3 Reasons Why Tesla Model 3 Will Be Game Changing EV

3 years ago by Mark Kane 30

Stunning from all angles, the Tesla Model S lives up to the hype.

Tesla Model S

The Motley Fool recently tried to convince us that there are three reasons why Tesla Model III will be game changing EV.

Tesla Model 3 Coming In 2017 According To CEO Musk

Tesla Model 3 Coming In 2017 According To CEO Musk

1. Big investments

2. A unique value proposition

3. A boost from solar

The most affordable car planned by Tesla, marked by a vertical E (III) to achieve some S E X, could enter the market in 2017 (however Tesla, and not only Tesla, is accustomed to delays, so don’t pencil in 2017 just yet). The price is hinted at some $35,000, but again we’re not so sure this will hold true.

Anyway, to achieve sales of hundreds of thousands, investments in Tesla’s factory must be huge and accompanied by Tesla Gigafactory for another $5 billion. This is probably much more than investment than we’ve seen in any other electric model to date.

“Tesla is making the investments needed to turn itself into a large automobile manufacturer. The Model 3 will be built on a new and separate platform that will fill out more of the capacity of its Fremont, California, factory. Tesla CEO Elon Musk said the factory has capacity to eventually tool for production of 500,000 cars per year. Tesla has also said it eventually will build factories overseas, showing interest in both China and Europe.”

“Musk wants to solve the lithium-ion battery bottleneck that is currently holding up the company from ramping up production fast enough to keep up with demand once and for all when the company builds its planned Gigafactory. The $5 billion project is set to begin this year and finish on time for the 2017 Model 3 launch.”

Second, Tesla Model S is selling well and the Motley Fool believes that Model III will too thanks to unique and compelling selling points (high safety ratings, over-the-air updates, free supercharging for life, meaningful all-electric range):

“Tesla doesn’t have any trouble selling its vehicles. Despite no advertising spending and no promotions, Tesla remains limited by supply — not demand. Even so, in 2013 Tesla’s Model S was the best-selling vehicle in North America among comparably priced cars.”

Cheyy Volt's Grab a Charge Under a Solar EV Charging Canopy

Chevy Volts Grab a Charge Under a Solar EV Charging Canopy

But solar? PV panels aren’t directly related to cars so we struggle to see how solar could make one concrete model a game-changer, because the whole market should benefit from lower prices.

“While a fully electric car already offers big savings over a gas-guzzling internal combustion vehicle, these savings will only grow as solar PV panels continue to become more affordable and more capable.”

“Just five years ago, it didn’t make sense for many homeowners to go solar. But this is changing rapidly. Consider, for instance, that solar panel prices declined 80% between 2008 and 2012 alone.”

“By the time the Model 3 is launched, the prices of solar panels are likely to be much lower than they are today. Buying an electric car toward the end of this decade will make more sense than ever.”

Now we ask: what are your thoughts on this Model III game-changing idea?

Source: Motley Fool

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30 responses to "3 Reasons Why Tesla Model 3 Will Be Game Changing EV"

  1. Josh says:

    I agree that Model 3 will be a game changing EV, but only because of point #2. A EPA 200+ mile EV that has an MSRP under $40k is a game changer. If Tesla can keep the same level of infotainment tech, the value gets even better.

    #2 is only possible because of #1, so I guess that is part of it.

    #3 I don’t agree with at all. In fact, I think it is the other way around. A large increase in Tesla (and all other plug-in) sales will increase the demand for solar. Especially in places that have tiered electricity pricing based on use (California and Florida, maybe some others).

    1. Jouni Valkonen says:

      You are demanding too much. Even if Tesla can produce 300 mile ranged AWD electric car with $50 000 dollars, it still means that Tesla has potential to sell roughly 2 million cars annually per year. This already means 20 fold EV market expansion from 2014.

      You cannot expect that game changing car means that everyman is afford to new EV. No, it is perfectly satisfying that the Rich and upper middle class families afford to buy new electric cars. This already means about five to ten million car annual markets for electric cars. And this is with today’s technology.

      The best way to incentivize EVs is that if your family belongs to top 2 percentile, you must buy an electric car or you get punished by 100 % car tax if your new car has ICE under the hood and it costs more than $25 000.

  2. Robert Fahey says:

    What if Tesla worked out a package deal:

    Buy or lease a Tesla
    Buy or lease Solar City panels
    Get a nice discount on both.

    1. Spec9 says:

      I’m pretty sure they already do that.

      1. Jouni Valkonen says:

        Not sure if Tesla is sold as a solar panel package, but BMW i3 can be bundled with SolarCity solar panels.

  3. Gibber says:

    While I am happy this car is one day coming, (The more choices I have the better). I believe the next generation LEAF is going to have a bigger impact. New body will appeal to more people, lessons learned from Gen one and a range I’m sure will be at or near 150 miles with a better sticker price.

    1. Rob Stark says:

      Nissan was surveying owners how much of a premium they were willing to pay for extra range. Nissan will not have the economies of scale in battery manufacturing that Tesla does. And they have to differentiate the Infiniti LE.

      Infinite LE 150 Mile range for $40k-$50k.

      LEAF 120-130 Mile range for $35k.

      Tesla will learn more from Model S,its first massed produced vehicle, to third generation vehicle than Nissan will gain. Nissan will learn something about manufacturing EV powertrains but they already know auto manufacture.

      Model 3 almost certainly will offer better bang for the buck than LEAF plus Supercharger network is superior to Nissan network.

      1. mike w says:

        Nissan has a network? I never saw it on their web site.

      2. Just_Chris says:

        I think it is really interesting to look forward and I don’t think there is a right or wrong answer but I think that by the time the model 3 arrives the Nissan Leaf will probably have left the market that the 3 is entering.

        Today’s base leaf is just under $30k and has a range of 80 miles being optimistic the 3 will enter at $35k with a range of 200 miles. If Nissan is still offering the the base leaf as is then Tesla will completely destroy it but if Nissan are selling a fugly little bean with an 80 mile range for $14k and a really nice looking infinity with 150 mile range for just under $30k then I think that it will be fairly even fight. If there is a 150 mile leaf for $20-25k in the mix then you really broaden the market. I would love to see this happen and think that there is more than enough for both to sell heaps of cars.

        IMO Nissan has more room to reduce cost and increase capacity than Tesla. Obviously I have nothing much to base this on but my gut feel is based on 2 rather shaky legs.

        1 – Nissan already make cheap cars, Tesla is a Luxury car manufacturer. Tesla learn quick but the have more to learn.

        2 – Tesla based their battery pack on an already mature battery cell made by Panasonic. Nissan developed a cell specifically for cars. It’s battery is larger, flat and supposedly easier/cheaper to manufacture. If all things are even Nissan should have had a much larger hill to climb in terms of paying off development costs, establishing manufacturing facilities and ironing out bugs (like thermal degradation) but now they are over that hill (maybe, hopefully) they should be able to expand faster and make less expensive cars than Tesla. In fact if the new “Lizard” battery has similar life to a Tesla pack that requires liquid cooling the Nissan could have a pretty big advantage but only time will tell.

  4. Stimpacker says:

    “By the time the Model 3 is launched, the prices of solar panels are likely to be much lower than they are today”

    Errr, very unlikely. Solar prices are not dropping. Installed prices are remaining high, even when material prices drop, Balance-of-System prices go up.

    Furthermore, thanks to Obama’s protectionist policies (e.g. on imported steel, tires), we just levied a SECOND round of tariffs on imported solar panels.

    Funny, the solar manufacturing industry has like 1000 workers in USA but the solar PV industry has 100,000 workers (heck SolarWorld, the chief complainant is a German company). Digressing here but whatever happened to government by the people for the people.

    1. Fool Cells says:

      So you are for Americans losing jobs to Chinese solar manufacturers who are dumping their panels below cost? Same goes for steel? To you it is fine america suffers from other countries unfair trade practices…some would call that treason.

    2. Bryan Whitton says:

      Actually the balance of system costs are slowly coming down. There isn’t a lot of room for it to drop though. The problem is that they all want everything for free. How dare I try and pay my installers a livable wage. How dare I try and provide a health insurance package. Retirement ha, they don’t deserve it. I should just hire illegal aliens and pay them $8.50 an hour or better yet $5 per hour cash and then I could sell solar to you for less. I see.
      But wait, you say it is expensive for solar, I say BS. how much is 25 years of electricity going to cost you if your current bill is $100 per month? I can replace that for $8K to $9K and leave you with a very small utility bill from your utility company.
      Look, people look at a $20K bill for solar and OMG that is so expensive and never look at what their electric bill is going to cost them over the 25 year warranty life of the solar. It seems very odd to me that hey say $20K is expensive and then say that $55K from the utility company over the next 25 years is perfectly fine.

      Having said all of that, if you have TVA or any of the very low kWh charged utilities then this may not be correct. But if you live in NE or CA or any of the 26 states that charge $.12 or more per kWh than this is an accurate representation.

      1. There is plenty of room for solar costs to go down (they are already a good deal, and like computers, will continually get better)

        Look at German install costs. They are well below US costs. It’s not because they use illegal labor.

        Solar efficiencies will rise, driving down both panel costs and install costs. Cells with 44% efficiency and commercial potential/intent have been demonstrated already.

  5. ClarksonCote says:

    Spelling/Grammar nazi: to, not too on the second sentence. 😉

    By the way, other people who obsess about these sorts of things may like this Weird Al song, “Word Crimes”: https://www.youtube.com/watch?v=8Gv0H-vPoDc

    1. Jesse Gurr says:

      +1 for tying Weird Al into the discussion. 😀

  6. ClarksonCote says:

    I suspect the Model III could do a lot for enabling the mainstream consumer to purchase EV’s that suit all their driving needs, but I’m still skeptical that it will come out on time and at the right price point.

  7. Ted Fredrick says:

    I hope it gets here while i can still get 10k off the price.

    1. Driverguy01 says:

      Nope.
      AFAIK, Tesla will most likely have sold 200K cars by then and that’s the limit for every manufacturer. It may have changed but i’m not sure.

  8. Spec9 says:

    Here are the 3 reasons the Model 3 will be a game-changer (assuming they can pull it off):

    1) Price
    2) Price
    3) Price.

    A $35K car that looks good and has 200 miles of range will be a game changer.

    1. mike w says:

      4. It doesn’t have an uncooled battery made by Nissan.

  9. scott franco says:

    S|||X eh? I guess it would work better with a true E lying on it’s side.

    If the Model III rolls to $40k it won’t be a disaster. The $40k-$60 market is the Lexus/upscale market, so much the better. With (the rumored) $5000 boost, the Leaf enters the $30 market, and if GM is smart (they aren’t, I know), they will position the Spark at $20k and below.

    I suspect none of this matters in any case. The pattern we usually see with makers who announce their plans years in advance is that they get swept by new and fast moving players. I would say a Chinese maker with a $15k-$20 25KWH car and a $20k-$25k 50KWH car would turn the market upside-down handily.

    1. Scramjett says:

      I wouldn’t touch a Chinese made car with a 10 meter cattle prod.

      1. Gibber says:

        Agreed but how about the recent post here about Nissan and Mitsubishi building a new entry level BEV? I know it’s pure speculation to think it may be sold in the USA but speculating is all we can do when talking about the launch date of the next Tesla so…

      2. Scott Franco says:

        Just out of curiosity, why? I’m assuming you are ok with other Asian made cars? One ran over your cat? Or?

        1. TomArt says:

          Asian made cars are not the problem – Chinese made anything is the problem.

  10. EV says:

    reason 1: its a Tesla

    1. Scramjett says:

      +1

  11. Anon says:

    When I think of the future Model III, the image of an electric Dodge Dart (the new one), keeps popping into my mind for some reason…

    1. Aaron says:

      I like the way you think. Quick ‘n dirty edit…

      http://imgur.com/YkQJ9LC

  12. Phr3d says:

    Fool has
    SERIOUS
    investment disclosure
    issues that should always be taken into account.
    just sayin’