I’m trying to figure out what the point of Tesla ditching the Model 3 with the longest range is. If the end goal is to let owners use their cars in a ride sharing service, wouldn’t the car with longest range be preferable in that scenario?
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Why ditch the Model 3 with the longest range?
- Thread starter ishabazz
- Start date
I wish they would ditch it so mine would be more special.
Yes, LR and SR are basically discontinued except they still have some HW2.5 LRs in stock and they want to sell those too. That's why LR is still available off-menu until they clear the stock. I don't think they will make any more LRs. SR is still available off-menu because Elon wants to feel like he kept his promise to offer a $35K version. They even went above and beyond and unbundled Autopilot just to keep it at $35K.
My guess is, LR is being discontinued because they will switch to AWD only. In other words, SR+ will be replaced by SR AWD. This will increase the price of the cheapest version which is a good idea for gross margins. In hindsight, they shouldn't have mentioned $35K at the reveal and neither SR nor SR+ should have been offered because the gross margins are either negative or close to zero. At the beginning of March, in my message here, I said SR would be discontinued. Now I think SR+ will be discontinued too and they will come up with SR AWD.
My guess is, LR is being discontinued because they will switch to AWD only. In other words, SR+ will be replaced by SR AWD. This will increase the price of the cheapest version which is a good idea for gross margins. In hindsight, they shouldn't have mentioned $35K at the reveal and neither SR nor SR+ should have been offered because the gross margins are either negative or close to zero. At the beginning of March, in my message here, I said SR would be discontinued. Now I think SR+ will be discontinued too and they will come up with SR AWD.
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Word on my street is additional range of my RWD LR is better than all wheel drive and I would guess that’s the word on many streets here in the Sunbelt.
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Thomas Edison
Active Member
The v3 computer is the only difference and I believe it’s cheaper than the v2 computer.
It's not necessarily preferable. It's somewhat like driving a bus for single passenger Uber rides. Most taxi runs don't use anywhere near that range in a day.
suwaneedad
Member
The only issue I see with this path forward is it reduces the size of the addressable market due to reduced affordability. And that's a risky move when Tesla clearly already has a demand problem right now (as evidenced by price cuts across all three vehicles). Maybe the expensive Model 3 leases will increase demand sufficiently, but I doubt it. I just don't see how Tesla is going to navigate the next 12 months, let alone the next 24-36 months, without a capital raise to bridge things.
That makes sense. I drive about 120 miles per day and I forget how far out of the norm that is. If a person normally drives under
40 or so, there’s plenty of range to spare even in the SR.
My prediction has nothing to do with that. Tesla had a surplus of inventory at the end of Q1 due to lower than expected sales. They had unfulfilled orders for the SR. They decided it was more cost effective to sell the existing SR+ inventory for $35K with some software locks than to produce the SR as it was previously configured.
At the same time, they are getting ready to introduce V3 of HW Autopilot at the investor demo next week. Once this happens they will announce that V3 is shipping in new cars. When they do this nobody is going to want a V2.5 car anymore so the faster they clear the inventory the better. Once they clear it, the SR for $35K will go away.
This is just me looking into my crystal ball and making a prediction. I may be wrong. But I don’t think my prediction is completely off base.
Wrong. They beat expectations, but due to offshore transit times, delivery didn't complete by end of Q1. The fact is, they produced more than expected number of vehicles, and as soon as the boats arrived, those vehicles were spoken for.
Wrong on many counts:
- V3 is only needed if you have FSD, and all FSD owners are already promised the new hardware. Therefor it doesn't matter if you have 2.5 vehicle or not.
- Even if you didn't get FSD, Tesla has already told us the price of the new hardware out of pocket ~$1,200. But again, it's useless to you without FSD. So there is no point to buying it.
Elon Musk on Twitter
They can't make the batteries fast enough. So they can work around this in two ways:
1. Sell more lower cost cars at higher profit margin (SR+ with AP required)
2. Sell more higher cost cars with higher profit margin (AWD is now a required option for LR)
The second motor costs Tesla less than $800. But they now get $2200 more profit per vehicle. AP costs nothing (beyond R&D) and now they enjoy $2000 more profit for anyone who would have otherwise bought one without it)
It makes perfect sense what they are doing, and so LR RWD may eventually make a comeback when the battery situation dies down.
I assume part of the problem is everyone who's waiting on their car. I am. The ordering & delivery sub-forum is full of others. And now they have to ship cars overseas -- so if they're not going to leave people waiting, they have to ship them before those orders are even placed.
If they make cars with a cloth interior, or a 2WD car with a large battery, those can't be anything but what they are. They can't give someone a cloth interior and software upgrade it to Vegan Leather, or give someone a 2WD and software upgrade it to AWD.
Whereas an SR+ can check two boxes (software downgrade to SR) and a LR AWD is a lot closer to a Performance -- new brakes and tires (except not even that in China, right?) and a stick-on spoiler and a software upgrade on the power... I'm not sure whether the lowering is easy or not, but it could be that an AWD/Performance conversion is pretty doable if they're stuck with a bunch of the wrong ones overseas.
It does seem like the reduced number of selections is going to make it easier to adjust production to better fit demand.
If they make cars with a cloth interior, or a 2WD car with a large battery, those can't be anything but what they are. They can't give someone a cloth interior and software upgrade it to Vegan Leather, or give someone a 2WD and software upgrade it to AWD.
Whereas an SR+ can check two boxes (software downgrade to SR) and a LR AWD is a lot closer to a Performance -- new brakes and tires (except not even that in China, right?) and a stick-on spoiler and a software upgrade on the power... I'm not sure whether the lowering is easy or not, but it could be that an AWD/Performance conversion is pretty doable if they're stuck with a bunch of the wrong ones overseas.
It does seem like the reduced number of selections is going to make it easier to adjust production to better fit demand.
If the issues is money, why not just raise the price across the board? The base prices are currently still lower than they were 8 weeks ago and now AP is included. Paint options are also $500 less now. Why lower the cost of paint if the issue is profits.
I agree about the SR vs SR+. However the difference between the LR and the AWD is the motor. The difference between the AWD and the P is software, lowering springs, pedals, and wheels. If a car was going to be cut for ease of ordering, it would seem that the AWD has the most overlap and it would be the one to go, But as @TMThree said, that lack of difference from the LR makes margins on the AWD much higher. I have a tough time buying that having the LR in the inline up complicated ordering for customers so much that it was worth dropping.
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