Tesla cuts 60kWh Model S, entry-level Model S is now 70D.

[maoing]

Vgrin, the highlighted part is your wishful thinking. Tesla can offer 10% discount to Europe customers, why not $7000 discount, ~9% off base price to 70D customers. I think you wrote many thesis of production constrained before. There is no sense of TM to give pricing incentive (the last resort I can think of at cost of GM) if there is really production constrained. I just don't want to discourage your TSLA investment enthusiasm, but rather stay cool with the reality.

So total value of options that are now standard is $14,450. The price increase, however, includes only $5,000 adder to base price and $2,000 for autopilot convenience features, for a total of $7,000. The discount is more than 50% - just to large if one assumes that TM is not reducing their margin.

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Unfortunately TM didn't mention cell supply constaints since last summer, given enough battery cell supply, it makes no sense to enhance gross profit per kWh. If you compare 70D side by side with 85D, you'll find 70D has additional $7000 discount. If we assume 85D GM is close to 30%, then 70D will be in low 20%. Due to the appealing pricing of 70D, I suspect 70D will be very popular and cannablize the 85D, so at the end 70D will take 60% of the US sales, and thus make US sale GM around 25%.

if Tesla is looking to enhance gross profit per kWh (if this is again their supply constraint),

 

[brucet999]

There is one changes that has me scratching my head: why is the White Alcantara headliner 1/2 the price of the Black Alcantara headliner?

Might have to do with dyes having to resist changing color/fading from sunlight on A-pillars? Cheaper black dyes can turn red or brown in the sun, white is not so much affected.

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What about the single charger vs. Dual onboard charger option? I don't even see that mentioned anywhere. Do we know anything about that?

Dual charger has not been a factory option for some months now. You can find it in the "shop" as a $2,000 installed option.

 

[smac]

This is kind of OT, but where did you get that picture from and is there more where it came from? I'm most interested in the actual (non-blank) cell count of the 60kWh modules. This has been a huge mystery for some time, since we have known that the 60kWh has 14 modules, but the math doesn't match up with the 16 modules of the 85kWh.

There were 3 possibilities: either less cells in the modules, lower capacity cells, or both. This picture shows there are less non-blank cells per module (although it doesn't necessarily eliminate the possibility of lower capacity cells, without knowing the cell count).

There is a final option. The 60's have always (or at least for some time) been 70's, just the software has been capped to give a bigger differentiation across the range. Same way the S85D has always been capable of higher BHP and 0-60 times. The weight, voltage, and module count, were all pointing this way.

That photo with blanks doesn't make sense. If they were made that way on purpose each of the strips would be consistent, not a random number of cells in each strip. How else would the pack balance? How would they ensure overall consistency per module in a production environment?. To me it looks like a QA failed / experimental pack (notice the burnt out cell to the top right). Ultimately we have no provenance to that photo. Until someone strips a real world S60 battery, from an actual car, we will never know if my theory is right.

My real suspicion is Tesla was seeing more of a split toward the S60 sales due to market maturation. Despite the offers, and incentives to go for an 85, actually a 60 offers 95%+ of the car if you don't do big miles (Low mileage users, second cars, price sensitive people desperate to get a Tesla, etc. etc.) This would have hurt in a number of ways:
1) Lowering the average selling price
2) Lowering the average ZEV rating of the fleet. (275 NEDC miles is a magic number)
3) If my theory of de-rating the packs is correct The relatively small percentage of S60s vs S85s sold meant the production and logistics simplicity of just building all the modules the same outweighed the cost of just using more cells in a relatively small % of cars. if the % went up it would hurt more.

The only reason this isn't a 75D (Which is what 14/16 * 85 would give) is there wouldn't be enough range separation (which is a struggle as it is). So while i'm in a predictive mood. I'll also say for the X there will be a 75 pack and an 85 pack, the 85 being the P version, the 75 again just hitting the 275 mile mark.

I said the S60 would die months ago on here (to some mockery TBH). The writing was on the wall.

What I didn't see coming is the death of the RWD cars which is surely next on the list. Anyone not using Tesla finance will love how finance companies view "deletion" options on the final balloon, and it's effect on monthly costs.

 

[RobStark]

Any report on product mixes has said 60s compromised ~10% of deliveries.

At these prices the 70D makes overwhelming sense which is why an upgrade to the 85 seems likely.

 

[macpacheco]

C'mon guys, if Tesla had a better Battery chemistry than current Model S ready to ship, they would offer a longer range Model S. If they had supply constraints, make it a substantial premium over the 85 pack. There is zero logic on offering a superior battery chemistry on the entry level product. If supply is really limited offer it only for the Roadster upgrade.

As far as getting rid of RWD models, I think its a natural progression. Having the whole lineup with AWD standard could be a superior distinction. I do however expect Tesla to wait until the vast majority of orders migrated to AWD (in time). I'm an efficiency junkie, so I might be the minority voice here.

Hopefully the S70D will be far more popular than the S60, it sounds like the customer pays for the motor upgrade but gets the extra 10kWh for free, a great deal !

Edit... Smart change, make it harder to choose the S85, show only the S60D, S85D, SP85D models, and make the customer remove the AWD to get the S85. Hopefully this will reduce S85 orders by a large number.

 

[vgrinshpun]

Vgrin, the highlighted part is your wishful thinking. Tesla can offer 10% discount to Europe customers, why not $7000 discount, ~9% off base price to 70D customers. I think you wrote many thesis of production constrained before. There is no sense of TM to give pricing incentive (the last resort I can think of at cost of GM) if there is really production constrained. I just don't want to discourage your TSLA investment enthusiasm, but rather stay cool with the reality

Can you provide some reference to the 10% to the European customers mentioned in your post? How do you determine it?

Regarding the production constraint, your belief that it did not exist, and theories about TM intentionally throttling production, as I shown many times before, are irrational and do not square with what was actually happening.

The fact that they *were* production constrained at the production rate of 1,000 cars/week does not, hovewer, mean that that they remain production constrained at say, 1200 cars a week. So if they increased production beyond the incoming rate of reservations, they might take measures(as they many times they said they would) to make sure that incoming rate of orders keeps pace with the increasing rate of the production.

And finally, regarding the next generation of cells, there is another circumstantial evidence that it is likely being used in 70D. Look at the rated Wh/mile. The numbers are not consistent with the additional weight that 10kWh worth of cells of the same generation woul add.

 

[chriSharek]

Now that I've slept on this, I'm not sold on the 70D - FOR ME IN FLORIDA. Why would I need the AWD and lose the frunk space? I don't think it makes sense. I'm sticking to my S85 configuration.

 

[David_Cary]

Traction in rain, traction coming out of turns, save $5k. Not trying to change your mind - just saying

I've done the same thinking. The other thought is that if you don't have 3rd row seating, the hatch is plenty big for most uses.

 

[CHGolferJim]

Like the new choices! Chips away at my sticker shock to 85D with desirable options. Main concern now, ironically, is "actual range anxiety" vs. 85D. Is 70D actual range likely to be 210 miles or so with normal mixed use (80% in NC) vs. EPA 240?

Main datapoints I'm extrapolating from are:

- Elon comments that we need 240 EPA to get 200 real
- Assumption that 70kWh will be sufficient for base model X to get 200 real

Also, I don't like showing the "price" as net of Fed credit and gas savings, and the actual delivered price as a footnote, but I have to admit it speaks to me a bit.......since it reinforces the similar TCO vs. E class and 5/7 series.

 

[ThosEM]

You have to choose the 85D first, then the previous "Drive" selection option appears to choose RWD or AWD.

Though at this point it looks to me like the 70D is a better deal than the 85. Better performance, almost as much range, $5k cheaper, and Supercharging is standard now.

Agreed. It seems strange that no 2WD option is given for the S70. The only rationale I can think of is assembly line simplicity. Anyone else?

 

[sandpiper]

Agreed. It seems strange that no 2WD option is given for the S70. The only rationale I can think of is assembly line simplicity. Anyone else?

That's my opinion. They've been making a concerted effort to reduce the number of options running through the assembly line. There are substantial differences between the front end structures in the 2WD vs AWD. That means that the press tooling has to be changed over to run the different sets of parts. That costs money and downtime. They're clearly actively discouraging 2WD and I'm 90% certain that the 2WD vehicle will be history inside of 6 months. This makes even more sense given that the X is AWD only.

 

[schonelucht]

Can you provide some reference to the 10% to the European customers mentioned in your post? How do you determine it?

By comparing the official prices on the website. When accounting for taxes, like for like options and base prices are roughly 10% cheaper in Norway/Europe as in the US. See here for a full breakdown : http://www.teslamotorsclub.com/show...utlook/page108?p=968183&viewfull=1#post968183

And finally, regarding the next generation of cells, there is another circumstantial evidence that it is likely being used in 70D. Look at the rated Wh/mile. The numbers are not consistent with the additional weight that 10kWh worth of cells of the same generation woul add.

On the contrary. EPA range for a 60kW model was 208 miles. 208/60*70 = 242 miles which is totally consistent with the announced 240 miles number.

 

[dirkhh]

The evidence is circumstantial, but it is there. The 70D added as standard the following features:

Tech package ($4,250 option)

Nope. Only the parts of the Tech package that are free to produce (i.e., Nav - the hardware is already there, all this means is enabling software) were included. Powered rear gate, fog lights, etc, all moved to the $5k Premium package. Auto pilot is in the Auto pilot package. For most people this is a price increase. If you didn't want the "premium internal materials" you know pay $2500 + $5000 for something that you could get for $4250 - so another $2250 in price increase.

Dual Motor ($5,000 option)
Supercharging ($2,000 option)
Extra 10kWh battery (implied cost $3,200 - 10 * (10,000-2,000) / (80 - 65))

You are confusing "cost" with "end user price". The real question here is "how much is the ASP going up"? And "how much is the incremental cost of what is provided".

So total value of options that are now standard is $14,450. The price increase, however, includes only $5,000 adder to base price and $2,000 for autopilot convenience features, for a total of $7,000. The discount is more than 50% - just to large if one assumes that TM is not reducing their margin. If they introduced next generation of cells, the quantity of cells will stay the same as in 60kWh battery, with approximately the same cost. So total discount in this case would be more palatable - under 37% 1-[7,000 / (14,450-3,200)].

Wishful thinking. Or to go back to words from another thread. Pure speculation.
My speculation is that the reshuffling of packages will actually increase ASP and margin.
Either way, nothing here is any indication that they changed cell technology.

 

[Yuri_G]

By comparing the official prices on the website. When accounting for taxes, like for like options and base prices are roughly 10% cheaper in Norway/Europe as in the US. See here for a full breakdown : http://www.teslamotorsclub.com/show...utlook/page108?p=968183&viewfull=1#post968183



On the contrary. EPA range for a 60kW model was 208 miles. 208/60*70 = 242 miles which is totally consistent with the announced 240 miles number.

Using the same formula with the 85 kWh pack and you get 294 miles. There obviously have been some efficiency gains in the 70D, since the 85D comes no where near that mileage number.

 

[dirkhh]

Using the same formula with the 85 kWh pack and you get 294 miles. There obviously have been some efficiency gains in the 70D, since the 85D comes no where near that mileage number.

As I posted elsewhere - I'm pretty sure the 240 EPA is a typo. In the blog post Elon talked about 240 miles at 65mph. And the cruising range (@65mph) of the 85D is indeed 295 miles according to an earlier blog post.

 

[Yuri_G]

As I posted elsewhere - I'm pretty sure the 240 EPA is a typo. In the blog post Elon talked about 240 miles at 65mph. And the cruising range (@65mph) of the 85D is indeed 295 miles according to an earlier blog post.

I don't think it's a typo.

Compare Side-by-Side

The most efficient Model S and the only one over 100 mpge in city and highway.

 

[Olle]

That's my opinion. They've been making a concerted effort to reduce the number of options running through the assembly line. There are substantial differences between the front end structures in the 2WD vs AWD. That means that the press tooling has to be changed over to run the different sets of parts. That costs money and downtime. They're clearly actively discouraging 2WD and I'm 90% certain that the 2WD vehicle will be history inside of 6 months. This makes even more sense given that the X is AWD only.

I agree with you. But, why is there still an RWD 85? A theory: to use up remaining non performance inverter components that are only used in 85. Then switch over to only AWD.

 

[iKhalid]

I agree with you. But, why is there still an RWD 85? A theory: to use up remaining non performance A motor components that are only used in 85. Then switch over to only AWD.

Or to check the demand. I don't know why but some people insist on having a RWD. Currently, the 70D is a better deal than the 85.

 

[sandpiper]

I agree with you. But, why is there still an RWD 85? A theory: to use up remaining non performance inverter components that are only used in 85. Then switch over to only AWD.

Two reasons I suspect:

1. We're a prickly lot, we Tesla people. They're probably afraid of a backlash if the RWD vehicle is instantly killed. It's better to leave it die a natural death over the next few months as people realize that either the 70D or 85D are better choices.

2. Yes, there's probably some inventory of parts in the system that they'd like to burn through.

 

[JST]

I agree with you. But, why is there still an RWD 85? A theory: to use up remaining non performance inverter components that are only used in 85. Then switch over to only AWD.

I suspect you're right, though the cynical part of me thinks that they can just use up those components in driveline replacements over the next few years.