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Tesla's Promised $35,000 Model 3 Is Still a Long Way Off (engadget.com) 276

When the Model 3 was first unveiled, it was pitched as an EV for the masses that would have a reasonable $35,000 price. Two years later and we still don't have a clear timeline as to when the $35,000 Model 3 will ship. In fact, Elon Musk last weekend unveiled the pricing and specs of a newer, more expensive Model 3 with AWD. It will cost $78,000. Engadget reports: CEO Elon Musk recently tweeted that the $35,000 Model 3 now won't ship until three to six months after Tesla achieves its 5,000 vehicle-per-week production goal. The reason for the new delay in the base model is simple: If the company was to ship it now, it would lose money on every vehicle and "die," as Musk put it. If Tesla had hit its initial forecasts and was producing 5,000 vehicles a week by January, the base, $35,000 Model 3 probably wouldn't have been delayed by so much. One potential problem for Tesla, as the WSJ points out, is that many of the 500,000 buyers who laid down a $1,000 deposit did so expecting to buy a $35,000 car, not a $49,000 one. When they get a letter saying the time has come to configure their EVs, quite a few might decide to back out, which could impact Tesla's already precarious cash flow situation.
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Tesla's Promised $35,000 Model 3 Is Still a Long Way Off

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  • Margin (Score:5, Insightful)

    by MachineShedFred ( 621896 ) on Wednesday May 23, 2018 @03:05AM (#56657412) Journal

    It's almost like you want to sell the higher margin ones first, in order to help pay for the amazing capital expenditure it takes to build a car assembly line.

    Who is shocked by this? Nobody should be, as this is how it has always worked.

    • Re: (Score:3, Insightful)

      by Anonymous Coward
      that maybe so, that won't make the average punter who forked out the $1000 to support Tesla and reserve their $35k any happier that they are being given the arse end of the deal.
      • Re:Margin (Score:5, Informative)

        by Rei ( 128717 ) on Wednesday May 23, 2018 @05:00AM (#56657712) Homepage

        I'm waiting for a SR Model 3. And I don't find this timeline bad in the least. And if you ask over at any of the Tesla forums, you'll find the same thing. SR was never supposed to be an early option. The whole vehicle is behind schedule, so why shouldn't the SR pack be as well? Particularly given that it was - until recently - the battery line holding production back.

        Regardless, Beau and I apparently have a very different definition of "long way off". For people who've been waiting for this vehicle, an accelerated schedule (yes, accelerated) of 3-6 months from hitting 5k is a breath of fresh air; I think most people were expecting it to be further in the future than that. Before this, it was looking like SR would come out somewhere in Q1; now it looks like mid Q3 to mid Q4, possibly late Q4. For reference, going from the leaks, Giga is over 5k packs per week and Fremont around 4,2k vehicles per week, with a downtime starting later this week to upgrade Fremont to 5-6k.

        Of course, as always people who have no interest in a Model 3 will concern troll this. Spare us.

        • Re:Margin (Score:4, Interesting)

          by AmiMoJo ( 196126 ) on Wednesday May 23, 2018 @05:08AM (#56657734) Homepage Journal

          It's just frustrating. I don't want to go back to fossil, but I need more range. The Leaf 40 is a disaster, and who knows if the 60 will be any better. CPO prices on Teslas are silly here and the new no-refurb CPO is a joke.

          And we are looking at late 2020, maybe 2021 to actually get an M3 of any kind. I'd get an LR if one was available.

          • The infrastructure build needed to support EVs is expensive and takes time to build out. The boutique mall in my little rural village just sprouted a row of ten Tesla chargers, so it is coming.

            Ultimately, it all comes down to batteries. Every advance in EV range is worth years of building more charging stations.

            • The infrastructure build needed to support EVs is expensive and takes time to build out.

              Oh look, that excuse again. In the mean time if you look to Europe where the EV market is quite big you'll see poor infrastructure that is massively underutilised as it is because *shock* one of the biggest selling points of EVs is that the infrastructure is in your garage.

          • by sjbe ( 173966 ) on Wednesday May 23, 2018 @07:37AM (#56658110)

            It's just frustrating. I don't want to go back to fossil, but I need more range. The Leaf 40 is a disaster, and who knows if the 60 will be any better.

            So buy a Chevy Bolt or a Volt. Both have much better range than the Leaf and are decent cars in their own right. The Leaf is a car that is useful for short commutes and that's it. If you need more then buy something else.

            • by teg ( 97890 )

              It's just frustrating. I don't want to go back to fossil, but I need more range. The Leaf 40 is a disaster, and who knows if the 60 will be any better.

              So buy a Chevy Bolt or a Volt. Both have much better range than the Leaf and are decent cars in their own right. The Leaf is a car that is useful for short commutes and that's it. If you need more then buy something else.

              In Europe, the Opel Ampera [wikipedia.org] had a multi-year waiting list. GM just wasn't able to/didn't want to deliver the desired quantities. After GM sold Opel, it's uncertain if they'll ever deliver them.

            • by AmiMoJo ( 196126 )

              Neither are available here.

      • by sjbe ( 173966 ) on Wednesday May 23, 2018 @07:33AM (#56658104)

        that maybe so, that won't make the average punter who forked out the $1000 to support Tesla and reserve their $35k any happier that they are being given the arse end of the deal.

        If anyone plunked down a deposit expecting to not have to wait a long time then they are idiots. 1) Tesla ALWAYS over promises delivery dates and routinely misses them. This is nothing new. 2) Tesla has ZERO experience with production at this volume. There is a learning curve. 3) If you buy the "cheap" model then you aren't their best customer and you should expect to go to the back of the line. Every business serves their best customers first. 4) A car received later is better than a car not received at all. 5) Tesla was up front that the pimped out models would be delivered first. Almost everyone has had to wait a little longer than hoped for.

      • by Luthair ( 847766 )
        At this rate by the time they have the 35k model available the tax credits won't be.
    • Re: (Score:2, Insightful)

      by danhuby ( 759002 )

      If you go back to the Tesla Model 3 reveal, the current setup not how it was sold.

      I'm pretty sure it was along the lines of "Available from $35,000 - place your reservation today".

      So the argument here is that those reservations were miss-sold, not that the business model is a surprise.

      • by Rei ( 128717 )

        The reservations told you exactly what you were getting for what price and with a timeline that showed SR not being made until LR was being made in volume. there is nobody with an order who didn't know A) that $35k is for the SR pack, and B) the LR pack was going into production first.

      • I'm pretty sure those reservations are still valid, so the only mis-selling here is that they're delaying delivery. If you've paid any attention to Tesla's history, you'll know that they've never really delivered any of their cars on time so would actually be unexpected if they had started delivering $35.000 Model 3s on schedule.
        • by gl4ss ( 559668 )

          well right now it seems that they don't even have a schedule. as the schedule is actually dependent even on things like component and assembly costs coming down....

          they do have a schedule to make more expensive models available though.

          look, we all know that he announced it to please investors because he needs a profitable, yet affordable car to sell at high volume.

    • by AmiMoJo ( 196126 )

      Sucks if you pre-ordered though. Rather than doing pre-orders first, anyone willing to pay more gets theirs years earlier.

      As someone in a RHD country I'll be the last to get one.

    • Not me... There's more than enough legitimate things you can criticize Musk and Tesla for, but this really isn't one of them. It's kind of funny how heavily people are divided into either doomsayers and evangelists on Tesla (and it would seem like the doomsayers are a considerably larger group). Anyone with even cursory knowledge of how mass production of goods like cars works will have known that lower margin cars will have much lower priority when it comes to how limited production is allocated.

      Still,
    • Comment removed based on user account deletion
    • It's almost like you want to sell the higher margin ones first, in order to help pay for the amazing capital expenditure it takes to build a car assembly line.

      Who is shocked by this? Nobody should be, as this is how it has always worked.

      No it hasn't always worked like that. All other car manufacturers release budget models the same time as the higher end ones.

    • by mjwx ( 966435 )

      It's almost like you want to sell the higher margin ones first, in order to help pay for the amazing capital expenditure it takes to build a car assembly line.

      Who is shocked by this? Nobody should be, as this is how it has always worked.

      Because most manufacturers cost the capital to make car before hand and amortise that over however many models they expect to sell.

      Or they buy the factories using cash on hand, therefore do not have to do this.

      Why didn't Telsa? Oh yeah, it's more important to be "edgy", "cool" and "disruptive" than to have a workable business plan.

    • What you call a margin can also be called a bait and switch.

      We're going to sell you this $35k car if you pre-order now, but when it comes time to actually buy the car, well. . . . . we don't have any of those available. But we DO have this nice $50k version if you're still interested. . . . .

      The Federal Trade Commission tends to frown upon this little maneuver and if you promised / advertised a product at X price, then steer folks to a higher priced alternative, it's called false advertising.

      It would surpr

    • I would be rather perturbed if I had ordered a low cost model within the first 50K deposits - only to find out that everyone else with a higher end model gets theirs first and I get to wait an extra year or so... I guess Tesla doesn't believe in Queues, they just want to pick-and-choose who gets what and when!
  • Word is that Tesla will need another round of funding before they can fulfill all the existing Model 3 orders. It makes sense they'd try to avoid this by fulfilling the most profitable orders first. There are likely enough of those to 'put off' the $35k Model 3 for a while. Given they recently announced options for a more powerful Model 3, they're likely going to remain in 'premium' territory for a while. Soon they'll be making more Model 3s each month than Bolts are made each year, so it's not like competi

  • by danhuby ( 759002 ) on Wednesday May 23, 2018 @03:40AM (#56657510) Homepage

    By the time Tesla manage to make a $35,000 Model 3, other manufacturers may well have beaten them to it.

    Some are already close. The electric Hyundai IONIQ is less than $30,000 and if the range improves by 60 miles or so (50%) it will be competitive with the Model 3 - which doesn't seem like a huge leap.

    And this is just one model. There is already the 180+ mile range Renault Zoe available in Europe, and the new LEAF has around 170 miles.

    • The battery is a huge cost! Increasing the battery by 50% is certainly going to increase the price by more than $5k, more than $10k probably. But they don't actually need to increase it by 50%, they need to increase it by 80%. But oops, that's a lot of weight! Then you need a bigger motor, as the existing one is under-sized. You also may need to change other things with that huge a weight jump. You probably need to re-engineer the whole thing.

      The whole point of the Model 3 is that it is good enough to repla

      • by AmiMoJo ( 196126 )

        Leaked Nissan price lists suggest that 25kWh is around â5k now.

    • by Rei ( 128717 ) on Wednesday May 23, 2018 @05:27AM (#56657766) Homepage

      Some are already close. The electric Hyundai IONIQ is less than $30,000 and if the range improves by 60 miles or so

      Ioniq's EPA range is 124 miles. You're asking them to nearly double the Ioniq's range for pocket change.

      Ioniq is also produced in very small volumes which Hyundai refuses to increase significantly - a good sign that the vehicle is a "compliance car".

      Ioniq is also smaller, and much slower than Model 3.

      There is already the 180+ mile range Renault Zoe available in Europe, and the new LEAF has around 170 miles.

      Let's all say it together: stop confusing drivecycles. The Leaf's EPA range is 151 miles. The Zoe has no EPA rating, but given that it's WLTP range is only 5% more than the Leaf, expect around 159 miles. They're both slower vehicles (the Zoe *much* slower, even less HP than the Ioniq), but most importantly, they're both terrible at charging (the Ioniq is worse than the Model 3, but nothing compared to these two). Zoe only does "high power" AC charging, which is less common than DC charging, and only up to 43kW, vehicle-limited (Model 3 = up to 117kW from current superchargers, charger-limited - and a new gen of supercharger is coming out late this summer). Leaf is even worse: Nominally it can take up to 50kW, and in practice, at first, lower 40s. But the latest Leaf has been plagued with a problem called #RapidGate (google it). Basically, their lack of pack cooling finally caught up with them; you barely make it any distance on a trip before it throttles you back to half speed. And speaking of the lack of pack cooling, it means that Leafs suffer degradation faster than other EVs. And is it worth mentioning that the Zoe's interior quality is among the worst in modern EVs (arguably only beaten by the e-NV200) and has the least amount of cargo space?

      There's a reason that half a million people flocked to the Model 3 and not the "competition", and yes, that's in quotes for a reason.

      • by Duds ( 100634 ) <dudley @ e n t e r space.org> on Wednesday May 23, 2018 @06:13AM (#56657862) Homepage Journal

        There's the powerful counterpoint of course that those vehicles actually exist, the $35k Tesla 3 does not in production quantities and is sliding further into the future with every announcement.

        By the time I can walk into a Tesla dealer (especially in the UK as the RHD will be even further behind) and buy a standard Tesla 3, there will be probably another 2 major updates to that Ioniq. And maybe Ford etc will have their hands properly in play.

        • by sjbe ( 173966 ) on Wednesday May 23, 2018 @07:57AM (#56658186)

          There's the powerful counterpoint of course that those vehicles actually exist, the $35k Tesla 3 does not in production quantities and is sliding further into the future with every announcement.

          The Ioniq EV sold 6797 units last year globally. Tesla delivered more Model 3s than that last QUARTER and is accelerating production. In fact Tesla delivered more Model 3s [teslarati.com] than the Chevy Bolt and Nissan Lead COMBINED in Jan and Feb this year. Right now Tesla is delivering around 2800 [bloomberg.com] Model 3s per week.

          By the time I can walk into a Tesla dealer (especially in the UK as the RHD will be even further behind) and buy a standard Tesla 3, there will be probably another 2 major updates to that Ioniq. And maybe Ford etc will have their hands properly in play.

          That's a nice little fantasy story you are telling yourself. You do know Ford is literally stopping production of almost all non-truck vehicles right? And you think the Ioniq is going to magically be redesigned massively to compete on range with the Tesla?

      • by kenh ( 9056 )

        Some are already close. The electric Hyundai IONIQ is less than $30,000 and if the range improves by 60 miles or so

        Ioniq's EPA range is 124 miles. You're asking them to nearly double

        the Ioniq's range for pocket change.

        Math?

        Adding 60 to 124 is not "nearly doubling", it is an aprox. 50% increase. I'm not sure what common core math priciples you were applying here, but a 50% increase is about half of a 100% increase, which is the definition of "doubling" something.

        • The Model 3 goes 310-335 miles on a single charge. Even the Consumer Reports article points out that they were able to go 350 miles with the aggressive regenerative breaking turned on, and 310 miles with the lower regenerative breaking setting.

          In other words, to be comparative with the Model 3, the Ioniq would have to double their range (and then some) because the Model 3 has a far greater range.

      • And speaking of the lack of pack cooling, it means that Leafs suffer degradation faster than other EVs.

        That could be an understatement of the month [electrek.co]. Triple the speed of degradation or more is very worrisome.

      • Ioniq is also produced in very small volumes which Hyundai refuses to increase significantly - a good sign that the vehicle is a "compliance car".

        Or maybe the market just isn't there to justify a full-on, high-volume electric vehicle?

    • Tesla needs to hurry up

      Aren't they backlogged as it is??

    • Oh, they only have to increase the battery capacity by 50%? I don't know why that hasn't been done already! How hard can that be?

      Are you serious with that?

    • Tesla isn't afraid of the competition - it welcomes it. It has a corporate mission, unlike most manufacturers. Obviously it needs a sustainable cashflow strategy to effect its mission.

      • See, that's the problem... Most corporate missions include something about actually having a sustainable cashflow and profit. I think Tesla missed that step, but that's rather common with most Silicone Valley companies...
    • by Luthair ( 847766 )
      Chevy already beat them with the Bolt last year.
  • People will drop off the list. Others who didn't want to put money down that far in advance, have since had a car wear out, or since become more successful will gladly throw in. As the car becomes more available, moves out of the beta phase it has obviously been in, people see them, people ride in ones their friends have, etc., reservation numbers will increase, not decrease.
    • New car buyers don't buy a new car because the old one wears out. Cars are usually sold on the first time long before then. They buy a new car because they want a new car. If the car they want most is delayed, they may well wait — especially if it has no credible competitors, which is in fact the case.

  • by mrwireless ( 1056688 ) on Wednesday May 23, 2018 @04:56AM (#56657710)
    There is a steady stream of negative stories about Tesla popping up recently. So many that it is starting to feel a bit artificial.
  • by Hognoxious ( 631665 ) on Wednesday May 23, 2018 @06:47AM (#56657976) Homepage Journal

    Alternative explanation: it's actually very small.

  • Will Musk reach Mars before he is able to offer a $35,000 car? I might need to look into that bet.
  • Unless Congress extends the tax credit, al lot of those people waiting for 35K Model 3's will not be eligible for it since Tesla will have hit 200K before tehy start on the base Model 3 deliveries. If those waiting for the base model and planned on it being around 27.5K after the credit (less any additional state rebates / credits) they are in for a shock. I wonder how many will stick around if the credit sunsets for Tesla?
    • by Rei ( 128717 )

      People on the waiting list have been debating since day 1 how much of the US tax credit they'd get. Nobody is in for a "shock", they're following it in way more detail than you.

      And the credit does not disappear at 200k. Rather, 200k (which Tesla looks to be trying to deliberately delay to Q3) starts a timer. The first two quarters (aka, Q3 and Q4) are full credit. Then Q1 and Q2 are a half credit, then Q3 and Q4 are a quarter credit. Then it disappears.

      • People on the waiting list have been debating since day 1 how much of the US tax credit they'd get. Nobody is in for a "shock", they're following it in way more detail than you.

        And the credit does not disappear at 200k. Rather, 200k (which Tesla looks to be trying to deliberately delay to Q3) starts a timer. The first two quarters (aka, Q3 and Q4) are full credit. Then Q1 and Q2 are a half credit, then Q3 and Q4 are a quarter credit. Then it disappears.

        It will be interesting to see how they control production to maximize the time for getting credits. The good news is if they can ramp up production fast enough before and during the full credit phaseout there is no limit to how many buyers can get the credit. They could manufacturer a bunch of 3's and not deliver them until the threshold is exceeded to stretch he phaseout as long as possible and get as many buyers the maximum credit as tehy can. It will be interesting to see what happens to deposits and ord

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