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What if every M3 came with a powerwall?

Discussion in 'TSLA Investor Discussions' started by Ukland Wombat, Mar 28, 2016.

  1. Ukland Wombat

    Ukland Wombat Member

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    It makes sense. It could be the April fools' Joker.
    I think it is doable. If it is doable, I think Musk will do it.
    Wild speculation from a know-nothing wombacile, of course, but consider:

    Every hostage (I mean person) would like to have an emergency power supply.
    Just to keep the fridge and freezer going and phones and laptops charged during a power outage.
    A sort of powerwall-type product. Just plug in to charge up and forget about until you need it.
    When the power fails, take the appliance(s) you want to keep running and plug into the power wall.
    Is there any hostage on this planet who would not like that?
    The EPS 10kwh powerwall product has been discontinued. Hint.
    We have been told a new one will be released in its place. Hint.

    Now suppose you were dithering about reserving a model 3
    Too many in the line ahead of you, so why bother?
    But with a bonus offer like that thrown in (for a limited time only of course in your region),
    wouldn't all your the dithering suddenly stop?
    If the M3 is already good value, think what a no-brainer for value this offer would be!!

    The reservation count without such an offer would be self-attenuating...
    because there is a forever diminishing incentive to join the line as the line gets longer.
    The reservation count with a plug and play powerwall thingy thrown in would be astronomical, IMO.

    In fact people would most likely reserve after the reveal but before the deadline cuts off
    feeling happy in the knowledge that even if they won't see their M3 for six years:(
    and even though they don't know its price (they can always cancel if it goes too high, of course)
    they can at least be sure that they will have the bonus + M3 for the same price others pay for the M3 alone.
    How about that?

    If I've dragged you this far out of the short term thread
    you may as well take a moment to consider the implications:

    Astronomical reservation numbers delivers an undeniable April fools' message to the world.
    An epic short squeeze on the back of the reservations number.
    Very relevant to short term term thread but please DO NOT TRADE ON wombat wishfulness.
    This wombat could very easily be a wrong bat

    but continuing anyway...

    How about a 'reserv-a-nometer' clocking up the numbers second by second at tesla.com?
    ICE OEMs the world over can no longer remain in public denial.
    Are German Auto executives already changing their language?
    But what about the Japanese?
    Will Toyota remain in denial? What if the reservation numbers from Japan are embarrassingly high?
    The government and ICE OEM boardrooms are suddenly forced to change their language.
    The capital markets will move on this...in a big way, IMO, but don't ask me how.

    Thoughts?

    I don't expect any posts to this thread because all of you experts in the short term thread
    (I really, really really appreciate your expertise, so don't get me wrong here)
    who post there frequently would risk looking as silly as a wombacile:)
    if you dared to post here,
    and then discover that there was no plug and play powerwall bonus thingy after all:(.

    I invite your comments, just for the sport of it...

    All I ask is:
    Please don't get me banned with so many dislikes that it becomes automatic!
    Be kind to wombats. Just move on...don't kill them.

    Wombats have no expertise at all, and so no reputation to lose.
    Please don't trade on anything you hear from the wombat world.
    We live underground, but we're not like moles. Moles are something else!

    And this wombat happens to be a longbat, no options, so nothing to lose on that score there either.
     
  2. Fallenone

    Fallenone Active Member

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    Tesla will file chapter 11 in no time if they give you a powerwall for free with a base model 3.
     
    • Like x 1
  3. Johan

    Johan Took a TSLA bear test. Came back negative.

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  4. Ukland Wombat

    Ukland Wombat Member

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  5. Ukland Wombat

    Ukland Wombat Member

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    Why are you so sure?

    We don't know its price yet...just maybe a base model around $35k in US.
    This offer can be selectively tuned to different geographies by pricing and bonus cut-off dates.
    It could be an incredibly flexible tool to juice up reservation numbers.
     
  6. Fallenone

    Fallenone Active Member

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    Powerwall costs 3k. And it eats in their battery production power which put pressure on their production speed which is already under a lot of pressure and needs tons of capex so it is even worse than a straight 10% discount on the car. Tesla is not a non-profit company.
     
  7. Johan

    Johan Took a TSLA bear test. Came back negative.

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    WRT to the actual theory: it's super unlikely.

    What would make somewhat more sense (I should say slightly less nonsense) would be to offer PowerWalls at say 30% off to Model 3 buyers (probably pretty close to break even for Tesla, or in fact probably a loss).

    But then again why? It's not like they're going to have demand problems with Model 3.

    High reservation numbers for Model 3 will be threatening to the incumbents for the reason that the car will cut in to their market share WHILE MAKING NICE PROFITS FOR TESLA. In other words, if Tesla were to sell Model 3, bundled with something like a PowerWall or by itself, at a price point where Tesla is not making a profit or even losing money how is this threatening?

    If a potential competitor has to give away their products for free or sell cheaply (taking a loss) in order to get a foot in the door (market share) this signals weakness, not strength.
     
  8. Ukland Wombat

    Ukland Wombat Member

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    Not sure that the bonus offer has to be $3k cost to TM.
    Whatever it turns out to be (if at all?) it will be cheaper to build in 2 years' time and getting cheaper by the year.
    It may not be of as much capacity (10kwh) as the one quietly removed from the line up.
    It need not necessarily be a wall mounted thingy
    It will need to be small enough so as to add no cost in shipping (ships inside the M3)
    There will be no sales and installation costs. It will be plug and play. Just sit wherever you chose to put it.

    Tesla will leverage a colossal business advantage in the bigger picture (think secret master plan)
    And SolarCity might be able to hang on its coat-tails in new markets
    (don't know exactly how yet, I will only think about that if this whole grandiose fantasy becomes true)

    So, may I suggest there are massive profit opportunities, probably in ways wombats cannot imagine.
     
  9. Ukland Wombat

    Ukland Wombat Member

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    Thank you Johan.

    Good points.

    I can only answer in a loose way.
    We have only one clue so far on price. A base model at about $35,000
    Suppose that really was the base model, so base that the bonus is not included
    (sorry it contradicts "every" in the title to the thread...
    but hey, this thread will have at best only a few days to live...like a butterfly?)

    Then TM needn't supply anything at a loss.
    Or maybe the bonus is the bait (the hook to secure the all-important early reservation)
    And that bonus is only bundled with some options not others
    All in such away that the bonus "thrown in" as I have described it is actually a profit source.
    This doesn't have to be a 10kwh type of thing, it can be smaller.

    My main point is that this bonus tool is very tuneable in a marketing sense to whatever TM thinks is best.
     
  10. Johan

    Johan Took a TSLA bear test. Came back negative.

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    There is a far simpler and obvious answer to this: What you are looking for we usually call options. Such as leather seats, heated steering wheels, bigger batteries, Performance mode, Ludicrous mode, air suspension and what-not. All these things increase the margins for Tesla i.e. they cost the consumer relatively more than they do Tesla. No need to mix in the Powerwall, that's just confusing.
     
  11. Ukland Wombat

    Ukland Wombat Member

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    #11 Ukland Wombat, Mar 28, 2016
    Last edited: Mar 28, 2016
    I am suggesting the options could be bundled and priced so that their is absolutely no margin penalty in providing some sort of mini-powerwall as a bonus for ordering before a certain cut-off date, and maybe even a profit to be had thereby.

    The base model can be so unattractive that few of those "bonus-less" offerings are sold.

    I mean TM will always be hoping to juice the average selling price whatever way the company can.

    edit] Also, consider that the millions who buy the M3 but who didn't take up the bonus offer by the cut off date(before Q1 ER maybe?)...well their options packages will be providing to TM much greater margins. :)
     
  12. ggr

    ggr Roadster R80 537, SigS P85 29

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    Wombats are the second most dangerous animal in Australia, after Drop Bears. They are incredibly dense; they can't swim because they just sink. They are dangerous because when you hit one in your car, it will pretty much destroy the frame alignment, and the wombat will laugh at you as it waddles away. Their scat is cubic. I don't know if the UK variety has that characteristic or not.
     
  13. Ukland Wombat

    Ukland Wombat Member

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    HaHa...they are troublesome little creatures for sure! But let me reassure you, it's only because they were born that way...they never act with malice...;)

    I was born in UK, lived a long time in Australia, became an Australian and for the moment am living in the UK.
     
  14. Fallenone

    Fallenone Active Member

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    OK so it doesn't costs Tesla 3k to make it in 2017, how much will it cost them to make it? 2k? 1k? And no matter the cost, Tesla is losing 3k revenue each Model 3 they sell if we assume 100% of the Model 3 owners are going to buy a Powerwall anyway. If 50% of them will buy a powerwall no matter what, they are losing 1.5k revenue plus half the cost for every Model 3 they sell. I see 0% of profit opportunities here, let alone massive.

    My argument still holds true for your imaginary smaller size, not wall mounted thingy. Putting aside of the practicability of such device you suggest, it's still a matter of how big Tesla will loss. Plus, the user needs to pay for an invertor in their home if they don't have one and the invertor and installation fee is around 5k, you are aware of this right?
     
  15. Ukland Wombat

    Ukland Wombat Member

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    #15 Ukland Wombat, Mar 28, 2016
    Last edited: Mar 28, 2016
    Thanks for your comments.

    First, I could have made a better thread title by dropping the word "every".

    You seem to be assuming it will be like the old 10kwr powerwall. That is discontinued, they are designing another for release soon. I'm speculating this could be it. A plug and play device (no electrician needed) less capacity (easier to lug around) but still modular so you could link them up to match your needs. It will need inverter circuits of course and power outlet sockets so you can unplug any appliance from the dead (in emergency) wall socket and then plug it into the device. One of these in the early reservers' bonus package may lead to after market sales of a few more. It will be a Tesla Energy product so they will want cascading sales from wherever the company can get them.

    Now, may I take you back a step.

    Assume TM has a reason (very compelling IMO, but I won't go there to reply to your points) to want to 'shock and awe' the whole auto world with explosive reservation numbers, climbing into the millions (an order of magnitude greater than the sort of numbers that have hitherto been debated in the short term thread).

    This offer, reserve by such and such a date (I now imagine close off just before Q1 ER) to get this bonus device free could have the desired effect.

    Consider, Person A pays $1,000 to reserve an M3 one day before the bonus deal closes, while person B pays $1,000 to reserve an identically optioned M3 one day after the bonus offer closes. If person A and person B take delivery of their cars at about the same time and so for the exact same price (which will be revised periodically into the future), then person A will be happy in the knowledge all along that they will get a highly desirable universally useful little bonus, a handy device that person B has missed out on. How person A thinks about the handy device a few years into the future doesn't matter. What matters is that it provides an incentive to make an early reservation.


    The incentive to reserve early will be all the more powerful if the device is perceived (at retail price) to be worth significantly more than the reservation deposit. Then, if you want the car anyway, it will be an absolute no-brainer to reserve early to be sure to "win it" the device as well as get the car sooner (than if you don't).

    After all, no commitment if the reserver changes their mind about the car, just ask for the deposit back and forget about the device too.

    This way, I think TM may pull in reservations which could generate a 5 or 6 year backlog immediately. Who knows?...I just guessed by what it would take to get me to reserve early...

    I'm guessing that US TMC early adopter type forum members probably think getting the M3 sooner is incentive enough to order early, many of you have done it with S and X, I suggest that more incentive is needed for a lower price car say 4 years ahead of delivery in other parts of the world.

    Now I'm getting to your concerns about the cost to TM of the device.

    First, it only need be perceived (at retail) to be worth more than $1,000. TM is likely to be the world's leading low cost battery pack manufacturer two years out from now when M3 deliveries start, and of course we hope thereafter too. Let's just say it costs TM $1,000 to produce this device and TM retails it for $1,500 as one of its standard product lines.

    Then the cost to TM is about 3% of base model cost of $35,000.

    Now TM has a choice:

    1. Bonus with every M3 reserved before deadline

    If their margin on the base model M3 is 15% they may absorb the cost of the device...so a margin loss on each device.
    Then TM can mitigate those margin losses by selling very few base models..(like with model S 40, not that popular, then eventually discontinued).

    The product mix out of the gate is likely to be well optioned. The option pricing can be such that the bonus device overly inflates the price of all other option packages with it's own healthy margin (more than enough to compensate margin loss on the base model) but who's to know?

    Pricing hasn't been disclosed for anything other than the base model so far, and is subject to adjustment as the years roll on. It is just the relative difference between Person A's deal and Person B's deal that matters.

    TM will make more profit margin from Person B obviously. That too will mitigate margin hit on Person A.

    2. Bonus with some M3 option bundles reserved before deadline

    For instance no bonus device included with the base model. So no margin hit there.

    Then say, include the bonus device with all other option bundles making sure its cost is covered with a healthy margin. Who's to know if it's price isn't broken out of the option bundles?

    You suggest, a lot of M3 customers will buy a Powerwall anyway, the 6.4 kWh daily cycler I suppose you mean?
    Hopefully they will do that as well.

    Thanks Fallenone, for inviting me to explain my speculation. I appreciate your questions.
     
  16. winfield100

    winfield100 Member

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    perhaps a packege. SCTY PV panels for roof, integrated with powerwall(s) and # (or S or X) reservation. your personal microgrid that merges with local grid (or not)
     
  17. Gerardf

    Gerardf Active Member

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    As a Tesla customer, all goodies / incentives are nice to receive of course.

    As a TSLA shareholder, such offering would make me very unhappy. We have not seen tha car or any of the detailed spec, but I am confident to predict :

    - Model-3 does not need any lower price or any incentives / bonus to get a 'ludicrous' number of pre-reservations
    - Model-3 does not need any lower price or any incentives / bonus to sell
    - Model-3 does not need any lower price or any incentives / bonus to get free press for a long time to come.
    - Demand will be higher than production for a long, long time. Even if it had a 40k entry price.

    - If anything, Model-3 price is to low from a pure business point-of-view. However I support that entry-price for other reasons (e.g. the company vision statement)
    - Model-3 having equal price compared to comparable ICE is more than good enough. EV's are better cars !
    - It is important to keep gross margin high, to use that money & credit to build out production as fast as the organisation allows.

    P.S. I am happy to see you moved this discussion to its own thread !
     
  18. Ukland Wombat

    Ukland Wombat Member

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    thanks winfield for your comment.

    It is interesting isn't it?...
    What lies under the surface of the massive Musk master Plan?
    I'm convinced TM, SolarCity and even SpaceX are already holding hands under the surface where we can't see.
    You only have to think...would companies in anyway similar to these even exist without Musk?
    Each is unusual in its own industrial sector.

    To your point on Solar PV package.
    I think it is premature to think of this now, but I would definitely not rule it out in the future.

    One positive, if my speculation turns out to be correct (that a mini plug and play (EPS) Powerall type of product could be a bonus to an option package of the M3 at reveal) is that it would be an excellent vector for the Tesla Energy infection to get at lightening speed (literally in the boot of the car) into every new market that wants that car. (Where won't they want it, if it's good value.) A bit like a mosquito (M3) carry malaria (mini p/w)!

    If Tesla gets it right there could be an exploding cascade of demand for more mini p/w in those new markets without the need to set up regional warehousing...instead just despatch from the nearest Gigafactory where the product is made...how easy!

    So, at present I see the mini p/w bonus trick as a little pointy-end wedge to get Tesla Energy products in the door.

    Thereafter, more Tesla Energy products and then a visit from SolarCity, I agree with you, will probably follow...but I cannot yet see the mechanisms in my mind.

    But so fascinating...the Musk project seems so gargantuan that we earthlings can't even begin to wrap our brains around the so far unpublicised goals and mechanisms to reach them...but I can't help trying nevertheless!
     
  19. Ukland Wombat

    Ukland Wombat Member

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    Thanks Gerardf for all of your thoughtful comments.
    Last first...I'm happy to have moved here myself and I'm more than happy that you took a moment to comment here!
    You push me to speculate further, to mark my territory (always shifting), and I love that!

    What you say is totally reasonable when you look at the company and say it has got to have good margins and skilfully use debt and equity to grow as fast as it can (mindful of risks) ...I'm with you...got it!

    And here, I will be annoyingly non-specific to open up the background view. I invite you to criticise my very limited sense of direction as my mind gropes its way thru the fog.:

    In the short term thread there was a fascinating discussion on how the future will play out for ICE OEMs post reveal day (=end of denial day, IMO). Many commented. I focused on understanding the discussion paraphrased below:

    Lango: Some might not go bust (but massive restructuring needed) if they switch 100% to EV immediately and also get bailed out by their respective governments.

    Julian: It is certain they will all go bust
    A few days earlier I had speculated that some will "get Musked" for lack of a better term... meaning Musk will turn some of the present ICE OEMs to TM's purpose. (I can't tell you exactly how it might happen, of course, I'm entertaining a few half baked- whacky ideas at the moment). Julian quickly shot my idea down in his 'authoritative' way , but I'm sort of hanging on to the idea that some ICE OEMs will get Musked. It fits better to what I think the landscape looks like if you try to zoom out even further.

    I'm sorry if that means de-coupling from evidence much further than readers are comfortable with, but hey Gerardf you did support the entry level price for M3 being low for the reason of the company vision statement... which I take to mean ...overiding the strictly 'here and now' of the financials.

    So now it gets really foggy:

    Somehow, I just cannot imagine Musk, in the executing of his grand master plan, wanting to use any scorched earth policy to eliminate obstacles in his path. Two reasons:

    First, I believe Musk is much more subtle than that. Using the analogy of warfare, the general who has the deepest understanding of the mind of the enemy general(s) does in fact have a significant advantage, all else equal. Musk has that advantage over ICE OEM generals.

    Second, my hunch is that it would be deeply offensive to his character to destroy anything unnecessarily on the way to building TM. My guess is that he would avoid it if he could...find a way to give his opponent a way out, if at one and the same time it advances his cause (which is bigger than TSLA...the stock) of accelerating the transition of the world to sustainable transport.

    I think (contrary to all the rational business heads posting in this forum, it seems)..that when Musk says accelerating he really means accelerating. He has an opportunity to juice reservations up to astronomical numbers by slipping in a product (already in his stable, but being re-developed we are told) as a bonus to incent the early deposit of ditherers, people wanting the car but feeling like me that the longer the line gets the less I want to join it.

    Astronomical reservation numbers punch a massive political and boardroom blow to the whole automotive world. What will happen? No idea. Has Musk got a plan? Absolutely no idea from me...but I like to speculate. When will it start...this week!

    To your point that M3 doesn't need a bonus offer to incent ludicrous reservations. May be we can agree, but only if we calibrate the scale first. I'm guessing your ludicrous = a several hundred thousand, in which case I agree with you. I'm talking about astronomical, which on my scale is several million.

    I'll leave it there for the moment, thanks again for you perspective which is definitely in the majority. You win on your rational view grown out of what we know. What interests me is all that we don't know that has the potential to move the ground itself that your rational view is rooted in.
     

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