Forums

How Much Will a Fully Loaded Model 3 Cost?

How Much Will a Fully Loaded Model 3 Cost?

I've been looking at the options for the Model S. The vast majority of them are so tempting that, if they were offered on the Model 3, I'd be very reluctant to omit them. However, there seems to be no such thing as a cheap Tesla option, with the least expensive being £650/$750 for various wood décors. By the time you add in the cooler options such as the Autopilot Convenience Features, Premium Upgrades Package, etc., the price escalates at an alarming rate. And that's before you even consider the Ludicrous Speed Upgrade at £8,700/$10,000!

I believe that Elon has said that at least some of the options will be less expensive on the Model 3, but there is no guarantee that they will all be proportionately less; there seems to be a general feeling that Tesla are relying on options for the majority of their profits.

So, what are your best guesses for the worst-case price for a fully loaded Model 3?

tommyalexandersb | 16 aprile 2016

I'm planning on paying around $60,000 for my model 3, and will be pleasantly surprised if it's less than that for a fully loaded vehicle.

Supraman | 16 aprile 2016

I'm working on a spreadsheet to try to come up with my own answer to this question. I was hoping to provide figures in both USD and GPB (I'm in the UK).

However, in order to do that, I need to understand how car tax works in the US. For example, in the UK a P90D costs £96,900, which is £80,750 plus £16,150 of Value-Added-Tax (VAT) as 20%. This figure is then reduced by a £4,500 tax incentive, but I'm intending to ignore incentives for now.

I know that in the US, a P90D cost $109,500 before incentives. However, I don't understand whether this figure already includes any tax or whether each state has different tax rules that are applied separately. I would appreciate a quick US Vehicle Tax lesson!

Red Sage ca us | 16 aprile 2016

$69,999.99 would be about right... But only if you purchased all the accessories from the Tesla Store to go along with the car. Gloves, shades, T-Shirts...

yongliangzhu68 | 16 aprile 2016

@ Supraman: Each State has its own sales tax, therefor we do not include it in any projected sale prices. So $35,000 base is before each state adds in sales tax if applicable.

Supraman | 16 aprile 2016

wf - thanks for the answer. Can you give me an idea of the range of sales taxes?

yongliangzhu68 | 16 aprile 2016

0% to 9.5%

yongliangzhu68 | 16 aprile 2016

Also to make it more complicated individual counties can add to the base state sales tax.

moorelin | 16 aprile 2016

@ Supra

US cost is before sales tax, which varies by state.
The difference in US price between maxed out (except for child seats) MS90DL over 70D is $68k, so the maximum possible price of a fully loaded M☰ would be 35 + 68 = $103K (!!!)

A simple decrease by ratio of the basic M☰ price to basic 70D price would make the cost of all options about $31k = $66k total

But the actual costs to Tesla of the various features will presumably only be a bit lower for M☰ than for MS, not less than half for the as the simple cost ratio suggests. So I guess that that maxed out M☰ will be significantly more than Red Sage's $70k, no T-Shirts included.

snakes | 16 aprile 2016

I'm figuring twice the base price of $35,000. So $70,000 is what I'm budgeting for..

warren_tran | 16 aprile 2016

I think a fully load should not exceed $70k. Realisticly, it should be near or mid $65k. If the price is above that, most people would opt to buy model S unless they truly want the smaller size sedan.

I do plan on keep it near Elon average price of $42k.

Red Sage ca us | 16 aprile 2016

moorelin: My presumption is that economies of scale will benefit in-house cost of components for the Model ☰, which is expected to at least sell at a 10:1 rate when compared to Model S. So, where Tesla Motors enjoys a ~25% margin or more on Model S options... I expect that margin will improve to at least 50% or better for Model ☰. Thus, a $50,000 car with $15,000 in options might cost no more than $45,800 to build and be sold at $65,000. That is a 29.5% margin -- and likely better than that.

george210 | 16 aprile 2016

I'll want autopilot and maximum battery range (perhaps some supercharging to use on a trip once a year)

eandmjep | 16 aprile 2016

I doubt the M3 will have any automatic doors or extra interior lighting. I have only heard rumors about the panoramic roof being standard. I see autopilot, dual motors, a second battery size option, wheels, maybe cold weather package, Air suspension maybe, not sure about surround sound (12 speakers in the S, 'I mean seriously?';) don't know why anyone would want it to be able to tow. Of course Supercharging, dual charger option for the Max battery size oh and lets not forget Color both exterior and interior. But I think a fully loaded M3 would be around the $60,000 range. I mean $25,000 in options would be a lot to cram in that little car. Think about this, If they are going to mass produce this car it would be easier if there were less options to have to build to order. Software is a much easier upgrade and could be completed after the initial build is complete. Supercharging, Autopilot, performance upgrades, navigation etc all software. Just let them roll off the line.

I wonder if eventually they would try and build an inventory say of base models (lets build 5000 mat black ones all this depending on history of sales) maybe 3/4 of them with Dual motors. Software could be programmed to fit the customer, Dual chargers and battery options done at the Service center/Tesla dealership....... Drop the battery open a panel and install another pack etc. More detailed options would still have to be built to order. Air suspension etc.

Iowa92x | 16 aprile 2016

Bob, $1 please.

Supraman | 16 aprile 2016

Thanks for all the answers. Here are some follow-up questions:

wj - you said the sales tax range is approximately 0% to 9.5% but then added "Also to make it more complicated individual counties can add to the base state sales tax". Does your range include the county taxes as well? Why doesn't everybody live in the states with a 0% sales tax???

Red Sage - You said "So, where Tesla Motors enjoys a ~25% margin or more on Model S options... I expect that margin will improve to at least 50% or better for Model ☰". Are you saying that Tesla could have a 50% margin on options, but will instead choose to keep their margin at 25% and pass on the saving to the consumer?

papaeus | 17 aprile 2016

@supraman: not only can counties add a sales tax,but cities can, too, though it's not as common. As for why people don't live in the states with no sales tax..a) people live where they do for a wide variety of reasons, tho the most common ones involve work and/or family; sales tax isn't often considered much in the mix - it comes the territory; b) states, counties, cities have to fund themselves somehow, so they traditionally use as a primary source either a sales tax or an income tax - and occasionally, both. I live in Oregon, & we have no sales tax, but we do have an income tax. I have also lived in Florida and Washington state (as opposed to D.C.), & they both have sales tax, but no state income tax. Many of their cities and counties attach an extra 1 or 2% sales tax on in addition to state sales tax. Just to make things more fun, many if not most states additionally add some sort of registration or excise tax/fee for registering your car in your state. For some, it's a flat fee, for others it's a percentage of the perceived value of the car. Since Oregon has no sales tax, our Model X won't have much added to it's retail price (we LOVE this!). But if we lived in Washington state (just a few miles north of us, here in Portland), we'd have to add something like 8 or 10k to the price! Blech.

Supraman | 17 aprile 2016

I used some of the helpful information on this thread to create my recent "Model 3 Configurator (Sort Of)" thread. Based on that, my guess is that a fully loaded Model 3 will cost $76,550 (or approximately £67,750 including VAT).

Ross1 | 17 aprile 2016

@Supraman:
In some places you might feel taxed wearing your undies over your body suit

Supraman | 17 aprile 2016

For those of you who were thinking of maxing out your cars, how would you feel if my estimate of $76,550/£67,750 turned out to be accurate?

To be honest, it puts me off a little. I feel like I'm starting to relive the Model S experience that I had over 2 years ago. I spent hours/days/weeks immersing myself in everything about the car, but in the end I cancelled my order because I realised I couldn't afford the spec that I wanted. My intention was to buy a pre-owned Model S but, just as the prices were starting to fall, Tesla introduced the D models so I decided to wait. Then the Model 3 came on the horizon so I decided to wait. Then when the Model 3 was launched and I realised that UK deliveries would be 2-3 years away, I started thinking about the Model S again. Then Tesla announced the facelift, which I much prefer!

Will it never end???

Ross1 | 17 aprile 2016

no , no never, never no more

Ross1 | 17 aprile 2016

But what owners say to me is that because of the OTA updates they still are being upgraded continually to best car in the world.
No one else, ICES, dont /cant/wont do that.

Supraman | 17 aprile 2016

Yeah, I get that. However, the D option and AP didn't come OTA!

SamO | 17 aprile 2016

AP did in fact come in several OTA updates.

carlk | 17 aprile 2016

@Supraman

"For those of you who were thinking of maxing out your cars, how would you feel if my estimate of $76,550/£67,750 turned out to be accurate?"

You don't need to buy the top model but if you do you will buy a really great car. With $40K upgrade I assume you will get a longer range dual motor and performance enhanced car that can sit 5 comfortably and go fro 0-60 in well under 4 sec. That would be a better car and much better value than BMW M5 and Porsche 911 combined. Again you don't need to get all the upgrades you just need to buy whatever you feel comfortable with like you do buying any other cars.

Red Sage ca us | 17 aprile 2016

Supraman inquired, "Are you saying that Tesla could have a 50% margin on options, but will instead choose to keep their margin at 25% and pass on the saving to the consumer?"

No. I'm speaking in terms of 'worst case'. Generally speaking, the price ratio of Retail to Wholesale is 2:1 pricing. Rather, if it costs $5.00 to buy something Wholesale, you will probably sell it at $10.00 Retail. During 2015 worldwide sales of the Model S were stil less than 1/10th those of the Honda Accord. So Tesla Motors may not have as much pull with Suppliers as larger automotive manufacturers enjoy.

If there is a set of wheels & tires that Tesla Motors might offer for a $5,000 package price on Model S, I would hope their internal cost is not more than $2,500 for them -- a 50% margin. But the reality is that due to relatively low volume compared to major manufacturers, their internal cost might be as high as $3,750 per set instead. That works out to a 25% margin on the option of that particular set of wheels & tires.

Due to the volume of the Model ☰, Tesla Motors will be able to work out better deals with Suppliers. So, they will at the very least be able to get a 50% margin on pretty much any and every hardware option. So a $3,000 set of wheels & tires at Retail, would likely not cost Tesla Motors more than $1,500 to acquire from a Supplier. And for components that sell to every single Customer, and thus are not optional at all, Tesla can negotiate more aggressively so that their internal cost was as little as 25%-to-33% of what a replacement part would be at Retail.

NKYTA | 17 aprile 2016

A lot...it's the wife car.

esiegel | 18 aprile 2016

Already have an S PD85 so looking for the minimum in this care with no add-ons as an alternate back-up car to replace my current "beater" Prius 2008.

PhillyGal | 18 aprile 2016

@supraman - Yes, a range of 0-9% covers county/city tax from what I know.
The states that have 0% sales tax are few, so it's probably safe to assume the average Tesla owner will pay 6% sales tax. But since sales tax is a fact of life for most Americans, we ignore it when talking about price.

What's interesting (in my state at least) is that you only pay sales tax on the purchase price less your trade in. So for me, private sales has to be more than 8% greater than a dealer offers me for trade in since I'll benefit by that much anyway.

The tax credit itself is way after the fact - February/March/April of the calendar year following your purchase. So if you purchase June 1, 2018, you won't get the tax credit until 13-15 months later.

Made in CA | 18 aprile 2016

$80,000 before credits and taxes

slasher0016 | 18 aprile 2016

Two points: I really hope they keep fully loaded in the $60s. On high-end cars you tend to see these skyrocketing options, but on lower priced cars they don't tend to get nearly as bad. For example a $37k base priced Audi A4 fully optioned out tops up at $49k. Of course, in that case there's not an engine upgrade, so you can tack on a few thousand for that.

Secondly, on the taxes, the states with the lower sales taxes tend to have higher income taxes, so in the end it's usually close to a wash unless you're in one of the really highly taxed states like California, Connecticut or Hawaii.

PhillyGal | 18 aprile 2016

@slasher - Can you believe we pay 8% sales tax in Philly. The city imposed a "temporary" increase at the city level a few years ago... that's now permanent. (Big shock there.)

Supraman | 18 aprile 2016

slasher016 - you said "a $37k base priced Audi A4 fully optioned out tops up at $49k". Does that include the S4 (I don't think there is a current RS4)?

Hi_Tech | 18 aprile 2016

PG - Yup... taxes are never reduced! too bad!
In MA, our "temporary tolls" have taken a life of their own, our "temporary tax increase" seems to never come to an end...

slasher0016 | 18 aprile 2016

That does not include an S4, but that's more than just an engine upgrade and I consider it a completely different car. I actually own an S4 so that's where I'm coming from on that. In the S4, you get 1) different seats 2) different engine 3) different transmission options 4) bigger wheels and tires 5) interior is completely different (steering wheel, seat design, seat material, interior trim, contrast stitching, etc). The only thing that's the same is the outside basic shape and the MMI.

slasher0016 | 18 aprile 2016

Of course one thing I didn't mention is a completely different suspension and brake package. It's basically the difference between a BMW M3 and a 335.

Supraman | 18 aprile 2016

slasher016 - thanks for the clarification.

I guess my concern is that Tesla will regard a Model 3 PD as competing with an S4/M3 or even an RS4 and therefore feel justified in choosing a higher price tag. How much are S4s and M3s in the US?

I really hope you're right about the $69,999 ceiling though. If that's the case, I will pick every option I want and not resent a penny!

slasher0016 | 18 aprile 2016

S4 starts around $50k, M3 is around $63k.

Ross1 | 18 aprile 2016

There was an article many many years ago in Pop Sci or Pop Mech, regarding resale value and depreciation.

It was found that to lose the least money, you buy the base model but with premium paint.

Just saying.

yongliangzhu68 | 18 aprile 2016

@ Ross: Didn't need Pop Mech to 'learn' me that since it is the way options are priced (with a much higher markup). Also did Pop Mech article mention that you will have the 'least' fun in a non optioned base model? :)

swingshiftworker | 18 aprile 2016

If I can't get the Model 3 for $35k as promised, I simply will not buy it.

$35k is a very critical price point in auto sales and I believe that many other people feel the same as I do. It is also estimated that around 40% (according to 1 article) of Model 3 deposit holders say they will not buy the Model 3 if they can't get the Federal tax credit for it. These people expect to get the car for $27.5k net.

So, many potential buyers of the Model 3 are very price sensitive and are not guaranteed purchasers of the Model 3. The higher the cost, the less likely they will buy one.

Musk has already tried to prepare potential buyers for sticker shock by telling us that the "average" price of a Model 3 will be $42k which means that if 50% sell for $35k then 50% will sell for $49k. At $49k, you can now buy a used Model S and, if I wanted to spend that much, I'd seriously consider that option. However, there's no way that I'd buy a Model 3 for that price -- let alone at $65-70k that some here say that a "fully loaded" Model 3 will cost.

JeffreyR | 18 aprile 2016

@swingshiftworker said, "Musk has already tried to prepare potential buyers for sticker shock by telling us that the 'average' price of a Model 3 will be $42k which means that if 50% sell for $35k then 50% will sell for $49k."

Actually Elon was referring to Average Sales Price (ASP) which is more of a technical term, but comes down to the example you gave. Elon knows what options are most popular for Model S and Model X. The Cost of Goods Sold (CoGS) or the physical stuff, is impacted by economies of scale. So to understand the cost of the Model ≡ Tesla needs to understand what will be popular. So even though the costs/options will be a distribution, they will be able to estimate what will sell the most.

Haggy | 18 aprile 2016

California gives a rebate of up to $4000, but my sales tax is 10%. Most people in CA will be eligible for the $2500 rebate. If I end up with a configuration that costs me $50,000, I will pay the equivalent of 5% sales tax after rebate.

Red Sage ca us | 18 aprile 2016

swingshiftworker: Tesla Motors typically aims for something in the range of 40% to 50% of their Deliveries to US Customers. 40% of 40% of 400,000 comes to 64,000. I'm pretty sure that: 1) if those many people were to cancel, someone else would take their place between now and October 1, 2017; and 2) Tesla would probably thank those folks for relieving some of the pressure on them to ramp up Production, even temporarily.

Red Sage ca us | 18 aprile 2016

swingshiftworker: As for 'sticker shock'...? You can add something like $30,000 in options to the Tesla Model S P90D. I would not be surprised if you are able to add $15,000 in options to the base Model ☰, dual motor all wheel drive Model ☰, or Performance Model ☰. Elon Musk also prepared us to accept that the base Model ☰ would be the best car you could buy for $35,000. So... Chill. Relax. Chillax.

carlk | 18 aprile 2016

We always want to pay less for more but at the same time we need to understand there is a huge imbalance of demand and supply. Our position of making the call as a consumer is greatly diminished. To be honest I doubt people would be able to get a $35K base model in a year or two, if not more, after production started unless you're a Tesla/SpaceX employee or current S/X owener. You are not the only person who want an inexpensive car and Tesla is not obligated to supply lowest margin car until it has fullfilled higher profit orders. That's just how the free market system works and the reason why we all want to make more money.

Supraman | 19 aprile 2016

JeffreyR - You said "Actually Elon was referring to Average Sales Price (ASP) which is more of a technical term".

What distinction are you making between "Average Sales Price" and "average price"?

topher | 19 aprile 2016

If the options team has any brains (and they do), they will make as many options with as ludicrous prices as possible, on the assumption that it is morally wrong to let suckers keep their money. Good on them, keep my price low, by charging $1000 for a _different_ wood veneer (is it actual wood?) on the dash. And good on you for buying it all.

The price of the car is $35,000, if you choose to add options to get to $42,000 that is your choice. Sticker shock has nothing to do with it, since the car is made custom for _you_, options are all *optional*.
Thank you kindly.

Tiebreaker | 19 aprile 2016

I am expecting that the profit margin for Model 3 will be much lower than for Models S or X. Model 3 is the reason of Tesla Motors' existence. It needs to be as affordable as possible. Tesla should have enough profit margin to sustain production, future development and enhancements, but not to finance a gargantuan undertaking by selling a relatively small number of units (see Roadster -> Model S -> Model 3 with Gigafactory).

Haggy | 19 aprile 2016

The cost of options will be determined by those who know how to calculate what will give them maximum financial gain. For some options, they will have to factor in time and materials, and then figure out at what price point would fewer people order. It's more complex than that because if doubling the price gave 50% of the sales, it would mean getting the same revenue but expending half the labor and materials. If they could find one person willing to pay a billion dollars to add autopilot, then they'd be better off pricing it at a billion dollars than $2500, since the latter would require 400,000 sales where 100% opt for autopilot. They could drop the price from a billion dollars down to $1500 if there were no more takers.

Features such as autopilot would have a different curve since the costs of adding the software would be minimal. Obviously the development costs are there and the overall price needs to be profitable compared to developing the feature, but optimizing price based on anticipated value won't have to factor that in. Tesla already knows what range of prices would make it profitable and as long as they are above that minimum and hit expected volume, they will do fine.

Red Sage ca us | 19 aprile 2016

Haggy: +1! Exactly.

This is why I argue so feverishly with those who are certain that Tesla Motors margins on Model ☰ 'will be razor thin'. No. They won't.

Tesla Motors hires people who are at least smart enough to know that the majority of automobile companies that have a profit margin below 5% go out of business. They also know that the admitted (though possibly fictional) overall margin in the automobile industry is 6%. Using this as a baseline, they know that if the Model ☰ in base trim costs more than $32,900 to source, build, and deliver they will be in trouble.

Knowing that two issues will be out of the way: 1) 'independent franchised dealerships' as a distribution method; and 2) traditional paid advertising as a means of marketing -- means that those potential draws on profitability are gone as well. Those could, combined, add another 6% to the profit margin of the base car.

Once you are at a point where the base version of the car only costs you 88% of the Retail amount to get to the Customer, you are in great shape. Lexus apparently has survived over 25 years by having a 14% margin. That is good company to keep if you would like to stay in business.

So, no... A 12% margin is not as much as the 25% or more Tesla Motors has enjoyed with the Model S. But with the base Model ☰ costing exactly half as much as the base Model S, it is at least a proportional rate that can be targeted, and attained.

Then, when you consider options packages... If the options chosen most frequently average a 2:1 ratio... Meaning $15,000 in optional features only cost $7,500 to build into the car... That means a car priced at $50,000 Retail may only cost $38,300 to build. Resulting in an excellent 23.4% margin. Which only improves further if there is a 3:1, 4:1 or 5:1 ratio on options.

This allows you to build affordable cars that are still profitable. And due to the profitability rate, there is no need to gouge unreasonably. Thus, an electric vehicle with extreme performance and superior accouterments might cost considerably less than a similarly marketed ICE vehicle. Making even the highest priced version of the Model ☰ a relative bargain when compared to BMW M3.

Pages