Model 3 Unveiling [video]
model3.tesla.com
model3.tesla.com
Tesla's current production rate is about 70,000 units a year. Yes, the NUMMI plant once produced 500K vehicles a year on that site, but that just means Tesla has lots of empty building shell into which they can expand.
The real problem is profitability. Bloomberg is skeptical.[1] Tesla isn't profitable, and they have a high price point now. Cutting the price means they have to produce at a far lower cost while expanding factory capacity. That will be very tough. Jason Wheeler, Tesla's CFO, is going to have to come up with some creative financial strategies. But with near-zero interest rates, and lots of pre-orders, they can probably borrow heavily for plant at very low cost.
[1] http://www.bloomberg.com/news/videos/2016-03-31/tesla-double...
On a per-unit sold basis, Tesla Model S is wildly profitable, with a gross margin north of 30% [1]. However, they are obviously still in startup mode, so they reinvest all of those earnings along with investor capital into improving the business.
>Cutting the price means they have to produce at a far lower cost while expanding factory capacity.
Corporate finance is a little more nuanced than that. The price of expanding factory capacity is not an interesting number by itself; what matters is whether that investment will yield a profit over its useful life. Or, in more technical jargon, over the useful life of this investment, will marginal revenue per unit made possible by this investment exceed average total cost of producing units with this investment. Moreover, a dramatic expansion of capacity, executed competently, will reduce production costs across all product lines due to economies of scale, economies of scope, and improved negotiating power.
>But with near-zero interest rates, and lots of pre-orders, they can probably borrow heavily for plant at very low cost.
Tesla's credit rating is in junk bond territory [2] and their weighted average cost of capital is almost 9% (which includes interest free loans from pre-order reservation payments). So there isn't a lot of financial magic here - they need to produce units profitably to be successful.
[1] http://seekingalpha.com/article/855661-tesla-profit-point [2] http://www.businessinsider.com/tesla-rated-junk-by-sp-2014-5
I didn't read the article, but it's from 2012. Gross margins hace declined from 27.6% in 2014 to 22.8%. In fact in the fourth quarter the gross margin was just 18%, below Toyota, Daimler, BMW, Nissan, Renault, Hyunday, Kia (all in the range 18.9-20.1%) and Honda (22.9%). To be fair it was 19.2% for Tesla's automotive division. And after excluding a number of nasty thing the company can get to a better looking 25%. But I'm not sure this qualifies as "wildly profitable".
OK, I searched for "30%" in your link and nothing came up. So I scanned and saw nothing that claimed a gross margin of 30%. Where's it hiding?
I assume by gross margin you mean, "revenue - COGS". This of course ignores all the fixed costs, so it doesn't mean much. Even if they weren't investing in future growth, their fix costs could easily drag that 30% (still don't know where that came from) down into negative territory.
Au contraire, my friend. In business finance there are roughly 2 methods to calculate costs per unit: direct costing (DC) and absorption costing (AC) and they both have their benefits/disadvantages.
DC is where you leave out fixed costs to estimate if you will ever reach economics of scale. If a growth in production doesn't lead to diminishing marginal costs under the DC method, then you can never reach profitability under AC.
As long as DC leads to gross margin profits, there's hope of economies of scale and "all" you need to do is to increase production to make it work.
Of course this distinction doesn't apply for accounting and your P&L (however there are ways to get 'creative' with costs and depreciation there as well) so this is purely about decision making: should I build product/factory or not?
SeekingAlpha is basically a collection of blogs to which anyone can contribute. If you spend any time there, you'd know "articles" are all over the map. I'm not sure that constitutes a good source.
They would still report a profit under this scenario.
This is essentially the entire reason Tesla even exists. Nearly a decade of near zero interest rates have resulted in massive amounts of capital are available to be thrown at huge projects like this.
115,000 deposits of $1000 equals $115M.
... which means, given Tesla's previous model delays, what, another year on top of that?
We put money down today, but as non-VIPs, the earliest possible theoretical delivery is 2 years from today, and more realistically it's like 3 years.
But the "late 2017" number has been consistent. That doesn't mean you should believe they'll hit it, just that it's been very consistent for some time now.
Production time should be easy to estimate once activity is seen at the factory. That is a lot of equipment that will need to be delivered and installed and it should be easy to estimate from what types of equipment and how much of it there is as to when production can reasonably start
Also, I made a reservation at the Fremont factory today. Took around 15 mins including line, but I went in around 10:30-11am. I'd estimate there were around 600 people before me in the morning. Fairly certain they will hit 100k before the stream starts.
Cough Star Citizen Cough ;)
A Toyota Prius is an economy sedan with a surprisingly large back seat.
A Subaru BRZ is a small 4-seat sport coupe.
Your comparison can't possibly be valid because it's all over the map. From what I've seen, it IS a small sedan in the vein of a 3-series of A4 (larger than a Civic, smaller than an Accord).
Since when is a car under 35K is considered luxury?
But his presentation style is hard to watch - he is literally stammering through what feels like a dry script.
I've never seen him live before is this par for the course or nerves?
Edit - wow that is a better looking car than I expected. You can be as awkward serving as you like if that's the main course!
That's typical of salespeople at the higher levels. The smooth-talking types are down at the midmarket dealerships.
For the other extreme, see Shai Agassi, who ran an electric car company, Better Place. This is his 2009 TED talk.[1] I heard him speak once. He's really good looking, he sounds very convincing, and his business plan was total bullshit. ("E-miles follow Moore's Law.") But he convinced people to invest $900 million, met with many national leaders, and got massive press coverage. Better Place delivered a only a few hundred cars, built by Renault, before it went bust.
Similar isn't Same.
And on top of that we are talking about different kind of resemblance.
But Elon Musk jumps right to the point, and doesn't beat around the bush.
He might have some sort of speech impediment and it would be a shit of a world if he were judged on that instead of his achievements.
Apple handles this a lot better, they get applause and cheers, but it always seems to be at the right time. Is it because their audience is apple employees highly trained to give feedback on cue?
I think a lot of people in the audience had just spent 1000$ on a reservation and they needed to rationalise.
Considering that the $1,000 is fully refundable with no fuss, I don't think there's much need for rationalization.
This audience seems to be anyone who'd pre-ordered the model 3, so the general (Bay Area?) public. As a result it sounds like a terrible mix between an American stand-up show, a rock concert and a cheesy sitcom where everyone applauds when the main character coughs. Hence also everyone videoing the event on their phones - it's not even like a gig where you'd have to pay for the video...
(They also do this at Apple, but people seem to be a lot more covert about recording.)
It doesn't matter though, the Model 3 would still be just as promising with or without the audience participation.
Think of it: he has over 20 year experience as an entrepreneur. Actually his whole career after school was being a business man, with the majority of it in high level position and with considerable success. During his career he had and still has to talk and negotiate with Heads of States, Nasa Scientists and Astronauts, Banks, other CEO of the most important companies in the world ( his peers ), ...
He chose to do the unveiling, he has the confidence to do that. If he thought he was not up to it or that his style was letting him down, he could have chosen any other unveiling strategy.
I mean, I'll reserve judgement until I see some more photos, but when he revealed the car it felt like a huge let down in the room. And I think we all know the car will be a success, but I got the impression that the people in the room were let down a bit by the design. I was surprised Elon didn't showcase the design at all.
Not that this stopped me from putting down my deposit.
It's funny too, I never thought about the price point they're actually selling it for. I can afford one, and might just get one for my wife (my car is still new-ish, and efficient enough).
This, on the other hand is genuinely good looking.
I was pleasantly surprised to see the video footage of it, though I don't think it translates well to the stills/screen grabs we've seen.
The headlights-above-the-beltline look reminds me of the Roadster and the Panamera and maybe a touch like the Dodge Razor concept. it's very much not an S, while somehow being attractive in many of the ways the S is (and ugly in none of the ways that the X is). Overall I'm quite pleased with the looks.
Can't stand the front. Looks more like a Toyota than like a "premium car". But I don't like the Porsche Panamera too. I don't think we have the same taste in cars.
What I found interesting was how smooth all the panels are. Obviously for aerodynamics, but I suspect it also lowers their costs, as lots of ridges and dips mean more chance for a panel to be stamped wrong, or to not align with an adjacent panel. Same with the interior - no gauge cluster means a cleaner look and lower costs. Not sure what the DOT and NHTSA is going to say about it...
http://o.aolcdn.com/dims-global/dims3/GLOB/legacy_thumbnail/...
1.) Design is subjective. I for one think while the Model S looks great, the X and 3 do not look that attractive.
2.) I really don't think "faster" really means much when are you talking about the majority of the mainstream automobile market. Top speed is low on the list of priorities for the average consumer.
3.) Cheaper is not free. I would save about $70 (based on today's gas prices in Ontario, Canada) per month in gasoline costs, but it would still cost me about $60 a month in electricity costs to do an average of 20,000 km a year.
4.) Production capability, supply chain and support network can not be overlooked. Tesla struggled to get 50,000 cars out last year. BMW sold north of 2 million cars in 2015. I recognize Tesla is growing day by day, but 50,000 to 2 million is a big jump.
Everyone appreciates a speedy acceleration, when merging into highways or getting out of the way. Its far more important to be quick on acceleration than to have a top-speed.
Please do not compare all the models BMW sold with a single Tesla Model S. BMW only sold 142,000 of 3 series in 2014. http://www.goodcarbadcar.net/2011/01/bmw-3-series-sales-figu...
Legit question: How much does a Tesla cost to recharge?
I mean assuming you do it in your home and not at a free charging station. Are we talking $1/charge? $5? 50c? I just want a frame of reference. I'm talking raw electricity only (and obviously based on some average rate).
They do sell lower capacity battery versions and the entry level Model 3 will likely have a 50kWh battery for a 215mi range, so that would cost $7.50 to fill.
Most areas have night-time plans from the utilities to level demand where they charge a lot less for power, the Supercharging stations are free to use for Tesla owners, so the average cost will probably be quite a bit lower.
I'll get solar (PV) eventually though.
http://images.car.bauercdn.com/upload/32029/images/1040x585/...
Interior:
http://media.caranddriver.com/images/media/547435/2015-merce...
http://preview.netcarshow.com/Mercedes-Benz-C-Class-2015-160...
Personally, I like futuristic looking stuff (I think it goes back to the Lamborgini Countach when I was growing up). Other people hate that, hate the Prius, etc. I'm always shocked how many people think a car has to have a traditional shape or it's ugly. Some people love Ferraris, I think they look like a woman's shoe. It's just a mess.
I think luxury cars look totally silly. I actually think the Toyota Previa is a gorgeous car and I'd have way more fun in that than in a Mercedes, which would make me feel totally ridiculous. I doubt there's another person on the planet who feels the same. I don't know why car aesthetics are so personal. I guess clothing is the same, only no one expects clothes to be one size fits all.
But I don't care too much about asthetics in cars, I value practical considerations much higher.
A much, much, much more luxurious experience.
The highest end, max-optioned Model S you can buy does not have as nice an interior as a decent 3 series or C class mercedes. It doesn't even beat out their low end.
Never mind the cars in its price range (A8/S class/7series). They're not even remotely comparable in terms of interior or luxury appointment.
I find it odd, actually ... of all the things you have to do to make a car, sourcing some decent highly adjustable seats and some nice leather appointments, etc., has to be the easiest. Further, you can just add a "luxury package" and option it at $9950 and call it a day ... and lots of people would buy it.
215 Miles Range
with 0-60 in 6secs,
Seats 5 will have autodrive tech
all for $35,000
Deliveries begin end of 2017 (Hopefully)
This is truly a mass market full electric car. We may be seeing something on the lines of the iPhone - a category busting product.
This part confuses me.
The very fast 0-60 times that you see in electric cars are a function not of their massive engines or super tuned turbos, but of their instantaneous torque (as they are electric).
Given that this is an electric car, and that its size and weight are commensurable to the (presumably) smaller electric motor, I would expect it to have similar 0-60 times.
I just assumed that whenever this car was released it would have <4 second times ... why wouldn't it ?
(Int. Combustion Engine)---[variable rotational speed/torque]--->drivetrain
with:
ICE---[constant rot. speed & constant torque]-->dynamo--->battery-->fully electric motor(s) drive train.
That would give most of the performance benefits/efficiency of electric motors, with the range of ICE-based vehicles. Since operating at essentially constant torque / speed, the ICE could then itself be made more compact and simplified to reduce the vehicle's weight.
I'm sure the above is already being done or worked on, and maybe someone could point to examples of it.
https://www.youtube.com/watch?v=yjWzoJdmPeM
It uses the battery to get going, and then gradually revvs up the ICE engine, which only has a single speed, as you go faster. You get the growl and power of an engine in its sweet spot with the instant torque of an electric and a dramatically simpler drivetrain, less weight, etc.
Supposedly it's amazing to drive, if you have a million dollars.
Chevrolet Volt, BMW i3 with Range Extender
>Given that this is an electric car, and that its size and weight are commensurable to the (presumably) smaller electric motor, I would expect it to have similar 0-60 times.
And so it does! The fastest RWD Model S has a 0-60 of 5.4 seconds. https://en.wikipedia.org/wiki/Tesla_Model_S#Specifications
To get sub-4 seconds you need to add a second motor (and larger motors for the "P" versions), which Tesla made optional to keep the base price down.
Also peak battery power limits the 0-60. Again to keep the base price down the cheapest Model 3 has a smaller battery than the S, which tends to reduce peak power and therefore acceleration. That explains the performance drop from 5.4s to <6s.
No, not quite. 0-60 times in an electric car are determined by power. You're right that motors don't have to change too much to be more powerful, but _delivering_ that much power becomes difficult.
First off, batteries can only deliver so much power, in proportion to their size. So, a 90kWh battery will be able to deliver more power than a 60kWh one. Then you have to change the DC power of the battery to AC for the motor: the more you want to handle the more inverter you need and the more costs rise. And all the ancillary things around the drivetrain need to scale up: cooling, copper wire gauge, etc.
It's easier to go fast in an EV, but you still don't get it for free. I'd actually prefer an 8-second 0-60 if they could put that money somewhere else. That's plenty fast for me.
* Article title is "A Lot Riding on Tesla's Model 3 Unveiling"
Customers would complain if they only got <100 miles range because they were doing burnouts at every stop light.
I believe it's simply so that they can get people to pay for upgrades. I don't think there's much of a difference in motor cost/size/weight so they _could_ have a larger motor in the base model, but then you'd need other incentives for people to buy a more expensive package.
I wouldn't be surprised to see a Model 3 with something like a P65D besting M3/C63 performance numbers.
[1] - https://twitter.com/autonews_west/status/715761107508584448
[2] - https://twitter.com/autonews_west/status/715767638916472833
"Tomorrow is Part 1 of the Model 3 unveil. Part 2, which takes things to another level, will be closer to production. "
And back in January he tweeted this[2]:
"In ~2 years, summon should work anywhere connected by land & not blocked by borders, eg you're in LA and the car is in NY"
Do you think he is saying the Model 3 will be fully autonomous?
https://www.teslamotors.com/node/14147?no_cache=1459519432
The eventual goal is to have the car be able to open your garage door, exit, close your garage door, then drive to your location, stopping to charge itself at supercharger stations along the way.
The NYC to LA tweet implies the car would need fully autonomous driving capabilities to do so.
It has no cluster - no gauges of any kind in front of the driver, and only a tiny speed readout on the big screen in the center of the dash. In the Verge video a Tesla designer says that's production ready (not just alpha).
I won't be shocked if it doesn't have a steering wheel or pedals, or at least downplays them a lot.
You always mix in SOME crowd noise otherwise they don't seem to cheer. But it is a pretty dynamic operation with an operator raising the gain and lowering it as needed to get the desired effect.
In this case the crowd noise was as loud as the speaker and as a result they seemed to shout over him.
There's something unnerving about this. Your car has access to so much information about you. Where you go, where you work, what stores you like to shop at, and what restaurants you like. To me, a car is a tool. When I purchase a car, I'm purchasing The engine, the wheels, and the right to use the software running behind the scenes. I couldn't care less about forging a one sided, Orwellian relationship with a large company. Even if that company is freakishly awesome.
Conventional modern vechicles might not track your movements, but they keep you tied to the mothership/dealership after purchase.
These conventional modern vechicles are complicated. They are loaded with propriatiatry features, unbelievably complicated emmission devices, and computers I can't access--even if I spend 5 grand on the right scanner. (If they will sell to an owner?)
That vechicle in the movie Vacation comes to mind. These modern vechicles, not Elan's, are just a time bomb waiting to break down. Good luck finding an independent shop that knows how to efficiently repair these modern masterpieces. Most people are going to have a relationship with a dealership, at dealership prices.
I just got smogged a '87 Toyota yesterday. What I spent on parts/my labor was rediculious. Yea--it passed, but it's rediculious how stringent CARB has gotten. My little car is not a threat to the enviornment. Plus, how much carbon did I spare the enviornment by not buying a new vechicle every few years?
This rant is Not about Tesla. I understand why they need access to most of the vechicle's electronics.
It's about these conventional vechicles you people are buying. I want a vechicle that I can keep for a long time.
If things don't change, I forsee throwaway vechicles. Essentially a bunch of bricks.
Maybe that's what they want. "Oh they will just by the newer version? They loved the voice assisted gps?
I'm driving around my old vechicle that's running a stoichiometric number of 14.7:1. Meaning it's running well. I'm throwing out 20 ppm's of HC. 02 was .1 percent. My CO was .04 at idle. My N0 was 0 due to a $300 catalytic converter.
In California, my little 4 banger is a horrid high emitter?
Good luck smogging these newer vechicles when that warranty runs out. Good luck repairing these overly modernized vechicles. They will break down.
I have an electric leaf blower, that never requires maintenance, lubrication, oil changes, etc. My next door neighbor has an ICE powered leaf blower and has to change the oil and lubricate it every season.
I'm not sure how you can argue that an ICE equipped vehicle will be easier to maintain than a fully electric one.
Smog? There is no smog on an EV - it's zero emissions.
Note that [depending on the modem], simply removing the SIM might not be enough to turn the radio off. It might still try connecting to the network and naturally send your IMEI to the carrier. For instance, handsets are usually configured so you can call emergency numbers without SIM cards. They need to reach out to a network to do so. You might still be tracked. It's better to make sure it is not powered.
I agree that Tesla probably takes the Orwellian issues to a whole new level, but I'm not sure this sort of lockdown would be limited to EVs for long.
I am aware that this is an unpopular opinion.
If it gives us self driving cars a couple years earlier than we would have otherwise, I think it's worth the tradeoff.
Look at the citroen cactus dashboard and make it more Tesla-like http://images.autowereld.com/high/78673-image.jpg
Caught the glimpse the new horizontal screen, but no details on that in the presentation or on the side....
Wonder if they are not ready with all those yet. Or maybe I am used to Apple keynotes
Essentially they re-branded "full" on the AC dial.
Hopefully some vehicle reviewers will test drive it and we'll learn more going forward. Or when Tesla's site comes online.
I'm not. The car is not ready for prime-time, but there's pressure on Tesla, the company, to show they're "on track".
For the price point, I would obviously still buy one... but the hatchback style is not as appealing for a mid level luxury car that may compete with a MB C-class or BMW 3-series.
They could have made it look like an Audi A4 sedan, with an available hatchback, but I think that would cannibalize Model S sales to some extent.
Tesla also announced they are going to increase Model S prices starting this month. This could be part of their strategy to increase Model S sales now, before they release revisions in the future.
What's also interesting is that Tesla cleared all CPO inventory at the beginning of the year. On their Pre-Owned site, they had used Model S going for less than 50k. They cleared it all out early in the year and now only offer recent models as inventory for lease/purchase.
The K-tail is an abbreviation of that impractical-for-cars long tail which gives most of the effect for much less effort.
The Tatra T77 was an attempt to implement the optimum form though even then the tail was somewhat abbreviated:
I think the front is very clean, and seen from above and behind the large rear window makes it look great. In my book this is way better than a Prius.
When you open the trunk on the Model 3, none of the rear window glass opens up, the trunk hinges behind the glass. So technically, it's a sedan.
Looks wise, it's a fastback.
So to someone with typical American sensibilities, it's got the worst of both worlds: the looks of a fastback, but without the cavernous rear opening you get with a fastback or a hatchback.
Luckily, I've got more European sensibilities and much prefer the looks of hatchbacks, fastbacks and wagons to boring sedans.
Yes the car is amazing in a ton of other ways, and yes the look will probably grow on me over time, but I don't want to "learn to love it". I want to innately find it beautiful at first glance. And my initial, instinctual reaction to the unveil was...a feeling of slight letdown.
Hatchbacks are simply more practical vehicles unfortunately. They don't even have that much worse MPG than a sedan, and they give you a little more space to work with. It is a pragmatic choice.
I'm on car number 7 now and hope to never own a sedan in my life. Wagon/hatchback for life.
[1]http://www.msn.com/en-us/money/companies/tesla-unveils-its-d...
Tesla have targeted 500k vehicles a year, which would be a huge stretch from their current 70k a year.
1. http://www.autonews.com/article/20140113/COPY01/301139914/bm...
[1] http://evobsession.com/nissan-leaf-sales-climb-to-over-17000...
Of course, we basically have no details currently. The spec of the car, and the delivery capacity of Tesla will change until the actual release day but it is way too early to compare to actual existing cars.
Looks almost identical specs-wise to Chevy Bolt, which will be available at the end of 2016 rather than 2017.
http://www.bloomberg.com/news/articles/2016-03-31/tesla-s-ne...
I'm sorry, I may be missing something re: specs, but can you point to where it says that the Bolt will go 0-60 in <6s?
Also, does the Bolt have a nationwide supercharging network? Does it have autopilot? Does it have an astounding, unparalleled safety rating?
Is the Bolt actually a better car? No, but I think it's evidence that if automakers actually get serious about electric they can put together something competitive and bring it to market far faster than Tesla.
[1] http://www.roadandtrack.com/car-shows/detroit-auto-show/news...
"Incredibly inspired by the interest in Model 3. You won't be disappointed. Also, small token of appreciation coming for those who lined up."
holy shit comes to mind
An interesting thing is Hackett is executive chairman of a company called Redflow which claims its Zinc Bromine home storage solution is better than Li-ion ones like Tesla Powerwall (though it seems to be a fair bit more expensive).
In the video, the postal carrier mentions the Tesla being better than spending $30 on gas per day. At $2.50/gallon, that's 12 gallons of gas. Assuming 20mpg (all of the stop and go), that's about 250 miles per day, or ~5000 miles per month assuming five-day delivery.
1. https://about.usps.com/postal-bulletin/2012/pb22340/html/inf...
>Get the latest Flash player to view this content
A car from 2016, a video from 1996.
Edit: https://www.ustream.tv/embed/22190759, original link had a "html5ui" parameter but it doesn't seem to help.
Livestreamer with --default-stream mobile_720p gets 403.
It would've been helpful if there was some visual indication that the event hadn't started yet, like a countdown.
Fun fact is he appears to be heavily involved in a company aiming to compete with Tesla's Powerwall: http://redflow.com/about-us/board-management/
https://scontent.cdninstagram.com/hphotos-xaf1/t51.2885-15/s...
The link was only a preview. It links back to their site now. Kinda defeats the purpose of using Periscope.
Shouldn't this really be the model E and not 3?
https://www.teslamotors.com/blog/mythbusters-part-3-recyclin...
Goes in to some detail but basically states, we have some good ideas, but our fallback is the land fill since these batteries etc are considered non toxic. Still: sourcing, building, recycling, and disposing of these batteries seems like a giant problem that is hard to believe is environmentally sound
So today was their Kickstarter pitch :-)
Glass roof anywhere in the southwestern or southeastern usa is the worst idea I've ever seen. Not only the sun but stuff constantly being thrown on or at it on the highways.
Never had a windshield last more than a decade without a crack, imagine what it costs to replace a piece of glass the size of a car.
So Tesla can enjoy their millions of undeliverables and bouncebacks. Good luck on those leads Tesla sales.
>1 million tuned in to watch the unveiling and we got this list of emails to prove it
>dick@dick.penis
From my eyes, it looks like its roughly the size of a Scion, maybe only a little bit larger than a Honda Fit. Which seats 5... technically... but its not too comfortable. Its more of a 4-seater with a 5th seat that may be used if you care about it.
I imagine the model 3 has the same benefits and the interior is a lot larger than it looks.
countdown to 8:30pm PST
That's 0330 UTC, for anyone who wants to convert it.
The door windows also disappeared, but the front screen stayed together
Is Tesla desperate for leads and sales? This tells me Tesla is hurting for numbers or they're worried about GM Bolt and others. So they want to spam the interested parties or keep them from committing to other brands for the next year or so until Model 3 is available.
BTW, Bolt has already been unveiled [0]
And some manufacturing has already started [1]
[0] http://arstechnica.com/cars/2016/01/chevrolets-bolt-is-an-el...
I guess I'm marketing form blind.