Tesla Ends Online Sales of $35,000 Model 3 (nytimes.com) 147
Tesla is changing up its retail strategy yet again, this time deciding to end online sales of the long-awaited $35,000 version of its Model 3 sedan (Warning: source may be paywalled; alternative source). The move comes just over a month after the company announced that the $35,000 version was finally coming to market. The New York Times reports: In a blog post late Thursday, Tesla said customers wanting the $35,000 version of the Model 3 would have to make the purchase by phone or in person at one of its stores. The cheapest Model 3s ordered online will now include Tesla's Autopilot driver-assistance system and a longer battery range, features that increase the price to $39,500. The blog post said Tesla was making the changes to "simplify vehicle choices and to make Autopilot more affordable." Such a configuration would previously have cost $40,500, it said.
A Tesla spokesman said the change would allow the company to produce one version of the Model 3 and use software to limit the battery range and turn off features such as heated seats for customers who wanted the $35,000 model. A longer range and additional features will be switched on in the $39,500 car, known as the Standard Plus model. Previously, Tesla planned to put a smaller battery pack in the basic model and a larger one in the Standard Plus, the spokesman said. Tesla's announcement also said it would begin leasing the Model 3, but would not offer customers the option to buy the cars after their leases expired, a departure from the typical industry practice and its own policy on other models. Tesla said it aimed to upgrade Model 3s returned after a lease to allow them to drive themselves, with no human at the wheel, and be deployed in a driverless taxi fleet. The company acknowledged that the technology for driverless taxis was still in development and would need to be approved by safety regulators before such a business could begin.
A Tesla spokesman said the change would allow the company to produce one version of the Model 3 and use software to limit the battery range and turn off features such as heated seats for customers who wanted the $35,000 model. A longer range and additional features will be switched on in the $39,500 car, known as the Standard Plus model. Previously, Tesla planned to put a smaller battery pack in the basic model and a larger one in the Standard Plus, the spokesman said. Tesla's announcement also said it would begin leasing the Model 3, but would not offer customers the option to buy the cars after their leases expired, a departure from the typical industry practice and its own policy on other models. Tesla said it aimed to upgrade Model 3s returned after a lease to allow them to drive themselves, with no human at the wheel, and be deployed in a driverless taxi fleet. The company acknowledged that the technology for driverless taxis was still in development and would need to be approved by safety regulators before such a business could begin.
I am altering the deal (Score:4, Funny)
Pray I don't alter it any further.
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This is not "altering the deal", it is just an attempt at upselling. And it isn't a galactic evil lord doing the talking, it just a car salesman. No need to make it overly dramatic, there is a bunch of real electric vehicles to choose from already.
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It's probably because the $35k model was losing them money, and losing Panasonic money on the batteries. They technically fulfilled Musk's promise, they got the compliance $35k version out, so now they can make it really hard to buy and just sell the profitable models.
Note also that Autopilot isn't an option any more, it's mandatory. They fit the hardware to every car and then used to charge you to turn it on, but it looks like now they just added $2000 to the price and made it standard.
The most annoying pa
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I know that most of the Tesla options are difficult or impossible to unlock without paying.
However, it seems somewhat likely that one could just rewire the heated seats separately...
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You can only alter a deal if you've had a deal in the first place. This is withdrawing the offer for a deal. No need go crying to your deity about that.
Software to limit functionality? (Score:5, Interesting)
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Yep, it's intelligent inventory management and also avoiding the need for separate production lines.
Lots of things are done this way now.
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Hmmm, Ford, GM, Fiat, Toyota, Honda - they all use a single production line per model. They manage entirely different powerplants and transmission combinations (not to mention even body styles, like convertibles and hard tops, and of course different interior packages), not just a battery pack with different internals (which would be akin to a gas tank with the same external dimensions and connections and mounting points, but a different internal capacity). Honda doesn't sell you a V6 and disable a pair
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They know at least SOME of the demand - those tens of thousands of $35K model 3s presold. But I guess better to spend extra on batteries than deal with the problem. This just screams of a company that is immature in its internal warehousing/stocking/manufacturing processes and will spend hundreds - thousands? - more per vehicle rather than optimize their manufacturing processes to handle what is considered normal throughout the rest of the industry (build to spec, on a production line).
This should be no m
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The cost of the steel is the same, but making it in the right shape costs money. I'm assuming that the parts are not identical between the battery packs, since things like retainers and supports might need to move based on the number of cells.
It's not all about the assembly, it's partly about SKUs, inventory management, production line scheduling, and long-term replacement parts inventory.
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C'mon Tesla, just come out and say it - you cannot sell a $35,000 car, and you have no intention to do so, and you're just playing games to get people to "move up" to the $40K version.
You should consider the fact that Mr. Musk is no longer at the helm of the company. I'm betting this is a cynical move by the board of directors to increase profits. Musk didn't care about the money as much as he cared about the technology getting used. New overlord, new priorities,
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Musk didn't care about the money as much as he cared about the technology getting used. New overlord, new priorities,
Uh huh. This is the guy who was fired from Paypal (circa 2000) because he actually wanted to abandon their existing Linux infrastructure and migrate to Windows servers...
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He had probably heard rumours about systemd...
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Musk didn't care about the money as much as he cared about the technology getting used. New overlord, new priorities,
Uh huh. This is the guy who was fired from Paypal (circa 2000) because he actually wanted to abandon their existing Linux infrastructure and migrate to Windows servers...
Paypal didn't run on Linux infrastructure. But close.
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Um, hate to break it to you, but Musk is still the CEO of the company; he's still at the helm. He is not the chairman, but the chairman doesn't run the company - the chairman heads the board which is responsible for ensuring the CxOs and VPs are managing the company correctly. The directors are the captains; the VPs are the colonels, the CxOs are the generals - and the board are the politicians back home. They do not control the company, they hire and manage others to do that.
As far as profits, how can i
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Um, hate to break it to you, but Musk is still the CEO of the company; he's still at the helm. He is not the chairman, but the chairman doesn't run the company - the chairman heads the board which is responsible for ensuring the CxOs and VPs are managing the company correctly.
Good so far, except that boards often won't interfere at a level as low as VP - the CEO/President is in charge of day-to-day operations, including hiring and firing of underlings like VPs..
The directors are the captains; the VPs are the colonels, the CxOs are the generals - and the board are the politicians back home.
This makes no sense, the directors are the board. The board defines goals for the company, and possibly specifics for C-level executives. The CEO/President decides how to achieve those goals (developing strategies and high-level plans), and the VPs (and everyone below them) does the actual work needed to implement the C
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Musk was still CEO of Tesla last time I checked. He is still at the helm.
Still, I do think this is a cynical move. In fact, the announcement of the $35k model 3 was a cynical move. I don't think there was ever any possibility of building it at a profit. I think they just announced it as part of a bait and switch move.
2016: "if you sign up to the waiting list for our super duper $35k car, you won't have to make do with a crappy Leaf or Bolt.
2019: "Oh sorry, you can't have the $35k car after all. What about a
Re:Software to limit functionality? (Score:4, Insightful)
So - the car still COSTS Tesla the same amount of money to make
No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials.
Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.
Re:Software to limit functionality? (Score:5, Informative)
So - the car still COSTS Tesla the same amount of money to make
No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials. Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.
Example, please? I work in high-volume consumer electronics and I've never seen this done. It could be done - software "disable" features from a higher-end product, and sell at a lower cost. But I've never seen it done, because if you're going to sell in any appreciable volume, the costs "wasted" in production vastly outweigh the supposed savings in tooling/NRE. Especially when the major components (for a car, that would be the engines, interior, body, suspension, etc) are not affected at all.
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Example, please? I work in high-volume consumer electronics and I've never seen this done.
You've "never seen it done" in high-volume consumer electronics? You've never seen a desktop Intel i5, then?
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It's been years since they've fused off working units to get a lower SKU since everybody is supply constrained on the high end. But what they will do is take the four core die with two out of spec cores and package that as a two core SKU.
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Not quite. What's you're describing is binning. They aim for the top and then bin the chips with dead cores.
It is however done on CPUs in general. See Intel VROC, a little hardware dongle you plug in on the motherboard that enables the NVMe RAID support in the Xeon CPU, or maybe back in the Clarksdale days where you could buy an upgrade voucher with a certain code in it to enable hyperthreadding on your processor via a utility from Intel's website.
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Example, please?
Examples abound. Oscilloscopes are a good example. I bought a good scope (nice mixed signal model) then paid extra to get the bus decoding features unlocked. Mine's a Hameg, but all the vendors do it. Some of them even allow you to unlock higher sampling rates.
It certainly used to be the case with graphics cards too (in the AGP era). Nvidia Quadros used to be identical to the much cheaper consumer models. The "pro" features like stereo visuals were unlocked by the drivers. You used to be ab
What costs wasted in production? (Score:2)
if you're going to sell in any appreciable volume, the costs "wasted" in production vastly outweigh
How do you know the costs "vasty outweigh"?
In fact, doesn't it seem like the costs of having two different kinds of batteries in an assembly line, along with needing to stock spare batteries of both types for years, along with the manufacturing costs of multiple kinds of batteries instead of just one all add up to a pretty significant cost - especially when you are talking about something as large as a whole-
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"Example, please?"
The number keypads on drive-up ATMs still have bump on the '5' key so you can find i by touch even though to get there you would have to be able to drive to get there. It's a huge savings in stock tracking and inventory to just use they same keypad everywhere.
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The two classic examples are IBM mainframe clock frequency (in which you paid extra to get the gizmo halving the frequency *removed*,), and early electronic calculators.
The reality is that for some products, each engineering variant adds significant costs. So it costs you less to build, for example, a single calculator chip with all of the abilities, but not put square root keys and memory keys on your low end models.
If you wanted to sell all $40 full featured calculators, you couldn't sell as many as $20
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Good one. Didn't know about the IBM mainframe one, but a current practice from Intel on their high end stuff is to ship Xeons with NVMe RAID that is disabled unless an appropriate $150 dongle is detected on the motherboard. AMD likes telling the world that Threadripper gives you that feature for free.
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It's entirely possible that technological differences mean that it makes sense for Intel to use one die for multiple products this way, while AMD finds it more efficient to make multiple dies.
I hadn't heard ab out there dongle, though--I would have thought it more efficient to do this on the package with fuses.
And I forgot to mention the articles in the 70s in Popular Electronics and the like that showed you how to mount four or five buttons on the case of your calculator to get the extra functions . . .
haw
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Example, please? I work in high-volume consumer electronics and I've never seen this done.
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Plenty.
Every piece of equipment you sell is tested using a plethora of equipment where functionality is determined by license. HP did it in the 90s, Agilent continued it now, Keysight is still doing it. The difference between their $3000 CROs and their $2000 CROs is either embedded in the firmware or activated via bolt on dongles.
Speaking of dongles do you know one of the differences between AMD's Threadripper and Intel's Xeons? The former supports NVMe RAID in the CPU leading to blazing fast speeds. The l
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you cannot sell a $35,000 car
That begs the question... wouldn't $35,000 three years ago be pretty fucking close to $40,000 in "2019 Dollars??" You can point to low interest rates all you like but food prices - an accurate indicator of true inflation - have certainly increased by at least that much in three years.
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The people who pre-ordered the car only made a small deposit on it. They didn't pay the full amount.
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In the US from March 2016 to March 2019, consumer prices have risen by approximately 6.7% [inflationdata.com]. $35k then would therefore be about $37,400 now.
However, when the car was announced, Musk said deliveries would begin in late 2017, so we should really be measuring the price rise between (say) October 2017 and now. That's about 3.25%.
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So - the car still COSTS Tesla the same amount of money to make, they will just sell it to you for cheaper if you let them set a few bits in the firmware - thereby cutting their own margins.
If they make another variant of the battery pack, then they have to do another series of crash tests in order to be able to sell cars with it in. They don't that many vehicles with the lower allotment will be sold, and/or they expect that many of those vehicles will be upgraded later. In the mean time, they're reducing warranty claims by selling an overprovisioned pack, which will last longer because it will not be discharged as far. This is really not as complicated as it would have to be to justify your i
Costs have been estimated .... (Score:2)
There was recently a YouTube video I watched where a CEO in the auto industry did some "best guess" cost estimates on what Tesla was really spending to build its vehicles.
His belief was that the $35K Model 3 was probably at or near a "break even" point, IF it was built in the USA. The big differentiator would be if Tesla opted to build it in China instead, where he estimated it could then sell at $35K while still making at least a 15-20% profit margin.
I suspect that's the issue with selling a base Model 3 r
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a) for 35k why would I pay for something I won't use? leave it out on the assembly line and it should be 30k
b) for 40k why would I pay for something that is technically there for 35k?
Re:Software to limit functionality? (Score:4, Insightful)
The incremental hardware cost is nothing compared to the R&D costs that they have to recoup with every sale. This is something common across the industry from Boeing to Intel. It decreases production costs overall.
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> This is something common across the industry from Boeing to Intel.
But not true of Chinese manufacturers that simply rip-off R&D.
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What? Really? In this case, we're talking about software changes (no more than 1 man year to do, and that's being generous) or a change in design of a battery pack (perhaps 3 man years, again being hugely generous). Well under $500,000 in NRE costs. But you're probably spending at least $500 - if not $1000 - per "throttled" battery. If you're going to sell more than a few thousand cars, you're money ahead to make the smaller battery.
As far as Boeing, they do not build only 737-900s and "throttle" the s
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They don't purposefully take a 3.8 GHz processor and throttle it down to 3.2 GHz so they can sell it for less money. They sell the 3.8 GHz unit as a 3.8 GHz unit. and the one that runs at 3.2 GHz reliably is sold as a 3.2 GHz processor.
Actually Intel and other CPU vendors do this all the time. Say a vendor orders a bunch of 3.2 GHz processors. If they don't have enough low binner processors to fullfill the order they use higher binned ones and clock them lower.
It's called artificial scarcity.
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Nobody has a excess of top bin parts these days.
Re: Software to limit functionality? (Score:1)
Mediocre doesn't generate excitement (Score:2, Flamebait)
Tesla still dangling that $35k carrot out there I see.
Non-news until they actually start selling the car they promised at the price / performance they promised.
If you want to try and peddle an inferior version of your cars on me, remember there are more than plenty of ICE options still out there.
If your option is too expensive or of inferior quality / performance, it really makes my choice a rather easy one doesn't it ?
Also more Chevy Volt than Model 3, under $35K. Tod (Score:2)
> remember there are more than plenty of ICE options still out there.
And if you want an American plug-in for under $35k, you can pick up a Volt today. As a bonus, it also has an engine you can choose to use instead of stopping to charge ten minutes before you reach your destination. Maybe that's why there are more Volts on the road than Model 3 or Model S. Ford has three plug-ins to choose from, including options under $35,000.
That's just American plug-ins. Last month, 100,000 plug-ins were made by Chin
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More Volts on the road than Teslas?
In 2018, 18306 Volts were sold vs. 139782 Model 3s
In the first three months of 2019, 2520 Volts vs 22425 Model 3s
Even just the Model S or Model X outsell the Volt, in number of cars sold, while being a LOT more expensive.
https://insideevs.com/monthly-... [insideevs.com]
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Still wrong.
136k Volts sold over 9 years. 250k+ Teslas sold in the US alone, confirmed by the phasing-out of the EV tax credit.
Doing that on purpose, or had a brain fart? (Score:2)
Are you purposely conflating things to try to mislead readers, or did you just have a brain fart?
There are millions of Chevys out there. A hundred times as many Chevrolet as Model 3, but that's not what we're talking about.
The top three American made plug-in cars are:
Volt
Model S
Model 3
Worldwide, BMW produces thousands i8 cars each month, and all of these are a joke to BYD, who makes more electric vehicles than Chevy, Tesla, and BMW combined.
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I think that the problem is that Tesla still hasn't figured out how the traditional car industry works yet, or they just think that they're somehow above it.
For any other car maker, It's normal to show a shiny cool looking $50,000 car with all of the premium performance and luxury features in your car advertising. They then end that commercial with some bullshit tag line saying "Starting at $30,000" to get people in the door. When they come in, they'll then see some stripped down piece of junk in the $30,00
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They couldn't do that. If you remember, the Model 3 generated massive interest and Tesla had a stack of pre-orders.If they had made the $35k version available, they would have been sold straight away to people on the waiting list, probably at a substantial loss.
Cost of cars (Score:1)
The car community likes to talk about Tesla having a huge cost advantage over rivals. Well...
Clearly they wouldn't make money on a $35K model 3, which has a 50 kWh pack.
If Tesla is truly at roughly $100/kWh, as everyone speculates, that means the pack costs them an even $5,000.
Assume they sold a model 3 with no pack at all. This means they would not be able to build and sell this car, without a pack and without the entire internal combustion engine system, for $30k.
Tesla very likely has a considerable cos
Re: Cost of cars (Score:2)
demand for cars has collapsed
Are we in an economic crisis already?
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Clearly they wouldn't make money on a $35K model 3, which has a 50 kWh pack.
If Tesla is truly at roughly $100/kWh, as everyone speculates, that means the pack costs them an even $5,000.
You seem to be ignoring that fact that economics can change as production processes are refined.
It might not have made much sense to make $35K models six months ago, I might make perfect sense now. Who knows?
And the subscription model creeps into car sales (Score:3, Insightful)
Has anyone noticed that Panasonic is backing away from Tesla now too?
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Their contract with Tesla ended not too long ago and Tesla just purchased a battery company who has patents on next-generation battery tech.
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It is harder to upsell over the Internet. When the web page keeps popping up "how about adding this great option for a low, low total of $45k", you just adblock it.
Hedging Bets... Sell (Score:1)
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Razors and eyeglasses have proven to be market âoedisrupters.â Cars, not so much. Tesla is over and out, sooner rather than later.
Don't come crying when you lose money, shortseller.
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Re: Slashdot boiz (Score:1)
My truck has been paid off for half a decade.
drive themselves, with no human at the wheel and w (Score:2)
drive themselves, with no human at the wheel and who is liable? and no EULA can pin it on leaser or taxi hailed at least in criminal court.
and in civil court Tesla may have an hard time getting off with an 3rd party victim that had no EULA
I predict (Score:2)
Self driving cars are going to be a pipe dream. One accident with no one to blame and thats it.
Its one of those futurey things that sounds easy, but ends up being really fucking hard without sometimes killing people.
other countries will do it if we don't (Score:2)
I still think there's going to be a moral panic over it at some point, but that said, I think worse case scenario will be a delay. All it takes is one country to legalize it, then before
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declaring certain cities as driverless-only
How would such cities handle 1. pedestrians and 2. the cost of living barrier for people who would otherwise cycle?
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In the end the advantages are too great to ignore, particularly after cars get all around cheaper and longer lasting when electric starts to really take off. Driverless ride sharing / Uber-like services are a big game changer as well and should
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Self driving cars are going to be a pipe dream. One accident with no one to blame and thats it.
Its one of those futurey things that sounds easy, but ends up being really fucking hard without sometimes killing people.
Luckily for us, judges are as stupid as people who keep repeating that.
Cars don't have to be be perfect, they just have to be better than the monkeys that are currently behind the wheels.
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Its one of those futurey things that sounds easy, but ends up being really fucking hard without sometimes killing people.
This is all rather sad really. We know that human driven cars are impossible to do without killing tons of people. However, "we" won't accept killing far fewer people if we can't blame someone for the deaths that do occur.
They keep thrashing about lately .... (Score:2)
Lots of seat of the pants changes and decisions that quickly get pulled back, as of late. Of course, the pundits are coming out of the woodwork, declaring this indicates Tesla really is on its death-bed and about to fail, etc.
I suspect some of thing happens in other businesses all the time, but nobody notices -- because when it's a more mundane product like a can of soup or a new pair of pliers, there aren't all the eyes on it.
In any case, I think THIS change isn't a big deal. I agree that most sensible car
New company, same old sleaze... (Score:2)
Tesla is bringing the sleazy car sales game into the modern era. What do expect from a company run by a tech guy in the age of the ubiquitous TOS? The arrangement and even the product you purchased are subject to change at any time.