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

[insaneoctane]

Yes, that would be 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.

Yes,but....
If Tesla can offer the "cheap" version for even the same cost as the premium, the existence of the cheaper option will justify upgrades for some to many. For example, if the metal roof can be produced and assembled for the same price as the all glass roof,then Tesla won't lose any money, but some people will pay extra $ for the upgrade. That solution nets Tesla more $ and margin than just giving the all glass roof because it is the same price to them....

 

[UngaBunga1989]

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 actually think it is almost as likely (and probably smarter) for them to drop the price on the midrange a couple of thousand more and call it a day. “At $39,000 the MR represents an outstanding value vehicle and all of us at Tesla believe this is the best balance of features that Tesla drivers expect and the best price point we can deliver.”

 

[insaneoctane]

I actually think it is almost as likely (and probably smarter) for them to drop the price on the midrange a couple of thousand more and call it a day. “At $39,000 the MR represents an outstanding value vehicle and all of us at Tesla believe this is the best balance of features that Tesla drivers expect and the best price point we can deliver.”

Maybe a better choice, but no way will Tesla/Elon give the naysayers the ammo by not offering the $35K before incentives car!

 

[DriveMe]

I actually think it is almost as likely (and probably smarter) for them to drop the price on the midrange a couple of thousand more and call it a day. “At $39,000 the MR represents an outstanding value vehicle and all of us at Tesla believe this is the best balance of features that Tesla drivers expect and the best price point we can deliver.”

I don't think this is an option from publicity and legal standpoints. They've been promising the $35K option all along, they will have to deliver it one way or another.

 

[Need]

I think OP has a point. If the price difference is only about $5K, why not do what they did with MS/MX... offer a short range version with identical hardware as the mid range... just software limited speed and range. They probably could even software limit the sound system.. like no output to the sub-woofer. No heated seats is also easily controlled by software. That way, they could milk you later for enhancement piece by piece. $2000 to unlock faster 0-60. $500 to enable the sub-woofer. You want heated seats?.... if you are in warm area like Hawaii, California, Florida, ... it would be $500. If you are in colder area.... $1000.

 

[Barklikeadog]

Maybe a better choice, but no way will Tesla/Elon give the naysayers the ammo by not offering the $35K before incentives car!

Forget naysayers, the blowback will be from the line-waiters who make 40k per year, put down a deposit, and waited waited waited. An extra 7k is too much to ask of them.

 

[trm2]

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.

Exactly. I traded in a Volt to get my Model S. Upon delivery, they told me about the "gas savings" I would enjoy. I laughed and told them about the extra electricity I was going to buy because the Tesla is less efficient than the Volt. (and it is actually a huge difference. My S takes about twice the electricity that my Volt did on my daily commute)

 

[adaptabl]

Where does $12,000 rebate come from?

Some states and cities have additional rebates.

1. Colorado

• State credit: $5,000

 

[CyberShy]

A piece of glass is way more expensive than a steel roof and a cloth liner with insulation. Glass has to be 5-10x more.

 

[ItsNotAboutTheMoney]

I actually think it is almost as likely (and probably smarter) for them to drop the price on the midrange a couple of thousand more and call it a day. “At $39,000 the MR represents an outstanding value vehicle and all of us at Tesla believe this is the best balance of features that Tesla drivers expect and the best price point we can deliver.”

The SR uses fewer cells. It would always cheaper than the MR.

 

[M3BlueGeorgia]

Running the numbers, using USA pricing:

MR+RWD with premium interior = $42.9K
Less $5K for premium interior = $37.9K

There was a $3K difference between the LR and MR when the MR was announced, and SR has similar battery size reduction
Therefore reduce by $2.9K to get SR+RWD with basic interior = $35K
Alternatively, SR+RWD with premium interior = $40K

So we can now see the path to a $35K version of the Model 3.
The battery size is the easy part.

If I were setting configurations for Tesla, initially there'd be a mid-level interior, which compared to the premium interior would have:
1) Non-glass roof
2) Cloth seats
3) Manual adjust on passenger seat
4) Replace piano-black elements and wood trim with cloth or plastic, as appropriate
5) (maybe) Manual adjust on steering wheel?
6) (maybe) Remove rear seat heaters
7) (maybe) Remove rear seat vent

Tesla should be able to price this cloth trim version at around $2K

 

[Need]

If you are just looking at this a traditional cost vs price comparison, it would make sense for Tesla to cut things out and cut costs. But this is Tesla we are talking about. They put EAP hardware on all their cars even if you don't buy EAP. They want to sell you "unlocks". And if you don't buy it, fine... the new person who buys your car may. And if you sell it back to Tesla... they could just unlock everything and "bang" your short range used M3 is now a mid range M3 CPO.

 

[DriveMe]

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...

I think they will continue selling higher-priced configurations in good numbers even if range and performance are the only differentiating factors. Not everyone will be OK with the Standard Range version, some will be looking for longer range, some will want better performance, and some will settle for nothing but an AWD.

However, many of those who are currently waiting for the SR version, have already stretched their budgets to get a Tesla, so up-selling to them won't be easy, at least initially. Perhaps in a year or two thing will be different.

 

[DriveMe]

3) Manual adjust on passenger seat
5) (maybe) Manual adjust on steering wheel?

This is slightly off-topic, but I'll be surprised if we see any manual adjustments in the SR version! The car is intentionally designed to be completely "stateless" every single adjustment (except for the rear view mirror) can be reset automatically or potentially adjusted to a driver profile. Seat positions, the steering wheel, side mirrors, even the ventilation and the turn signal switch. Nothing has to be reset manually. I think this is a fundamental design concept, perhaps with the long-term vision for the Tesla Network and ride sharing: one driver/passenger leaves - the car automatically resets for the next driver...

 

[RScottyL]

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.

I agree 100%!

I am not fond of the use of gas savings when looking up the pricing!

 

[UngaBunga1989]

If you are just looking at this a traditional cost vs price comparison, it would make sense for Tesla to cut things out and cut costs. But this is Tesla we are talking about. They put EAP hardware on all their cars even if you don't buy EAP. They want to sell you "unlocks". And if you don't buy it, fine... the new person who buys your car may. And if you sell it back to Tesla... they could just unlock everything and "bang" your short range used M3 is now a mid range M3 CPO.

GREAT point! Never thought about that...

 

[kev1n]

i wouldnt be surprised if they included the glass roof at the minimum.

the other stuff like textile seats, speakers, may still come as an option

 

[ebwb]

They should remove AP hardware from the base car and offer rudimentary automatic emergency braking that meets the minimum federal requirements. Every dollar counts, so why add unnecessary hardware that will never be utilized?

 

[fr100]

I don't think they can save much by removing PUP. Maybe $1,000-$1,500. Which means they will lose $3,500-$4,000 in margin for everyone that decides not to get PUP.

 

[240W]

Running the numbers, using USA pricing:

MR+RWD with premium interior = $42.9K
Less $5K for premium interior = $37.9K

There was a $3K difference between the LR and MR when the MR was announced, and SR has similar battery size reduction
Therefore reduce by $2.9K to get SR+RWD with basic interior = $35K
Alternatively, SR+RWD with premium interior = $40K

So we can now see the path to a $35K version of the Model 3.
The battery size is the easy part.

If I were setting configurations for Tesla, initially there'd be a mid-level interior, which compared to the premium interior would have:
1) Non-glass roof
2) Cloth seats
3) Manual adjust on passenger seat
4) Replace piano-black elements and wood trim with cloth or plastic, as appropriate
5) (maybe) Manual adjust on steering wheel?
6) (maybe) Remove rear seat heaters
7) (maybe) Remove rear seat vent

Tesla should be able to price this cloth trim version at around $2K

Cheaper wheels and tires
Delete cameras/sensors not needed for eap/fsd
Remove all seat heaters
And smaller screen, haha