed. Volume reductions at this point will be minimal. I actually think, not sure, that most of battery improvements right now are cell architecture (getting more complex for material efficiency, not simpler easier to manufacture) and cell chemistry.

I hope I am wrong.

 

[meepz11]

I really hope that is possible. But that means in 5 years today a current pack costing $10,000 would cost $2,373 in 5 years. I just don't buy it. I think we will probably be in the $6,000-$7,000 range at best (~8% drop for 5 years straight). It isn't like Li-Ions are new. A lot of production cost is already removed. Volume reductions at this point will be minimal. I actually think, not sure, that most of battery improvements right now are cell architecture (getting more complex for material efficiency, not simpler easier to manufacture) and cell chemistry.

I hope I am wrong.

I hope I am wrong.

As with the original thread that bought this up, I should caution that the percentages (25% per year) he mentions actually look like a typo or poor choice of language. The important point is the price per kWh target which people believed to be plausible/accurate.

 

[ElSupreme]

As with the original thread that bought this up, I should caution that the percentages (25% per year) he mentions actually look like a typo or poor choice of language. The important point is the price per kWh target which people believed to be plausible/accurate.

Using your numbers from earlier I think it is close.

$15k for Car body, interior, suspension, chassis.
$6.5 k for motor, inverter.
$12.5k for battery (~40kWh for ~200 ideal miles)
$2k for warranty 'insurance'

That equals $36k before profit. I don't think Tesla can get into the high volume low margin market before they are selling 30-40k cars a year. They won't be producing enough to properly scale up. There will be labor problems, supplier problems, customer service problems, maintenance problems, loan problems.

I home they can make it $40k or less before any tax breaks. If the Federal $7,500 break is still in place I will put money on the base price being either $42,400 or $47,400 before tax break!

If they go lower they will lose their margins, and start competing with Nissan, maybe Ford, probably Toyota.

 

[dsm363]

I think a $50,000 well equiped car with a 200 mile ideal range would be a reasonable target. Future model years can always come down in price as Tesla ramps up and is able to decrease their cost while protecting their profit. Of course when the $7,500 federal tax credit is close to ending, they'll have to figure out what to do with their pricing.

 

[WhiteKnight]

2012 BMW 328i starts at $34,900 - just sayin!

 

[Norbert]

Hmmm, that is 300k units per year. Ok, that enables them for one Real Mass Market model in $25k class.
Thanks for the info

IIRC Tesla mentioned 550,000 per year as the nominal capacity of the Fremont factory itself.