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[mcfrank]

Great article from Stratechery on the model 3 appeal vs the bolt

Let’s start with the caveats: no, Tesla did not sell 276,000 Model 3’s in three days; that is the number of fully refundable pre-orders that required a deposit of “only” $1,000.And yes, Tesla has a history of delivering cars late and with a higher price than expected. Moreover, given the fact that Tesla only delivered just over 50,000 cars last year, no matter how quickly Tesla scales it will almost certainly be years before this first week of reservations is fulfilled, and even then Tesla will only control a fraction of the car market.

With that out of the way, can we marvel at what Tesla co-founder and CEO Elon Musk has accomplished? Nearly 300,000 people have willingly parted with $1,000 despite the fact they will not have a chance to purchase a car for years; an astounding 115,000 of them sent in their deposit before they even knew what the car looked like. A friend got in line to make his reservation at 6:45am and there were 123 people in front of him. This is, no matter how you measure it, a phenomenon that is nearly unprecedented; the only possible comparison is Apple and its iPhone.

Long lines and fans committed to ordering new products sight-unseen are not the only things Tesla and Apple have in common: both companies have been doubted for allegedly not understanding Disruption Theory; both, though, are proving that Disruption Theory does not have all the answers, particularly when it comes to consumer markets.

THE IPHONE AND DISRUPTION
Back in 2013 I wrote What Clayton Christensen Got Wrong, specifically, about Apple and the iPhone:

Christensen’s theory is based on examples drawn from buying decisions made by businesses, not consumers. The reason this matters is that the theory of low-end disruption presumes:

Buyers are rational
Every attribute that matters can be documented and measured
Modular providers can become “good enough” on all the attributes that matter to the buyers
All three of the assumptions fail in the consumer market, and this, ultimately, is why Christensen’s theory fails as well…
My conclusion was that the iPhone was, contrary to the then-conventional wisdom, not likely to suffer from low-end disruption, and not only has that proven to be correct, Apple has in fact expanded its global marketshare. And now, with the iPhone SE, Apple is expanding the high end to a price point accessible to customers in developing markets who very much want an iPhone but simply don’t have the means to afford top-of-the-line prices.

It’s this latter point — that a high-end approach can drive growth at lower price points — that seems particularly pertinent to the Model 3.

TESLA’S MASTER PLAN
During Thursday’s Model 3 introduction Musk referenced Tesla’s “secret master plan,” which he laid out in a blog post back in 2006. Musk wrote:

The initial product of Tesla Motors is a high performance electric sports car called the Tesla Roadster. However, some readers may not be aware of the fact that our long term plan is to build a wide range of models, including affordably priced family cars…Critical to making that happen is an electric car without compromises, which is why the Tesla Roadster is designed to beat a gasoline sports car like a Porsche or Ferrari in a head to head showdown. Then, over and above that fact, it has twice the energy efficiency of a Prius…

The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model…The second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable.

In keeping with a fast growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.
Leaving aside the fact that the “sporty four door family car” costs $25,000 more than Musk’s promise, the strategy seems to have worked: Tesla, with a detour to build the Model X crossover along the way, has moved down the cost curve culminating in the announcement of the affordable Model 3.

A closer look, though, suggests that Musk painted too rosy a picture when it comes to the Master Plan’s funding: while Tesla’s cars have, from 2009 on, been sold at a profit, the company has still lost significant amounts of money every year. The reality is the company’s significant research and development costs have been paid for by issuing stock and incurring debt, not the profits of high-end models.

LOW END DOGMA
Given Tesla’s finances, it’s tempting to ask why the company didn’t simply start with the low-end; indeed, researchers at Christensen’s Forum for Growth and Innovation argued last year that a better approach to the electric vehicle market would be exactly that. From a Harvard Business Review article entitled Tesla’s Not as Disruptive as You Might Think:

It [is] clear that Tesla is not a disrupter. It’s a classic “sustaining innovation” — a product that, according to Christensen’s definition, offers incrementally better performance at a higher price…because it’s a sustaining innovation, theory predicts that competitors will emerge. Our analysis concludes that a competitive response won’t happen until Tesla expands outside its current niche of people who prefer electric vehicles to gas-powered cars — but if it expands by creating more variety (such as SUVs) and more-affordable vehicles, competition will be fierce.
Instead the research team suggested the better route for electric vehicles would be “neighborhood electric vehicles”, which are pretty much the exact opposite of a Tesla: the article describes them as “a low-speed vehicle that resembles a souped-up golf cart.”

Don’t feel bad if you haven’t heard of neighborhood electric vehicles: Global Electric Motorcars, featured in the article’s sidebar, have only sold 50,000 vehicles in 17 years, despite the fact they cost around a tenth as much as a Model S. Tesla, meanwhile, sold over 50,000 Model S’s last year alone, more than any other car in its class; it’s growth rate relative to its competitors was especially impressive. This table about large luxury vehicles in the U.S. is from the company’s February 2016 letter to investors:

Screen Shot 2016-04-05 at 9.08.36 PM

One would think the other car companies in this table would be incentivized to respond, no? Yet Tesla is not being out-competed, and they sure as heck aren’t selling glorified golf carts:

Video Player

00:0000:51
The truth is that the HBS Growth and Innovation Forum team is right: Tesla is not disruptive. Rather, their error was a repeat of the mistake Christensen made with the iPhone; first, they don’t understand why people buy Teslas, and two, they assume that disruption is the only viable strategy to enter a new market.

THE POWER OF BEST
When it comes to the iPhone I have argued that Apple’s smartphone was, relative to the phones on the market, Obsoletive: the iPhone effectively reduced the phones that came before it to apps on a general purpose computer, justifying a higher price even as it made cheaper incumbents obsolete.
This doesn’t quite work for Tesla: at the end of the day a Model S is still doing the same job as a traditional BMW or Mercedes-Benz. It just does it better: a Model S accelerates faster, it has more storage, it has innovative features like limited auto-pilot and a huge touch-screen interface, and you don’t have to stop at the gas station. Most importantly, though, it is a Tesla.

The real payoff of Musk’s “Master Plan” is the fact that Tesla means something: yes, it stands for sustainability and caring for the environment, but more important is that Tesla also means amazing performance and Silicon Valley cool. To be sure Tesla’s focus on the high end has helped them move down the cost curve but it was Musk’s insistence on making “An electric car without compromises” that ultimately led to 276,000 people reserving a Model 3, many without even seeing the car: after all, it’s a Tesla.

FROM CLEAN SLATES TO FREE PASSES
Last month Wired wrote an article entitled How GM Beat Tesla to the First True Mass-Market Electric Car:

The electric car business has taken the form of an old-fashioned race for a prize…but now it looks pretty clear who the winner will be. And it ain’t Tesla.

General Motors first unveiled the Chevy Bolt as a concept car in January 2015, billing it as a vehicle that would offer 200 miles of range for just $30,000 (after a $7,500 federal tax credit). Barring any unforeseen delays, the first Bolts will roll off the production line at GM’s Orion Assembly facility in Michigan by the end of 2016. As Pam Fletcher, GM’s executive chief engineer for electric vehicles, recently put it to me with a confident grin: “Who wants to be second?”
Good for GM, but I’m afraid the company — and Wired — missed the plot; as the article notes an optimistic goal for the Bolt is 50,000 units a year, and I’d bet the under: at the end of the day the company is still selling a relatively slow and ugly Chevrolet. Brand and reputation matters far more than being “first” to a product category where every model on the market has fallen short of expectations — except for Tesla.

To that end, the significance of electric to Tesla that the radical rethinking of a car made possible by a new drivetrain gave Tesla the opportunity to make the best car: there was a clean slate. More than that, Tesla’s lack of car-making experience was actually an advantage: the company’s mission, internal incentives, and bottom line were all dependent on getting electric right.

Again the iPhone is a useful comparison: people contend that Microsoft lost mobile to Apple, but the reality is that smartphones required a radical rethinking of the general purpose computer: there was a clean slate. More than that, Microsoft was fundamentally handicapped by the fact Windows was so successful on PCs: the company could never align their mission, incentives, and bottom line like Apple could.

To be sure, what Tesla and Apple have accomplished is not easy, and ongoing success is not guaranteed, particularly at lower price points. I think, though, Tesla, like Apple before them, has more control of their destiny than it may appear. Writing about Apple in an article called Best I said:

As nearly every other consumer industry has shown, as long as there is a clear delineation between the top-of-the-line and everything else, some segment of the user base will pay a premium for the best. That’s the key to Apple’s future: they don’t need completely new products every other year (or half-decade); they just need to keep creating the best stuff in their categories. Easy, right?
It is, in fact, devilishly hard; indeed Apple’s software quality has, in the eyes of many observers, declined the last few years. The company, though, has been synonymous with “best” for so long that they have time to get it right, and millions of new customers who can’t wait to buy their first iPhone; Tesla will likely receive similar grace when and if the Model 3 comes in late and over its promised price. After all, it will still be a Tesla.

 

[Valkyr Junkie]

For those who have already reserved a Model 3, how many of you live in apartments? Obviously a house would be easier for overnight charging, but I've been trying to work out how feasible an electric car would be for apartment dwellers such as myself.

I have a house, but I probably won't ever park it in the garage or even install a 240V charger at home. There are EV charging spots in my company's parking garage.

 

[Sykra]

For those who have already reserved a Model 3, how many of you live in apartments? Obviously a house would be easier for overnight charging, but I've been trying to work out how feasible an electric car would be for apartment dwellers such as myself.

I live in an apartment, but my commute is minimal and there are more and more chargers around every day so i don't think it will be an issue.

 

[twinturbo2]

That blog post is hilarious. He's sooo salty!

He's not salty, just realistic here. He does make multiple salient points there.

 

[captive]

It’s this latter point — that a high-end approach can drive growth at lower price points — that seems particularly pertinent to the Model 3.

its true. Me and several friends from work at a previous job all wanted Tesla Model S' but we couldnt justify the price at the time. I think its clear that many people want them given the amount of preorders.

He's not salty, just realistic here. He does make multiple salient points there.

oh come on, you cant sit there and tell me that someone who refers to the media as sucking Elon's dick as unbiased and not salty. No, no thats absolutely high quality journalism. As someone else said go make your own thread to shit on tesla already.

 

[duderon]

Look at all of those precious ICE sales slipping away. Can you imagine what the 3 will do to the compact luxury market?

 

[GTI Guy]

interesting analysis of the $7500 tax credit

http://insideevs.com/when-will-the-7500-us-credit-expire-for-the-tesla-model-3-and-everyone-else/

 

[Joel Was Right]

Most park their cars on the street. It's not feasible to have an EV charging station available to most cars in such circumstances.

I looked at the possibility of installing one a few years ago. But the installation of a charger in a residential or public road is only the first challenge. The greater one would be to get the council/town hall to assign you a private parking area so your car can be parked near enough to the charger. And even then, what's to stop someone actually parking in that area? Or the area next to making it impossible for the cable to reach the plug?

The only sensible option would be to have public charging networks similar to gas stations. They would need to be within 30mins reach inside any major urban area. No car company would pay for an infrastructure of that magnitude.

So even if you could afford the Model 3, you're probably unlikely to buy it if you don't have a garage or a charger readily available. Of the public ones I've seen, they lack a timer. So if you had 30miles left on your Tesla and you cant charge it yet because there is another car there, how long would you need to wait? What if that car owner has decided to leave it parked there overnight?

Again, serious issues that have yet to be addressed by Tesla. I don't think Elon has ever really discussed non-garage owners or have no access to off-street parking. Utterly ridiculous. There's no way the Model 3 will be a mass market car until this is resolved.

 

[Jimrpg]

The best method is to buy a lot of Tesla stock. By the time you buy your car, you will have made enough on the stock to pay for it in cash!

Spoiler

Don't do this.

Stock has gone up in the days since the reveal.

My opinion only and not stock advice. After 3 days of preorders Tesla has an order book of $10bn and their market cap is $30bn. By the time late 2017 rolls around they are going to have plenty of preorders. Heck they still have a second reveal on the model 3 which will drive more preorders.

Jelly of all the people who got in at $150 share price mark last month.

 

[duderon]

Most park their cars on the street. It's not feasible to have an EV charging station available to most cars in such circumstances.

I looked at the possibility of installing one a few years ago. But the installation of a charger in a residential or public road is only the first challenge. The greater one would be to get the council/town hall to assign you a private parking area so your car can be parked near enough to the charger. And even then, what's to stop someone actually parking in that area? Or the area next to making it impossible for the cable to reach the plug?

The only sensible option would be to have public charging networks similar to gas stations. They would need to be within 30mins reach inside any major urban area. No car company would pay for an infrastructure of that magnitude.

So even if you could afford the Model 3, you're probably unlikely to buy it if you don't have a garage or a charger readily available. Of the public ones I've seen, they lack a timer. So if you had 30miles left on your Tesla and you cant charge it yet because there is another car there, how long would you need to wait? What if that car owner has decided to leave it parked there overnight?

Again, serious issues that have yet to be addressed by Tesla. I don't think Elon has ever really discussed non-garage owners or have no access to off-street parking. Utterly ridiculous. There's no way the Model 3 will be a mass market car until this is resolved.

Musk has addressed this before in saying that it still needed to be solved. It's one of the biggest barriers for the Chinese, since a large percentage of people their don't have a garage. It is a big part of the equation for EV adoption, but it's solvable. The best tenants can do right now is ask their landlords to install chargers or plugs in garages. In addition if employers could install chargers at the workplace that would also help since that is another time when cars sit unused for the majority of the day.

 

[BlastProcessing]

He's not salty, just realistic here. He does make multiple salient points there.

He unironically uses the phrase "collective media stumblebums". The article is nothing but frothing, misplaced, impotent rage.

It's actually adorable; it reminds me of a Blackberry user circa 2007.

 

[nomster]

interesting analysis of the $7500 tax credit

http://insideevs.com/when-will-the-7500-us-credit-expire-for-the-tesla-model-3-and-everyone-else/

If this accurate here I come dual motor

 

[shinshoryuken]

its true. Me and several friends from work at a previous job all wanted Tesla Model S' but we couldnt justify the price at the time. I think its clear that many people want them given the amount of preorders.



oh come on, you cant sit there and tell me that someone who refers to the media as sucking Elon's dick as unbiased and not salty. No, no thats absolutely high quality journalism. As someone else said go make your own thread to shit on tesla already.

Why would somebody be salty?

He does have a valid point, specially about about the Model X.

Seem like some people are way over sensitive when someone is skeptical or ponder he shortcoming of a tesla.

Someone who doesn't share the same opinion as you doesn't make them a troll.

 

[Unknown Soldier]

Stock has gone up in the days since the reveal.

My opinion only and not stock advice. After 3 days of preorders Tesla has an order book of $10bn and their market cap is $30bn. By the time late 2017 rolls around they are going to have plenty of preorders. Heck they still have a second reveal on the model 3 which will drive more preorders.

Jelly of all the people who got in at $150 share price mark last month.

Be jelly of the bastards who bought in at $30. They are probably buying their second yachts right now so they can park one next to the bank that holds their tax haven money in the Bahamas.

 

[captive]

Why would somebody be salty?

He does have a valid point, specially about about the Model X.

Seem like some people are way over sensitive when someone is skeptical or ponder he shortcoming of a tesla.

Someone who doesn't share the same opinion as you doesn't make them a troll.

So you think it's perfectly legitimate to post an article claim it's unbiased when the author refers to media members sacking someone's dick?

As i've stated many times I have no problem with people having different viewpoints. Why you still on about the troll thing? I hadn't called him a troll in days. Also how come he never bothers to respond to my questions of him?

 

[shinshoryuken]

So you think it's perfectly legitimate to post an article claim it's unbiased when the author refers to media members sacking someone's dick?

As i've stated many times I have no problem with people having different viewpoints. Why you still on about the troll thing? I hadn't called him a troll in days. Also how come he never bothers to respond to my questions of him?

Well its not a great article and some stuff he says are idiotic. But it did have some valid point. Some people are not aware of the model x situation.

Also, I had a different viewpoint as you and you called me a troll, plus made fun of my car. Even though I never said that my car looked better than a Model S.


The model 3's look actually grew on me.
But I'm still skeptical about actual availability. I actually drive alot so charging is a a concern. Also, no one really knows what the model 3 will end up like.

 

[GTI Guy]

Most park their cars on the street. It's not feasible to have an EV charging station available to most cars in such circumstances.

I looked at the possibility of installing one a few years ago. But the installation of a charger in a residential or public road is only the first challenge. The greater one would be to get the council/town hall to assign you a private parking area so your car can be parked near enough to the charger. And even then, what's to stop someone actually parking in that area? Or the area next to making it impossible for the cable to reach the plug?

The only sensible option would be to have public charging networks similar to gas stations. They would need to be within 30mins reach inside any major urban area. No car company would pay for an infrastructure of that magnitude.

So even if you could afford the Model 3, you're probably unlikely to buy it if you don't have a garage or a charger readily available. Of the public ones I've seen, they lack a timer. So if you had 30miles left on your Tesla and you cant charge it yet because there is another car there, how long would you need to wait? What if that car owner has decided to leave it parked there overnight?

Again, serious issues that have yet to be addressed by Tesla. I don't think Elon has ever really discussed non-garage owners or have no access to off-street parking. Utterly ridiculous. There's no way the Model 3 will be a mass market car until this is resolved.

All legitimate concerns for EV cars. Hope they figure this stuff out

 

[Joel Was Right]

Portable chargers that give 60 miles. It would have to be portable and magnetic so it can be attached to the side of the car whilst it charges to secure it. That sort of range would allow even a depleted car to get to the nearest Supercharger to 'fill up'.

These suggestions of getting public chargers installed on a residential road, or at work, are ridiculously impractical.

Until then, Tesla cars remain only suitable for suburban home owners.

 

[GTI Guy]

Portable chargers that give 60 miles. It would have to be portable and magnetic so it can be attached to the side of the car whilst it charges to secure it. That sort of range would allow even a depleted car to get to the nearest Supercharger to 'fill up'.

These suggestions of getting public chargers installed on a residential road, or at work, are ridiculously impractical.

Until then, Tesla cars remain only suitable for suburban home owners.

There's a lot of suburban home owners out there that's a big enough market for them to focus on for a while. Baby steps.

 

[fritolay]

What happens if you don't make it to the next charger, and get stuck on the side of a road. Do you have to get a tow? Is their mobile quick charge option?

 

[Joel Was Right]

What happens if you don't make it to the next charger, and get stuck on the side of a road. Do you have to get a tow? Is their mobile quick charge option?

You're screwed.

But the Tesla's GPS have nearby Superchargers programmed in and will notify you when you need to change your route to charge before that ever happens.

But I agree, there needs to be a mobile charging option for emergencies.

 

[Unknown Soldier]

It took more than a century of the ICE to reach the density of gas stations in industrialized nations that we have today. To expect EV charging stations to reach that density overnight is unrealistic.

One thing about the ICE is that the fuel is a highly portable liquid. This means you can always bring the fuel back to the vehicle, if it is present somewhere and you have a container. This is one advantage that the ICE will always possess in uninhabited or very sparsely inhabited regions of the world. The EV cannot ever displace the ICE in those parts of the world for simple practical reasons.

 

[captive]

Well its not a great article and some stuff he says are idiotic. But it did have some valid point. Some people are not aware of the model x situation.

Also, I had a different viewpoint as you and you called me a troll, plus made fun of my car. Even though I never said that my car looked better than a Model S.

actually, i never called you a troll.

HAHAHA..... why do you keep starting your posts off like this? Its ridiculous and brings nothing to the conversation and makes you look like a troll.

i said the way you start your posts off makes you look like a troll.

are you the guy that posted your Fit? If so, then yes, i definitely made fun of your car. So what? I drive a VW Passat TSI, im sure multiple someones somewhere think the car is ugly. I couldn't give two shits if someone here or elsewhere said so.

Portable chargers that give 60 miles. It would have to be portable and magnetic so it can be attached to the side of the car whilst it charges to secure it. That sort of range would allow even a depleted car to get to the nearest Supercharger to 'fill up'.

These suggestions of getting public chargers installed on a residential road, or at work, are ridiculously impractical.

Until then, Tesla cars remain only suitable for suburban home owners.

while you bring up some valid points, i think you're talking about stuff thats at least 5 years down the road.

However, a lot of condo dwellers have garage parking, it wouldnt be that hard to add chargers.

Chargers at work are perfectly practical, realistic is the actual question. Only the best employers would do something like that as the 98% of other employers don't give a shit about their employees.

 

[n0razi]

3-4 years before any of us realistically even get the car is a long time (assuming 50k/yr production rate starting in late 2017 and ramping up to 100k). Things can change... better cars can be announced, apple or google could announce better tech, you could move into an apartment or out of one, you might switch jobs to one that doesn't have EV charging, you might start a family and end up needing tesla s/x size, you might have a mid life crisis and want a convertible roadster, etc...

 

[shinshoryuken]

I'm not to sure about your question.

Tesla's do intrigue me due to the tech and the..*Yay no more paying for gas!*
The performance is there but I just can't get how boring/generic it looks.

Also from what I've read is the reliability is questionable too.

I have a honda fit and its great. Good gas mileage and I'll probably get 200k mile without major issues.

And like alot of people here, I'm questioning the hype and why are people standing inline to pre-order a car unseen...

guys, it'd be better if we didnt feed the trolls. No one in their right mind possibly thinks the fit looks better than a model s. Like c'mon son.

yup you called me a troll.

and I never even said my car looked better than a model S. I questioned the hype because the delay of the model x.

seem like you're over sensitive and over defensive whenever someone even slightly talk bad about tesla.

to you they are a troll or "salty".

 

[captive]

yup you called me a troll.

and I never even said my car looked better than a model S. I questioned the hype because the delay of the model x.

seem like you're over sensitive and over defensive whenever someone even slightly talk bad about tesla.

to you they are a troll or "salty".

not really, i was speaking in general to not feed the trolls. It gets tiresome seeing 10-15 people quoting the same post over and over again.

but yea the way your post is worded you say "it looks so boring and generic" and then say you have a fit and its great. Did you explicitly state that it looks better, no, but multiple people quoted you and said you were nuts to think that the fit looks better, so there must have been something about your post that people took the wrong way. Thats on you.

Not sure why your still on my ass about it, apparently you really like your fit and i hurt your feelings or something.

anyhoo, im generally sorry if i hurt your feelings by insulting your fit. Not sure why some random guy on the internet opinion bothers you so much. Again i drive a VW passat, please, feel free to insult it, thanks, and have a good night.

 

[titiklabingapat]

Whats stopping Tesla from initiating a priority system on the supercharger network? Like if you use it a lot, you'd go down on the priority list compared to someone who occasionally use it (to prevent people from using it everyday). You can also start imposing fees for those who want the option to use the superchargers more often.

 

[nomster]

Whats stopping Tesla from initiating a priority system on the supercharger network? Like if you use it a lot, you'd go down on the priority list compared to someone who occasionally use it (to prevent people from using it everyday). You can also start imposing fees for those who want the option to use the superchargers more often.

It's not designed for scheduled use, it's meant to get you from point a to point b. They probably need a different model for people that want to use a supercharger as their "home base" charger.

 

[FyreWulff]

What happens if you don't make it to the next charger, and get stuck on the side of a road. Do you have to get a tow? Is their mobile quick charge option?

Same as you run out of gas. Hope someone comes by.

This is one of those issues that won't even be at the forefront once there's more electric cars, as people will be able to give you a limp charge to the next station with their own EV.

Whats stopping Tesla from initiating a priority system on the supercharger network? Like if you use it a lot, you'd go down on the priority list compared to someone who occasionally use it (to prevent people from using it everyday). You can also start imposing fees for those who want the option to use the superchargers more often.

There's no real need to do this as the electrical demands of these stations aren't really that high. The most they would probably ever do make it so a car being charged can move forward automatically to let someone else get in to charge if you're away from your vehicle, or text/call you to come get your vehicle if you go somewhere and suddenly the station gets filled up.

As it is, I think, it won't be an issue since EV will change people's habits. There will be less 'stop at the station to make my car keep working' because people will get used to charging their car at home and while it's parked at work.

 

[pj]

He unironically uses the phrase "collective media stumblebums". The article is nothing but frothing, misplaced, impotent rage.

It's actually adorable; it reminds me of a Blackberry user circa 2007.

The adorable thing is people think they will be driving a $35k tesla in a year and a half. It reminds me of a $50,000 40kwh Tesla Model S pre-orderer circa 2010 who didn't get their car until late 2013.

IF there are no delays, anyone who plans to spend less than 40k on their model 3 will be lucky if they get a car by mid 2020

 

[East Lake]

It's not particularly adorable. Here's a fairly recent article from before the model 3 was unveiled. Notice the complete lack of vitriol and that it pays little attention to fanboys.

Wall Street analysts have been touring Tesla’s massive factory in Fremont, Calif., and they're returning with the same conclusion: Elon Musk's electric-vehicle company is getting ready for something big. In a sign of this enthusiasm, Robert W. Baird & Co. upgraded its Tesla rating on Monday morning following a factory tour.

Tesla spent some $1.6 billion on major upgrades last year as it prepares to launch its first attempt at a mass-market car—the Model 3—on March 31.1 The transformation is striking, according to auto analysts at Stifel Financial Corp., Credit Suisse Group AG, and Baird. The firms are telling investors that Tesla is learning from the mistakes that delayed its previous launches and is on track to make the shift from producing tens of thousands of $80,000 cars to hundreds of thousands of $35,000 cars—assuming the Model 3 proves a success with drivers.2

Stifel and Credit Suisse both noted Tesla's new aluminum stamping press, which Credit Suisse's Galves says has 10 to 20 times the output of Tesla's older machine. The bodies of the Model S and Model X are both made of aluminum, which costs twice as much as steel but weighs less. Tesla hasn't yet disclosed the composition of the Model 3. Keeping the weight down on electric vehicles helps achieve the maximum range on the battery, but maintaining a balance between cost and performance is crucial for a mass-market plug-in car.

Tesla's assembly lines are faster and more automated than those observed during a tour 18 months ago, according to Credit Suisse's Galves. The body assembly line is now rated to produce about 175,000 cars a year, with final assembly capability of more than 100,000 cars.

"Robotics systems are customized, production processes are revolutionary, and attention-to-detail/supply chain management is improving by the minute," wrote Stifel's Albertine. "We do not believe this production process is one competitors can easily recreate." Tesla's manufacturing skills will help the company reach its target of more than 25 percent gross profit margins on the Model X, according to Baird's Kallo.

Tesla is already shifting battery production work to its massive "gigafactory" under construction in Nevada. After the factory tour in Fremont, Baird's Kallo came back convinced that battery costs are already just half the industry average and are falling more quickly than most estimates. "This should allow Tesla to produce the Model 3 with healthy margins, and to invest in vehicle aesthetics and performance, placing it above competing vehicles," he wrote in a note to investors on March 14. He upgraded his rating on the stock to "outperform" and raised his price target to $300. The stock rose 3.8 percent, to $215.47, on Monday morning.

http://www.bloomberg.com/news/artic...ours-the-tesla-factory-and-loves-what-it-sees

 

[BlastProcessing]

It's not particularly adorable. Here's a fairly recent article from before the model 3 was unveiled. Notice the complete lack of vitriol and that it pays little attention to fanboys.










http://www.bloomberg.com/news/artic...ours-the-tesla-factory-and-loves-what-it-sees

Everybody knows that Credit Suisse are just a bunch of slobbering media stumblebums.

 

[mcfrank]

A week ago, we started taking reservations for Model 3, and the excitement has been incredible. We’ve now received more than 325,000 reservations, which corresponds to about $14 billion in implied future sales, making this the single biggest one-week launch of any product ever. This interest has spread completely organically. Unlike other major product launches, we haven’t advertised or paid for any endorsements. Instead, this has been a true grassroots effort driven by the passion of the Tesla team that’s worked so hard to get to this point and our current and future customers who believe so strongly in what we are trying to achieve. Most importantly, we are all taking a huge step towards a better future by accelerating the transition to sustainable transportation.

We want to thank everyone who has shown their faith in Tesla and the mission of electric vehicles. We would write more, but we need to get back to increasing our Model 3 production plans!

325,000 preorders in a week. That is a pretty remarkable number. Hopefully they are able to scale production reasonably quickly.

 

[Jimrpg]

A million pre orders is not out of the question before the car actually ships. They still have a second reveal which will get a lot more interest in the product. A million preorders = $35bn and makes their share price cheap right now.

 

[plagiarize]

You're screwed.

But the Tesla's GPS have nearby Superchargers programmed in and will notify you when you need to change your route to charge before that ever happens.

But I agree, there needs to be a mobile charging option for emergencies.

You could have a supercharger on a truck full of batteries. I wonder if it's something they've thought about.

 

[RustyNails]

A million pre orders is not out of the question before the car actually ships. They still have a second reveal which will get a lot more interest in the product. A million preorders = $35bn and makes their share price cheap right now.

When is the second reveal?

 

[Deleted member 80556]

Potentially 14bn dollars of sales?!

 

[Jimrpg]

When is the second reveal?

Hasn't been announced yet.

 

[Jimrpg]

Potentially 14bn dollars of sales?!

I don't think people would put $1000 down if they didn't think they could afford it. I'd expect most people who preorder to be buying one and certainly those who have acted as quick as they did.

 

[GTI Guy]

Hasn't been announced yet.

I gotta imagine it's a year or so out.

 

[ColdPizza]

So with 325k pre-orders, they have 325,000,000 in which they can probably borrow 1B if they wanted...that 325m could be used to pay the balance on the loan until then

 

[Deleted member 80556]

I don't think people would put $1000 down if they didn't think they could afford it. I'd expect most people who preorder to be buying one and certainly those who have acted as quick as they did.

People are patient, damn. I have to wait but just because there are no Teslas in Colombia. Some might have to wait until Fall 2018 or even further! It's worth it though.

 

[massivekettle]

A million pre orders is not out of the question before the car actually ships. They still have a second reveal which will get a lot more interest in the product. A million preorders = $35bn and makes their share price cheap right now.

Again, that's not how market cap is calculated. Wal Mart generates nearly $500bn in revenues. Market cap is only $220bn.

Besides, there are still significant risks with regards to Tesla's operational ramp up.

So with 325k pre-orders, they have 325,000,000 in which they can probably borrow 1B if they wanted...that 325m could be used to pay the balance on the loan until then

They could do that, or they could use the cash from pre-orders to start assembling Model 3 cars?

 

[Cake Boss]

That's what he's saying, what do you think the $1B is being used for? Bonuses?

 

[Par Score]

The thing is, I'd go out and buy a Model 3 tomorrow, but there is no way I'm putting down a $1,000 pre-order on a car I might not see for 4 years.

I'd imagine $14bn is actually something of an underestimate, since we don't really have a pre-order culture when it comes to cars.

 

[pj]

It's not particularly adorable. Here's a fairly recent article from before the model 3 was unveiled. Notice the complete lack of vitriol and that it pays little attention to fanboys.

http://www.bloomberg.com/news/artic...ours-the-tesla-factory-and-loves-what-it-sees

I think it's entirely possible they can get to 500k annual production by 2020, which is their stated goal.

Accepting that, if you order a model 3 today, you will not get it until the middle of 2020.

I can also find recent articles from fancy sounding sources that are level headed and not as optimistic about tesla. Lack of vitriol doesn't mean more accurate.

Look, here's one:

Ahead of the kick-off, Morgan Stanley auto analyst Adam Jonas outlined expectations for the car.

Jonas is a noted Tesla bull with a target price of $333 per share, while the stock is trading at $230.

In fact, concerns about the car's rollout prompted Jonas to lower his own target on the stock earlier this year from $450 a share to the current $333.

He repeated some of those in the latest note: The production version of the car will likely be delayed, cost more and sell less than Tesla's projections.

For starters, it's not going to cost $35,000. At least not at first.

"While we don’t doubt there could be base configurations of the model that could indeed start as low as $35k (excluding incentives), we anticipate the price of the average configuration of the model to be in excess of $60k at first," he wrote.

There's precedent for this forecast. Even though a Tesla's Model X SUV could sell for as little as $75,000, when the car debuted last September only a top-of-the-line $140,000 P90D Signature edition was available.

Jonas and his team also believe that Tesla is unlikely to meet its target launch date of late 2017 and will instead, begin production of the Model 3 in late 2018.

The Morgan Stanley analyst has, in the past, cited Tesla's focus on the production of the Model X SUV as a cause for potential delays to Model 3 production.

Despite the lower price point, Jonas expects the Model 3 to deliver the uncompromising performance one has come to expect from Tesla.

"We would be very surprised if performance specs such as acceleration and handling were not on par with or superior to high performance ‘M’ or ‘AMG’ versions of the equivalent German premium sedans with similar wheelbase– potentially at a more affordable price," Jonas wrote.

http://www.businessinsider.com/morgan-stanley-tesla-what-we-expect-model-3-2016-3

Everyone knows that Morgan Stanley are just a bunch of slobbering anti-Tesla Luddites.

Edit: CNBC happens to be talking about Tesla right now and they are saying that they would be shocked if even half of the 300k pre-orders turned into actual sales

 

[HStallion]

So this question has most likely been asked several times in this thread or others about electric cars but to solve the issue of charging your vehicle if you park on the street or dont have easy access to an outdoors electrical outlet, could you somehow integrate solar panels into the cars design? Like could you make the entire roof or even exterior of the vehicle a giant solar panel and it would be enough to charge the battery in a timely fashion? Like over the course of an 8 hour workday?

 

[Deleted member 80556]

I feel like those kind of articles ignore the fact that the culture in Tesla consists of learning from mistakes. Someone posted earlier a WSJ article that stated they were upgrading their gear to prevent them from making the same mistakes.

 

[Giggzy]

Saw this email this morning:

Towards the bottom it mentions Tesla increasing their production plans to meet the overwhelming demand for the Model 3. We all knew this of course, and I'm still not going to get my hopes up that there won't be any delays, but still nice to see.

I preordered shortly after the online reservations opened (before the reveal event) so I assume I'm roughly around 85K-110K in queue. I do live in California though, and I plan on adding options to the car which will probably bring it to around the 40K-44K. Hopefully this means I'll get the car in 2018!

 

[East Lake]

I think it's entirely possible they can get to 500k annual production by 2020, which is their stated goal.

Accepting that, if you order a model 3 today, you will not get it until the middle of 2020.

I can also find recent articles from fancy sounding sources that are level headed and not as optimistic about tesla. Lack of vitriol doesn't mean more accurate.

Look, here's one:









http://www.businessinsider.com/morgan-stanley-tesla-what-we-expect-model-3-2016-3

Everyone knows that Morgan Stanley are just a bunch of slobbering anti-Tesla Luddites.

Edit: CNBC happens to be talking about Tesla right now and they are saying that they would be shocked if even half of the 300k pre-orders turned into actual sales

Notice your link makes no mention of the manufacturing processes or really gives any insight into the company aside from "there were delays before."

Adam Jonas might be right and the other analysts might be wrong, but if you're going to get snarky and post stuff about how people are going to wait til 2050 to get their car and bring this type of evidence or posts links from the auto extremist blog, which offers zero insight into the company then don't expect people to accept it as some enlightened opinion.