Tesla's Model 3 could cost $25,000 or less after tax incentives

[Brovane]

I think it would have been smarter for them to focus on making more cutting edge high end cars. Maybe also expand to making hybrid electric buses or long haul trucks.

License or do some collaboration with an existing high end manufacturer like Toyota for the Model 3. For one thing, their only factory is pretty high cost, right? In Cali?

Tesla has already opened up the patents on there technology so other companies can use it without paying a fee. Elon wants to bring Electric cars to the mass market to affect the largest number of people.

 

[KeithP]

Well, I put down a deposit. I want to be one of the first to get the "Model 3 production has been delayed" notice. 😉

-KeithP

 

[DAGTA]

Well, I put down a deposit. I want to be one of the first to get the "Model 3 production has been delayed" notice. 😉

-KeithP

Tesla isn't accepting Model 3 deposits, yet. Are you sure you didn't put it down on a Model S or Model X ?

 

[tweakmonkey]

I think it would have been smarter for them to focus on making more cutting edge high end cars. Maybe also expand to making hybrid electric buses or long haul trucks.

License or do some collaboration with an existing high end manufacturer like Toyota for the Model 3. For one thing, their only factory is pretty high cost, right? In Cali?

Yep the factory is in Fremont - about 1 mile from my work. A 1 bedroom apartment in Fremont is $2500 right now so you can imagine what it costs to keep their workforce there.

 

[desura]

Yep the factory is in Fremont - about 1 mile from my work. A 1 bedroom apartment in Fremont is $2500 right now so you can imagine what it costs to keep their workforce there.

Yup. If you look at GM and Ford, they basically only make their expensive cars with UAW labor. For cheap stuff, they source lots to Mexico. Unless Tesla is getting a hella sweetheart deal in Cali, I don't see how they make this work. They're already losing something like $200 million per quarter.

 

[Brovane]

Yup. If you look at GM and Ford, they basically only make their expensive cars with UAW labor. For cheap stuff, they source lots to Mexico. Unless Tesla is getting a hella sweetheart deal in Cali, I don't see how they make this work. They're already losing something like $200 million per quarter.

The reason that Tesla is burning through so much cash is because of their Capital investments to continue to grow production by about 40%-50%. If Tesla stopped investing in production increases they could be profitable now. However Musk doesn't want Tesla to be a niche player in the auto market and he knows that he needs to push production.

Tesla doesn't have to deal with expensive UAW labor contracts and legacy costs like the traditional auto companies have had to deal with. Tesla also uses vertical integration of production which also helps Tesla control it costs. Tesla maintains about a 20% retail margin on the Model S which is above the industry norm. If they don't reduce the Model S price when the giga-factory comes online this retail margin which continue to get better.

Keep in mind the same person that runs Tesla has managed to also produce a rocket in California that beats in price every other space launch vehicle in the world.

 

[Accord99]

The reason that Tesla is burning through so much cash is because of their Capital investments to continue to grow production by about 40%-50%.

But capital investment in itself doesn't affect operating profit/loss, which is the oft-quoted figure in earnings releases.

Tesla maintains about a 20% retail margin on the Model S which is above the industry norm.

But that's because Tesla sells at retail. But in turn, their selling expense is well above the industry norm because they pay for the stores and service centers.

 

[desura]

The reason that Tesla is burning through so much cash is because of their Capital investments to continue to grow production by about 40%-50%. If Tesla stopped investing in production increases they could be profitable now. However Musk doesn't want Tesla to be a niche player in the auto market and he knows that he needs to push production.

Tesla doesn't have to deal with expensive UAW labor contracts and legacy costs like the traditional auto companies have had to deal with. Tesla also uses vertical integration of production which also helps Tesla control it costs. Tesla maintains about a 20% retail margin on the Model S which is above the industry norm. If they don't reduce the Model S price when the giga-factory comes online this retail margin which continue to get better.

Keep in mind the same person that runs Tesla has managed to also produce a rocket in California that beats in price every other space launch vehicle in the world.

Okay, vertical integration doesn't necessarily mean decreased costs. The trend really has been outsourcing as much as you can while retaining essential talents, like Apple. The Space X program succeeds also because the federal government has lots of sourcing requirements which inflate costs. The Space X rocket isn't a mass consumption product but they make a few at a time.

 

[Brovane]

But capital investment in itself doesn't affect operating profit/loss, which is the oft-quoted figure in earnings releases.

However R&D is counted and Tesla spent over $700 Million in R&D this year. Tesla was cash flow positive on it's core operations.

But that's because Tesla sells at retail. But in turn, their selling expense is well above the industry norm because they pay for the stores and service centers.

I don't disagree.

 

[Brovane]

Okay, vertical integration doesn't necessarily mean decreased costs. The trend really has been outsourcing as much as you can while retaining essential talents, like Apple. The Space X program succeeds also because the federal government has lots of sourcing requirements which inflate costs. The Space X rocket isn't a mass consumption product but they make a few at a time.

The Falcon-9 meets EELV certification standards for DOD payloads, currently meets NASA Category-2 certification standards for launches and the F9 meets or exceeds all NASA human rating certification standards. The Falcon-9 successfully competes on the world space launch market against other launch vehicles, like the ESA Ariane-5 and the Russian Proton. The Falcon-9 meets the same Federal government sourcing requirements that the Atlas-V and the Delta-IV have to meet. SpaceX also developed and manufacturers the rocket engine for the Falcon-9 in-house which is unique in the US space launch industry for a orbital launch vehicle. At the Hawthorne factory, raw material goes in one side of the factory and rockets come out the other side. The fact that ULA has to source the Atlas-V boost stage engine from the Russians is causing ULA a lot of head-aches. Clearly in the instance of SpaceX vertical integration has resulted in reduced costs when compared to other launch vehicles both domestic and foreign.

 

[SSSnail]

I'll believe $35K MSRP when I see one in the flesh. Either these are going to be pretty stripped down or Tesla will be selling a loss leader for something else or they're anticipating reselling of carbon credits going through the roof.

Just buy a stripped out base model, velcro a tablet to the console and waahhla, optioned.

 

[slugg]

I'm sold on the idea of electric cars. But aside from the Teslas that normal people can't afford, there is nothing worth having right now. Charging stations are still an issue, especially if you live anywhere outside of California. Right now is just not the time, so maybe the late 2018 launch might make sense.

The answer is always Miata.

 

[nk215]

Nah. 🙂 as others have said, it's much cheaper than gasoline and my gasoline bill is greatly reduced.

Also, I've put in a request for the EV rate program where the electric company offers a "super off peak" rate from 11pm to 5am. I can schedule the car to charge during that time.

Did you price out the replacement battery cost? I looked into Tesla S and the battery replacement is $22K + your original battery. Tesla won't even sell you a battery by itself. you must turn in your old battery.

A $3000 body damage on a normal car cost $22K to fix in a Tesla model S. Similar damage on a Audi aluminum body cost around $5.5K.

The above 2 are among the reasons I decided against Tesla Model S.

I prefer Tesla to keep the price high so people don't have to queue up at charger station udring long trip. At $35K-$60K price point some cheap ass owners would camp the charger station to save a few buck charging at home.

 

[Brovane]

I'm sold on the idea of electric cars. But aside from the Teslas that normal people can't afford, there is nothing worth having right now. Charging stations are still an issue, especially if you live anywhere outside of California. Right now is just not the time, so maybe the late 2018 launch might make sense.

The answer is always Miata.

There is plenty of charging stations around. The problem is the length of time that it takes to charge. The other issue is that charging stations tend to be located close to the main doors for establishments so they take up prime parking spots. This means that you have a good chance that the EV spot is ICE'd

I just bought a Nissan Leaf in December and it works just fine as 2nd car for travelling around Orange County. Just plug it in at night and in the morning it is ready to go again.

 

[DAGTA]

Did you price out the replacement battery cost? I looked into Tesla S and the battery replacement is $22K + your original battery. Tesla won't even sell you a battery by itself. you must turn in your old battery.

A $3000 body damage on a normal car cost $22K to fix in a Tesla model S. Similar damage on a Audi aluminum body cost around $5.5K.

The above 2 are among the reasons I decided against Tesla Model S.

I prefer Tesla to keep the price high so people don't have to queue up at charger station udring long trip. At $35K-$60K price point some cheap ass owners would camp the charger station to save a few buck charging at home.

I bought a CPO (used) Model S. Tesla gives a new 4 year, 50,000 mile full car warranty on the CPOs. At this point, I don't want to own a Tesla out of warranty because of the high repair costs and Tesla's unwillingness to share information so people and other shops can do repair work. I think that will shift after the Model 3 release. My current plan is to either trade in my Tesla for another CPO in 3 or 3.5 years, or sell it myself and buy something else.

My deductible on my insurance is $250 on the Tesla and $500 on the Miata. I went $250 because it was cheaper to do $250 without full glass coverage than $500 with full glass coverage on the Tesla.

I have the remainder of the original 8 year / unlimited miles battery warranty. The car was manufactured in June 2013 so my battery is covered until June 2021. As of today, it appears to have lost about 4.5% of it's capacity; about 1.8% loss per year.

 

[desura]

The Falcon-9 meets EELV certification standards for DOD payloads, currently meets NASA Category-2 certification standards for launches and the F9 meets or exceeds all NASA human rating certification standards. The Falcon-9 successfully competes on the world space launch market against other launch vehicles, like the ESA Ariane-5 and the Russian Proton. The Falcon-9 meets the same Federal government sourcing requirements that the Atlas-V and the Delta-IV have to meet. SpaceX also developed and manufacturers the rocket engine for the Falcon-9 in-house which is unique in the US space launch industry for a orbital launch vehicle. At the Hawthorne factory, raw material goes in one side of the factory and rockets come out the other side. The fact that ULA has to source the Atlas-V boost stage engine from the Russians is causing ULA a lot of head-aches. Clearly in the instance of SpaceX vertical integration has resulted in reduced costs when compared to other launch vehicles both domestic and foreign.

Yes, but they make like 5 a year, right?

A Model 3 is looking at 200k/yr if all goes according to plan.

 

[vi edit]

I bought a CPO (used) Model S. Tesla gives a new 4 year, 50,000 mile full car warranty on the CPOs. At this point, I don't want to own a Tesla out of warranty because of the high repair costs and Tesla's unwillingness to share information so people and other shops can do repair work. I think that will shift after the Model 3 release. My current plan is to either trade in my Tesla for another CPO in 3 or 3.5 years, or sell it myself and buy something else.

Do they negotiate on their CPO prices?

 

[Brovane]

Yes, but they make like 5 a year, right?

A Model 3 is looking at 200k/yr if all goes according to plan.

Current production rate is about 6-8 cores a year with a increase to 18 cores a year this year with a eventual production rate of 30 cores a year. They will also have to increase the Merlin Engine production to keep up with the core production.

 

[Sidekicknichola]

Hoping your next electric bill won't give you a heart attack 😵

FWIW - I bought a Volt about two years ago, figured I would drive it for 4-6 years until the Model 3 releases, try and dump the Volt for the 3 and hope for the best. In the past 18 months the addition of charging the Volt has raised our electric bill $16 a month. Usually I burn the battery down to 0-7 miles a day, and do this ~23 days a month (working days).

The volt is awesome, seriously shocked there aren't more out there. Summer I get 50 miles on a charge, winter (sub 20*) I get 27 on a charge... my round trip commute is 34 miles, so some of the year I use a little gas, but 8 months of the year, not a drop. Even on the interstate at 75 I get 43 or so MPG. The car is small, quirky looking, but is seriously is perfect for my needs.

My fingers are crossed the model 3 can provide 180 miles range in the cold, 5 second 0-60, and the same UI as the Model S/X. If they can do that, I'm in.

 

[Pantoot]

My deductible on my insurance is $250 on the Tesla and $500 on the Miata. I went $250 because it was cheaper to do $250 without full glass coverage than $500 with full glass coverage on the Tesla.

That's brave of you. We replaced the first windshield due to a rock strike about a month in. The second one got a crack a week after that.

Bad luck for sure, but I wouldn't want to be paying out of pocket, I think they are around $1500 to replace. (plus another $300 for the tint.)

 

[desura]

FWIW - I bought a Volt about two years ago, figured I would drive it for 4-6 years until the Model 3 releases, try and dump the Volt for the 3 and hope for the best. In the past 18 months the addition of charging the Volt has raised our electric bill $16 a month. Usually I burn the battery down to 0-7 miles a day, and do this ~23 days a month (working days).

The volt is awesome, seriously shocked there aren't more out there. Summer I get 50 miles on a charge, winter (sub 20*) I get 27 on a charge... my round trip commute is 34 miles, so some of the year I use a little gas, but 8 months of the year, not a drop. Even on the interstate at 75 I get 43 or so MPG. The car is small, quirky looking, but is seriously is perfect for my needs.

My fingers are crossed the model 3 can provide 180 miles range in the cold, 5 second 0-60, and the same UI as the Model S/X. If they can do that, I'm in.

I got a C-max though I considered a Volt. I live in a region with heavy coal usage for electricity though, so climate-wise it wasn't that great. However, replacing oil with coal is a win now that I think about, send less money to those jackals in the middle east.

 

[DAGTA]

Do they negotiate on their CPO prices?

No. However, if you have a trade-in, they post that to a marketplace of buyers. You can try to negotiate a bit on that, but it sounds like it's auction style. I managed to get more than I expected from my trade-in.

 

[DAGTA]

That's brave of you. We replaced the first windshield due to a rock strike about a month in. The second one got a crack a week after that.

Bad luck for sure, but I wouldn't want to be paying out of pocket, I think they are around $1500 to replace. (plus another $300 for the tint.)

According to my ins, I pay for the replacement, then submit a claim, and get reimbursed for the claim amount minus the $250 deductible. So a windshield costs $250 for me.

 

[slugg]

There is plenty of charging stations around. The problem is the length of time that it takes to charge.

... Says the guy from California, right after I said charging stations were a problem anywhere outside of California. In Tampa, I've seen literally two charging stations ever. I know more exist, but I've only seen two. Outside of Tampa, I've seen one.

As far as the charging time, a Tesla Super-Charger will take care of you in 20 minutes. Granted, it's not as fast as filling up at a pump, it's not a problem. Annoyance, sure, but not a problem. But guess how many Tesla chargers even exist in Florida? 12. And that's with 80 to 120 miles of distance between each one. That's a problem.

Maybe it'll get better in a few years. Really, I'm sold on electric cars. I just don't think it's quite ready yet. So close, but not quite.

 

[DAGTA]

... Says the guy from California, right after I said charging stations were a problem anywhere outside of California. In Tampa, I've seen literally two charging stations ever. I know more exist, but I've only seen two. Outside of Tampa, I've seen one.

As far as the charging time, a Tesla Super-Charger will take care of you in 20 minutes. Granted, it's not as fast as filling up at a pump, it's not a problem. Annoyance, sure, but not a problem. But guess how many Tesla chargers even exist in Florida? 12. And that's with 80 to 120 miles of distance between each one. That's a problem.

Maybe it'll get better in a few years. Really, I'm sold on electric cars. I just don't think it's quite ready yet. So close, but not quite.

http://www.plugshare.com/ is very useful.

Tesla said they were targeting adding 300 more superchargers in 2016 worldwide. They plan to continue to build out the network.