Model 3 set to dominate it's category as early as next month

[Brando]

Let's assume 35k config is definitely a thing and will be forever available as an option. And let's assume we're at a point in the future where Tesla has exhausted all of the tax credits. I think at this price point, we're still going to see a lot of volume. I see so many BMW 3 series are on the road, and to me, each of those people are a potential Model 3 buyer from a means perspective. At that point, if Tesla decides it needs to start advertising the car, I suspect Model 3 will continue to crush everything in its segment. Given how savvy Tesla's marketing has been thus far, I have a feeling that a Model 3 ad is going to be very high impact.

Advertising is of course an extra cost.
Elon/Tesla thinks better to spend extra money on product improvement and NOT ads.

Some articles I have read, claim ads add up to 10%? (you see car ads/TV/internet/radio/newspaper) and claim 3% from dealer and 7% from manufacturer. IF you need to increase demand, how about a direct discount offer to the buyer? or to car rental companies or taxis companies? You get my drift. I think Tesla can imagine/think up much better & more direct ways to promote sales/increase demand. For some (only some) operating costs may be enough, right?

Continuous improvement, software updates, operating savings (SuperCharger too), Stores.
These will continue to crush the competition and not use of Ads - In My Humble Opinion.

For the future, as Elon noted, improved design/manufacturing and battery manufacturing/improvements may well keep Tesla a leader in demand/sales. Roadster/SEMI/Model Y so hopefully just the beginning of the revolution/electrification.

 

[dhrivnak]

That market is feature sensitive**. By that I mean they will choose a car based on ability to add their pet feature and stay within their budget. For some it is leather, for others it is radar assisted cruise, for many it is AWD ... the permutations are large. They might look at a Model 3 and then find that their pet feature bumps the price to over 40k compared to $30k for the alternative. The difference in fuel costs does in fact cover a $10k purchase price difference for people with PV, but that is so far a small group of people and it requires a bit of arithmetic outside of the comfort zone of mainstream America. Remember, mainstream America is still uncertain if AGW is a real thing and they refuse or are incapable of pricing it into their choices.

My gut feeling is that Tesla will have to reduce the base price to $30k and increase the battery to 60 kWh to really compete well in this segment. Or fossil fool can rise to over $4/gallon. Whichever comes first

**
Ask your mainstream friends if they prefer a "stripped" Tesla or a "top of the line" Camry/Accord.

Owning a 3 I can say a stripped 3 should compete quite well in this segment assuming Tesla does not cripple the base model. The maps, infotainment, cargo space and performance should be second to none.

 

[nvx1977]

Advertising is of course an extra cost.
Elon/Tesla thinks better to spend extra money on product improvement and NOT ads.

I would love to see Tesla maintain its ability to not advertise. I feel like they've gotten enough publicity for Model 3 through media coverage and such, but anecdotally, I have people who come up to me not knowing that company makes my car. They don't recognize the T logo. If people don't even know the brand, discounts aren't going to work... unless word of mouth becomes even stronger as more reservation holders get their cars.

I also think that Tesla doesn't need to brute-force their ads like other car companies do, so they don't have to spend as much. When you have very little to differentiate yourself from others, you have to advertise like mad.

For US audience, Tesla basically has to say:

130mpge vs <30mpg ICE sedan (OMGWTF so much more efficient, so much greener)
0-60 in 5.6sec, compared to base BMW 3-series 7.1s. (not only are we efficient A.F., we're faster than everyone else)
Fully electric vehicle (get off our dependence on foreign oil, start every day with a "full tank")
220mi range, charging stations - with multiple bays - everywhere for longer trips (no more range anxiety)
Starting at 35k. Made in the USA (that's right. Buy American).

They could probably get away with a youtube ad.

 

[Brando]

PERSPECTIVE

500,000 per year = about 0.5% of annual vehicle sales world wide.
1 million per year = about 1% of world production

Just rough estimates on my part - but you get the idea.

 

[Swampgator]

It's going to get quite painful for BMW, Audi, and Mercedes starting next month:

Tesla to take up to 50% of US Small Luxury Market — BMW, Mercedes & Audi get Disrupted

 

[Knightshade]

Owning a 3 I can say a stripped 3 should compete quite well in this segment assuming Tesla does not cripple the base model. The maps, infotainment, cargo space and performance should be second to none.

Having recently been in a few rental cars in that price range- the maps and infotainment (and smartphone integration) at least are pretty crap in the Tesla compared to even cheap american cars

Plenty of OTHER things are vastly better in the tesla- but there's a lot of folks who'd like to be able to use, say, waze or google maps on their main display like a lot of other cars can- or say have better/more reliable control of music plugged into the car (vs just BT)

 

[SageBrush]

Having recently been in a few rental cars in that price range- the maps and infotainment (and smartphone integration) at least are pretty crap in the Tesla compared to even cheap american cars

I don't have any opinion about the infotainment, but Nav in the Tesla is brilliant.

 

[Knightshade]

I don't have any opinion about the infotainment, but Nav in the Tesla is brilliant.

Have you not ever used another nav system then?

Because there's numerous threads on here about how awful the routing (esp. regarding traffic, accidents, etc) is compared to the same routes done via waze or other apps.... and yes, even in recent months.

 

[dhanson865]

I read somewhere that Tesla is tracking what cars people are coming off of when they buy Model 3 (via trade-in declarations). I bet they will want to keep that secret, but man, I'd love to know that info.

Well there was a facebook poll that will give you some insight

The Facebook group entitled, TESLA MODEL 3 Owners Club, ran an interesting survey asking Model 3 reservation holders what car their upcoming Model 3 will be replacing.

Top 10 list, in terms of responses:

1. BMW 3 Series: 21
2. Nissan Leaf: 15
3. Toyota Prius: 13
4. Chevy Volt: 12
5. BMW i3: 12
6. Audi A4: 10
7. Chevy Bolt EV: 8
8. VW e-Golf: 6
9. BMW 5 Series: 5
10. Honda Civic: 5

If my Prius hadn't been in that collision the Model 3 would replace it. As is it will replace the leaf with the shortest range (worst degradation).

But I'm in no hurry to replace it, I get the same efficiency per mile at a lower cost of ownership with the Leaf. I just want to move up the chain a little on the next replacement. Barring another collision I'll wait for the reservation queue to clear and grab one then.

 

[dhanson865]

Model 3 is already dominating, last month's numbers.

Man that guy is all over the place.

Good premise, faulty statement, good premise, faulty statement.

I kept going back and forth on whether I should down vote the video just for the misinformation.

His heart is in the right place, but a month is not a quarter. Pretty bad when you are just reading numbers off a chart and you keep referring to a month as a quarter.

Then when is on a good rebuttal to a short article and saying Model 3 US sales don't consider ones shipped to Canada he adds supposed Model 3s being shipped to China as if that is actually happening.

I couldn't make it all the way through the video. There may be more errors after that.

 

[dgpcolorado]

Have you not ever used another nav system then?

Because there's numerous threads on here about how awful the routing (esp. regarding traffic, accidents, etc) is compared to the same routes done via waze or other apps.... and yes, even in recent months.

Depends on what you want nav to do. Tesla nav is really great for road trips. Give it a destination several states away and it will route you to each needed Supercharger Station, let you know what time you will get there, what your remaining charge level will be, how long you will need to charge to get to the next stop, and what time you will get to the destination. And It will update all that info in real time as you drive. I've used it for tens of thousands of miles of road trips. It also adapts instantly when missing a turn. "Brilliant" is exactly what it is for road trips (I certainly don't need nav for local driving since I know where I'm going and don't need Supercharging).

The only change I'd like to see is the ability to use waypoints (often requested by others here) to select a different or longer route, although just driving the route I want will cause nav to adapt.

 

[Knightshade]

Depends on what you want nav to do. Tesla nav is really great for road trips. Give it a destination several states away and it will route you to each needed Supercharger Station, let you know what time you will get there, what your remaining charge level will be, how long you will need to charge to get to the next stop, and what time you will get to the destination. And It will update all that info in real time as you drive. I've used it for tens of thousands of miles of road trips. It also adapts instantly when missing a turn. "Brilliant" is exactly what it is for road trips (I certainly don't need nav for local driving since I know where I'm going and don't need Supercharging).

The only change I'd like to see is the ability to use waypoints (often requested by others here) to select a different or longer route, although just driving the route I want will cause nav to adapt.

I mean... other than the auto-find-supercharger part that's what every nav system has done for like 15 years now.... and waypoints is something other nav systems do do...and have for...like 15 years now...it's kind of baffling Tesla doesn't have that.

As to local driving- I know where I'm going too... but waze does a much better job than the Tesla system in telling me which of the 3 different ways to get there is backed up with traffic, or has speed traps set up, or had an accident on it... and which ones are clear.

 

[Brando]

I would love to see Tesla maintain its ability to not advertise. I feel like they've gotten enough publicity for Model 3 through media coverage and such, but anecdotally, I have people who come up to me not knowing that company makes my car. They don't recognize the T logo. If people don't even know the brand, discounts aren't going to work... unless word of mouth becomes even stronger as more reservation holders get their cars.

I also think that Tesla doesn't need to brute-force their ads like other car companies do, so they don't have to spend as much. When you have very little to differentiate yourself from others, you have to advertise like mad.

For US audience, Tesla basically has to say:

130mpge vs <30mpg ICE sedan (OMGWTF so much more efficient, so much greener)
0-60 in 5.6sec, compared to base BMW 3-series 7.1s. (not only are we efficient A.F., we're faster than everyone else)
Fully electric vehicle (get off our dependence on foreign oil, start every day with a "full tank")
220mi range, charging stations - with multiple bays - everywhere for longer trips (no more range anxiety)
Starting at 35k. Made in the USA (that's right. Buy American).

They could probably get away with a youtube ad.

1- Model 3 has about a what? a 2 year backlog for some? increased demand now not really needed.
2- Can you name an ad campaign that you think actually "significantly increased" demand?
for example was the Leaf out selling Tesla because of the Leaf Ad Campaign?
and of course Leaf sales dropped off a cliff in 2017
#1 Tesla Model S, #2 Tesla Model X, #3 Chevy Bolt — 2017's US Electric Car Sales Winners | CleanTechnica

side note: Cadillac Ads didn't seem to help Caddy much, right?
AND Ford Ads didn't help their sedan sales, right?

3- Some YouTube ads already from many - Fully Charged, Model 3 Owner Club Canada, etc.
4- YOUR personal talking to those interested is by far the most useful/important.
(if people don't already have some interest how would an ad help?? And who trust Ads anyway??)
5- basic cost vs competition is of course important. We shall have to see how Base $35,000 compares to the competition and we may well have to wait another year or year and a half to know the details.

and thanks to @Swampgator for this excellent article from above - everyone should take time to read.
Tesla to take up to 50% of US Small Luxury Market — BMW, Mercedes & Audi get Disrupted

 

[Swampgator]

Just an update from Cleantechnica: Tesla Model 3 Sales vs Small & Midsize Luxury Car Sales (USA), Tesla Now Crushing The Competition? — #CleanTechnica Report | CleanTechnica

This is an absolute slaughter of the legacy competition.

 

[nvx1977]

For comparison, this was their June 2018 estimate. Note that for July above, they've widened the scope for each manufacturer to make it a "closer race."

 

[EinSV]

@Swampgator -- thanks for posting the charts.

Looking forward to seeing how your charts look when the Model 3 outsells the C-Class, 3-Series and A4 and then when it outsells all of them combined.

That didn't take long ....

"In July 2018, Model 3 not only had the #1 market share position in its segment in the US, it outsold all other mid-sized premium sedans combined, accounting for 52% of the segment overall." http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712​

 

[Swampgator]

Yes. Brown paints stains all around at BMW and MB

It's only going to get worse through the year end. These guys are in serious trouble. Oh, until they all come out with their "Tesla Killers" in 2020!

 

[dhanson865]

Top 5 trade ins for model 3 for Jan 2018 to Jun 2018

• Toyota Prius
• BMW 3
• Honda Accord
• Honda Civic
• Nissan Leaf

and that is before the $35,000 config is available.

Model 3 isn't going to stop with just taking over luxury. It'll take over other segments as well.

 

[Electroman]

That didn't take long ....

"In July 2018, Model 3 not only had the #1 market share position in its segment in the US, it outsold all other mid-sized premium sedans combined, accounting for 52% of the segment overall." http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712​

Oh, Come on guys. July is all about clearing the backlog. So July or the rest of the year is not a proof that M3 will outsell its peers. Once the backlog is cleared and the sales reaches steady state in Q2 next year when $7.5k credit is gone, then we have to see where the chips might fall. For instance, now we know that S+X have peaked at a healthy 2k/month. So don't read too much into these M3 sales comparisons at this stage.

We are better than Anton, aren't we?

 

[EinSV]

Oh, Come on guys. July is all about clearing the backlog. So July or the rest of the year is not a proof that M3 will outsell its peers. Once the backlog is cleared and the sales reaches steady state in Q2 next year when $7.5k credit is gone, then we have to see where the chips might fall. For instance, now we know that S+X have peaked at a healthy 2k/month. So don't read too much into these M3 sales comparisons at this stage. <snip>

I disagree. Estimates suggest Tesla only delivered something along the lines of 14K Model 3s in the US in July.

With only the more expensive long range battery available, no leases, no test drives and word of mouth just getting started, we ain’t seen nothing yet.