No Model III until 2019?

[scaesare]

Well, to start with, a cube 10 feet on a side has a 1000 cubic feet. Reduce by 20% gives 8 feet on a side: 512 cubic feet. That's about half, I'd say.

Then, manufacturing cost is always divided into each car. 50,000 Model S had to pay for $5M development and mfg cost, which runs out to $10 per car. 350,000 Model 3 paying for another 3.5 million development (they've already done most of the work on the S) comes out to a dollar a car. I figure that same math could apply to all the rest, so half the profit per car (making $25K profit now, Model 3 would make $12K profit) would easily pay for needed profit.

Then we drop the price of building the battery by a third ($40K less a third is 27K) and make it smaller by a third from 300 mile to 200 mile (so our 27 K becomes < 20K), so the battery is about half price.

I don't see a problem. High level fit and finish, moderate size and range, for half price. Doable!

What you've described is an object that's 50% smaller, not 20%. Of course, the overall measurement reduction is going to vary... for instance I suspect it's going to be much easier to reduce the length and width of the car, but likely not the height much if at all.

But again, reducing materials cost by a given percentage doesn't reduce the production cost by the same. If it costs $1 to stamp, finish, and install a $1 piece of material, then it costs $1.80 to do the same for 20% less material... a 10% cost reduction.

Certainly R&D can be amortized over a larger production run, but typically for long-run high volume production, that's going to be an increasing smaller factor in overall price than manufacturing costs.

 

[tftf]

I think the real challenge here is to reduce the sedan size by 20%, but the price by >50%.

Yes, the GF-produced battery pack is a good chunk of that, but certainly the car itself must also be made more inexpensively. And a 20% reduction in materials cost does not equate to a 20% reduction in manufacturing cost... it's less than that by a good margin.
....
....
There's a lot of engineering effort there that goes beyond scaling the current platform -20% and minor style tweaking.

I agree on the price being the hard part.

The only probable scenario I see for the Model 3 being introduced before the end of 2017 is changing the promised specs, especially the base price level.

I.e. Tesla could raise the base prices to $40-50k and announce it as a high-end Model3 variant compared to what they were planning for. In this scenario, the 'original' $30-40k base price version could maybe follow in 2019 or 2020 once Model 3 and GF production ramps up; maybe even never in an extreme scenario.*

The problem with the promised $30-35k base prices is doing a fast ramp-up while keeping product and service quality at high levels all while maintaining the promised margins for investors. That's a lot of variables to hit and I don't think it's possible, especially by 2017 (unless they raise the prices and lower the output volume as discussed).


------------
* My personal opinion still is that Tesla could/should stay in a high-end niche and never release a car below $50-60k base pricing (what I called the "Porsche of EVs" strategy. There would be no need to build a GF and the annual car output would level off around 100-250k units per year maximum. Tesla would remain a niche player, much like Porsche in iCE cars). I know that's not going to happen with curent management and the GF is already under construction, so this strategy is purely a 'what if'.

 

[scaesare]

Well, my post wasn't designed to suggest 2017 is not attainable. It was to counter the idea that it was simple to do with software and style tweaks only.

 

[JRP3]

Certainly I simplified the process, but less expensive materials will be used, i.e. more steel than aluminum, so it's more than just a size reduction. Also I believe a 20% reduction in weight means other parts could be reduced even more than 20% in size. Additionally I would not be surprised to see the base price be closer to $39K, maybe even using subsidies which would still be in effect for early production cars. On the other hand Tesla may continue with their practice of putting out higher end more expensive models first, though I hope they wouldn't do more than maybe a run of Sigs first. I'm still expecting the base pack to be 45-50kWh which would squeak out 200 miles at 225-250 Wh/mi. The larger heavier S60 is rated at 208 miles so 288 Wh/mi. 50kWh at $200/kWh is $10K for the pack, which should leave another $20K or so for the rest of the car. At $150/kWh it's $7.5K for the pack. The aero and frictional mods they are doing for the Roadster leads me to believe they have some good ideas about how to make the Model 3 highly efficient which will keep pack size and cost down as much as possible for the base model.

 

[MassModel3]

Certainly I simplified the process, but less expensive materials will be used, i.e. more steel than aluminum...

I don't think this will necessarily be the case. Advances in aluminum technology allow for lighter, stronger, and more formable (stampable) aluminum sheets. I don't think Tesla would compromise weight of next-gen EVs when they're trying to optimize range.

* My personal opinion still is that Tesla could/should stay in a high-end niche and never release a car below $50-60k base pricing (what I called the "Porsche of EVs" strategy...)

This completely misses the point of Tesla's ultimate goal of putting an EV in the hands of every driver in America. If the strategy were just to make money, sure, that might be how they did it. But the goal is to make the planet a cleaner place. Elon Musk released their patents not because he wanted to sell a few cars and make them head-and-shoulders above the rest, but because he wants other manufactures to adopt processes and advancements Tesla has developed and optimized already. The Model S is about showing the world that EVs can be sexy, luxurious, and fast. The Model 3 is about giving the world a state-of-the-art green vehicle where the drivers don't have to compromise comfort, range, or performance.

 

[Breezy]

This completely misses the point of Tesla's ultimate goal of putting an EV in the hands of every driver in America. If the strategy were just to make money, sure, that might be how they did it. But the goal is to make the planet a cleaner place. Elon Musk released their patents not because he wanted to sell a few cars and make them head-and-shoulders above the rest, but because he wants other manufactures to adopt processes and advancements Tesla has developed and optimized already. The Model S is about showing the world that EVs can be sexy, luxurious, and fast. The Model 3 is about giving the world a state-of-the-art green vehicle where the drivers don't have to compromise comfort, range, or performance.

TSLA is a public company. Their goal has to be to make as much money as possible, or someone else comes in and does it for them. But they can make the planet a cleaner place at the same time.

The Model 3 will still be a compromise of some sort. The Model 3 will be a premium/luxury car and probably cost too much for most people. 200 miles of range is still a compromise compared to a Toyota Yaris. The relative lack of rapid charging points (compared to gas pumps) is a compromise.

 

[Kevin Harney]

TSLA is a public company. Their goal has to be to make as much money as possible, or someone else comes in and does it for them. But they can make the planet a cleaner place at the same time.

The Model 3 will still be a compromise of some sort. The Model 3 will be a premium/luxury car and probably cost too much for most people. 200 miles of range is still a compromise compared to a Toyota Yaris. The relative lack of rapid charging points (compared to gas pumps) is a compromise.

Partially agree. Model 3 will be a premium/luxury car. Competing with BMW, Mercedes and Audi. And you are right it will not be a "Mass Market" car in the sense that it will not cost < $30K. But it will be a step towards that in the right direction. 200 Miles would be a compromise. But I believe that Model 3 will have a greater range than that. At least 250 in the base and closer to 350 in the P or Sig versions. There is currently a shortage in Superchargers. You are correct. However, by the time Model 3 comes out 99-100% of the US, Europe will be covered and probably close to 50% of Asia will be covered and I believe that most of the other continents will be on their way.

 

[MassModel3]

TSLA is a public company. Their goal has to be to make as much money as possible, or someone else comes in and does it for them.

The investors knew what they were getting into when they put their money down. Elon Musk has never tried to hide the fact that he wants to show the world how to go green on the road. In the process, he's positioned Tesla as perhaps the world's most advanced EV company, pleasing all investors. But I'm not convinced the investors are his primary concern, especially considering his recent statement that the stock prices were/are "kind of high right now".

 

[Model 3]

TSLA is a public company. Their goal has to be to make as much money as possible, or someone else comes in and does it for them. But they can make the planet a cleaner place at the same time.

You got it all upside down... Tesla's goal is to make the planet a cleaner place. But they can make some money at the same time.

 

[sjd]

You got it all upside down... Tesla's goal is to make the planet a cleaner place. But they can make some money at the same time.

Exactly. Companies whose main focus is "shareholder value" is why we have companies full of CEO's and executives who only care about the short term.

 

[JRP3]

I don't think this will necessarily be the case.

Tesla has already stated that it will. Of course things could change, but that's what they've said to date.

 

[Matias]

The investors knew what they were getting into when they put their money down. Elon Musk has never tried to hide the fact that he wants to show the world how to go green on the road. In the process, he's positioned Tesla as perhaps the world's most advanced EV company, pleasing all investors. But I'm not convinced the investors are his primary concern, especially considering his recent statement that the stock prices were/are "kind of high right now".

Musk owns 23% of Tesla. i.e. he cant deside alone. If majority of shareholders want, they can outnumber him. At this point there is no reason to do so, but anyway he can't deside things againts the majority.

 

[tftf]

This completely misses the point of Tesla's ultimate goal of putting an EV in the hands of every driver in America. If the strategy were just to make money, sure, that might be how they did it. But the goal is to make the planet a cleaner place. Elon Musk released their patents not because he wanted to sell a few cars and make them head-and-shoulders above the rest, but because he wants other manufactures to adopt processes and advancements Tesla has developed and optimized already. The Model S is about showing the world that EVs can be sexy, luxurious, and fast. The Model 3 is about giving the world a state-of-the-art green vehicle where the drivers don't have to compromise comfort, range, or performance.

If so, they better hurry up and stick to the promised $30-35k base price, otherwise it's not a mass-market car and lost in a red sea of mass market competition by the time it's on sale:

Both GM and Nissan will announce their longer-range EVs by 2017 or before. New entrants such as Hyundai will also introduce long-range EVs by 2016-2017:

Hyundai Commits To 2016 Launch Of Midsize Electric Car Powered By Next-Generation LG Chem Batteries

The list of competitors will be growing rapidly over the coming years due to emission regulations in Asia and Europe, this legal farmework alone dictates more EVs and PHEVs from all major car companies.

If the Model 3 is delayed until 2018-2020, it will be nothing special or 'ahead of its time' compared to the initial plans to introduce the car in 2015-2016. The Model 3 was originally supposed to be introduced in the current Model X time frame launch!

There will be dozens of PHEVs and at least 5-10 longer-range EVs from other manufacturers in the mass-market price range available by 2018-2020, most of them could beat the Model 3 to market.

Tesla can't wait forever with the Model 3 introduction.

As I long maintained: The industry producing more and more PHEVs/EVs doesn't mean that Tesla ultimately makes money or gets a lot of market-share, especially not in the mass-market segment. The mass-market buyer is a very different and price-sensitive customer, most of these buyers will not await the Model 3 once alternatives are available.

 

[MassModel3]

Tesla has already stated that it will. Of course things could change, but that's what they've said to date.

Yes, perhaps, but if a newer and better aluminum technology, such as this, comes out, why wouldn't they consider it instead of steel? Lighter and stronger than steel, now it just comes down to price...

Musk owns 23% of Tesla. i.e. he cant deside alone. If majority of shareholders want, they can outnumber him. At this point there is no reason to do so, but anyway he can't deside things againts the majority.

Well as we've seen so far, they let him be the driving force for Tesla, and as the majority stake-holder he certainly has a lot of pull. He has gone on record repeatedly that he wants to make the planet a greener place, fewer reliance on non-renewable energy, etc. When or if the company decides to officially go a different route, I'm sure the marketing department will step in and tell Elon and the Board he needs to change his story. They haven't yet as far as I know.

If so, they better hurry up and stick to the promised $30-35k base price, otherwise it's not a mass-market car and lost in a red sea of mass market competition:

Both GM and Nissan will announce their longer-range EVs by 2017 or before. New entrants such as Hyundai will also introduce long-range EVs by 2016-2017:

Hyundai Commits To 2016 Launch Of Midsize Electric Car Powered By Next-Generation LG Chem Batteries

The list of competitors will be growing rapidly.

If the Model 3 is delayed until 2018-2020, it will be nothing special compared to the initial plans to introduce it in 2015-2016. The Model 3 was originally supposed to be introduced in the current time frame of the Model X launch.

There will be dozens of PHEVs and at least 5-10 longer-range EVs from other manufacturers in the mass-market price range by 2018-2020, most of them could beat the Model 3 to market. Tesla can't wait forever with the Model 3 introduction.

As I long maintained: The industry producing more and more PHEVs/EVs doesn't mean that Tesla ultimately makes money or gets a lot of market-share, especially not in the mass-market segment. The mass-market buyer is a very different and price-sensitive customer.

As with the Model 3, it's all vaporware until it hits the streets.

 

[Breezy]

Partially agree. Model 3 will be a premium/luxury car. Competing with BMW, Mercedes and Audi. And you are right it will not be a "Mass Market" car in the sense that it will not cost < $30K. But it will be a step towards that in the right direction. 200 Miles would be a compromise. But I believe that Model 3 will have a greater range than that. At least 250 in the base and closer to 350 in the P or Sig versions. There is currently a shortage in Superchargers. You are correct. However, by the time Model 3 comes out 99-100% of the US, Europe will be covered and probably close to 50% of Asia will be covered and I believe that most of the other continents will be on their way.

I hope all of that is correct, but I can't see them giving us significantly more than 200 miles in the base version. There are too many cost pressures already.

The range circles for Model 3 should cover 100% of the US and populated areas of Canada by then but as far as point to point travel outside of major corridors I don't think it's possible. Still the compromise with the lack of ubiquitous Supercharging may be worth it for some people (including me), considering all of the other advantages of driving electric.

 

[tftf]

As with the Model 3, it's all vaporware until it hits the streets.

Given the track record of the companies involved I currently assume with much higher conviction and probability that most other car companies will introduce their next-gen EVs and PHEVs on schedule.

Yes, many of them depend on LG Chem as battery supplier. In case LG Chem can't keep the promised 2016 date for cell supplies, their next-gen EVs will also arrive late. Same for an unexpected battery recall (we all remember how that affected the Mitsubishi Outlander PHEV) or other outliers such as incredibly low oil prices (say $30-40/barrel until 2020).

Other than that, I expect Tesla competitors to keep their launch deadlines. It's a necessity for most of them because of tougher regulations around the world, they can't delay their EVs and PHEVs.

Tesla on the other hand has a history of continued delays, the Model X is now in its fourth or fifth delay cycle. I'm not even sure the delay into Q3 2015 will be the last one (or at least that there will be fewer and slower customer deliveries in late 2015 even though Tesla expected a faster ramp-up compared to the Model S).

A car company, especially a smaller one like Tesla, doesn't have unlimited testing and engineering resources. Some departments work on more than one model, not everything is done in parallel, this even applies to giants like GM, VW or Toyota. I don't believe the continued Model X delays will not affect Model 3 schedules, even if it's just for a few months.

Add a few Model 3 specific delays and a launch date of (late) 2018-2020 becomes highly probable.

Any Model 3 sale before CY 2018 or even early 2018 looks incredibly optimistic to me at this point.

 

[scaesare]

Certainly I simplified the process, but less expensive materials will be used, i.e. more steel than aluminum, so it's more than just a size reduction.

The problem with this is that by using steel, you would likely end up with a HEAVIER car than if built with aluminum, despite the 20% size reduction. While there are many variables, a given structural component of equivalent strength can be ~40% lighter.

Also I believe a 20% reduction in weight means other parts could be reduced even more than 20% in size.

I'm not sure what this gets at? Tesla has already stated the 20% reduction has to do with the overall size of the car. That will determine drag. For that given size, whatever material is used is what will determine the overall mass of the vehicle.

What parts are you talking about reducing in size beyond 20%?

 

[techmaven]

Given the track record of the companies involved I currently assume with much higher conviction and probability that most other car companies will introduce their next-gen EVs and PHEVs on schedule.

This has been covered extensively on Seeking Alpha. LG Chem has yet to introduce the chemistry they will use for the follow on of the GM Spark EV. Thier use of NCM is likely to lock them far behind Tesla/Panasonic's cell chemistry in specific energy, the most critical aspect of making a viable long range BEV product. High voltage NCM has failed so far. They also have to reduce costs down to even match Tesla's pricing today, much less compete head to head against what the Gigafactory will put out.

The clincher, however, is that in order to ship hundreds of thousands of long range BEVs a year, the major auto manufacturers will have to commission their own Gigafactories. Even if the ownership structure is with Samsung, LG Chem or others, the size of the investment required will mean the committing of billions towards these factories by the automakers. And then the factories will have to be built. But they don't have the chemistry yet. And therefore, it is hard to design the car without the cells, other than do the modular concepts like the VW Golf. That also makes them less competitive due to the necessary engineering compromises with multi-power plant designs.

We will be able to see about 2-4 years in advance of a real Tesla competitor. Tesla's job for the Model 3 is, in comparison, far easier since they have already demonstrated many of the same, similar, or even better technology in the Model S.

 

[aronth5]

The problem with this is that by using steel, you would likely end up with a HEAVIER car than if built with aluminum, despite the 20% size reduction. While there are many variables, a given structural component of equivalent strength can be ~40% lighter.

I'm not sure what this gets at? Tesla has already stated the 20% reduction has to do with the overall size of the car. That will determine drag. For that given size, whatever material is used is what will determine the overall mass of the vehicle.
What parts are you talking about reducing in size beyond 20%?

I found this statement by Chris Porritt interesting although the headline is somewhat misleading as it appears to preclude aluminum altogether which is not accurate.
"Talking of the Model S design and construction method, which makes extensive use of aluminum, Porritt said very little of existing Model S manufacturing processes will be used in the as-yet unnamed third-generation Tesla."

Third-Generation Tesla Won’t Be Made of Aluminum, Says Tesla VP of Engineering

https://transportevolved.com/2014/07/01/third-generation-tesla-wont-made-aluminum-says-tesla-vp-engineering/

 

[scaesare]

I found this statement by Chris Porritt interesting although the headline is somewhat misleading as it appears to preclude aluminum altogether which is not accurate.
"Talking of the Model S design and construction method, which makes extensive use of aluminum, Porritt said very little of existing Model S manufacturing processes will be used in the as-yet unnamed third-generation Tesla."

Third-Generation Tesla Won’t Be Made of Aluminum, Says Tesla VP of Engineering

https://transportevolved.com/2014/0...wont-made-aluminum-says-tesla-vp-engineering/

Yeah, I remember that too. My point is that using 20% less material by volume, yet making that material 40% heaver for a given strength doesn't net a weight savings.

Somehow I suspect Tesla will not be compromising on safety significantly. So it will be interesting to see what they end up with.