Mass EV vs. Mass ICE

It's been said many times that the target competition for the Model 3 is the BMW 3-Series. Tesla has presented itself as a luxury EV company. With that being the case, the price of a fully loaded Honda Civic is mostly irrelevant. While Tesla has a goal of promoting the widespread adoption of EVs, it doesn't necessarily mean that the cars they currently plan on offering should match Honda Civic sales numbers. The goal is to get other companies to adopt EVs and move the automobile industry as a whole to EVs. The Model 3 is a start, as they want to show that you can make a compelling EV (read: not a barebones weirdmobile) for an affordable price (read: not the price of a Model S). But again, the target competition for the Model 3 is the BMW-3 series.

OldSlowCuber said:

I understand that charging with electricity is cheaper than the cost of refueling with gasoline.

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Unfortunately this is currently not true.

OldSlowCuber said:

I realize that maintenance costs for EVs are significantly cheaper than for ICEs.

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Unfortunately this is currently not true for the Model S either.

$35k for a Civic seems like an awful lot.

At least in the US the Civic is very popular because its a good cheap car. It starts at around $18k. Thats about half the starting price of the Model 3. A much better comaprison is the 3-Series or A4. Those will be the product that competes with the Model 3, and while those aren't true mass market cars, the segment is quite large enough to have a huge impact on the future of transportation.

jaguar36 said:

Unfortunately this is currently not true.

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I don't know what you pay for electricity, but my charging costs are equivalent to less than $1 per gallon.

Well, in California, it's cheaper to operate an EV if you have a TOU contract, or free charging at work.

With a Tesla, if you have a nearby Supercharger, you can eliminate most your electric costs.

EV's will never be a big seller until more people get behind the wheel. EV powertrains are addictive. It's a better method of locomotion.

There are 2 states that have cheap, quick, good handling small EV's that are fun to drive. In California the Spark EV can have a total Out The Door including promotions and rebates of under $15k. It's really not bad by 2016 standards as an urban commuter car, and has very good reviews.

But they don't sell well. So it's not just the price. People don't even want to test drive them.

IIRC, most Tesla buyers have never driven an EV prior to purchase. Then they are amazed at how much better electromotive drivetrains are, and they sometimes assume that only Tesla has that advantage over it's ICE competitors. No. Pretty much all EV's are better cars than ICE cars in their segment as far as Fun Factor and ease of use go.

Tesla is the only EV currently (har) that draws a significant number of buyers without experience or test drives. Few would buy a Leaf without driving it first. Nissan simply isn't a brand that people trust without reservation.

Someday in the future, there will be a tipping point. Save The Whales will never sell large numbers of EV's. The fact EV power is superior will though. Owner loyalty for EV drivetrains is higher than ICE drivetrains. So the goal is just to get more people exposed to EV technology. Prices will be like ICE cars, from cheap to hyper expensive (918 Anyone?). They will choose the EV because they would rather drive under EV power than ICE. "Argghh, the WalkaKnobby GTxI5 is a nice car, but it drives like my dad's Buick. It shifts gears, I have to check the gas gauge every morning, it is laggy, poor power at high altitude, etc. I'd wish WK would sell an EV."

OldSlowCuber said:

Given the fact that this is supposed to be an affordable mass market car, is this price point likely to promote the widespread adoption of EVs over ICEs?

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The Tesla Model ≡ will definitely promote adoption of electric vehicles by the public at large, in such numbers that it will have a direct affect on the types of vehicles offered by traditional automobile manufacturers within the next decade.

OldSlowCuber said:

If Tesla hopes to accelerate the advent of sustainable transportation, is the Model 3 being set at the right price point?

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Yes, it is. The average sale price for a new car in the United States is already over $31,000. It is certain that between 2018 and 2020 it will grow closer to $35,000, if not sooner.

OldSlowCuber said:

Given this reality, is the Model 3 starting at the right price to convince society to adopt this car on a mass scale?

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And you ask the same question again, with a slightly different focus. Once more, the answer is 'YES'. Already, people who expect to buy an Accord, Camry, Malibu, Sonata, or Malibu may decide, after seeing their price point for a fully loaded version, to do a test drive of slightly more expensive car such as an AUDI A4, BMW 3-Series, or Cadillac ATS. Since they are all ICE vehicles there is not much of a difference between them. So, most decide it is best to save a few bucks, get a well equipped 'ordinary' car instead of an 'entry level luxury' car. A very few of them might be enticed by leasing deals to move to a higher end marque for the sake of brand cachet and status. But the difference in Performance, when they decide to test drive a Model ≡ will be immediately noticeable, and convince quite a few of them to go up market.

OldSlowCuber said:

Based on the Honda Civic's price point, the Model 3 might be starting too high. If a fully loaded Model 3 was $35K, it might be positioned to have the kind of impact Elon Musk is hoping for.

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You are looking at the situation from the wrong end of the telescope. Apparently, you are presuming facts that are not in evidence. At no point has Tesla Motors claimed the Model ≡ was being built to compete with such vehicles as the Honda Civic, Toyota Corolla, Volkswagen Golf, Ford Focus, Chevrolet Cruze, Hyundai Elantra, or Kia Rio. The companies that manufacture those cars all have tremendous manufacturing capacity, into the millions. At least three of those cars are among the top ten best selling passenger vehicles in the world on an annual basis. It will be close to a decade before Tesla Motors is able to compete against those cars directly, and even then their price points will all be over $25,000. Very few vehicles sell in excess of 100,000 units per year in the United States of America. And not all of those are under $20,000 as a base price. Many cars that you might consider 'mass market' due to their price point, are actually rather poor sellers, moving less than 30,000 units per year in the US.

One point of note is that what most would call 'cheap' cars: Hyundai Accent, Ford Fiesta, and Chevrolet Sonic; were all outsold by the Lexus ES, an upmarket version of the Toyota Camry/Avalon, with a current base price of $38,000. Tesla Motors is a Premium car maker. I doubt they will ever offer a 'cheap' car, any more so than will Lexus.

gregincal said:

I don't know what you pay for electricity, but my charging costs are equivalent to less than $1 per gallon.

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In UK it currently costs £1 per 0.22 gallon (1litre) of petrol. £1 = $1.45

This is a process that will take some time to unfold. It's not going to be an overnight sensation in 2017 or whenever the Model 3 actually arrives.

Keep in mind it's $35,000 USD, or $48,000 CAD at the current exchange rate. Tesla will set the price separately for the Canadian market, but it will be significantly more than $35k in any case. The Civic starts at $15,990 CAD and tops out at $26,990.

We'll get there, but it's going to take time.

And it's still cheaper to fuel an EV in Ontario. Our "cheap gas" currently averages 87 cents/L or $3.29 per US gallon.

1208 said:

In UK it currently costs £1 per 0.22 gallon (1litre) of petrol. £1 = $1.45

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Maybe a liter is 0.22 imperial gallons, but it is about 0.263 US gallons (3.8 liters/US gallon). For those playing along at home, that comes to $1.45/L * 3.8L/USgal = $5.51/USgal AAAACK!

jaguar36 said:

Unfortunately this is currently not true.



Unfortunately this is currently not true for the Model S either.

$35k for a Civic seems like an awful lot.

At least in the US the Civic is very popular because its a good cheap car. It starts at around $18k. Thats about half the starting price of the Model 3. A much better comaprison is the 3-Series or A4. Those will be the product that competes with the Model 3, and while those aren't true mass market cars, the segment is quite large enough to have a huge impact on the future of transportation.

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Regarding gas prices, you'd be hard pressed to go 400 km on a tank of gas that cost less than $10 even now. Besides, Supercharging is still free too.

ilg said:

Maybe a liter is 0.22 imperial gallons, but it is about 0.263 US gallons (3.8 liters/US gallon). For those playing along at home, that comes to $1.45/L * 3.8L/USgal = $5.51/USgal AAAACK!

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Yes, but it includes your health insurance premium...

1208 said:

In UK it currently costs £1 per 0.22 gallon (1litre) of petrol. £1 = $1.45

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That's what always puzzles me. Gas in cheaper in the UK than Norway. Yet Norway is one of the larger exporters of petroleum.

Random quote, here: “People who complain about taxes can be divided into two classes: men and women.”

gregincal said:

I don't know what you pay for electricity, but my charging costs are equivalent to less than $1 per gallon.

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Electricity costs for me are about 4 cents a mile (12 cents/kwh). Pick any other large sedan and you'll get about 20 mpg so my cost is less than gas at $1/gallon.
Plus, it's foolish to make a long term capital purchase based on a short term dip in gas prices.

I guess the first company to really test the "mass market" priced long range EV will be GM, as the Bolt will probably beat the M3 to market by close to a year. Of course there is the argument that GM is terrible at marketing their EVs and so the Bolt will still probably be a niche car.

Electricity prices can be more expensive than gas prices, but that is a very regional effect. The majority of folks will pay less to charge than the price of gas (although with gas slipping below $1 in some parts of the US, that will become closer).


As far as maintenance goes - my Volt has been a much lower maintenance vehicle than anything I have owned in the past. Its almost too maintenance-free - since I am not taking it in for regular oil changes I have been forgetting to rotate my tires and check my fluid levels, LOL.

I get the impression this is not true for Model S's as they seem to have some reliability issues and also have an annual/12,500 mile $600 maintenance visit. That's a lot of scratch and probably equals or exceeds the $$ I used to spend on my ICE vehicle maintenance (I drive 25-30k a year so would need two annual services to stay within the mileage limits).

I'm under no false pretences that Tesla is aiming for a cheap EV. Elon has alsways said Model 3 will be the same size as a BMW 3 series, Mercedes C class or an Audi 4. That shows you where his target is for Model 3. The problem is that most people have blinders on about the $35k price and only see that. It's the *base* price for the car before options. Elon has also said they're very focussed on only advertising that price due to incentives going away by the time they really get to ramped up production by 2020. GM is going for the low end of the market and all the power to them. Tesla is going to make a *compelling* (Elon's favourite word) EV for the industry, all things considered.

The only fly in the ointment right now is the strong US dollar and low oil prices which will affect their sales outside the US.

McRat said:

That's what always puzzles me. Gas in cheaper in the UK than Norway. Yet Norway is one of the larger exporters of petroleum.

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Probably higher taxes or maybe cost more for them to refine.

ilg said:

Maybe a liter is 0.22 imperial gallons, but it is about 0.263 US gallons (3.8 liters/US gallon). For those playing along at home, that comes to $1.45/L * 3.8L/USgal = $5.51/USgal AAAACK!

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That's not bad! I recall driving in Spain in the 90s (can't remember the year) and gassing up to the equivalent of almost $7-8/USgal.

Boy was I glad to be heading back to the states at that point.

McRat said:

That's what always puzzles me. Gas in cheaper in the UK than Norway. Yet Norway is one of the larger exporters of petroleum.

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1208 said:

Probably higher taxes or maybe cost more for them to refine.

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It is the higher taxes yes. And that is what's drives the EV sales here, not that we get our EV's at a lower price then everywhere else, but that the taxes on all other cars is so high, and the effect of dropping all taxes on EV's provides a huge price advantage for EVs vs. fossil cars. And electricity vs. fossil fuels.

Model 3 said:

It is the higher taxes yes. And that is what's drives the EV sales here, not that we get our EV's at a lower price then everywhere else, but that the taxes on all other cars is so high, and the effect of dropping all taxes on EV's provides a huge price advantage for EVs vs. fossil cars. And electricity vs. fossil fuels.

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I'm curious. So as more and more people adopt EVs in Norway, do you think they would raise taxes somewhere else to make up for the lost revenue from fuel taxes? Sorry, I'm American and I can't help but think that way. It's the way of life here!