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$30K Tesla cost reduction idea

$30K Tesla cost reduction idea

I want a $30K Tesla ASAP. To lower the cost, can you please design 3rd Gen car with two super modules.

Super Module 1:
your core IP (Intelligent Property) Super Module, which includes Battery pack, Motor and Computer system only.

Super Module 2:
Pre-assembled everything for rest of the car.

The idea is to out source the Super Module 2 to whoever can build with lowest cost. Whenever you need to build a car, just order the Super Module 2 and drop in the Super Module 1, and you are done. No overhead, no invertory and quick turn around to build a low cost car.

Another idea is to build a Gate way on every 17" control pad so that customers can order things they needed directly from there. This will help to lower the cost in long run since you can get charge others who wants to sell something to your customers.

Thanks! I want to make a reservation today.

jbunn | 13 juin 2013

Yes, because that would be a great idea for Tesla! For that idea, we'll send you a car kit, complimentary on us!

No, really? While this would be fun, would you like to explain how the business model works?

Seriously, what the heck....

Kleist | 13 juin 2013

Brilliant idea ! How to spot a good idea is if someone else had the same idea before. That is the Coda concept, the only problem was nobody wanted to buy a cheap car with a 3 star safety rating.
What I like about Tesla/Elon... no shortcuts.

SEASTAR888 | 13 juin 2013

Super Module 2 is made of commodity parts, same parts as all other GAS cars. It is not Tesla's core business. Elon has no need to waste time on it since his goal is to offer low cost car sooner with large Qty. In fact, it is very costly to build and maintain a large maufaturing work force during upturn and down turn.

Apple does not build iPhone by themself. Foxconn does all the work with 1 million plus workers. Time to market is very critical. Tesla can build much more cars with out-sourcing help and take the market share quickly.

For me, I hate to go to Gas Stations every week. I careless about body/seat/paint as long as I have a low cost Tesla Car. My Camry cost 20K, plus another 20K for gas for 10 years. That is 40K already. I would rather to buy a 30K Tesla instead of Camry.

SEASTAR888 | 13 juin 2013

Tesla S/W eng team should build a Tesla Mall/Gate way in the screen, since you have full control of the 17" pad. The idea is to turn every car sold as Tesla's cash register. Any business who wants to access Tesla customer base must pay to get into the Tesla Mall or share revenue with Tesla. For example, I park my car at home, touch Tesla Mall, and touch Pizza Hot. My address and Credit card info are pre-stored already in the car, like Amazon. I can place an order for Pizza with few touch.

This is a great business model when customer based is getting bigger and bigger over time.

ajamison | 13 juin 2013

Seastar888 that is not the type of business TM is looking to get into, the issue with kit cars like this is that you have a hard time ensuring the quality of the parts.

Elon would rather go bankrupt then not engineer the car in house I imagine.

And only a small portion of the parts are standard car parts for one the body is made from Aluminum which most car companies do not do they opt for the cheaper Steel instead.

SEASTAR888 | 13 juin 2013

Car is designed by Tesla, but product SPEC is given to vendors by Tesla to make supper modules/pre-assembled car without battery and motor based on TM's engineering SPEC.

Lush1 | 13 juin 2013

Tesla is sort of the Apple computer of the auto industry. Apple makes the hardware and the software, controlling both ends to insure a quality product. Tesla effectively does the same thing with their cars. The other model is the Microsoft way. They license the OS and anybody in the world can pay the fee and run Windows on any cheap piece of crap computer. I hope Tesla keeps the package intact so we don't have a bunch of crappy generic cars running on Tesla super modules. Yes, they could probably make a lot of money like Bill Gates did by selling the OS to anybody who could slap together a computer. A Tesla is not cheap, but it is super cool, like Macs. Selling their innovations to a bunch of foreign companies that would put it in ugly, cut rate, unsafe, tin bodies that fall apart would be a disastrous sellout and make the Tesla brand meaningless. Somebody would get rich but the market would be flooded with horrible cars, not amazing Teslas. Imagine the jumpers, dip switches and bios configuration and the blue screen of death nightmares that those kluged cars would have. I shudder at the very notion. Tesla makes the best cars in the world in America. Sell the technology and every company that manufactures widgets would be jumping on the bandwagon to churn out cut rate junkmobiles. Real car companies can't touch Tesla. What kind of cars would widget makers churn out?

jbunn | 14 juin 2013

Seastar, the brand name has value. You dont want to dilute that. You want tesla guts get a rav 4, or smart ev today.

Flaninacupboard | 14 juin 2013

Good idea! This is what Fisker did with Valmet and then.....

Oh no wait it's a terrible idea.

PaceyWhitter | 14 juin 2013

As jbunn said, Tesla already sells your "super module 1" to other car manufacturers.

They are not going to market it for direct consumer sales though, there is no market for kit cars.

SEASTAR888 | 14 juin 2013

Out sourced iPhone does not carry Foxconn brand. Out sourced Tesla is still a Tesla brand. Out sourced product does not mean low quality.

Most OEM silicon valley companies do out sourcing with much more complicated product than a Tesla car.

Jolinar | 14 juin 2013

yea, Fisker outsourced everything possible (incuding drivetrain) and went under... so terrible idea :)

TI Sailor | 14 juin 2013

Tesla bought their factory and equipment for pennies on the dollar. They manage all aspects of manufacturing, from purchasing to quality control. They also have the ability to right size for demand as well as to modify fairly quickly for different markets, e.g., US, Europe & Asia/Pacific. I don't think outsourcing would provide sufficient cost-savings, if any, to justify the risk of potential production or quality problems.

ChristianG | 14 juin 2013

@Seastar

Tesla already does outsource stuff (Batteries, electronics interior parts). Normaly there's a reason why a company does it a certain way. And I serciously doubt that if you manufacture the aluminium frame in china it would become 30k cheaper. My guess is that outsourcing takes away a LOT of flexability in a company where things have to change fast that's probably not good.

Also many guys here in the forum are very proud of Tesla being an american company wich also produces in america. It's probably a good thing to keep that for a while. Americans seems to be picky about it...

satyrias | 14 juin 2013

@SEASTAR888

You want a cheapo Electric car, so you come with your own solution. A poor selfish idea.

If Elon can develop a quality car, why should he adulterate its quality with a sub quality product from Chinese?

ajamison | 14 juin 2013

ChritianG its not that we are picky its that for the first time in over 100 years the US has a company that is changing the industry, a industry started by Americans I might add.

So in a way its kind of like the US is returning to its roots to an industry that helped make the US as wealthy as it is today. I personally would not want a frame to be made in China not because I am picky but because it keeps the people in our country employed something we need now recovering from a huge economic down turn.

Brian H | 14 juin 2013

T1;
Tesla actually got the NUMMI factory for free. At about the time it paid $40million for it, Toyota bought $40million worth of stock.

So TM traded a few pieces of paper for the factory.

jbunn | 14 juin 2013

Really smart move on the factory. One of Elon's better moves and based on the economics at the time.

So, regarding outsourcing Tesla tries to be vertical integrated. The did outsource the 12 volt battery to a reputable company who outsourced it to another company, who outsourced it to another country. End result, the 12 volt battery issue caused bad press and hurt feelings and expectations.

There is a difference between inexpensive and cheap.

And I think like many other people, nobody want's a cheap Chinese car. Coda just went down this month for that reason.

dcuk91 | 1 août 2013

I want this 30K version of the Model S to come out in 2 years. I don't know if i can wait 3-4 years. I am willing to buy the 30 version as soon as I finish school which is in about 2 years.

sgarapat | 1 août 2013

This is my idea (might not be practical). Tesla will design the vehicle, but it would be built by GM or ford. For some reason I believe GM has a better supply chain (being a large volume manufacturer) and they have expertise in producing cars (skilled people) than tesla. Tesla is sourcing parts for higher price than other auto manufacturers due to volume. Also their interior plastic is not aesthetically pleasing (cheap looking). Also in the forums we have already seen many people complaining about misalignment, rubber seal not properly done and other manufacturing defects. I think a big manufacturer like GM or ford could have better quality control and also could source parts effectively (in terms of money). But still the built cars would have to maintain the tesla quality specs. In a way same like Apple designs the device but it makes its supers manufacture hardware for them. Tesla could try GM or Ford like Foxconn for Apple.

But tesla wants to build I house which is nice, it will take tesla some years to get parts sourced for a little cheaper price as GM or ford and also it will take time for them to have better quality control. Right now I don't think they are very good with Qualoty control way too many complaints (I saw number of them pano roof noise, inverter hissing noise, break squeaking, door mirrors not tightly sealed for sound proofing, footwell plastic changes etc).

sgarapat | 1 août 2013

But Auto industry is not open as Tech industry. They might screw tesla with manufacturing. Auto industry is full of political lobbying and they don't have valley mindset of thinking.

sgarapat | 1 août 2013

Tesla could drop in the battery, Powertrain and infotainment at the end of assembly

tobi_ger | 1 août 2013

@sgarapat
You seem to have missed, that most (if not all) of the above reported issues have been fixed within the production process.

When praising Apple and Foxconn please also be aware that that is achieved on the backs of very poor people, child labor and horrendous work environments.

jbunn | 1 août 2013

Look, tesla has the best car in the world right now, they have hit all their targets, and without advertising,are selling cars as fast as they can build them. They have a margin they are hitting. Why on earth would tesla want to turn over their business to gm

Kleist | 1 août 2013

That is a false dream that GM, Ford could take a TM design and produce it at lower cost. The key supplier - battery cells - GM, Ford are in a big, big disadvantage.
To take the base model S 60 kWh at $70k with a battery pack retail of $28k... the $35k Tesla the battery pack has to retail for $14k - we are not there yet. $14k today buys you a 35 hWh battery pack or 125 miles range - barely above the Leaf.

sgarapat | 1 août 2013

@tobi_ger :
I am huge tesla admirer I really wanted tesla to build their cars in house. I mentioned my idea not practical in my post. But however most of the manufacturing issues are resolved, I accept it but their QC is not upto industry standards. We are all Tesla fans, but can not bluntly defend the company on every issue. I personally read many posts where many owners have to go to SC to get one or the other issue fixed. My friend took a model s delivery last week and he had issues with Panoroof squeaking at 50+ MPh speed and his windows are not tightly enclosed. Yeah he spent 100K on car and very much disappointed about the quality issues. Tesla manufacturing has to step up.

Coming to Apple and Foxconn, I do agree conditions in China are not great. But Apple did the right when the instances of abuse are brought to its notice. They made stringent rules to their suppliers to maintain good working conditions at their facilities. Kind of cash And command apple has on its suppliers they just forced their suppliers to be better at work. They did every thing they can. Why Apple is to be blamed every computer, electronic good we use are made in China (Foxconn or some other vendor). But Apple is a big player abd it if often targeted and criticized. Why not dell, HP and other manufacturers? They also use Foxconn . I personally many apple engineers and I know what the culture at apple is. they stand for values,

sgarapat | 1 août 2013

@Kliest :
I agree it is a false dream. When I said my idea is not practical I meant a hypothetical situation. From you posts I knew you come from a manufacturing background, and you have a lot experience in industry. I am just a recent college grad, you know much better than me about manufacturing logistics.

Theoretically what I meant is if there is a company which has the experience of making large number of cars (structural components : chassis, panels etc) and has already established supply chain could produce the parts for much lesser price. Let's say a steel vendor supplying steel to Toyota which makes about million cars could get the steel for cheaper price than a manufacture who makes thousands of cars (theoretically). Also these companies have established suppliers for raw materials of steel and plastic. These companies could even source aluminum for cheap also given their connections. This is just theory and my limited knowledge.

sgarapat | 1 août 2013

Many typos in my posts... I am blaming autocorrect of my iphone.

Kleist | 1 août 2013

@sgarapat - have you actually been to chinese factories ? From where do you get your info ? The news ?
Not that I want defend any conditions here, but the choice is starvation or work. The Chinese goverment has a huge problem of scale - 10% unemployment means the entire population of Germany has out of work.

Kleist | 1 août 2013

Edit - is out of work.

sgarapat | 2 août 2013

@ Kliest, I never been to Chineese factories. I know the conditions in China are not great. There is a large unemployment in China. But the thing is the Chineese government has to work on the working conditions and unemployment not Apple. I know for sure Apple mandated its suppliers about working conditions and also funded several organizations to conduct studies at Chineese facilities about working conditions. I know few people who conducted these studies and they said to me Apple is pushing hard but they just can't do every thing and govt in China doesn't act , for them it's very common.

I am from India and visited many manufacturing facilities during my under grad days. Even in India (much better than China) the working conditions are not great (compared to states). It's pretty much acceptable there, but if a person from US visits these facilities he would just say this is hell. So there is huge disparity in working conditions at American manufacturing facilities and countries like india (remember China is much worse than india, from what I heard - the socialist govt mandates every thing). A manufacturing facility in india which is very normal might be looking like hell house for American visiting these facilities.

Kleist | 2 août 2013

@sgarapat - yes, I am from a manufacturing background and helped to start up many high tech factories around the world. I have been to the Tesla factury in March and all I can say is Tesla is re-writing the textbook on how to start a factory... I couldn't do it better ( probably I would do worse ).
Second - there is an economy of scale, but on the other hand there is also a cost of scale - if a small team like TM needs $1M to finish a task then in a large company it takes $10-100 M to do the same task and instead of 1 month it takes a year. I work in a large company and only know too well the time and patience it takes to get simple tasks done.

sgarapat | 2 août 2013

@Kliest :
If you don't mind could I know what manufacturing product line you work on. If it is sheet metal or plastic injection molding design or manufacturing please let me know. I would like to ask you few questions, only if you don't mind.

Kleist | 2 août 2013

@sgarapat

Not Kliest but Kleist

"Ewald Georg von Kleist" is the inventor of the first device to store "vast" amounts of electricity ( a capacitor ) in 1745.

I work in computer harddrives - up and down the various functional operations over the years. Currently I am working in the operations to make read/write head.

sgarapat | 2 août 2013

Apologize for spelling your name wrong. Thanks for the info!
I am recent college graduate, just started my career as a Sr.Mechanical Design Engineer. I am always looking to interact with experienced people in the industry, I believe I could learn a lot and become a better engineer. I will stay in touch. It's been a pleasure interacting with you.

My college graduate work could be found here in case if you are interested in looking

http://srigarapati.com/Research/About_Me.html

2-Star | 2 août 2013

If Tesla were going to farm out any manufacturing, I think it would be to Mercedes or Toyota. They already have strong relationships with both companies, and both are shareholders in Tesla.

mrspaghetti | 2 août 2013

@kleist - ...the choice is starvation or work...

Isn't that basically true for most of us?

xradr | 2 août 2013

My two cents ...

I put in the reservation 3 years ago (and have been saving for about 3 1/2 years). I saved monthly, weekly, daily. Stopped getting starbucks, stopped buying crap that I didn't need, stopped eating out (mostly). I take pride in the car knowing that I earned every penny that went into the car the old fashion way (penny saved is a penny earned, right?).

I scraped it all up, and by the time the car was available, I didn't need to demand a $30K TESLA ASAP.

Is it me, or does it seem like people sometimes have unrealistic expectations? A lot of us can't afford to make bizarre demands of auto companies. I don't understand where this notion of entitlement for $30K Teslas ASAP comes from. I guess our insane consumerism has produced an entitled class of people who believe they are owed something.

Sometimes in life take the long road ... steady perseverance reaching toward your goals. In the end, I suspect it will be more rewarding and fulfilling.

Good luck to you SEASTAR888. I do wish you well on your journey.

edfinn | 2 août 2013

@BrianH It is not right to say Tesla got the NUMMI factory "for a few pieces of paper". Consider what those shares are worth now, and the opportunity costs that Tesla gave up by using that money to purchase the plant (which was a great decision and allows Tesla to control their product and destiny) rather than do something else, like say buy more pre-assembled modules from others like Fiskar did.
On quality control, I am very pleased with the QA/QC as evidenced by my Models S85 (pano, tech, sound). No issues at all in the six weeks and 2200 miles since I took delivery. Every day I drive I drive with a smile.

Flaninacupboard | 2 août 2013

That's admirable xradr, but the sad truth is that even if I didn't spend a SINGLE penny for three years, for housing, food, clothing, ANYTHING, I still couldn't afford a 60kwh car in the UK (£65k [$99k]), and it's not like I'm earning minimum wage.

Now a "$30k" (£35k [$53k]) car, well, that I could do, if I scrimped to the max.

xradr | 2 août 2013

@ Flaninacupboard,

The sad truth is that I can't afford a $40M dollar home, no matter how long I save. But I don't feel entitled to it, nor do I feel like I should demand the owner sell it to me for $10M dollars (which I also can't afford, hehe). If I can't make it, then I do without until I can afford it. I use the absurd home example as a matter of scale to illustrate that at some price point almost all of us can't afford something. AND --> that's OK!!!!

I suspect costs will continue to drop (over the next decade), technology will improve and become more widespread and EV adoption will continue to increase. Same thing happened with personal computers over the last 30+ years. Patience and perseverance are virtues that are so often under appreciated in our consumer driven, instant gratification entitlement societies (I want it now and at below materials pricing, in a manner of production that is inconsistent with the ethos of the company). I get the hint of arrogance/entitlement based on the OP. Perhaps I've just read WAY too much into it though (it will not be the last time I'm wrong today, hehe).

DTsea | 2 août 2013

Tesla's (and SpaceX's) production strategy is maximum vertical integration to control, and then reduce, costs. That means 'make it yourself.'

They also of course have control this way over customer perception of quality.

SpaceX is spanking everybody else in the booster business this way. The model S is expensive because it's big, aluminum, advanced, and has thousands of batteries. GM or Ford would NOT be fundamentally more efficient. Maybe you could 'dumb down' the design to a clasic sheet steel... but a body in white doesn't cost much (steel ones are less than $2000). The value add is motors, electronics, interiors, etc, etc.

Commodity sheet steel is about $1 per pound and aluminum is $2-5 per pound. A typical steel car body is about 700 pounds. So maybe you could save $1000-2000 by using steel... but the weight would hurt the car. I am sure that Tesla could save as much or more with steel as anybody else could.