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Saving on battery costs will also reduce costs of MS and MX

Saving on battery costs will also reduce costs of MS and MX

Reduce costs, but will it reduce prices?

For all the talk about M3 costing half of MS, it has to be factored in that the battery costs reducing will also affect MS, MX and Powerwall.

Ankit Mishra | March 27, 2016

No. Model S and Model X are premium cars, their price won't fall. More features will be added with time while keeping the price same. IMHO.

moorelin | March 27, 2016

Not in the short term, but in the long term it may make the S120 (and PS120DPl) practical.

dd.micsol | March 27, 2016

Battery reduction costs increases profits for shareholders/tesla. I'm currently holding 15k shares.

Chunky Jr. | March 27, 2016

@ dd.micsol : agreed. If Tesla is selling every car they can make, then each dollar saved goes straight to the bottom line.

Red Sage ca us | March 27, 2016

All the crybabies who were miffed about not having a 'quality interior' of saddleback leather that they would have found in a Panamera or Quattroporte will still be crying in their whiskey, though... Just as people who want a plusher, softer, more 'luxurious' experience as befits an LS or S-Class will look down their noses over their brandy snifters at 'improved' appointments and features in Model S as well... Coat hooks, cup holders, and grab handles are probably not coming... Though they may get a better ambient LED lighting package,

The Panamera Turbo S has a $180,300 base price, and you can still add thousands more by choosing dozens of other interior options. Quite a difference between that and a fully loaded Model S. I don't understand why the crybabies don't just but the car in a custom shop to get the crap they want to spend money on...

But I digress... No, the cost of the Model S will not be going down. It is already a bargain compared to its direct competitors. Tesla Motors will maintain or increase their profit margin on their Flagship vehicle by offering better performance and new creature comforts in the same price range. And as time goes by, some items that were previously optional will become standard issue, included in the base price.

moorelin | March 27, 2016
carlk | March 27, 2016

People kept forgetting value is decided by market force not by production cost. If people are willing to buy Tesla cars, or for that matter any products from iPhones to first growth wines, with high margin then more power to them.

KP in NPT | March 27, 2016

@moorelin LOL!

Red Sage ca us | March 27, 2016

carlk: +1! Exactly.

Ross1 | March 27, 2016

Probably means $15000 not 15000 shares?

Ross1 | March 27, 2016

15000 shares is worth $3.5 million (only)

Red Sage ca us | March 27, 2016

moorelin: That is an awesome story... But WHY would he tell that to police officers? I expect the conversation must have gone like this...

"Sir, is this YOUR car...?"

"Yes."

"What do you DO for a living...?"

"Oh. I'm a bricklayer. Here's my Union ID..."

"Wait... What the [FLOCK]...? There's NO WAY you can afford this car on that pay..."

"Well, I have gazillions in the bank..."

"Sir, please step out of the car..."

georgehawley.fl.us | March 28, 2016

Economies of scale? What a neat idea. Quick, someone pass the word to Elon.

Lower battery costs will definitely flow through to all Tesla products. (Costs to Tesla, not to consumers necessarily.

Lower costs=bigger gross profits if the price diesn't change. Bigger profits mean more cash for growth, reducing borrowing.

Lower costs also equal pricing flexibility. Suppose MB, BMW, Porsche or Audi comes out with a killer BEV next year: >300 miles of range, 200 KW charging stations, 0-60 in 2.5 sec. and tries to go frunk to frunk with Tesla. Being in the position of being the low cost provider will make Tesla the Heinz ketchup of the BEV world. Best product with the highest gross margin.

Earl and Nagin ... | March 28, 2016

As so many above have pointed out. The affect on the Model S and X will be more profit for Tesla. Therefore:
Buy your Model III to drive because the batteries will be much cheaper.
and
Buy TSLA stock now before their profits spike because the batteries will be much cheaper!
disclosure: I own TSLA stock