Why we won't get a 60 Kw base battery

[Rashomon]

I don't believe they will go months on end without offering a car that costs much more than 35K or too many naysayers will make the claim that they have failed in their main goal.

They'll list the standard model and you'll be able to order that configuration at $35k base price; you just won't see it delivered until 6-12 months after production starts to ramp. They have to optimize cash flow to keep the show going, and to work their way down the learning curve so that a $35k M3 doesn't have a negative margin. How long was it before you get a MX 75kWh? And even a 50kWh M3 will have better highway mileage at US freeway speeds than a Bolt.

 

[Sonny Daze]

Have they ever introduced a new pack that was available in a software limited version from day one, or was the limited version always announced some time after the initial release of that pack? (hope that made sense)

 

[Polly Wog]

Have they ever introduced a new pack that was available in a software limited version from day one, or was the limited version always announced some time after the initial release of that pack? (hope that made sense)

Software limited packs were introduced for two main reasons: (1) Transition between models when Tesla changed the battery sizes, and (2) to spur demand. Tesla has neither situation with the Model 3 release. It simply won't happen - at least not for a long time. The Model S 40 was the only exception to the above, but it was primarily because so few people ordered it. There are no doubt many, many reservation holders of the Model 3 that will be perfectly happy with the base battery size.

 

[Canuck]

The body panels will be Aluminium.

If Tesla manufactures it, it will more then likely be aluminium, because that is where their expertise and pricing power lies.

Which one is it? You're first statement is categorical but then you walk it back by saying "likely".

As to "pricing power", steel is cheaper than aluminium no matter what pricing power Tesla has.

Again, I sure hope the body panels are all aluminium but I just can't see how they can do that and keep it affordable plus all the articles I have read say the body panels will be steel.

 

[Reciprocity]

Which one is it? You're first statement is categorical but then you walk it back by saying "likely".

I don't speak Canuck obliviously, which is odd because my father in-law is from Winnipeg or some other such funnily named place. The body panels will be aluminum. I don't work there, I am not Elon, so I qualified my response using the term "Likely."

As to "pricing power", steel is cheaper than aluminium no matter what pricing power Tesla has.

Steel is only cheaper if you can use the same Cap ex and expertise to make cars from the steel and you do not lose any economies of scale by support both aluminium and steel. The body panels being made from aluminum is more about how efficiently and how quickly they can produce cars then the cost. This is because the capex is so high that if they can speed up the line by 20% because they have aluminum panels vs steel then its worth it to spend more for the better mettle. They know how to work with it, they have a huge investment in stamping it and painting it. The added bonus of less weight, which is important to an electric car. Any pricing power they can garner will also lower the cost for those same materials for S/X. Adding a bunch of steel to the 3 does nothing to lower the costs related to producing S/X, whereas using aluminium does.

 

[arnis]

If we're extremely lucky they'll just software limit the 75kw battery pack to 55. I know on the surface this doesn't make financial sense but as they seem hell bent on production efficiency I think it IS possible. They're already including all AP hardware on the cars regardless of whether you activate it or not, the whole HUD/Binnacle outcry is supposed to be because of production efficiency. Keeping just one battery pack would be the most efficient, and, like AP they may get revenue down the road as people do a software unlock.

This is what I was hoping as well

Absolutely not going to happen. It's not about luck, it's about business. Elon is not an idiot.
Adding almost 10% to vehicle cost and giving it out for free is just plain stupid.
It's not the same with Model S/X. kWh price is just a fraction of the vehicle cost.
And even there Tesla stops doing it as it doesn't make any sense.

 

[JeffK]

Absolutely not going to happen. It's not about luck, it's about business. Elon is not an idiot.
Adding almost 10% to vehicle cost and giving it out for free is just plain stupid.
It's not the same with Model S/X. kWh price is just a fraction of the vehicle cost.
And even there Tesla stops doing it as it doesn't make any sense.

At or under $100 / kWh at the pack level puts the extra $1500 which is 4.2% of the base price.

If people are truly upgrading after purchase as Tesla suggests then tacking on a penalty to upgrade after purchase allows people to purchase at a lower rate and also allows Tesla to make more money on the conversion than they would have otherwise. In addition, this raises the resale value because Tesla can simply unlock the extra capacity without extra labor, and it allows less capacity loss after a prolonged time period when sticking with a software locked 60 kWh version.

If they can afford to do a software locked 60 kWh it's a win/win for everyone assuming the majority of people don't stick with the bare bones base model. This also makes pack manufacturing super simple.

 

[Reciprocity]

If they can afford to do a software locked 60 kWh it's a win/win for everyone assuming the majority of people don't stick with the bare bones base model. This also makes pack manufacturing super simple.

I just think margins are going to be to tight in the first year. Maybe 2019 when battery prices are down to $100 after the have paid down some of those large gigafactory capital expenses. I do like the idea though, fits the Tesla way of doing things.

 

[phil0909]

On the Tesla website, it says "Premium Electric Vehicles". They cannot allow a car from the Generic Motors Corporation to have even one more mile of range. IT SIMPLY CANNOT HAPPEN!!!

And yet, it did happen. GM's base Bolt has more range than Tesla's base Model S and base Model X. Say it ain't so!

 

[FlatSix911]

Freudian slip I suppose ... let's hope the Pain is reduced

Thank you. Just because some lead designer said something over a year ago, doesn't mean it is fact today. Elon and his spaceship like controls for example, which is still true if your spaceship only has 1 screen and a steering wheel.

The body panels will be Aluminium. It has more to do with the manufacturing process at Tesla then the price/weight. They have built the manufacturing process around aluminium and in particular, the painting is a huge part of why they are going to use Aluminum so that they can use the same painting infrastructure for all 3 cars. This means they do not have to build different a different pain process for the 3 only.

 

[stopcrazypp]

Have they ever introduced a new pack that was available in a software limited version from day one, or was the limited version always announced some time after the initial release of that pack? (hope that made sense)

Not sure if this matches what you are talking about, but the 40kWh pack was software limited from day one of release. They originally planned a true 40kWh pack, but demand was supposedly low, so they just used the 60kWh pack and software limited it.

 

[aronth5]

I don't think it's clear at all, either. The base M3 isn't even going to be available in 2017 -- they're going to put the 75kWh battery in a rear drive configuration to start production, and they'll probably build dual-motor models before they release cars with the small battery. The 75 kWh model is going to blow past the Bolt on range, with somewhere around 300 mile EPA average, and absolutely killer highway range. I expect the big pack will add between $5000 and $7000 to $35K price, depending on how much margin Tesla needs to add. The base car is less expensive than the Bolt; it's going to be just fine with a 50 to 55kWh pack and EPA average range better than 215 miles, but perhaps not quite up to the Bolt.

Since Tesla & SpaceX employees go first I find it hard to believe they won't have the option to initially purchase a base model with the smaller battery.

 

[timk225]

Why wouldn't the Model 3 batteries be 60 and 85 like when the Model S first came out?

 

[FlatSix911]

Why wouldn't the Model 3 batteries be 60 and 85 like when the Model S first came out?

Perhaps, because it's not a Model S

 

[Muhammad]

Why wouldn't the Model 3 batteries be 60 and 85 like when the Model S first came out?

Em already said on twitter the largest battery they can offer on the 3 is 75KwH

 

[FlatSix911]

Cross post from the Model 3 delivery estimator

Hi. I've added estimated rated range numbers to the displayed results. These are based on my calculations. I have a separate spreadsheet HERE in case people are interested. When the actual numbers are released, we can look back and see if the estimates were any good. Estimated EPA rated range
Model 3 55: 218 mi
Model 3 55D: 227 mi
Model 3 75: 284 mi
Model 3 75D: 297 mi
Model 3 P75D: 281 mi

 

[RobStark]

And yet, it did happen. GM's base Bolt has more range than Tesla's base Model S and base Model X. Say it ain't so!

Apples to Mandarins

S and X are much bigger cars with full width seats for typical sized Americans not competing in the same price class as Bolt.

Although Bolt is a subcompact hatchback while Model 3 is a compact sedan the small battery RWD Model 3 will be in the same price class as Bolt. And they will both have about the same interior volume although configured very differently.

 

[alseTrick]

If they can afford to do a software locked 60 kWh it's a win/win for everyone assuming the majority of people don't stick with the bare bones base model. This also makes pack manufacturing super simple.

Sure. But this is a cheaper vehicle with lower margins targeted at less affluent people, many of whom either don't want/need or can't afford theextra cost for such upgrades.

The number of people later unlocking a software limited 3 battery will almost certainly be much less than in the S/X.

 

[JeffK]

Sure. But this is a cheaper vehicle with lower margins targeted at less affluent people, many of whom either don't want/need or can't afford theextra cost for such upgrades.

The number of people later unlocking a software limited 3 battery will almost certainly be much less than in the S/X.

I keep hearing this stated on the forums but there's been very little to indicate that margins (which are a percentage) are going to be lower with the Model 3.

Of course the up front cost initially will be high, but that's true of any new car.

The Model S/X with 60 kWh software locked was getting 15-20% gross margins and with conversion to 75 kWh it would push margins into the mid-20s. Performance models for comparison were getting 30-35% gross margins. We already know Tesla was shooting for 20% gross margins with the Model 3. We don't know how that breaks down just yet. It's also assumed that the performance version will be sold at a higher gross margin as well.

 

[Rashomon]

Every indication is that very few MX/MS 60 owners are unlocking to 75. There's a reason why Tesla canceled the 60s. It was a stop gap to increase short term demand, and didn't make long-term financial sense. I would be willing to bet real money ($100, anyone?) that the base pack for the M3 when it is initially available has only the number of cells it requires, and will not be unlockable to a higher energy. I suspect that the base pack will be the minimum size to beat the 215 mile EPA prediction by 5 to 15 miles, but on that Tesla may surprise.

There's a lot of wishful thinking by future M3 owners on this board, without reflecting on what makes business sense for Tesla. If Tesla manages to get the price of a pack (not cells) down to $125-135 kWh within the first year of Gigafactory production, that will be a stupendous achievement. Tesla has already said that the M3 base pack will be smaller than 60kWh, and has also strongly hinted that the big pack will be 75kWh. If there's a 20kWh difference in sizes, cost to the user for the pack will likely be 2 to 3 times OEM cost, so figure somewhere from $5000 to $8000 to upgrade. That's how higher-option cars (and vacuums, and televisions, and iPhones, and every other consumer product) have higher margins than base models. Base models invariably have very low or even near zero margins, and you make up for that by upselling. Just go try to find a base model Corolla on a Toyota dealer's lot.