My understanding was that M3 was still going to get about 1000miles free supercharger access every year.
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I want to confirm that. Following all information closely over the months I did take away that its not clear nor confirmed to what extend you get a credit or none at all but it was said that you can use the SC which is still the case.
All the FUD I heard in the news and around here made me wonder why. Assuming lots of people had a "wishful thinking moment" and keep remembering it without any official information. If anybody has a Quote that confirms me to be wrong, please send a link.
Let me phrase it this way. Tesla is currently selling all they can make at 25% GM. In 4-5 years, if need be, they can adjust the GM downward to sell out production.
In 4-5 years:
The odds they sell out production > the odds they sell out production AND maintain 25% GM.
This is a simple mathematical statement.
MartinAustin
Active Member
He means 400kWh free per calendar year. That has been talked about a lot.
(But I don't think the Model 3 is even getting that now... only Model S and X owners)
3Victoria
Active Member
Consider that the car sold in five years will not be the car sold today. The hope is that volume manufacturing and improvements will result in maintenance of the 25% GM.
This is an exceptional article - thank you for the link! It is **mandatory** to read it for anybody who wants to sort out the threat of competition and does not understand why I repeatedly extol that OEMs are **structurally not competitive" and until this changes all the talk about OEM EV competition threatening Tesla is just a blue sky.
Read this article and then juxtapose it to VW statements about the need for **industry** building battery plant to supply their batteries, or EU calling a conference to come up with a plan for creating **consortium** to supply batteries for EU OEMs. See here for more details on this.
**STRUCTURALLY NOT COMPETITIVE**
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Come on. I have no problem understanding **what** you are saying, whether statement is mathematical, simple or whatever.
The point I was making, once again, that your conclusion that Tesla margins will be pressured by the competition was not backed up by any reasoning. My reasoning for objecting to this link on another hand, was that competition is **structurally not competitive** and will not be able to exert any pressure whatsoever on TSLA GM. I do not see threat of competition as credible at this point - the fact that there will be other EVs on the market will not lead to Tesla having GM of less than 25%
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MartinAustin
Active Member
Not directly TSLA related, but, I just saw a TV commercial on CNBC for Karma Automotive.
Apparently their Revero is the car you buy when you're able to buy what you dream of. ><
Regardless... it's the only electric car being advertised on TV at the moment. (albeit an EREV PHEV)
Since they are paying for advertising, and Tesla pay zero, expect to see favourable comparisons for Karma, Bob Lutz extolling the virtues, etc. etc.
Apparently their Revero is the car you buy when you're able to buy what you dream of. ><
Regardless... it's the only electric car being advertised on TV at the moment. (albeit an EREV PHEV)
Since they are paying for advertising, and Tesla pay zero, expect to see favourable comparisons for Karma, Bob Lutz extolling the virtues, etc. etc.
Reciprocity
Active Member
In a vacuum, yes.. if they lower their retail price they will sell more production and the lower price will lower margins. That is the simple math of things. The question is if they will need to lower prices to sell out production or if they will continue to be production constrained and thus have more demand then they can produce cars for. I think the 4-5 year time frame, this company will still be the infancy of a very fast growing but small market when compared to the total market for autos. In 4-5 yes, how many new plants will be running at full speed and what will production capacity per year be? At best, a tiny fraction of the automotive market.. something like 88 million for 2016. 1% would be 880k cars. If they have 3 plants the size of Fremont running full speed ahead in 5 years, they would be at 3% or under 3 million cars per year. I think at that volume they would be supply constrained still. With the full S3XY line up and possible truck and semi? Nissan sold around 400,000 Rogues in North America in 2016 alone. An AWD Y is going to do very well in the US and should really dwarf the demand for model 3. Pickups are the most popular vehicles in the $50k and up price segment. I see Tesla having strong, maybe 30%+ for at least the next decade. I honestly dont think they will build anything that does not give them a path to 30%+ GM. If they do the math on a potential model and it GM is under 20%, they just will not do it.
I nearly started the day by posting the referenced article myself, but for a change read through the thread to see someone else was already there.
A different way to say the same thing for dolts like myself who are less sophisticated about industrial production is that the whole culture of industries have to change, like Hollywood's problem with male predators, or should I say, women's (and a few men's) problem with predators in general. (Cf last night's PBS Newshour discussion of the problem of slow change.)
I personally think the odds they can achieve that over the next 5 years are greater than 85%. The odds they sell out production > 95%.
Are you saying the odds they maintain > 25% GM are 100%?
We are both bulls. Maybe you are a little more optimistic than I am?
ValueAnalyst
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I estimate that not including 400 kWh of Supercharger credits for Model 3 adds ~1% to Tesla's operating margin, assuming 5y ownership period.
This is positive for shareholders as Tesla cannot possibly supply demand, so it makes sense to max cash flows and reinvest to build Gigafactories.
This is positive for shareholders as Tesla cannot possibly supply demand, so it makes sense to max cash flows and reinvest to build Gigafactories.
ValueAnalyst
Closed
Automotive industry has high operating leverage. Do you remember what the SpaceX director said: $30k cost to build one more Model S.
Watch what happens to Tesla's gross margin as Model 3 production ramps... 30% overall gross margin is within reach in 2019.
For later years, "competition" would have to offer a compelling car, and I don't see them coming even close to today's Model 3.
I think it helps refute the people who say that Tesla’s advantage is just in batteries. Those people have not studied what Elon did at Space-X. This article helps demonstrateTesla is reinventing the entire vehicle and manufacturing.
I can’t wait to see what the future holds.
That was from an engineer that Elon has known a long time.
He could have made the $30k marginal cost assertion back when Tesla was designing the 40 kWh S. Even if so, it is still very impressive.
I believe all of you are right. I am just not giving it 100% probability.
Things can happen.
yes. plus remember that not only does tesla have the GF, they apparently are still the only company to put a single software architecture across the entire vehicle. its been 5 years since the launch of the Model S and not a single other company is able to update their cars like tesla.
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