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The problem is making money at $35k. For that, they need to strip out everything. Small battery as planned and no PUP. Then they need to hope not too may take this option and go for options - PUP, Dual etc.

The cells really aren't that expensive. The difference between LR and SR cells may cost them ~$1k. Tesla may decide to simply focus on getting their production costs down by that extra $1k and making MR the base.

It's merely a possibility. Anything but a certainty, mind you.
 
I disagree, because actually the large majority of drivers that drive average mileage will be able to realize those savings, with the exception of a few places with mispriced electricity. We also know that Tesla owners tend to increase the mileage they are driving, because the car is fun and the fuel costs are much lower.

So this is not BS, at all: a $43k cost is only $43k if we ignore absolutely every other cost that comes after buying the car. Making buyers aware of the significantly lower total cost of ownership of EVs is an important part of the messaging.

Note how distorted and dishonest advertised ICE fuel use costs are already: if you've ever driven ICE cars that have a chance to compare to Tesla cars in terms of acceleration you'll know that actual ICE fuel use is often much higher than the EPA fuel economy estimates.

Factors the EPA fuel economy figures to not include:
  • with a Tesla car the stop-and-go penalty in heavy traffic is much lower,
  • with a Tesla car the accelerate/decelerate dynamic driving penalty is much lower as well,
  • with a Tesla car the idling/waiting fuel use is much lower as well,
  • with a Tesla car the efficiency of air-conditioning is much better, because it doesn't have to be driven by an inefficient engine.
(Also, as Elon just tweeted in a followup, savings are much higher in certain states - I suspect Tesla is estimating these conservatively.)

So let me play the devil's advocate here:
When Tesla starts selling their long awaited solar roof, the actual order page should list two prices one of which is "0$*".

"* Assuming X number of years of realized electricity savings".

This discussion is not about educating the public about the very real economical advantages of a BEV over an ICE.

This discussion is about misleading and confusing prices on a web-page of an actual, binding contract.

We all here talk about how Tesla is production constrained, so I strongly feel it is a mistake of Tesla to ostensibly attract buyers by displaying an artificially low price and not clearly separate the actual purchasing price and the very real annual savings on the cost of ownership - especially on the page where the customer agrees to enter a binding contract.
 
The cells really aren't that expensive. The difference between LR and SR cells may cost them ~$1k. Tesla may decide to simply focus on getting their production costs down by that extra $1k and making MR the base.

It's merely a possibility. Anything but a certainty, mind you.
I would think that the new battery module is a significant part of the savings to come. Also, Elon would be lying and breaking regulations?
 
I could well imagine that the way Tesla present these projected savings could cause problems with consumer protection regulators in certain European countries.

I mean, when you configure your Model 3, the price incl. the projected savings is presented in a manner that makes it non-trivial to see what exactly will be the actual amount of money to pay upon delivery. Added to that is the lack of clarity of exactly how government subsidies are including in these prices.

I believe I have read everything incl. the small print, yet I cannot see any specification of the actual amount to pay upon delivery for a given configuration. This important amount is different both from the price with and without projected savings (due to the 1K € reservation payment and the 2K € order pre-payment) - and possibly also impacted by the procedure during which any government subsidies are actually realized. Tesla has (naturally) fully deducted any such subsidies from their listed prices, but it is not clear how or when the buyer actually realizes any such subsidy.

This is a backlash that is waiting to happen.

I don't know how much more upfront they could get:

Savings.png

They are right there side-by-side.
 
And it was this trend that got me to wondering if the MR could become the SR. Okay, I'll admit it makes no sense to do the SR as a merely reduced cell-count battery pack (the MR). But if there is any trend to these price cuts the MR would easily be down to $35k (no premium) by mid-year. I've never felt that the MR had legs, it was just so clearly a stop gap.

Hang on a sec.

I think Vad42's on to something here.

What would makes sense to me is to take the above $38k MR-PUP down to $35K with software locked range-reduction. As soon as margins allow. Don't bother with a different battery pack. Keep the battery and production the same. Just like they just did with S.

That said, we know that, presumably before the pack redesign coming out ~this month, a SR's real cost was claimed to be $38,000.

We know there's $1100 or more of cost savings from ending the referral program, that's down to $36,900.

That means there's $1900 of cost that needs to be pulled out to break even on a $35,000 black standard interior car with no EAP or FSD.

Or, there's $400 of cost to pull out to break even on a color, and just loss-lead and production-limit the black cars.

But, if you limit a MR... you get future revenue from upgrades to offset loss-leading even further. And, at $100/kWh, it's, what, $1250ish of extra cost for a MR?
 
Hang on a sec.

I think Vad42's on to something here.



That said, we know that, presumably before the pack redesign coming out ~this month, a SR's real cost was claimed to be $38,000.

We know there's $1100 or more of cost savings from ending the referral program, that's down to $36,900.

That means there's $1900 of cost that needs to be pulled out to break even on a $35,000 black standard interior car with no EAP or FSD.

Or, there's $400 of cost to pull out to break even on a color, and just loss-lead and production-limit the black cars.

But, if you limit a MR... you get future revenue from upgrades to offset loss-leading even further. And, at $100/kWh, it's, what, $1250ish of extra cost for a MR?

The only way I can see Tesla selling the MR at $35k is if they do one of two things:

1) rename it SR

2) introduce the SR at an even lower price point

The MR is the stopgap, the SR was part of the original plan. I could always be surprised, but I would actually be shocked if there was no SR. It might be a re-named MR, have a lower price point, better range, whatever, but I fully expect Tesla to release something named "SR".
 
Nothing wrong with moving down the price - demand curve per se - but if you claim you are production constrained it doesn't fit. If I claim there's enough people to buy 5000/week of $50k + Model 3, why would I drop the price and lose 5 million bucks a week of profit?

Because you’re Elon Musk and your sole purpose in life is to accelerate sustainable transportation, not gouge people and keep your EVs unaffordable. That’s why.

The lower prices get, the more people start to think about switching to an EV. Thinking becomes figuring out at what price it’s possible m. Figuring leads to budgeting and discovering true costs of ownership. And that leads to buying.

If you’re confused about the price reduction, its timing or anything else, you don’t understand Elon Musk or Tesla’s mission. You just don’t get it nor do you understand your fellow human and what will motivate them to change.
 
The only way I can see Tesla selling the MR at $35k is if they do one of two things:

1) rename it SR

2) introduce the SR at an even lower price point

The MR is the stopgap, the SR was part of the original plan. I could always be surprised, but I would actually be shocked if there was no SR. It might be a re-named MR, have a lower price point, better range, whatever, but I fully expect Tesla to release something named "SR".

Note that both Vad42 and I are talking about a software-limited MR being sold as the SR. That is, a MR pack limited to and marketed as SR, just like the new base Model S/X with a 100 kWh pack, and the Model S/X 60/70 with a 75 kWh pack before that, and the Model S 40 with a 60 kWh pack before that.

There's plenty of precedent for Tesla to plan a base model, and actually launch a software-limited mid-range model for the base model customers.

More importantly, charging is a factor. Some people have hypothesized that the claims about Supercharger V3 having both reduced opex and capex will be through needing fewer stalls. If that's the case, maintaining a high charge rate will be necessary to keep both low. That would be an incentive to put derated MR packs in SR cars...
 
I don't know how much more upfront they could get:

View attachment 374919
They are right there side-by-side.

You will have to excuse me, but consumer protection is poorer in the USA, where e.g. a retail store is allowed to display a price excl. VAT. Or maybe it has improved in recent years, but in the EU it has been like that for decades.

Here in the EU we are so dumb that we cannot add the VAT in our heads as we do our shopping, so we are used to higher standards for price information. Standards where there are not two completely different types of prices listed for the same item.

And by those standards, I foresee trouble for Tesla. Trouble that they did not need to get into.

PS. I may have been ranting unfairly about consumer protection. The USA apparently has a Monroney sticker for cars that must display information related to the cost of ownership. To me that seems like the correct context for communicating the savings that Tesla has put right next to the purchasing price.
 
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You will have to excuse me, but consumer protection is poorer in the USA, where e.g. a retail store is allowed to display a price excl. VAT. Or maybe it has improved in recent years, but in the EU it has been like that for decades.

Here in the EU we are so dumb that we cannot add the VAT in our heads as we do our shopping, so we are used to higher standards for price information. Standards where there are not two completely different types of prices listed for the same item.

And by those standards, I foresee trouble for Tesla. Trouble that they did not need to get into.

The US doesn't use VAT, but "sales tax", which is different. Part of the problem - and the reason that prices don't include sales taxes - is that it'd be far harder. US sales taxes vary from state to state, county to county, and even city to city. So, I mean, how do you advertise a price inclusive in tax when you don't know what the actual tax will be in any specific viewer's market?

It's not a consumer protection thing, it's a "US is a patchwork mess" thing ;)
 
So along the lines of the SR Model 3...

Do you think the SR will just end up a smaller battery long range? In other words will they change the interior at this point? It might just be cheaper to keep everything the same and just reduce the battery size than try to redo the interior materials and features. If they can do that and still keep margins where they need to be it may make some sense. The old K.I.S.S. principal.

Dan
 
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