Anderman predicts Model 3 will cost between $50k-$80k, far above Tesla estimated $35k

[MSEV]

I read the threads that said it will be on the lower end of the cost spectrum, and I agreed.
Then I read the threads that said it will option out to nearly as high as the S, and I agreed with those threads.
So, I agree with all of you.
We don't know for sure what they will do, with both alternatives (a "lower" priced 200+ mi EV or options with high margins) making sense.

 

[vinnie97]

^I'm not made of money and don't need/desire the performance/luxury options (just the range, ma'am), so I vote for the former.

 

[AmpedUP]

I think that with the introduction of the Model III , big changes to the Model S will also be introduced as a means of differentiating the two all the more. Luxury appointments that many have complained are lacking in the Model S of today will be introduced, all while keeping the price the same because the less expensive battery pack will keep the bottom line in check. I do think the Model III at 35K would be very basic if it makes it to that price at all. I think 45K will probably be the base.

 

[JST]

Anderman predicts Model 3 will cost between $50k-$80k, far above Tesla estima...

I suspect that the Model 3 will track BMW 3 series pricing; mid 40s to 80s (base model to max performance) sounds right to me.

 

[CHG-ON]

Tesla needs a volume car to build a solid revenue stream. If they don't come in somewhere in the mid 30"s, that could make it tough for them. Look at Mercedes and how they have grown their lower cost cars. It gives them the ability to go all out on the top line models because of the cash that the 200 series gives them. I could see the Model 3, or whatever, starting in the mid 30's and optioning out to the 45 range. Look at every other premium car builder. But they won't be able to afford the level of support they now offer for the Model S. They will need to be very careful to differentiate between the two without cheapening the Models S/X (high end) or killing themselves with service costs on the cheapo models. Lastly, battery cost will drop precipitously as battery production volume grows, as it does for every new tech. Elon's strategy of opening up patents helps them to get there. Clearly, that is the main reason he did it. He NEEDS Toyota, GM, Ford, Mercedes, BMW to get on board as they will be the ones to lower cost through their ability to crank up volume based on their size, engineering size and wealth.

This development model has been repeated over and over again since the mid 1800s with the battle of John Deere, International Harvester and Ford. The news guys innovate, the big old guys develop and expand. Tesla's challenge will be to stay relevant as the big boys try to take over.

As an investor and a owner (on 9-26, dammit!), I think they are the right track.

 

[purplewalt]

I suspect that the Model 3 will track BMW 3 series pricing; mid 40s to 80s (base model to max performance) sounds right to me.

As long as the Model 3s are flying off the assembly line to eagerly waiting customers (with a huge backlog of orders), and TM is still making a decent profit per unit sold, it really doesn't matter what the cost is.
The overall market will dictate what the cars can sell for and what people are willing to pay.

There certainly is (and will continue to be) a market for a basic $35 K electric car with a beginning range of ~200 miles, as there is only one being manufactured right now (Model S).
And if there is a fully Optioned out Model 3, it has access to the Supercharger network and can outrun and frustrate BMW 3s all day long, so much the better.
The better mousetrap is what competition is all about.

 

[David_Cary]

I agree with the BMW 3 series pricing but in that regard, very few sold are the $80k model. From what I see, the vast majority of 3 series out there are the less than $50k variety. But I see a lot of tricked out Model S's. There is a very different math out there when you are paying close to $100k for a car vs $50k for a car. The amount of disposable income in this country is not spread out evenly at all.

As someone said earlier, the percentage spent on options seems much higher on more expensive cars. As someone who is price conscious, I would get a pretty lean Model S. And I'd be buying a 3 if it was available.

It seems that the newer trend of 3 series is to have almost all the 5 options available but not taken. You can spend a lot on a 3 but people rarely do.

 

[Trev Page]

Based on comments that Elon has said many times, they're aiming to compete with the BMW 3 series. That means size, options and pricing in my books. If you want a good idea of what the Model 3 will cost then go to the BMW website of your country and spec one out. I had a 1999 328i and it was nicely optioned at around $49K and I was very happy with it, nay the bet car I've owned.

I'm fully prepared to spend around $50K for a Model 3 then with a decent downpayment from redirected payments from my current car, which gets paid off in a year and a half, and selling my current car combined with any rebates, should bring the financed cost to around $32K. That's cheap in my books considering I won't be paying for gas anymore to the tune of $3500 a year. I'm in Canada so gas prices and car prices are much higher than in the US.

 

[JST]

My guess is that you are right that the option mix on the Model 3 will skew lower than the option mix on the Model S. At the same time, it would not surprise me if higher-optioned cars constituted a higher percentage of Model 3 sales than for the BMW 3 series.

One thing to keep in mind in these pricing discussions is that BMW typically offers very attractive leasing prices. Whether that's because BMWs typically have strong resale or because BMW is aggressively subsidizing the cap cost is a bit of an open question, but in my experience a BMW is going to generally be cheaper to lease than an Audi, even where those two cars have similar sticker prices.

I think one of the real challenges facing Tesla as it moves into the "mainstream luxury" market is how to deal with leasing, financing, and trade-ins. Customers at the Model S price point are much more likely to have some flexibility on these issues than customers at the 3 series price point--what works for selling Model Ss isn't likely to be as successful in the mainstream luxury segment.

Will we see Tesla offering subsidized leases? I doubt it, mostly because they won't need to but partly because they don't have the financial scale to do so.

 

[ckessel]

At 500,000 a year, I also wonder if Tesla will start using the franchise model. I forget if it was Elon or Diarmuid or Deepak, but at one point they said that while dealerships didn't suit Tesla right now, they weren't fundamentally opposed to them and might revisit their model when shipping a true mass market car. They could still keep the "one price" thing since there's already precedent for that by a "normal" manufacturer (Saturn, I think it was).

Or maybe Tesla manages to scale up their staff to handle a 10x increase in stores/service centers in a few years?

 

[JST]

At 500,000 a year, I also wonder if Tesla will start using the franchise model. I forget if it was Elon or Diarmuid or Deepak, but at one point they said that while dealerships didn't suit Tesla right now, they weren't fundamentally opposed to them and might revisit their model when shipping a true mass market car. They could still keep the "one price" thing since there's already precedent for that by a "normal" manufacturer (Saturn, I think it was).

Or maybe Tesla manages to scale up their staff to handle a 10x increase in stores/service centers in a few years?

That's an interesting question. The whole "one price" thing works for now because demand is higher than supply. Same was true for Mini for the first 5 or so years they were operating in the US; cars basically sold for MSRP. Even as late as 2011 it was hard to get more than $500 off sticker. These days, Mini discounts much more aggressively.

I have to wonder how Tesla will handle it once the shiny newness of the brand wears off a bit and the supply catches up with demand. One of the big advantages of franchising is that it spreads the risk. 'Til now that hasn't been much of an issue, but will that always be true?

I'm very bullish on Tesla's long-term prospects, but those who argue that the company represents a complete reinvention of the way cars are sold remind me a bit of the folks who in 1997 said that the Internet was transformative and that we'd seen the end of business cycles as we knew them.

 

[wallet.dat]

Because the only cost reduction will be from the battery pack. Everything else will cost exactly the same as the Model S.

/sarcasm

 

[Tasdevil]

I think the model X price will give some insight into how well tesla are going with lowering costs.

 

[robby]

I think the model X price will give some insight into how well tesla are going with lowering costs.

I don't think the cost to build the X will have any impact on the sale price of the X.

 

[EVNow]

There is no direct Model S competitor so if you want that type of car you have no where else to go. I think even by 2017 there will be no direct Model 3 competitor when it launches, and that will drive the buying behavior I have just described.

Isn't that the case esp. with competitors in the 150 to 200 mile EV segment ? If they are price conscious, they will get a Leaf 2 or a rumored Chevy 200 mile BEV - and if not buy Model 3 well optioned. Ofcourse the total Model 3 sales will be less with competition in the segment compared to what it could be without any competition.

 

[Reykjavik]

In the part of the report that I can actually see, he assumes that the battery will be 70 kWh. Considering that the Model S 60 KWh achieves an EPA rated 208 miles, I think it is a pretty amateurish mistake to think a smaller 200 mile car will need a battery that is larger.

Still, if based on battery savings alone, and increasing the battery size by nearly 20% results in shaving $20,000 off the base price, I'm quite optimistic that Tesla will be able to get the cost reduction they need.

 

[Trev Page]

I think the model X price will give some insight into how well tesla are going with lowering costs.

Model X is built on the same platform as Model S so don't expect any cost savings. We all know the price will be higher due to the extra motor, doors etc...

The real cost savings will come with the Gen 3 platform and the Gigafactory. Model S and X will remain premium cars in terms of price until Tesla designs them from the ground up (Gen 4?)

 

[Genebe]

Model X is built on the same platform as Model S so don't expect any cost savings. We all know the price will be higher due to the extra motor, doors etc...

The real cost savings will come with the Gen 3 platform and the Gigafactory. Model S and X will remain premium cars in terms of price until Tesla designs them from the ground up (Gen 4?)

^^ This

The Model S legitimized Tesla as a manufacturer to the skeptics. The Model X will show they're not just a 1-trick pony, and will raise brand awareness, but it's still going to be a premium vehicle (and rightly so).

The Model 3 will be the real game-changer and will make Tesla a household name overnight.

 

[rcc]

I think Elon is going to do what he said all along: price the Model E (er, Model 3) along the same lines as the 3-series (well, now 3/4-series) BMWs.

That's typically been $35-48K although that may have gone up in recent years to $40-55K. By the time we hit 2017, it could very well be low 40's to 60K.

BMW has certainly proven that you can get years and years of growth out of a 3-series, 5-series and a few other models here and there.

(edit to correct Model E/3 typo)

 

[Tasdevil]

Model X is built on the same platform as Model S so don't expect any cost savings. We all know the price will be higher due to the extra motor, doors etc...

Extra motor, door and side cameras. Maybe a few more things...
My point is with tesla ramping up production I don't expect the X to be 30k more than the S. Maybe 10-15k.

And my point is;
If a motor, falcon doors and side camera costs more than 15k
A gen3 car at 35k doesn't sound good.