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How Tesla could knock an ADDITIONAL $10K off the 3

How Tesla could knock an ADDITIONAL $10K off the 3

Here is a fun idea that I believe would put to rest some of the nay-saying I am hearing from the press. The problem (and I can't remember which news outlet printed this), "$35,000 is not an affordable car. Price needs to get down to about $25,000". Of course as many EV'ers realize, power from the grid is MUCH cheaper than power from the pump. And the media is not fairly capturing this. So TESLA could do the following:

Offer $10,000 off the price of the car up front, and then "Sell" "gas" at a fixed price of $3.50 into perpetuity, at a "mileage" of 30 mpg into perpetuity. So owners would pay monthly via auto CC debit based on their mileage that month and the differential between cost of electricity in their area and the equivalent of $3.50 per gallon at 30 mpg (so about 9 cents per mile or so). It would be easy and automatic for Tesla to set up, and some back of the envelope math indicates this would be a reasonable cost of capital for a bank who would underwrite the funding. Of course, some relatively important assumptions come into play: namely that people who opt for this would put enough miles on their car to pay off at the assumed rate, so perhaps some thought needs to go into this part.

In any event, this would really allow people to compare apples to apples (well, apples to hybridized super-apples) when cross shopping EV's with ICE's. I mean there are still 0 oil changes, 0 emissions, and spaceship controls as bonuses. What kind of sales bump would Ford get if they could GUARANTEE their customers 30 mpg and $3.50 per gallon gas and free instantaneous in-home oil changes forever?

eye.surgeon | 03. April 2016

You're focused on solving a problem that doesn't exist. Presales have shown strong demand at the current price.

Iowa92x | 03. April 2016

Average selling price for a new car in America is $33,000, so $35k is not a big deal.

Red Sage ca us | 03. April 2016

If I were a gozillionaire, I might consider offering Red Cash Back to people who bought a Model ☰. But really, at this point I don't believe any incentives are necessary at all, beyond it being a great car to buy, drive, and own. It would be nice to know how much money I'd have to give Tesla Motors to convince them to offer a Coupe, with Falcon Wing Doors, and a Liftback -- and a Ferrari front end.

michaelsd01 | 03. April 2016

Creating a subsidized model isn't a bad idea if the company wants to increase their customer-base once they are meeting the demand, but I'm not sure this is the way to do it.

N7_Maric | 03. April 2016

I don't think Tesla is looking to become a budget brand. Another issue is, Tesla is going to have trouble keeping up with demand of the $35k model 3. Imagine how many orders would have hit Day 1 for a $25k EV? Maybe after the new factory is up and running full force and the assembly line is running like butter with all the kinks worked out.

OHMY | 03. April 2016

I appologize as I was perhaps less clear than I could have been. The problem I want to solve is NOT the demand problem, since there IS no demand problem.

I am trying to solve a Press are Idiots and spreading misinformation problem. It is an ethics issue. Perhaps it is a pipe dream and they just know how to push my buttons and I shouldn't be so sensitive.

Or perhaps this offer could be made on the model S.

I understand 35 isn't that much, but if the average selling price is 33, then that means a whole bunch of people spend less - a lot less- than 33 on a new car, and a whole bunch more spend less than 33 on used cars. All of which spew poisonous gasses. Yes, Tesla has plenty of orders and a huge production challenge ahead of it as it is. So you are all correct, need 2 or 3 more gigafactories before this becomes possible. But- if that WAS made an option, then buy I'd have fun watching the press try to backtrack and soft-pedal that away.

Chunky Jr. | 03. April 2016

I agree that if they could come out with a service model, like on cell phones or TiVo, they could sell the cars much cheaper. I'm not sure if people are ready to spend a couple hundred a month on a software subscription plan, though.

MarlonBrown | 03. April 2016

The idea is not to make an 'affordable car'. We want a quality, fun, efficient car. That is not for everyone. If you want a car under $35K, then Kia, Ford, Nissan etc may soon have that electric car coming for you.

adoh2010 | 04. April 2016

300k reservations over the weekend means this: Nobody gives a **** about press anymore!

Haggy | 04. April 2016

A car for the masses must sell for the average price. This one does. That's unless you count tax credits and rebates, in which case you can save $10,000 in a number of ways, such as living in California.

This car already meets Tesla's goal. If they wanted to, they could have sold only fully loaded versions and never mentioned a $35K price, but they explicitly want people to buy the base cars, knowing that the profit isn't there, so they can have a truly affordable car on the market.

Captain_Zap | 04. April 2016

There will be ongoing problems with the press spreading FUD. There is too much money in legacy automaker ads. Also, there is an issue with the ownership of large multimedia companies having an interest in seeing Tesla fail. Much of what you read must be fact checked and the sources need to be scrutinized.

bcfireworks | 04. April 2016

I think Tesla's challenge will be more likely how to ADD $10,000 to the selling cost of the M3. Let's start with the gingerbread on the cars at the debut: glass roof, leather interior, upgraded wheels and fancy paint, AWD, extended range - all of which are well-documented upgrades in other models. There's also some speculation that access to the supercharger network will be an upgrade as well. I wouldn't mind paying up to another $10K for all those things and getting my vehicle sooner.

SUN 2 DRV | 04. April 2016

OHMY: Another way to accomplish something similar is to bundle the cost of electricity into a lease. Fixed price per month for car and energy. Ties nicely with milage based lease rates... I think Tesla already does this is some countries...

Red Sage ca us | 06. April 2016

Captain_Zap: +42! The Ultimate Answer to the Ultimate Question of Life, the Universe, and Everything about "Why Is the Media, Whether Print, Radio, or Television, So Dedicated to Forecasting DOOM for Tesla Motors?"

It really is simple. Tesla Motors does not give them advertising revenue. The 'news' on television and radio is just there to fill space between commercials. If you are doing back-to-back-to-back advertisements for Ford, Chevrolet, Lincoln, Cadillac, Honda, Toyota, Lexus, Acura, BMW, and Mercedes-Benz... Why would you want to report favorably on how AWESOME the Tesla Motors products are...? I am certain that the Editors-in-Chief of several major publications have already decided that until such time as they deign to buy advertising space, all they will print about Tesla Motors is anything and everything that can be spun as BAD news. Of course, the internet trumps such FUD rather easily with a 0.79 second Google search.

smiffy99 | 06. April 2016

$7,500 federal tax credit and for me at least, $2,500 tax credits for having to endure Commiefornia suddenly makes the Model 3 a less costly prospect.