model 3 affordability

model 3 affordability

So there are various things that can bring down the cost of the model 3:

- regular door handles
- regular seats
- smaller size
- lighter battery
- drive train efficiencies
- battery cost
- steel vs aluminum body
- 5 year leases
- regular wheels
- regular suspension
- 8 - 10 year no interest financing
- 12 inch vs 17 inch controls ( i hate the way the x display rides above the dash)
- production volume
- fewer moving parts
- trim changes

Did i forget anything?

jordanrichard | July 25, 2014

I don't know about forgetting anything, but some of which you listed doesn't make sense.

"regular seats", meaning what, non-power seats? If so, agreed.

Size and weight of the battery pack essentially go hand in hand.

Leases don't bring the overall cost of the car, just the monthly

What are regular wheels? If you mean steel, then no. They may be cheaper but the additional weight to hurt range.

"Regular suspension", vs what? My MS has a standard coil over shock suspension. Not all MSs have the air system, that is an additional option/cost.

No bank will give interest free financing for that long period of time. Nice thought though.

Smaller screen, true.

Fewer moving parts.... the MS's "drivetrain" has 2 moving parts. How much less do you want to go?

Trim/material changes, true.

pvandeloo.ipod | July 25, 2014

Cost savings will mainly be:

-battery size and cost per cell (if gigafactory happens and is successful)
-20% reduction in size of car
-cheaper materials

I expect Model 3 to cost 45.000-50.000 dollars before subsidy.

Red Sage ca us | July 25, 2014

I'm not sure if your intent is to save money for Tesla Motors, or for the Customers...

A door handle is a door handle. Economies of scale, regardless of design, bring costs down.
The seats will be what they will be.
Already confirmed to be 20% smaller. I believe this means it will weigh in at 80% of the Model S curb weight.
The battery packs will weigh less anyway, because of improved energy storage efficiency. Just because they will perhaps have a smaller physical size, does not mean they will have a lower capacity.
The drive train will be improved, but the electronics controls will have the greatest increase in overall efficiency.
Since fewer individual battery cells will be used, and the Gigafactory will be in play, 60 kWh or 85 kWh battery packs will cost around 40% of what they did in 2012.
I believe that using steel is a bad idea, because it increases weight, and thereby reduces range. Tesla has already proven that they can build a safe car using aluminum. I believe that perhaps certain critical parts of the chassis will be steel, but that the majority will remain aluminum. It may only be around 60% aluminum, instead of 90% though.
Three year leases will be fine. That way the cars could still be sold at a relatively high residual value while they have taken relatively little mileage abuse. Other cars in the segment are available for around $300 per month on a 24-36 month lease. That is the target they should shoot for...
If you mean steel wheels, with hubcaps...? Uh... NO.
If you mean leaf spring suspension with a live axle...? Uh... NO. Coil over spring with shocks and fully independent front suspension with multilink rear... That would be fine. Air suspension as an option will be fine. Upper and lower A-arms (double wishbone) suspension at all four corners would be preferred.
At this price point, people should be able to bring their own financing. Tesla Motors should not fall into the GMAC trap. If they choose to 'partner' with a bank, such as Wells Fargo, CHASE, or Bank of America, then go ahead, if they must. I would prefer they didn't.
There is absolutely no reason to change the size of the Central Control Module. It is ergonomically the correct size to fit in any vehicle designed for use by adults. By keeping it the same size, inventory will be interchangeable from one product to the next.
The whole point of the car is higher volume production and capacity to gain savings through economies of scale.
It's kind of hard to optimize moving parts any further... Maybe eliminate the disc brakes entirely in favor of 100% regen on the brake pedal to 'stop' a car?
The base version of the car series will be appointed about as well as your typical Toyota Camry LE. People will be able to choose options to go further upscale if they like.

EQC | July 25, 2014

I hope "regular" wheels means a base model with wheels that take a common, non-low-profile tire size. Big wheels and low profile tires are expensive, and that hits you at the initial purchase time, every time tires wear out, and anytime a wheel/tire is damaged.

Bigger wheels/lower profile tires should be an option, as long as that option is not unnecessarily grouped into a package the way other auto manufacturers do. There's no reason I should have to get the bigger wheels if I want the pano roof or the upgraded audio, etc.

Even on economy cars now, relatively low profile tires are very common. Why on Earth does a base model Honda Fit or Civic need lower profile tires than a Corvette from 40 years ago? Go above the base model, and the wheels get an inch or two bigger with even lower profile tires. More than anything, it is just a matter of style, and it adds to costs for the customer.

Higher profile tires on smaller wheels will provide:
-lower cost
-longer tire life -- there are tires warrantied for 90,000 miles now in the common sizes
-more comfortable ride
-less likely damage to wheel/tire from potholes

And again, if you don't care about any of the above, then the bigger wheels and low profile tires should be an option you can pay for.

Rocky_H | July 25, 2014

@EQC: ++applause!

grega | July 25, 2014

I'd like to see common tyres and so forth. And not just part interchangeability with other tesla's, but anything which allows me to maintain the car cost effectively. Can a standard auto-electrician fix tesla systems (I mean radio, lights... Not battery and drive train)?. Use standard things when tesla can't make something significantly better.

I'm not sure where to draw that line though. Is it more cost effective to work with iPads and android tablets for the consumer facing technology? Does using steel allow regular panel beaters to stay in business? :)

Rented batteries?
Or small batteries linked to big battery swap facilities might make a cheaper upfront price, then pay a rental fee when you need a battery swap (to double the size) plus access to super chargers until you return the battery?

vgarbutt | July 25, 2014

yes, by affordability, i mean for the buyer. Not only the cost, but the lifetime fueling and financing. Anything that reduces ownership costs per month is what grabs people like myself. Tesla should step out the box and give longer lease terms and longer payment terms like 8 years. I realize to date that's not been the case, but hey we are just kicking ideas around here right?

Good comments to all and I rather encourage any new ideas that can reduce lifetime ownership cost. Wouldn't it be cheaper per month for a 5 year lease over a 3 year lease?

Where else can costs be reduced to the owners in the entire life cycle?

Red Sage ca us | July 25, 2014

vgarbutt asked, "Wouldn't it be cheaper per month for a 5 year lease over a 3 year lease?"

No. At 15,000 miles allowed per year, that would mean the car would have as much as 30,000 more miles on it once the lease was up. So you go from a car with accrued mileage of 30,000 (24 month lease) or 45,000 (36 month lease) to one with 75,000 miles on it (60 month lease). The underwriting company would insist upon a higher downpayment up front, to cover the potential loss in residual value. It's the difference between paying $2000 up front and $300 per month for 36, versus paying $5,000 up front and $285 per month for 60.

"Where else can costs be reduced to the owners in the entire life cycle?"

❑ The car will probably come with LED lights throughout. They'll last until the cows come home, get bored, and leave again. So no replacement of headlights, tail lights, dome lights, vanity mirror lights...

❑ No 'independent franchised dealerships' acting as middlemen to raise prices.

❑ No advertising whatsoever.

❑ No unions.

vgarbutt | July 26, 2014

Well i saw another ev company that makes EV vans in europe. The price was 13,000 euros and the battery was leased.

Given that the tesla battery is essentially swappable by design, this makes great sense. After 5 or 8 years or whatever, when the lease runs out, just switch out the battery pack and Tesla, or a whole new industry, replaces the cells with the longer range ones, button it back up and pop your battery pack back in.

The battery case will last decades i imagine. Every 4 years you could get a whole new set of newer better cells.

The old cells would mostly still work great and they can be repackaged into leaf batteries or lawnmower batteries or home grid storage, or Tesla superchargers.

Anyone know the economics of lease financing? Could this instrument make the ownership of a tesla both more affordable and a better deal that outright purchasing?

Teslas Battery pack swapping readiness may be the tech that makes battery upgrades and leases something desirable to the buyers and for EV adoption.