Was I wrong?

[bonaire]

They might want people to take their deposits back because perhaps the only people that will be invited to order the 35k Model 3 are reservation holders... Since it wont be nearly as profitable as a car with more features/larger battery, one would assume they don't have a strong desire to sell them to every tom, dick, and harry...

Elon Musk stated that the goal was to move forward sustainable transportation. They didn't state that it was exclusive or tied specifically to higher-priced cars. The entire enterprise is valued at being able to serve down-market at-volume, with profit. They currently state they cannot afford to make the $35k SR. There needs to be a workable formula for long-term growth and survival and it's not actually clear yet with all the inventory build-up that is currently occurring. If they cannot sell all the inventory, they cannot afford to build the cheaper version which the consumer is "demanding" with the reservation volume that had existed.

 

[CyberShy]

I’m surprised that no one has considered the fact that Elon recently mentioned that the low priced (SR) model 3s (and Y) would be built in China.

Tesla officially breaks ground at Gigafactory 3, Musk confirms Model Y production, and more

The language is buried in the article and one can infer premium = Fremont built, base = China.

The labor there is cheaper. If Fremont makes only the premium cars because of high cost but profitable, then it makes sense for the base model 3s to come from China.

Of course, the China factory won’t be online for several more months. More waiting for those initial 3 orders, I guess.

So, if you knew your 3 was built in China, would anyone reconsider cancelling or going premium or LR?

 

[bonaire]

One thing he (possibly purposely?) left out was not saying whether the low-priced SR would be made in Fremont or not.
That is critical in this situation - do we know if they will ever make the USA-based Fremont factory create the $35k Model 3?

 

[voip-ninja]

Elon Musk stated that the goal was to move forward sustainable transportation. They didn't state that it was exclusive or tied specifically to higher-priced cars. The entire enterprise is valued at being able to serve down-market at-volume, with profit. They currently state they cannot afford to make the $35k SR. There needs to be a workable formula for long-term growth and survival and it's not actually clear yet with all the inventory build-up that is currently occurring. If they cannot sell all the inventory, they cannot afford to build the cheaper version which the consumer is "demanding" with the reservation volume that had existed.

What is your source that inventory is building? Business insider articles don't count. I do agree that Tesla has to serve the mid-tier market and not just the high-tier market. They have started serving the upper end of the mid-tier with the MR which starts at $43,000 before tax credits, and in some markets ends up being priced on-par with mid tier ICE offerings from Honda & Toyota after tax credits.

It remains to be seen if Tesla will ever serve the low-tier market. Tesla wants to be the Apple of electrified transport, not the Sansung or Huawei of electric transport.

From what I can see, Tesla is registering more VINs than ever with plans to ship most of it to international markets... so looks like they have plenty of time to continue lowering their cost to try to get a little more market-share in the US market;

Tesla recently exhibited what could very well be the most encouraging sign of the Model 3 ramp to date. From Friday to Sunday, Tesla registered a mammoth batch of more than 28,000 Model 3 VIN registrations, over 20,000 of which were designated for international markets. With these latest batches of filings, Tesla’s total Model 3 registrations now number 236,512.

The new registrations were reported by Model 3 VIN tracking group @Model3VINs, which tracks Tesla’s filings for the electric sedan. This latest batch also complements the more than 14,800 Model 3 VINs that were registered in the week of January 6. That’s more than 42,000 Model 3 VINs filed during the first two weeks of the first quarter alone. For perspective, the filings of the past three days alone are roughly equal to the registrations that Tesla submitted for the vehicle until early April 2018, more than eight months after the electric sedan entered production.

 

[Knightshade]

I’m surprised that no one has considered the fact that Elon recently mentioned that the low priced (SR) model 3s (and Y) would be built in China.

Tesla officially breaks ground at Gigafactory 3, Musk confirms Model Y production, and more

The language is buried in the article and one can infer premium = Fremont built, base = China.

for the Chinese market

If you're not buying a base model in China you won't be getting one built in China.

You're not the only one who misunderstood this though- he had to later clarify on twitter-

Shanghai Giga will produce affordable versions of 3/Y for greater China. All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW market, incl China.

So to sum up for the 3/Y:

Low-cost version for china market built in China.

All versions for all other markets, as well as the higher-end Chinese-market ones, built in the US.

 

[T34ME]

I assumed I would have been able to purchase a Tesla model 3 for $35k by now. I put $1k in April 2016. Was I stupid then to think I’d be driving my $35k car now?

No.

Am I wrong to think it will be 2020 before I can get it?

Yes, I think it will be available in July, 2019 to simulate sales as tax credit is reduced

Is it a good business practice to take $1k pre-order deposits for something that can’t be delivered for 4 years?

Yes, it is voting for the FUTURE with your dollars

Do consumers care?

Most don't

Should I be worried that corners will be cut in production to make a profit on a $35k car?

No, you will not get all the bells and whistles of the $50K model 3 but corners will not be cut. No corners were cut on my 3MR, in fact some corners were added!

I’ve never experienced anything like this in my life.

I have this experience before

I’m still dreamin of my $35k model 3 in my driveway.

I'm still dreaming of a $35K model 3 sitting in YOUR driveway. The more, the merrier

I’ve read posts about the paint dings, scrapes, and chips. I also have watched some youtubes. I know there are complaints about the panel gaps.

If you are anile enough to go over the car with a laser light, digital micrometer, calibrated decibel meter, and 100 point checklist, then you are sure to find something wrong. Will it make a difference? No. My car is as near to perfect as any car in this price range.

Can they source cheaper materials for the base model to cut a profit? Cheaper labor?

Yes, the base model 3 and model Y will eventually be built in China which does not mean lower quality. The majority of high end yachts are built in China today and they command high resale.

The texts, e-mails, and phone calls trying to get me to buy a non-base version tell me they don’t want to sell a $35k car. But I feel that was the selling point originally.

No, they are telling you that you can get a car today, IF you don't want to wait for the $35K base car (which I think will only be available for a couple of months before there is a price increase). Circumstances in life change for people and they may be able to afford something more expensive now.

Yes they tried to push me into canceling. That didn’t feel good. Why would they think I want to cancel? I’m waiting patiently for almost 3 years for my order

No, only YOU can push yourself into cancelling. As far as Tesla emailing their customer base and trying to give good service - DAMNED IF THEY DO, DAMNED IF THEY DON'T.

 

[jjrandorin]

for the Chinese market

If you're not buying a base model in China you won't be getting one built in China.

You're not the only one who misunderstood this though- he had to later clarify on twitter-




So to sum up for the 3/Y:

Low-cost version for china market built in China.

All versions for all other markets, as well as the higher-end Chinese-market ones, built in the US.

When I read the quote you referenced, I read it different than you do. You stated the quote says:

====================
Shanghai Giga will produce affordable versions of 3/Y for greater China. All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW market, incl China.
=====================

So, it does not say "All model 3 and Y for US will be built in the US". It says " All higher cost versions of Model 3/Y". When I read that, I dont see anything that says "Lower cost / Base version of Model 3 will be built in the US".

What exactly are "higher cost versions of Model 3 / Y"? I can only assume that those are the versions that have already been released. The statement above (very cleverly) covers 2 different things. It says that the chinese factory will make affordable versions of model 3 and Y for china (but doesnt say that it ALSO wont produce them for the US), and then it says that all Higher cost versions of 3/Y will be built in the US (but does not say that the US will also build the base model).

If you see it differently with the words provided in that quote (which is the only information I have, so you might have more information), then maybe you could explain how it says something different?

 

[Knightshade]

When I read the quote you referenced, I read it different than you do. You stated the quote says:

====================
Shanghai Giga will produce affordable versions of 3/Y for greater China. All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW market, incl China.
=====================

So, it does not say "All model 3 and Y for US will be built in the US". It says " All higher cost versions of Model 3/Y". When I read that, I dont see anything that says "Lower cost / Base version of Model 3 will be built in the US".

You mean other than the fact it explicitly states the Chinese built ones are specifically for the Chinese market?

If that's the case, where else would the cheaper 3/Y models for non-china markets be built OTHER than the US?

What exactly are "higher cost versions of Model 3 / Y"? I can only assume that those are the versions that have already been released.

Given there are no versions of the Y released yet that doesn't make the slightest bit of sense.



Here's another tweet of his clarifying all this BTW-

Shanghai Giga production of Model 3/Y will serve greater China region

That's the whole statement- not "greater China and other markets"

The only factory he mentions serving more than its own domestic market is the US factory, serving WW including chinese models not built in china.

 

[jjrandorin]

You mean other than the fact it explicitly states the Chinese built ones are specifically for the Chinese market?

If that's the case, where else would the cheaper 3/Y models for non-china markets be built OTHER than the US?




Given there are no versions of the Y released yet that doesn't make the slightest bit of sense.



Here's another tweet of his clarifying all this BTW-



That's the whole statement- not "greater China and other markets"

The only factory he mentions serving more than its own domestic market is the US factory, serving WW including chinese models not built in china.

That second quote is a lot less vague than the other one you quoted, so thanks for that. Given that, i wonder why the first statement was so carefully constructed to say "higher cost models"? There is no need for that part of the statement if there is not something else there.

Very easy for them to say " china production will only serve china. all tesla models for the US market will be made in the US".. but thats not what was said.

 

[Knightshade]

That second quote is a lot less vague than the other one you quoted, so thanks for that. Given that, i wonder why the first statement was so carefully constructed to say "higher cost models"? There is no need for that part of the statement if there is not something else there.

Very easy for them to say " china production will only serve china. all tesla models for the US market will be made in the US".. but thats not what was said.

Probably because the high cost models for china will also be made in the US, so they had to call that fact out too... (presumably this makes richer Chinese buyers feel better at getting an imported higher end version? While more middle class Chinese can avoid the 15% tariffs and buy a cheaper domestic made one)

 

[RayW]

Tesla hasn't filled demand for $50K cars, why would they build a $35K car?

 

[StillDreamin]

I don’t want a car from China. My dream is here in America! USA USA USA

I have this experience before

Where/how?

 

[T34ME]

I don’t want a car from China. My dream is here in America! USA USA USA

Lock him up, lock him up, lock him up!

Have you ever checked to see how much of the stuff you purchase today is manufactured in part or whole in China?

Where/how?

Where would like for me to begin? Let's start with my USA built trawler!

 

[StillDreamin]

Yep, and when I buy a Stratocaster, I want the MIA version. That's made in America in case you were wondering. Sure they make nice ones in Mexico, or Japan, or wherever, but I want the dream. I want the stripes and stars baby. The American dream.

 

[Dana1]

Which is less than 10.

And ignores the fact the 35k car wouldn't have sold at "zero" margin, it'd be sold at a loss up to this point.




Except the roadster isn't for sale, and won't be until next year... well after the 35k car is for sale. So that's pretty weird to bring up.



When the company needs to turn a profit and stop cash burn, no, it's really not. Hence why they didn't do it.



Certainly it'll be this year... costs have steadily decreased as volume has increased, so expect they'll be able to sell a 35k model 3 without losing money this year.

Sell them at a loss last year would've made 0 sense. Especially when every money-loser would've been taking up a MFG spot a profitable car would've otherwise been built in... (and especially when making an SR non-PUP config, which is what the 35k car is, would've vastly added to manufacturing complexity during a time production was still trying to ramp).

You really need to read more closely.

 

[Dana1]

For starters you bought AP so that means $55K vs 40K. Secondly, you bought PUP, so if SR with PUP held pricing you are now comparing $45K to 55K.

Final point is you got tax credits that future buyers likely won't get, so the difference will be even less in practice.

Nobody knows what a $35,000 stripped down SR is going to be like but I know it won't have auto-pilot and I know the range would be impractical in about 2/3 of the country that get cold weather for big parts of the year.

I'm not sure where you are getting the $60K price from either, an LR RWD Model 3 was $55,000 with autopilot, not $60K.

With FSD, premium wheels, and an extra cost color it was $59,500 this past summer.

 

[Knightshade]

You really need to read more closely.

You really need to present better arguments

 

[voip-ninja]

With FSD, premium wheels, and an extra cost color it was $59,500 this past summer.

And all those would be added to the $35,000 price of an SR model 3.

 

[Ron2andia]

Yes not fight for it but wait for it. I was given a car form the lot and said we could get it all done that day. I asked if the reservation money would be used and he said yes but then said no it had to be canceled.

 

[bonaire]

What is your source that inventory is building? Business insider articles don't count. I do agree that Tesla has to serve the mid-tier market and not just the high-tier market. They have started serving the upper end of the mid-tier with the MR which starts at $43,000 before tax credits, and in some markets ends up being priced on-par with mid tier ICE offerings from Honda & Toyota after tax credits.

It remains to be seen if Tesla will ever serve the low-tier market. Tesla wants to be the Apple of electrified transport, not the Sansung or Huawei of electric transport.

From what I can see, Tesla is registering more VINs than ever with plans to ship most of it to international markets... so looks like they have plenty of time to continue lowering their cost to try to get a little more market-share in the US market;

Inventory question: Inventory lots are building around the country, it's been seen on videos shared elsewhere. Also, S+X inventory aggregator web site shows build also.

VINS: Registering vins happened in October just prior to the ER release. Registering happening in January is 3-mo later. Bulk registration of vins can include imposed jumps or "clean vins" as they say in the industry. Demarked numbers for the MR were above 150,000 and a gap existed below. Expect a gap to demarkate the SR when it comes. Also to mark AWD MR which I'd expect soon.