Model Y after Model 3

[Alketi]

Another thing to keep in mind with subsequent vehicles is that the Gigafactory won't be fully completed until 2020. And, for fiscal reasons, I suspect Tesla will need to wait until Model 3 production starts before announcing Gigafactory 2.

I think that puts a Model Y launch in the 2019/2020 timeframe, assuming no issues with Model 3.

 

[Garlan Garner]

I'm getting married next month, but when we start having kids I sure as heck want a Model Y with fully autonomous capabilities (in addition to a Model 3). I can't wait!

You can't wait to have kids or buy a Model Y?

Are you going to have kids in order to get a MY?

 

[JeffK]

Are you going to have kids in order to get a MY?

Shh that's part of my master plan....

 

[Watts 4 Me]

In my opinion,I don't think Tesla is worried to much about losing a few model 3 reservation to an upcoming Model Y. Wasn't that the reason they reintroduced the S60? To reduce the amount of model 3 they have to produce. So if they show us a hint of the model Y at the next model 3 reveal. I for one most likely would wait for the MY. As long as it isn't to far into the future.

 

[JeffK]

In my opinion,I don't think Tesla is worried to much about losing a few model 3 reservation to an upcoming Model Y. Wasn't that the reason they reintroduced the S60? To reduce the amount of model 3 they have to produce. So if they show us a hint of the model Y at the next model 3 reveal. I for one most likely would wait for the MY. As long as it isn't to far into the future.

I believe the recent introduction of the S60 is a cash grab targeting the higher end market who would otherwise buy a Model 3. It wasn't so they could produce less Model 3s. Money now is more useful than money next year.

The problem with introducing and producing the Model Y too early is that it complicates the manufacturing process. The world is watching and they can't afford huge delays if they can help it.

If they plan to reveal the Model Y too early and Model 3 res holders decide to wait, then you'd run into the same cash flow problems, remember that cash now is better than cash in the future. It would negatively impact the ramp up and could affect future products and investments.

 

[MassModel3]

The Models S and X have much higher profit margins than the Model 3 will. It's in Tesla's best interest to sell a low-end S versus a low-end 3. Plus, as JeffK point out, a bigger bird in the hand (aka: more money now) is by far better than waiting more than a year for the same buyers to buy a car with lower profit margins.

 

[JeffK]

The Models S and X have much higher profit margins than the Model 3 will. It's in Tesla's best interest to sell a low-end S versus a low-end 3. Plus, as JeffK point out, a bigger bird in the hand (aka: more money now) is by far better than waiting more than a year for the same buyers to buy a car with lower profit margins.

The base Model S 60 is only a 15% margin which is pretty low as far as Tesla's margins go. They plan to have a 25% margin with the Model 3 and in higher volumes. So a Model 3 with options will likely have the same percentage gross margins as S/X which on the high end range to around 30%.

Keep in mind these margins are quite high as far as automotive margins go. Probably one of the highest in the industry...

 

[Garlan Garner]

I believe the recent introduction of the S60 is a cash grab targeting the higher end market who would otherwise buy a Model 3. It wasn't so they could produce less Model 3s. Money now is more useful than money next year.

The problem with introducing and producing the Model Y too early is that it complicates the manufacturing process. The world is watching and they can't afford huge delays if they can help it.

If they plan to reveal the Model Y too early and Model 3 res holders decide to wait, then you'd run into the same cash flow problems, remember that cash now is better than cash in the future. It would negatively impact the ramp up and could affect future products and investments.

Sooo... lets see - A base MS or a loaded M3?

I'll go with the M3.

 

[Topher]

There are 400k Model ≡ reservations. Announcing the Model Y before people confirm their pre-order will let them ease the waiting list a bit, while making those who would rather have a hatchback, (even though their wait increases over the ≡). The ≡ is production limited, Tesla basically get money as fast as they produce them.

Thank you kindly.

 

[Watts 4 Me]

As of now Tesla has about 375k reservations without the car being finished. Once they actually show the finished M3 i believe many more people will jump on the waiting list. So if they announce the Model Y, i think Tesla will still have more than they can chew in M3 reservations. I hope im explaining myself correctly.

 

[Genshi]

The base Model S 60 is only a 15% margin which is pretty low as far as Tesla's margins go. They plan to have a 25% margin with the Model 3 and in higher volumes. So a Model 3 with options will likely have the same percentage gross margins as S/X which on the high end range to around 30%.

Keep in mind these margins are quite high as far as automotive margins go. Probably one of the highest in the industry...

Do you happen to know if it's still considered high (margin wise) once you factor in dealer margins? I always assumed Tesla had higher margins, but I'd never done the research/google-fu to decipher if it was high overall, or just high for an automaker.

 

[JeffK]

Do you happen to know if it's still considered high (margin wise) once you factor in dealer margins? I always assumed Tesla had higher margins, but I'd never done the research/google-fu to decipher if it was high overall, or just high for an automaker.

Dealer margins typically range from 1-2% depending on how badly they scam the buyer. Dealers are often strapped with carrying costs, etc. Of course, the real money is made at dealerships from the service department. Go in for an oil change and they'll try to get you for $300 of repairs. They (Toyota) once tried to charge me $90 to change a light that was out above my license plate. I did it myself in under 5 minutes and a total cost of 30 cents for a bright LED instead of the crap bulb they were probably going to give me.

 

[ummgood]

Dealer margins typically range from 1-2% depending on how badly they scam the buyer. Dealers are often strapped with carrying costs, etc. Of course, the real money is made at dealerships from the service department. Go in for an oil change and they'll try to get you for $300 of repairs. They (Toyota) once tried to charge me $90 to change a light that was out above my license plate. I did it myself in under 5 minutes and a total cost of 30 cents for a bright LED instead of the crap bulb they were probably going to give me.

I had the same problem with my Tacoma. They tried to charge me $90 for an indicator bulb. It was literally the process: open hood, turn socket 1/4 turn, pull out socket, pull out bulb, put in new bulb, insert socket, turn 1/4 turn, close hood. It took me longer to wash my hands after completing the task than it did to do the task itself.

The best example of this though was when they said I needed to change my diff fluid in my front and rear diffs and my transfer case. Guess what the quote was? $900!! I went and bought a pump, $80 in gear oil, and did it myself in 45 minutes. Saved $800.

Anyway I think the prototype for the Model Y will come when the Model 3 has just started shipping and probably won't hit the roads until 2019. I think they need to be proficient at making the Model 3 before they take on another vehicle and they need the gigafactory closer to full production.

 

[MassModel3]

The base Model S 60 is only a 15% margin which is pretty low as far as Tesla's margins go. They plan to have a 25% margin with the Model 3 and in higher volumes. So a Model 3 with options will likely have the same percentage gross margins as S/X which on the high end range to around 30%.

Keep in mind these margins are quite high as far as automotive margins go. Probably one of the highest in the industry...

I've was not aware of those profit margin numbers, but is that average or base profit margin? If a base Model S is 15% and a base 3 is 25%, and if Tesla charges more for each option on an S than on a 3, the S can end up making more profit. I'm certainly not saying this is the case, but I expect options on the 3 to be less expensive than options on the S and X. For example, a fully loaded S or X adds about $60K to the cost of the base version. I can't imagine a fully loaded 3 adding $60K to the base price.

 

[JeffK]

I've was not aware of those profit margin numbers, but is that average or base profit margin? If a base Model S is 15% and a base 3 is 25%, and if Tesla charges more for each option on an S than on a 3, the S can end up making more profit. I'm certainly not saying this is the case, but I expect options on the 3 to be less expensive than options on the S and X. For example, a fully loaded S or X adds about $60K to the cost of the base version. I can't imagine a fully loaded 3 adding $60K to the base price.

It was discussed during the most recent financial call. 15% is the base S 60 RWD with 75 kWh battery. Tesla does charge more for each option in the Model S/X than planned for the Model 3 (at least for AWD we know for sure) and the battery packs should be cheaper for any given capacity but we don't know if Tesla will pass that savings onto consumers. Tesla tries to average 20-25% for each model S/X sold.

Percentage is percentage so obviously 25% of the price of the Model 3 is less than 25% the price of a Model S.