Why is the Model 3 compared to the BMW?

[shrspeedblade]

Quite a few people who would have bought a $35k car stretched to get a Model S, which they never would have for a 5/7 Series, etc.

I have a strong hunch you will see the same thing with people who would have bought $25k cars stretching to get a Model 3- heck with some tax credit it's no stretch at all!

 

[chronopc]

Quite a few people who would have bought a $35k car stretched to get a Model S, which they never would have for a 5/7 Series, etc.

I have a strong hunch you will see the same thing with people who would have bought $25k cars stretching to get a Model 3- heck with some tax credit it's no stretch at all!

When they announced the Model 3 I really thought the main customers would be people who wanted an S or X but couldn't afford one.

 

[Barklikeadog]

In the US so far this year the top 3 selling vehicles are all pick up trucks. I don't think BWM 3-series is anywhere near the top 20 cars sold in the US. But even with that somehow there is over 500k total reservations for the Model 3 and according to the earning report meeting today there's an average of 1,800 new reservations daily since the delivery event. I really don't know what is a good comparison for the Model 3, but there seems to be quite a bit of demand for it. Which sucks for me cause I am hoping people would cancel their reservations so I can move closer to the head of the line. Lol.

I think they should have skipped the 3 and built a pickup truck. They'd easily have a million+ reservations. If done right, I'd be in line.

 

[Barklikeadog]

Quite a few people who would have bought a $35k car stretched to get a Model S, which they never would have for a 5/7 Series, etc.

I have a strong hunch you will see the same thing with people who would have bought $25k cars stretching to get a Model 3- heck with some tax credit it's no stretch at all!

yup. It will be the silent majority of 3 buyers.

 

[Saghost]

I think they should have skipped the 3 and built a pickup truck. They'd easily have a million+ reservations. If done right, I'd be in line.

The pickup truck is in Part Duex. But to make something that heavy and unaerodynamic practical, they need big, big battery packs - and so to make it affordable, the 3 had to come first and drive the price of the batteries down. There's generally a method to Tesla's madness I've found...

 

[Saghost]

Quite a few people who would have bought a $35k car stretched to get a Model S, which they never would have for a 5/7 Series, etc.

I have a strong hunch you will see the same thing with people who would have bought $25k cars stretching to get a Model 3- heck with some tax credit it's no stretch at all!

I really think the base 3 will be able to compete with most $25k cars on a TCO basis for a typical 5 year ownership period even without the tax credit or other incentives.

 

[voip-ninja]

I was responding to someone who said that it was cute to say the model S cost $50k. My comparison of gas savings was towards luxury cars such as the 5-series.

Yeah, that was me.

You are getting flack because no way, no how is Model S $50K even after incentives. As to "gas savings"... sure, electricity is a bit cheaper than gas, but not that much! You'd have to drive a Model S for about 20 years to recoup $10K in "gas savings" and that's if your in a place like CA or HI where gas is still $3.50 a gallon!

 

[chronopc]

Yeah, that was me.

You are getting flack because no way, no how is Model S $50K even after incentives. As to "gas savings"... sure, electricity is a bit cheaper than gas, but not that much! You'd have to drive a Model S for about 20 years to recoup $10K in "gas savings" and that's if your in a place like CA or HI where gas is still $3.50 a gallon!

Base model S is $69,500 - $7,500 (federal tax incentive) - $2,500 (CA tax incentive) = 59,500.

In regard to gas savings it will definitely depend on how much you drive, the more you drive the more you save. As a comparison in CA, where I live you pay 20 cents per KwH and about $3 a gallon of gas. So assuming 300wH per mile and 30mpg, you're looking at 6 cents per mile for the Model S vs. 10 cents per mile for an ICE. However if you do buy an S you can use a referral code and get free supercharging for life which will further increase your gas savings.

So taking everything into account and assuming you drive quite a bit, you're pretty close to $50k, maybe around $55k taking into account gas savings for 5 years?

Also you save on maintenance. No oil change. Much less parts to replace over the lifetime of the vehicle. Take that into account the model S compares pretty well to a $50k ICE vehicle.

 

[voip-ninja]

Base model S is $69,500 - $7,500 (federal tax incentive) - $2,500 (CA tax incentive) = 59,500.

In regard to gas savings it will definitely depend on how much you drive, the more you drive the more you save. As a comparison in CA, where I live you pay 20 cents per KwH and about $3 a gallon of gas. So assuming 300wH per mile and 30mpg, you're looking at 6 cents per mile for the Model S vs. 10 cents per mile for an ICE. However if you do buy an S you can use a referral code and get free supercharging for life which will further increase your gas savings.

So taking everything into account and assuming you drive quite a bit, you're pretty close to $50k, maybe around $55k taking into account gas savings for 5 years?

Well, now we've gone off into cloud cuckoo land.

The original comment of "he thinks a Model S costs $50,000, isn't that cute"? was directed to someone who argued that someone who wants a $50,000 car would be looking at the Model S over the model 3.

No matter how you slice it or dice it, a Model S does not cost $50,000. The average model S sold costs probably $85,000 just like the average model 3 will cost $45,000-$49,000 before incentives which may or may not exist at the time the order is fulfilled.

No matter how you fudge the numbers the Model S is not a "$50K car"....

The original comment I replied to is just more griping by people who are angry and frustrated that they aren't getting a fully loaded Model-3 with 310 mile range and all the goodies for "$35,000 before incentives".

Tesla did not build the Model 3 to compete with Honda Accord, Toyota Camry or Hyundai Sonata. They built it to compete with luxury sedans, just like model S was built to compete with luxury mid-size sedans.

People seem to be having a really hard time squaring that with reality.... and coming to grips that to get the Model 3 optioned with the goodies is going to cost more like $50K.

Anyone who would take a "$50K" total bare bones Model S (post incentives and other crap) over a fully loaded "$50K Model 3" (post incentives and other crap) either insists on a large car or is just an idiot.

 

[30seconds]

I think they should have skipped the 3 and built a pickup truck. They'd easily have a million+ reservations. If done right, I'd be in line.

Sedans far outsell pickups in all but the North American market. Pretty clear why they built a sedan first.

 

[30seconds]

Well, now we've gone off into cloud cuckoo land.

The original comment of "he thinks a Model S costs $50,000, isn't that cute"? was directed to someone who argued that someone who wants a $50,000 car would be looking at the Model S over the model 3.

No matter how you slice it or dice it, a Model S does not cost $50,000. The average model S sold costs probably $85,000 just like the average model 3 will cost $45,000-$49,000 before incentives which may or may not exist at the time the order is fulfilled.

No matter how you slice it and dice it, the Model S is not a "$50K car"....

The original comment I replied to is just more griping by people who are angry and frustrated that they aren't getting a fully loaded Model-3 with 310 mile range and all the goodies for "$35,000 before incentives".

Tesla did not build the Model 3 to compete with Honda Accord, Toyota Camry or Hyundai Sonata. They built it to compete with luxury sedans, just like model S was built to compete with luxury mid-size sedans.

People seem to be having a really hard time squaring that with reality.... and coming to grips that to get the Model 3 optioned with the goodies is going to cost more like $50K.

Anyone who would take a "$50K" total bare bones Model S (post incentives and other crap) over a fully loaded "$50K Model 3" (post incentives and other crap) either insists on a large car or is just an idiot.

Happens all day long with other brands. Why BMW sells a 525/530 that costs less than a fully loaded 3-series

 

[chronopc]

Well, now we've gone off into cloud cuckoo land.

The original comment of "he thinks a Model S costs $50,000, isn't that cute"? was directed to someone who argued that someone who wants a $50,000 car would be looking at the Model S over the model 3.

No matter how you slice it or dice it, a Model S does not cost $50,000. The average model S sold costs probably $85,000 just like the average model 3 will cost $45,000-$49,000 before incentives which may or may not exist at the time the order is fulfilled.

No matter how you slice it and dice it, the Model S is not a "$50K car"....

The original comment I replied to is just more griping by people who are angry and frustrated that they aren't getting a fully loaded Model-3 with 310 mile range and all the goodies for "$35,000 before incentives".

Tesla did not build the Model 3 to compete with Honda Accord, Toyota Camry or Hyundai Sonata. They built it to compete with luxury sedans, just like model S was built to compete with luxury mid-size sedans.

People seem to be having a really hard time squaring that with reality.... and coming to grips that to get the Model 3 optioned with the goodies is going to cost more like $50K.

Anyone who would take a "$50K" total bare bones Model S (post incentives and other crap) over a fully loaded "$50K Model 3" (post incentives and other crap) either insists on a large car or is just an idiot.

I totally agree buying the Model 3 is definitely the better choice if you have a $50k budget.

But if you take into account all the savings from tax incentives, gas and maintenance, the Model S does compare pretty well to a base $50k ICE vehicle. Still doesn't mean that you should buy it though.

 

[chronopc]

Sedans far outsell pickups in all but the North American market. Pretty clear why they built a sedan first.

In CA sedans and SUVs outsell pickups as well.

 

[John E.]

If the Model 3 is truly meant for the average car buyer, then why isn't it compared to the Camry, Accord, Civic, Elantra, Altima, Corolla...
Why is it compared to entry level luxury cars? Is it just because of price? Shouldn't the comparison discussion be about the Model 3
being 5k more expensive than the above mentioned vehicles? BMW only sells about 75k 3-series every year, 400k of the Camry are sold.
The 3Series is ranked 75th in cars sold for 2016. The A4 is 99th, the C-Class is 72nd.

Those who want to drop 50k on a luxury car are more likely to buy the Model S IMHO.
Every year 2 million people buy the average sedans I listed above... which tend to start under 30k and price up into the 40s with all options.

I believe that 2 years from now when Tesla has sold several hundred thousand Model 3s, the biggest losers will be Toyota, Honda, etc, not BMW or Mercedes.

Thoughts?

If the M3 is produced in sufficient quantities, and sells as expected, it would impact the premium brands, first and foremost. The only exception might be the Toyota Prius....several of their upper end models are in the upper 20's without adding any options. I would think that a fair number of those would move up to the M3. I dont see a Camry, Optima, Sonata Accord driver moving up to an M3.

 

[voip-ninja]

Happens all day long with other brands. Why BMW sells a 525/530 that costs less than a fully loaded 3-series

comparing apples to apples is comparing a $70,000 MSRP Model S to a $35,000 Model 3, and looking at what you get with each. Base price on the Model S is 200% the base price on the Model 3.

Base price on BMW 530i is $52,000, base price on BMW 330i is $38,500. So a BMW 530i is 130% of 330i.

Huge, no, enormous difference.

 

[Barklikeadog]

The pickup truck is in Part Duex. But to make something that heavy and unaerodynamic practical, they need big, big battery packs - and so to make it affordable, the 3 had to come first and drive the price of the batteries down. There's generally a method to Tesla's madness I've found...

Well, now we've gone off into cloud cuckoo land.

The original comment of "he thinks a Model S costs $50,000, isn't that cute"? was directed to someone who argued that someone who wants a $50,000 car would be looking at the Model S over the model 3.

No matter how you slice it or dice it, a Model S does not cost $50,000. The average model S sold costs probably $85,000 just like the average model 3 will cost $45,000-$49,000 before incentives which may or may not exist at the time the order is fulfilled.

I hate repeating myself... I never said that the Model S costs 50k. I said that Model S buyers who would typically drop 50k on a car, decided to spend more
to get the Model S. I believe the same thing is happening with the Model 3 reservations. These aren't BMW buyers, most of these reservations are
drivers who would buy a 30k Camry, Corolla, Accord, etc...

Here is a survey from a couple years ago...

Jefferies auto analyst Dan Dolev released a Tesla research note on Thursday. In it, he and his team report on a survey Jefferies conducted of 145 U.S. Tesla owners.

The big takeaway is that Tesla owners aren't necessarily all wealthy early adopters of high tech toys.

About 70% of them moved to Tesla from cars that cost less than $60,000, Jefferies noted.

These owners were happy to pay more.

"On average, owners were willing to pay 60% more for a Tesla," Dolev wrote.


I don't see why it is so outrageous to suggest that many of the Model S owners, who probably spent 75k+, previously owned vehicles which cost 50k.

and I don't see why it is so outrageous to suggest that many of the Model 3 reservation holders think the same way. I think what we will see are people
who would normally spend 30k on a sedan, willing to spend 45k for the Model 3.

 

[sub]

Most I've ever paid for a car is 35k. I could have bought a model S and almost did a few times but did not because I couldn't justify it and I knew the M3 was coming. I leased an i3 for 2 years and got in line early for the M3. I hope to have my 60k model 3 by years end and I have no issue with the price.

There is no one buyer of the model S/3/X. I've seen people with 1/3 the income as our family buy model S, and there will be plenty of high earners/wealthy people buy a model 3. Part of it is the size of the vehicle as well, currently drive a 3 series and it's plenty big.

Don't assume someone's wealth based on their possessions. 70% of Americans are flat broke, don't have 1k in the bank but most don't hesitate to own the latest iPhone or have a $700 a month car payment.

 

[stopcrazypp]

Then you need to address the numbers. There are probably 300k reservations for the model 3 in the USA alone. Sales of the C class, 3-series, A4, don't even add up to 200k cars sold in a year.

Sales of Camry, Corolla, Civic, Accord, etc add up to 2 million cars sold in the USA in a year.

I doubt that entry level luxury cars will see a 90% drop in sales next year... so where are the reservations coming from? I can only deduce
that most of these buyers are coming from outside of the entry level luxury car segment.

You are basing your opinion on someone you talked to. Like people who say they don't know anyone who voted for Trump.

I said it once, and you ignored. The 3 series alone sells 400-500k units per year worldwide (which is the appropriate measure given the Model 3 reservations are worldwide).
BMW 3 Series - Wikipedia

Also Tesla won't be processing all orders in one year, so comparing annual sales is extremely misleading. And you completely fail to factor in there is a lot of pent up demand from people waiting for years for this car.

And it bears repeating again: targeting economy cars is a recipe for market failure for an EV. At $35k, a Model 3 compares well on equipment levels with an entry level premium car. At $35k, an economy car would be loaded, and a Model 3 targeted to that market would lose in that comparison and that would mean lower sales.

 

[tescroft]

I said it once, and you ignored. The 3 series alone sells 400-500k units per year worldwide.

Yes, but that was before Model 3. Check 3 series sales next year.

 

[stopcrazypp]

Yes, but that was before Model 3. Check 3 series sales next year.

That doesn't matter, that only shows that Model 3 is successful in conquest sales. His point is the premium car market is not large enough to support the Model 3. That's clearly not true even before factoring in the expanding effect it might cause (the market is not zero sum).