Will the $35K version really have all those initially announced limitations?

[DriveMe]

Here is what I've been thinking about the Standard Range $35K version. Pure speculation!

The Mid-range version is now $42,900 as of today. If Tesla can find a way to lower the price of the Mid-range version, say, by another couple of thousand dollars by July, bringing the price close to $40K and compensating for the next tax credit reduction, then the remaining price gap becomes rather small (just $5-6K) and Tesla could possibly forgo some of the initially planned limitations, in order to simplify the production and inventory! They may decide to release the $35K version with better configuration than what was initially announced!

Sure, they could save some money by redesigning and making the battery smaller, putting the metal roof instead of the glass roof, using fabric seats, downgrading the audio system, etc. However, all those changes add complexity to the production line: it will have to be retooled and reconfigured and they will have to deal with many additional options both in production, and in inventory.

So, I am thinking that they may find it feasible not to implement some of those limitations! For example, they may conclude that it would be better to standardize on the glass roof across all Tesla models. Or they may decide not to redesign the battery and just either further reduce the number of cells, like they did with the Mid-range model or even release the Standard-Range version with a software-limited mid-range battery in hopes that some will choose to upgrade down the road.

What do you guys think?

 

[brobinson]

Whatever they do, they really should stop marketing the price including 'gas savings.' It is, and always has been, shady as hell. I think its fair to include the tax credit since the vast majority of buyers will qualify. Gas savings is just far to variable.

 

[Barklikeadog]

Don't factor in a credit that some buyers won't get! 'Gas savings'? Cmon man. How much of the gas savings are people getting if they are trading in an EV for the 3?

Sell it for $35,000 or don't.

 

[Barklikeadog]

Here is what I've been thinking about the Standard Range $35K version. Pure speculation!

The Mid-range version is now $42,900 as of today. If Tesla can find a way to lower the price of the Mid-range version, say, by another couple of thousand dollars by July, bringing the price close to $40K and compensating for the next tax credit reduction, then the remaining price gap becomes rather small (just $5-6K) and Tesla could possibly forgo some of the initially planned limitations, in order to simplify the production and inventory! They may decide to release the $35K version with better configuration than what was initially announced!

Sure, they could save some money by redesigning and making the battery smaller, putting the metal roof instead of the glass roof, using fabric seats, downgrading the audio system, etc. However, all those changes add complexity to the production line: it will have to be retooled and reconfigured and they will have to deal with many additional options both in production, and in inventory.

So, I am thinking that they may find it feasible not to implement some of those limitations! For example, they may conclude that it would be better to standardize on the glass roof across all Tesla models. Or they may decide not to redesign the battery and just either further reduce the number of cells, like they did with the Mid-range model or even release the Standard-Range version with a software-limited mid-range battery in hopes that some will choose to upgrade down the road.

What do you guys think?

I wonder if they will ever offer it at this point without an asterisk. Good theory that the 35k people might get a better vehicle for the money as Tesla could save on production costs.
They will make up for it, though. I bet that they increase the paint fees again for any color besides black. it will make the 35k crowd cringe. i have to assume that the 35k holdouts
are those who would normally spend 25k max on a car. If you spend 50k on a car, you have a model 3 already. The 25/35k people will cringe at paying 2k for paint on a small car.
And we haven't even addressed the 'credit' reduction

 

[tashtibet]

also people should not hold on to the mind set of $35K base model if they see it's not happening-just get on the band wagon & enjoy the car.

 

[adaptabl]

also people should not hold on to the mind set of $35K base model if they see it's not happening-just get on the band wagon & enjoy the car.

It was 35K less the $7,500-$12,000 rebates That puts the price at $22,500 in June. That's what buyers are expecting.

 

[mtndrew1]

Power seats, power steering columns, and 15 speaker audio systems with powered subwoofers are very expensive. Definitely expect all of those to be ditched.

Tesla has their own seat fab and cushion room so applying textile isn’t going to be a big deal and is almost certainly cheaper than the fake leather. They’ll just skip the heat element step for the back seats saving some cash.

As far as manufacturing complexity, the robots will install the cheap seats in the identical manner and the speakers in the same way, just with fewer of them.

I think the only possible thing they waver on is the glass roof, but a glass piece without the heat rejection layer and painted black on the underside that doesn’t need to be optically correct with some textile material on the underside can be installed the same way the current panel is and will cut cost.

Car companies fret over fractions of a cent in car parts to cut costs; all of these are tens or hundreds of dollars each. Expect them to go.

 

[ItsNotAboutTheMoney]

It was 35K less the $7,500-$12,000 rebates That puts the price at $22,500 in June. That's what buyers are expecting.

No it isn't.
Buyers were _hoping_ for rebates.

It has been repeated many times: $35k before incentives. That's the target.
That'll allow +PUP+color+deliver to come in around the $42k entry level premium segment ASP.

 

[Rsdavis9]

Well the difference is:
1. Battery is smaller with less cells
2. Metal roof
3. Premium interior stuff
So what is the most expensive?
Probably the battery.
So keep all the other stuff the battery is the easiest to change for the assembly line. Just one component changes.

 

[ewoodrick]

Don't worry about the production line, as either an existing one will be retooled or new one built.
By reducing all of the premium features both cost and complexity will decrease.
Plus, don't assume that reducing the cost when the tax credit reduces / disappears will occur next time, I suspect that the are pretty near the bottom now

 

[brkaus]

They need a model w/ the limitations at the lower price. It allows up-sell to the more expensive model.

Battery / range up-sell is hard for the non EV aware. Touch and feel feature up-sell is easier. There is profit in this stuff and people want it.

My friend used to sell cars at a new car dealer. He said people frequently came in looking at the bottom end model. In the day when AC wasn't so common, he was always required to keep his window up during test drives no matter the outside temp. There was a list of other test drive things as well, I cannot recall at the moment.

 

[Probllama]

Well the difference is:
1. Battery is smaller with less cells
2. Metal roof
3. Premium interior stuff
So what is the most expensive?
Probably the battery.
So keep all the other stuff the battery is the easiest to change for the assembly line. Just one component changes.

I am afraid you are right and it sucks for all the cheapos like me hoping to save $5k while still getting a range more than 220 miles. In my opinion range is king when it comes to EVs and it will be the last thing I would sacrifice for a lower price point. My dream Model 3 at this point has a LR battery with cloth interior and metal roof but looks like that is not happening anytime soon...

 

[ebmcs03]

It was 35K less the $7,500-$12,000 rebates That puts the price at $22,500 in June. That's what buyers are expecting.

Where does $12,000 rebate come from?

 

[DriveMe]

They need a model w/ the limitations at the lower price. It allows up-sell to the more expensive model.

Battery / range up-sell is hard for the non EV aware. Touch and feel feature up-sell is easier. There is profit in this stuff and people want it.

My friend used to sell cars at a new car dealer. He said people frequently came in looking at the bottom end model. In the day when AC wasn't so common, he was always required to keep his window up during test drives no matter the outside temp. There was a list of other test drive things as well, I cannot recall at the moment.

That's a valid point. However, Tesla is not known for pushing the up-sell. There are no dealerships and Tesla sales people are not on commissions. Besides, most of those buying a Tesla are going to be EV aware to a certain degree. So, I am not sure much effort will be put into up-sell. It certainly wasn't with the Model S or X. Tesla has simplified the Model S and X production, made most optional features standard. I suspect they will do the same with the Standard-range Model 3. The up-sell if any will likely come from software-enabled features.

 

[T-Will]

I think they're going to strip the $35k model to save every dollar they can. I doubt they'll deliver the $35k model until the end of 2019 if not early 2020.

That being said, I canceled my $1000 deposit and will just wait for the used market to come down into the $30k range (I've already seen a couple in the high $30k's).

 

[Probllama]

That's a valid point. However, Tesla is not known for pushing the up-sell. There are no dealerships and Tesla sales people are not on commissions. Besides, most of those buying a Tesla are going to be EV aware to a certain degree. So, I am not sure much effort will be put into up-sell. It certainly wasn't with the Model S or X. Tesla has simplified the Model S and X production, made most optional features standard. I suspect they will do the same with the Standard-range Model 3. The up-sell if any will likely come from software-enabled features.

Up-sell generates better gross margin for the company and to achieve the 25% they promised while selling a $35k base model they need to sell a bunch of $50k+ Model 3s...

 

[insaneoctane]

I'm confident that Tesla will offer the neutered model. The only questionable retraction might be the metal roof. It's not clear to me that a metal roof option will be cheaper for Tesla. It *might* be cheaper for them to skip the IR coatings and stick some fabric above the driver. Some folks might be able to remove that and get tint applied for a "poor man's" version of the current glass roof. We'll just have to wait and see.... But the other changes ABSOLUTELY save Tesla money (smaller battery for SURE, fabric upholstery with no motors or heating elements for SURE, bye bye Alcantara on the doors, fewer speakers and no sub) All pretty easy for Tesla to introduce. Of course if you want the car for $35K it will be black!

 

[DriveMe]

I think they're going to strip the $35k model to save every dollar they can.

Yes, that would be the goal. But the point I am trying to make is that stripping down the design is not always the best way of reducing the costs. Sometimes simplifying the production and reducing the number of options might be a better choice for saving the costs.

 

[DriveMe]

It's not clear to me that a metal roof option will be cheaper for Tesla. It *might* be cheaper for them to skip the IR coatings and stick some fabric above the driver.

That's an interesting idea!

 

[thx1139]

Here is what I've been thinking about the Standard Range $35K version. Pure speculation!

The Mid-range version is now $42,900 as of today. If Tesla can find a way to lower the price of the Mid-range version, say, by another couple of thousand dollars by July, bringing the price close to $40K and compensating for the next tax credit reduction, then the remaining price gap becomes rather small (just $5-6K) and Tesla could possibly forgo some of the initially planned limitations, in order to simplify the production and inventory! They may decide to release the $35K version with better configuration than what was initially announced!

Sure, they could save some money by redesigning and making the battery smaller, putting the metal roof instead of the glass roof, using fabric seats, downgrading the audio system, etc. However, all those changes add complexity to the production line: it will have to be retooled and reconfigured and they will have to deal with many additional options both in production, and in inventory.

So, I am thinking that they may find it feasible not to implement some of those limitations! For example, they may conclude that it would be better to standardize on the glass roof across all Tesla models. Or they may decide not to redesign the battery and just either further reduce the number of cells, like they did with the Mid-range model or even release the Standard-Range version with a software-limited mid-range battery in hopes that some will choose to upgrade down the road.

What do you guys think?

Part of what you say is why I think a SR version is the next step. Production Line already setup to put in LR or MR battery. Not much complexity to add the SR battery. The other options put more stress on the production line. I think once spring hits and SuperCharger construction picks up again you will see SR battery released. Why SuperCharger? Well with more SR vehicles out it puts more stress on the SuperCharger network. Colder weather makes it even worse. So wait until the freezing temperatures are gone. Then by next winter the SC network is likely devoid of long stretches between SuperChargers that make shorter range more stressful.