Hey all, I'm trying to wrap my head around how the S/X costs so much and how the 3 can cut that literally in half (or nearly 30k$ as far as I can reckon). The battery component seems well quantified at maybe 5k$ or so savings. Final assembly labor as far as I can tell might max out at around 100 hours @ 60$\hour (all in) or 6k$ for the S, so some chunk of that might be saved (half or 3k$?). Still a long way to go. Then I get to thinking about the various parts in an automobile and it seems like they have high upfront, low marginal cost. The raw materials themselves probably average out to under a dollar a pound. For instance, the headlight assembly is just a bunch of cheap plastic, so presumably a high chunk of cost is the initial manufacture. So is it possible that really the vast majority of savings is in the part supplier contracts? I mean let's say it costs 2 Million to make the first headlight assembly but then you only promise 100k in volume @ 5$ in marginal cost to make one, that has an all-in cost of 25$ but if you promise 1M in volume that's 2.5$.
Of course if I reason from the other direction it's easier. Take a 3-series, pull out the ICE and put in the EV drivetrain and you might be cheaper by 1k$ or so, then put in the battery and you are now more expensive net 5k$ or so, simplify\cheapify the interior a bit and maybe you save 2k$, credit the lower labor cost and maybe you save 2k$, and everything is getting close. That implicitly assumes similar 3rd party supplier margins. The model 3 might be the highest passenger car by volume over 35k$ in the world right? If cost is hinged on volume, that's a great place to be.
Also, incidentally, anyone seen the 3-series sales rate this year? It's down 28% in the US:
US sales: November 2016, models - Left-Lane.com . I'm suspicious there is another explanation *other* than Tesla but it stands to reason these two cars are competing for buyers.
