$35,000 Base Tesla Model 3 Predicted To Arrive Soon

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FEB 27 2019 BY STEVEN LOVEDAY 160

When will the sought-after $35,000 Tesla Model 3 actually come to market?

Sadly, there’s no way to really know. But, notoriously Tesla-negative outfit Seeking Alpha seems to think the highly anticipated base Tesla Model 3 might be available in the upcoming months. While some people, in addition to Seeking Alpha have asserted that it may never come to be, now there’s a change of direction. As Tesla CEO Elon Musk continues to assert, the “cheap” model is definitely on its way.

Seeking Alpha points out what we already knew. Tesla plans to bring a $35,000 base Model 3 to market at some point. But as stated on numerous occasions — per CEO Elon Musk — the automaker can’t do so until certain monetary expectations are met. In addition, the automaker must finally streamline Model 3 production to a level of efficiency such that it won’t lose money on the cheaper variant.

As reported by Seeking Alpha, Tesla’s constant innovations may finally make its standard Model 3 available within the next three to five months. The firm currently puts gross margin of the base $35,000 Model 3 at 12.07%. If indeed this happens, Seeking Alpha sees a market increase of about 9 percent for Tesla. This is, as long as the Silicon Valley automaker is able to actually deliver on these previous promises. The story predicts that Tesla will release a related statement by March 15, 2019. To further substantiate Seeking Alpha’s claims, it adds:

 As I mentioned before, it seems Tesla, or Elon Musk, may be trying to work around the initial promise of a $35,000 vehicle. This idea is quite worrisome for many customers that are looking to buy the Standard Range variant as it hints at the idea of this vehicle never actually being available. If Tesla were to forego a true $35,000 Model 3, I believe that they would try to find a type of loophole to get around their promise. However, Elon Musk has an incredible ego, and to admit even slight failure would crush him, so I do believe he will do what he can to create a true $35,000 Model 3.

Do you agree? Is it bound to happen at some point? Let us know in comment section below.

Source: Seeking Alpha

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160 Comments on "$35,000 Base Tesla Model 3 Predicted To Arrive Soon"

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The standard range 4-6 month guesstimation timeframe on the Model 3 build page disappeared completely a couple of weeks ago. What does that mean?

I expect production to begin by end of March and deliveries in 2nd quarter. After a full month of sales in Europe and China. Tesla has to work out the kinks and get up to production speed in the US before kicking off production in China by 4th qtr. UK deliveries are set to start in the second half of 2019 as well with production coming from US. So Tesla has 2nd quarter to get up to production speed in the US to be ready to make deliveries in Europe by 3rd or 4th quarter.

Early Wednesday, Elon Musk posted a series of cryptic tweets:

“Thursday 2 pm,”

“California”

“some Tesla news.”

https://www.teslarati.com/tesla-tsla-elon-musk-thursday-announcement/

Nothing can be read into that one way or another with any certainty

What does anything mean when it comes to Tesla? Their web site still says I can order a Model 3 and get it in February. Unless I want the Performance version, that will be “late February”, lol.

The SA author totally screwed up his math on costs. At those costs Tesla would have reported >30% Model 3 gross margins in Q4 vs. the actual 20%. And they’d be wildly profitable this quarter, instead of “maybe a tiny profit” if they’re “lucky” as Musk said at layoff time.

I think its because of pending Model Y unveiling which should be within a month. I think Model Y production and ramp up will happen more quickly than expected and it’ll come before Model 3 Standard Range. There is pent up demand for Model Y, more than Model 3 SR and it’ll be more profitable. Once Model Y is out for several quarters, margins on both will go down… my guess is end of 2020 you’ll see standard range for both.

That’s a reasonable postulate. Even if Model Y pent up demand wasn’t higher, the margins certainly would be higher.

But do they have VEHICLE production facilities ready to go (or even started?) at the Nevada site where Model Y production is supposed to occur????

I don’t think they have even started installing the production lines for the Model Y at the Nevada Gigafactory. Last I read, they hadn’t even fully committed to doing that; they were seriously considering it, but hadn’t finalized plans.

Don’t expect to see any production Model Y’s this year. Hopefully that will come in 2020.

2021 was estamation

Many experts speculate, based on their past history, you’re trying to get state incentives, even from Nevada, in order to build Model Y in the state…If TX would allow them to sell cars there and they got more favorable incentives than Nevada, why not build a new factory there?

They build S and X on the same line don’t they? Why not 3/Y? Those two vehicles are much more similar than S/X

“We’re going to need a bigger tent”…I’m not saying they couldn’t but it seems unlikely due to the high volume and the fact they literally had to build a tent; there may not be any space to stock both 3/Y parts and equipment…

Right. The fact that Tesla has already had to resort to partial assembly lines in tents in the parking lot (!!) is a pretty good indication of how the Fremont assembly plant is bursting at the seams. There simply isn’t room for Model Y production at Fremont.

Nix keeps saying that the Fremont plant is undergoing a major expansion which should approx. double the floor space. Now, I’ve learned that it’s pretty dangerous to argue with Nix, since he’s very nearly always right; but I haven’t seen much evidence to support what he’s talking about there. If Tesla will soon double floor space at the Fremont plant, then they’re keeping rather quiet about it!

Ask and ye shall receive.

Tesla filed this long-term plan as part of their construction permit applications:

https://www.sfchronicle.com/business/article/New-Tesla-plan-could-double-size-of-Fremont-9936003.php

Much of this construction is underway already.

parts of that facility are hidden from tourists.
So, hard to say.

It’s most likely leasing and/or a Model Y reveal event date and/or self driving cross country update…There’s going to be far less pent up demand than you think for the Model Y because most are going to want the cheaper version which could be years away…

Do Not Read Between The Lines

It means everything and nothing.

If Tesla has effectively quietly killed the ability to reserve/preorder a Model 3 SR, that should be a major story which I would imagine would be already out there… Can you even place a Model 3 SR deposit to reserve or preorder one? It appears you can no longer even do that, only choice is to “Order now” with the model 3…I’ve only performed a quick google search and have navigated Tesla.com and can’t find anything obvious so at the very least Tesla is making it difficult to locate the reservations page…

Tesla stopped taking deposits in the US a long time ago. Before the MR even came out. It didn’t stop people from buying the MR……

And now we know!

Note to the editor: Seeking Alpha is not a small group of paid writers, they take content from a wide range of people. So it is possible to find many viewpoints on Tesla on that site, though many do tend to be negative, especially from some repeat writers.

From this post we can determine that one of those writers has a HUGE EGO.
Projection: where to tell the world who and what you are, by how you criticize others:

“However, Elon Musk has an incredible ego, and to admit even slight failure would crush him,…”

That’s why the shorts can never admit they are failures, their egos would be crushed.

Also, this supposed financial analysis has no mention of LEASING.
Which will DOUBLE Model 3 demand.

Leasing is big for EVs, because it makes it easy to add in gas savings (especially outside the US, where gas is pricey). Let’s say a $43k Model 3 is $500/mo with zero down, and you save $100 in fuel costs (gas minus electricity).

Now your gas alternative needs to cost $400/mo. Only enough for a barebones 3-series or C/CLA.

And while it shouldn’t be the case for Tesla, many are worried about battery degradation and obsolescence. Leasing removes that risk.

???
Where did you derive your numbers from?
Rectum?

Make that $4k down and $500/ mo.

Yelp

Teslas are notorious for bad lease rates (and that was BEFORE the fed tax credit got halved). Lease rates are even more unappealing moving forward when the credit eventually disappears. If you think offering lease options is suddenly gonna double Model 3 sales, I have an oceanfront property in Iowa to sell you.

You have been consistently wrong on Tesla so many times that anyone would be a fool to trust your words any longer.

“Teslas are notorious for bad lease rates…”

If you say so, MadBro, then we can be fairly confident it’s not true.

Dunno why you keep pretending to be an EV advocate, since you’re only here to spread falsehoods about Tesla and its cars.

Push he’s right about the lease. My BF wanted to trade in his 2017 Explorer Sport with some money down like $2k for model X lease and it was $1.8k he said forget about and went back to a ICE

He is correct on the leasing front, Musk himself said they don’t really offer incentives on leases…It doesn’t make a lot of sense to allow leasing on your lowest priced vehicle and start incentivizing them…

Exactly, if you have a pulse you can publish on Seeking Alpha – there is no requirement for expertise/intelligence or even common sense.

Any article on Seeking Alpha may just as well have been published on some random guys blog.

Some of the random blog guys who post in these comments here also write on SA.

Some of whom are regularly debunked repeatedly here.

Indeed. The guy who posts here as “tftf”, one of the most prolific serial Tesla bashers on Reeking Alpha, where he posts as “Tales From The Future”, made quite a few posts here a few weeks back.

It’s very odd to see an InsideEVs article treating Reeking Alpha as a legitimate news source with editorial control, when it’s just a social media site for stock investors on which pretty much anybody — with any agenda, legitimate or otherwise — can post.

I may try my hand. See if they have satire detection in place. Could be fun.

Makes no sense for any writer to reference seeking alpha which are just opinion pieces. Tesla will produce a 35k SR version, but lots of things need to happen before they do. Such as: 1) Continue to lower prices for LR and MR at various times around the globe to maintain demand. 2) Start leasing for LR and MR 3) Perhaps produce a SR version that is slightly more costly than 35k, say 37 or 38k. Then lower the price in US once the incentives drop to zero Jan 1, 2020. Two key factors any business do to maximize profits are: 1) The demand for the higher end, more profitable, LR & MR versions are satiated. Tesla still has some room to drop the price of these and still maintain good margins (higher margins than a 35k SR version). They have already started down this path in US and will do the same in Europe and China as well. 2) #1 has occurred to point where profits for the LR & MR are only slightly higher than the 35k SR version and they have more supply than demand, they’ll make a 35k version. Note: As they increase production to 7,000… Read more »

“I’d say 3 to $5,000 less to produce each vehicle when going from 5,000 a week to 7,000.”

That’s way off. The highest estimates of fixed and quasi-fixed Model 3 costs are around $300 million per quarter. This is mostly depreciation and labor, plus a few minor items. Going from 5k to 7k/week (65k to 91k/quarter) spreads these fixed costs over more cars and reduces the per can cost:

$300m / 65k cars = $4600/car
$300m / 91k cars = $3300/car

That’s $1300/car, using generous assumptions. Some of their parts contracts may also reduce prices a couple percent as volume increases – creating another $500/car or so in savings.

Reduced scrappage, the new battery pack design, improved reliability to reduce warranty repairs, production line efficiency improvements and other “hard” things are needed to get costs down.

There are some writers on SA who do homework and use data. I wouldn’t lump them all into the “know nothing” category.

Yes, but the percentage of SA articles that fit that category comprises only a tiny minority of the blog posts seen at Seeking Alpha. (I won’t dignify what’s generally published there by calling them “articles”.)

If you root thru a trash pile, occasionally you find something worth salvaging. That doesn’t mean it’s worth your time to dig thru every pile of trash you see.

In my years of posting frequent comments to IEVs, there has been only one single SA blog post that I ever thought was worthy of attention from IEVs staff.

This article isn’t the one.

So is Evannex. I’m so glad those articles are far from between now these days

Man, delivery of the promised $35k Model 3 is gonna be super painful for certain haters that come to this site. Of course the narrative will change, I’ve already seen the $35k Model 3 as referred to as the “Profit Killer” model by biased news outlets that grudgingly acknowledge that the $35k car is gonna happen.

Yup, we can be sure that the hardcore serial Tesla bashers already have their goal-post-moving comments written in advance for when Tesla does finally start selling the $35k Model 3. The serial Tesla bashers will instantly change from “Tesla will never sell the $35k Model 3” to “Tesla is now so desperate for sales that they’re selling the Model 3 at a loss.”

You read it here first. Well, I’m probably a long way from the first to predict that… but at least, you read it here in advance. 😉

Seeking Alpha, which is constantly bashed on pro-Tesla sites as being home to all the serial TSLA shorts is suddenly now this bastion of truth because one rando on the internet said the $35k Model 3 is “coming soon”? LOL
It ain’t coming soon, you can take that to the bank. The $35k base Model 3 will continue to be vaporware for a long, long while.
With demand in Europe and China for optioned up Model 3s, Tesla has ZERO incentive to make a $35k Model 3 right now, even if they could without the company “dying” as Elon stated.

Hahahaha!! That didn’t take long. Again, like always, you fail to really read and digest my comments. Nowhere in my comment did I say anything about the $35k Model 3 happening. Once again, let me clarify my statement in a different way (although YOU have to be the one to slow down enough and understand it- I can’t do it for you) to make it easier for you- I merely predicted that if (IF) the $35k Model 3 happens, there will be certain folks that will not like it because they’ve beaten their anti-drum so long about it. And the run-up to it will change the narrative into something yet again negative.

By the way, I gave your Bolt props on the earlier article regarding car dealership gouging. 🙂

“Man, delivery of the promised $35k Model 3 is gonna be super painful for certain haters that come to this site. ”

There is no conditional wording in your above statement.

Fair enough. I’ll revise my language to officially say “if.” There- now we can be friends again.

I still believe the $35k version is coming. And I still like your Bolt.

how much does it cost to ship the car to Europe or China? I suspect that it is more than the difference between the current bottom M3 price and the 35K.

So was this opinion on SA written before or after Elon posted his cryptic tweets today?

something coming? The Model Y?

Who knows? Elon is teasing us; being coy. A couple of his tweets from May 23, 2018:

“I just made that up, because the Ides of March sounded good”

-and-

“But consider it real. We could unveil Model Y anytime from late this year to mid next year, so March 15 is about right.”

So this is actually recycled old news, which is typical of the trash posted to Reeking Alpha.

First, they will sell all the high-end variants in China they can before the tariff debacle. Secondly, they will do the same for all of Europe, Australia, Japan, Canada, Israel, and Mexico. Probably some MR RWD in there too. I would think that would fill four months and maybe five. Ideally, they make it to at least the first weeks of June to keep profitability high. Then they ship the SR like mad to the US market for six months and cross their fingers that the gigafactory 3 is close behind.

This sounds like a realistic scenario but we also never know with Tesla

A realistic scenario except that there’s no way Gigafactory 3 (in Shanghai) is going to be assembling Model 3’s, or any other car, this year. The two-year timespan to build a large factory and get it up and running at volume can’t be reduced to a single year, no matter how hard Elon wishes that can happen. Sadly, this is the “We can get the Model 3 production going months ahead of schedule” wishful thinking all over again.

We may see some Model 3 battery packs assembled (probably mostly hand-assembled) in China this year. But we’re not going to see Model 3’s made on an assembly line there this year. If there are any assembled in China, they will be hand-assembled. I will be more than merely surprised if that turns out to be incorrect.

Ford installed a completely new F-150 production line (sans paint shop) in Dearborn and ramped up to 1400 trucks per day in less than 3 months. Of course there isn’t even a building in Shanghai yet in which to install anything, even if Tesla is already testing the equipment in another location as Ford did. Empty building shells go up quickly, though, and they’ve got a lot more than 3 months left in the year.

Also, Musk does not seem to be directly involved, so that’s a plus.

I wouldn’t be at all surprised if one of the Model 3 production lines at Tesla’s Fremont plant was installed and tuned up for volume production in 3 months, or even less. But duplicating a production line right beside an existing one is a very long way for building a new auto assembly factory from the ground up, and getting it tuned up for volume production.

It took ~18 months from when Tesla took possession of the former NUMMI assembly plant (now Tesla’s Fremont plant) and put the Model S into production there, even though there was still a lot of production line equipment left from the former owners. And Model S production was fairly small for the first few months.

Really, -4 down-votes for my comment? O_o

Every fact I stated is correct. Look it up for yourself if you doubt it; you can start with Wikipedia’s “Tesla Factory” article.

https://en.wikipedia.org/wiki/Tesla_Factory

Nobody knows when giga 3 arrives. My comment implies sometime in 2020. I agree that nothing meaningful happens in 2019, but the sooner they can hit the ground in 2020 the sooner the market outside the US sees a $35K Model 3 IMO.

A manufacturer cannot survive on 12% gross margins. Btw, gross margins is (a) simply the difference between sales and cost of goods sold divided (b) by sales.

There are many industries that do. How can you assume what is required for a BEV manufacture when there’s never been one before? There’s also no way to know their gross margins yet; Tesla themselves aren’t even sure of where they are going to be.

Most of an EV isn’t that different from a gasmobile. Yes, there are industries in which a 12% gross profit margin is perfectly adequate to make a net profit. But a heavy industry in which thousands of parts are required to make a product will probably never be one of those. Automobile manufacturing is characterized by high capital costs and low profit margins, and that’s not likely to change.

“Gas cars are the only viable way of transport, that’s not likely to change.”
“No one will feel comfortable sending money to someone else on the internet, that’s not likely to change.”
“Rockets are single use items and cannot be landed and reused, that’s not likely to change”
“Tunnel boring is extremely challenging, expensive, and complicated, that’s not likely to change.”
“Air travel is the only way to efficiently move people and cargo quickly, that’s not likely to change.”

You may have noticed…Elon is likely to change things.

Tesla Motors (back before Elon was running it) thought it could build automobiles in a very different way; build them like Silicon Valley builds computers.

The steep learning curve for top Tesla execs It was a very painful “school of hard knocks” learning experience for Martin Eberhard and, later, Elon Musk. Surprise! You can’t run a heavy industry as if it’s a light industry… no matter how innovative you are.

Now, that’s not to say that Tesla does everything the way Detroit does. Sandy Munro has lately been very vocal about how Tesla does a lot of things much better than legacy auto makers.

But without some near-magical new tech such as using nanotech robots to build cars directly out of raw materials, I don’t see any maker of highway-capable automobiles surviving on such a low gross profit margin. There are unbreakable laws governing economics just as there are unbreakable laws governing physics and thermodynamics.

Yes. But many will option up to 40k or more so the average selling price would be higher and the gross margin better. They aren’t going to sell all 35k base no options. So 12% on the cheapest configuration may be good enough.

But they aren’t going to sell all 3s at such a low margin. Unless Musk decides to do what they do in China, making EAP standard, the average selling price of a 3, once it reaches steady-state (which won’t be for many months after the $35k base trim is available), will be well over $40k. You can count on that. In fact, now that I think about it, Musk predicted that the average selling price would be about $42k steady-state. That would easily exceed their original target of 15% margin on the Model 3.

Yes, but Musk made that $42k prediction back when he thought he could bring down the average cost for building a Model 3 on touchless, 100% automated assembly lines with robotic arms moving at eye-blurring speed. That turned out to be a fantasy, so any prediction he based on that wishful thinking should be discounted.

You don’t understand the automotive industry. All car makers have higher and lower margin cars and trim levels. This is done on purpose. Your comments falsely conflate the margin for one trim level as if it were the same as the entire company.

No car company does the math like that.

I think it’s safe to say that even if Tesla makes a $35,000 model, it won’t sell many of them. Most people will probably tack on a few thousand dollars of options. Meaning, the overall percentage of base models will be small. I think this is true of most car manufacturers. So, you make it sound like they are going to stop selling everything but the base model and have to live on 12% gross margin to survive.

$35k is still a tough build with today’s material prices. Not to mention zero Fed tax credit soon.

They can probably do it, but, without gas pickups to actually make a profit odds are slim.

I tend to agree. However, there are thousands (or hundreds of thousands) of reservation holders who are looking to get $35K (or $36K) Tesla 3. I hope Tesla produce at least enough $35K version to fill existing reservation holders. We’re not talking about billions of cars, just few hundred thousand at most.

At $39,150 after tax, with 264 miles vs. 220 and glass roof, power seats, premium audio, etc. the MR today is a much better deal than the $35,000 Model Godot will be in 10 months. Also, that deal was even better two months ago at $38,500, yet ~7000 remained unsold on December 31.

I agree thousands of reservation holders are waiting for various reasons. Some didn’t have enough tax liability to get the “after tax” price last year. Some want leasing. Some have to wait for their existing car lease to expire. And so on. I just don’t see this huge surge of demand once they release the SR base model. I think it’ll be more like the MR launch – a small surge but mostly just enough to help maintain demand.

Exactly! The current MR is much better offer than the future SR.

I think there’s quite a few of us that just want that version to come out so we can get them quicker on the used market. Also, leases would be good news too.

7000 remained unsold? According to what?

Tesla’s production, delivery and in transit numbers.

Which includes all the cars that were built to be put on this ship, that had to have completed manufacture, gone through inspection, gone through prep, loaded on trucks, transported to this dock, and lined up ready to load within one business week of the end of 2018.

It is absolutely obvious to anybody who can count on their fingers that Tesla would have been building cars for foreign markets in late 2018 that they couldn’t sell in the US (different plug sockets) even if they wanted to.

So effing sick of your moronic diarrhea pushing your fake demand meme story after story after story, where you completely ignore all the actual facts and keep posting the same feces anyways. Take your bullpucky back to your Seeking Alpha stories you post there.

https://insideevs.com/shipment-tesla-model-3-big-ship-europe/

In other words, there were 7000 cars in transit on Dec. 31 and/or being used as demo or service loaner cars.

That number will of course increase year-on-year, as Tesla’s production and sales continues to ramp up. You have to be an outright Tesla basher to mis-characterize that as a bad thing!

And I remember, Doggy, when you were merely somewhat skeptical about Tesla’s claims, rather than being the outright serial Tesla basher you’ve turned yourself into. 🙁

Pushmi – On 12/31/18 they had 1010 in transit to customers and just under 7000 unsold. I’ve never heard of a Model 3 loaner, Musk was adamant that loaners should be high end P100D-type cars. The 100 or so US stores typically have a Model 3 in the showroom and one or two for test rides. They also had a few in overseas showrooms at the end of 2018. Those few hundred cars are indeed included in the nearly ~7k of unsold new inventory.

I never said inventory was bad. To the contrary, I’ve said it was smart to carry S/X inventory, as Tesla has for years, because it lets them capture customers who want a brand new car but can’t or don’t want to wait weeks or months. Every time I say this, USING NUMBERS FROM TESLA, people like you call me a serial basher and Nix flips out completely.

DroopyDogWorld keeps outright ignoring that those “unsold” numbers also include the thousands of cars built intentionally for foreign markets that were all delivered to this dock within one business week of the end of 2018 production:

https://d2t6ms4cjod3h9.cloudfront.net/wp-content/uploads/2019/01/111-4.jpg

The fool keeps implying that Tesla quite clearly batch building for a foreign market at the end of 2018 somehow is a sales demand problem. Sadly, no matter how many times you point out to the fool that Tesla couldn’t even sell cars built for EU and China markets in the US even if they wanted to, the fool will keep trying to push his bullpucky demand meme.

https://insideevs.com/shipment-tesla-model-3-big-ship-europe/

In your haste to insult me you once again ignore basic facts. Tesla did not even register overseas VINs until January 2, 2019 (aside from a handful last fall for homologation testing). There is ample photographic evidence of thousands of Model 3s on lots across the country around New Year’s, but not a single photo of international Model 3s in lots at or near Port 80 until more than a week into January. Where did they hide all these ship-bound cars you imagine they built in 2018?

In your vast ignorance, you falsely believe that Tesla is required to register foreign VINs with the US Gov’t before they are manufactured.

They aren’t.

They have all the way up until the time of export to register them.

You double down your ignorance with the old “if there isn’t a photo, it could have never happened” bullpucky. How many times do I have to debunk that exact same BS claim from you over and over? You were wrong on that claim when you said there would be no Model 3’s at the reveal, and you’ve been wrong ever since.

No pic’s of MR before release, but we know they had to test them and govt certify them long before. Every time Tesla does something new, you act shocked that you were wrong because nobody got pics.

I don’t see Tesla putting a $35k Model 3 into production on a temporary basis just to satisfy reservation holders. Not to say that’s impossible, but my prediction is that Tesla won’t put the Standard Range Model 3, without a mandatory PUP, into production until they won’t lose much money on that lowest trim level. I don’t think Tesla has to make a profit on the very lowest $35k trim level, because other auto makers don’t make a profit on such “stripper” cars sold in low numbers, and Tesla doesn’t either. As Nix correctly pointed out above, the bottom line for any auto maker is the average profit margin, not the profit margin on any individual trim level for any car, and for most auto makers, not even the profit margin on any one single model.

Tesla sold 40kWh Model S for a while, so it’s not like limited run $35K version doesn’t have precedence. Despite what Nix say, I’d rather have Tesla make profit on ALL their cars, but at the same time not disappoint reservation holders’ hopes. Limited run (still many thousands) could be a good compromise.

To be clear, I’m NOT saying that the SR will be built at a loss. But having some lower margin trim levels and other trim levels being higher margin is the automotive industry norm. It would actually be shocking if the margin were the same for every trim level and option choice that Tesla builds. That simply doesn’t happen anywhere in the automotive industry.

Tesla likely sold way more than “many thousands” in just the first few hours of SR and SR Plus sales.

On several occasions Elon Musk has admitted to making boneheaded mistakes and yet some people like to say he has an incredible ego. Are they jealous of his superior intellect?

You mean like how Elon’s super high IQ created its own production hell for the Model 3 because Elon failed to understand what robots can do and what robots cannot do?

Source: from Elon’s own mouth

Or Elon’s arrogance to go to production of the Model 3 without the necessary pre-production tests?

Source: https://autoweek.com/article/green-cars/tesla-wont-test-model-3s-assembly-line-starting-full-scale-production

Super High IQ + Arrogance = Bad Mix

You missed the point – he admitted to his mistakes – from the inability to automate the Model 3 line entirely, to the bells and whistles on the Model X… his behavior directly contradicts the assertion by the SA blogger.

.

His strategy is aimed at his personnel: push bright people exceptionally hard to do the impossible. Many “impossible” tasks turn out to be only difficult but can be overcome by being very clever and often it works. Sometimes it doesn’t.

It’s identical to Steve Jobs. But more important for human society.

If he was not arrogant he would have accepted widely held beliefs that orbital class reusable rockets and cool, sexy electric cars are not possible. Tesla and SpaceX would not have existed.

I’ll take Elon’s “arrogance” as he builds out 300,000 to 500,000 EV’s a year.
Yeah, that’s “arrogance”, actually achieving what you tell the world you’re trying to achieve.

Again, Projection.
Take your arrogance home with you.
And examine your envy.
Don’t like his success? Try to get something done yourself.

Elon does have incredible ego. For example, he claims to be the “founder” of Tesla Motors when he wasn’t even part of the organization when it was founded. His ego also lead him to believe he could build a touchless high-speed auto assembly line moving at 5x or even 10x the rate seen in any other automobile assembly plant.

Now, maybe Elon needs to have such an incredible ego, because that has lead him to go ahead and do things that people told him were impossible Things like reusable booster rockets landing on their tail. Things like growing a startup EV auto maker into a company that is putting all of the legacy auto makers to shame, and is growing its market far, far faster than any other auto maker outside China.

But Elon’s ego is definitely a two-edged sword. Yeah, he’s accomplished things which conventional wisdom said were impossible to achieve in any practical sense. But Elon also has convinced himself that he (or his companies) can do things which truly are not possible, at least not with today’s technology.

Elon is definitely one of my heroes… big time! But I’m not blind to his faults.

Elon put his financial health on the line, and succeeded.
He’s earned only admiration.
To give him anything negative, you have to look at Your Issues and your mental health.

You have confused admiring someone, and viewing him as a hero, with outright uncritical hero worship. Elon isn’t a god, and like all humans, he has his faults. Ignoring those isn’t a virtue.

For the record, the space shuttle was mostly recovered and reused, only the liquid fuel tank was left to burn up on each launch.

No, the Space Shuttle was not reusable to nearly the extent that the public was lead to believe. NASA had to rebuild much of the ship for every launch. They even wound up cannibalizing parts off of other shuttles to put them on the one that was being prepared for launch. Also, the solid rocket boosters wound up being more expensive to re-use than the cost for disposable ones. The Space Shuttle was originally conceived with good intent, but it wound up being very much a result of a “design by committee”.

Contrariwise, Elon wants to make commercial spaceflight a reality, using the same sort of economic model and turnaround time as commercial airliners today.

You can read a lot more about this approach in the eminently readable (for those who have an interest in space programs and rocket science) LEO on the Cheap.

https://upload.wikimedia.org/wikipedia/commons/7/79/LEOonthecheap.pdf

Yes, the part about his ego requiring a 35k base SR was dumb. Tesla never released the 89k Roadster and only faux-released the $49,900 (after tax) Model S. Neither “crushed him”.

With European and Asian deliveries in full swing, Drumpf stumbling into delaying tariff hikes, leasing coming soon, and strong/steady demand for Tesla’s ’round the world, the 35k Model 3 is just around the corner.

It’s a catch 22. If demand is strong around the world for the higher end models the 35K will wait.

Being a public company, they can’t do that, really. The promise has been pushed back multiple times to being at some point this calendar year. He can’t go beyond that, even if the first quarter after production starts shows a slight loss as a result. At least, that’s my gut feeling. For a short time, the stock would drop, but it would come back once people read the factual reports about how little the loss (hopefully) would be, and that it would be solely because of prioritizing the base trim for the domestic market.

Do Not Read Between The Lines

It would have to be ridiculously strong compared to the USA.

The US market is a premium market and already well past the high-end backlog. They’ll eat through the global backlog quickly, Tesla needs to get to the SR base fast, both for demand and margin.

What is a drumpf?

Donald trUMP’s parents’ name.

Tesla untapped revenue source:
I wonder how many Tesla car owners did not buy the $5K Enhanced Autopilot option like me? It’s $7,000 if added after delivery. I would think if the number is high and Tesla needs cash, they could offer a one-time deal to add it for $5K or less.

NPNS! SBF!
Volt#671 + BoltEV + Model 3

I think a clever variant to your idea is to lease software only. That way it can be turned off if payment is missed. Maybe some would buy this if it did not add to the upfront price. Little risk and capital investment for Tesla given all the hardware is there.

Nelson,
I didn’t either. But about two days after taking delivery (last week) I got a message about a free 30 day trial of Enhanced Autopilot. After that if I decide to buy it I think the purchase price was only $5500.00.

That offer would produce cash, but zero revenue because Tesla defers al revenue on FSD sales.

Not FSD, Enhanced Autopilot.

Oops, I misread.

EAP take rate was very high (80-90%) until MR came along, so I don’t think an EAP deal for current owners would move the needle. FSD take rate was pretty low, if they actually deliver some FSD and get people excited a ‘one-time’ trial/discount deal could generate a lot of cash.

Still no RHD Model 3’s then?

Not for several months, anyway. Shipments to Europe and China started just a few weeks ago; it will be some time, maybe a year, before enough of the reservations and pent-up demand are satisfied that it would make sense for Tesla to start shipping TM3 to right-hand-drive countries.

Tesla production for the past month has been well over 7000. (how could you know with the all out FUD assault to bury the positives)

Bloombergs trailing 13 week avg has shot up by over 1000 from Q4 to 5850/wk and has been moving up by 50 or so a day as starting the 3rd week of January Tesla has been on a production boom with WELL OVER 7000/wk SUSTAINED FORTHE LAST MONTH! As December’s <5000/wk drops off the avg. expect to end the qtr pushing 7000/wk for Q1. (Bloomberg model 3 tracker)

Tesla has now achieved production scale necessary to make the standard range Model 3. When demand for the higher end models runs course in EU/China/Domestic and slides below 75% Fremont max capacity….expect the release. I expect July 1st initial delivery with a mad rush to satisfy domestic reservations before.

I don’t think it really has been over 7000, but I bet it is above the 13- week trailing average. Anything above 6000/wk of the high-end variants has to be profitable. I don’t see that they have a choice to make the SR for the US market in Fremont, but they have to make the SR for the rest of the market at the gigafactory 3. Things are going to come out of the SR to reach profitability which is OK. As many have stated, we won’t see it until all the high-end demand is met. It’s just good business.

“Tesla production for the past month has been well over 7000.”

Just for the Model 3? Very probably not. Don’t believe what you read on Bloomberg’s so-called “Model 3 Production Tracker” site; it’s often wildly wrong.

As I recall, Elon has said that production is maxed out at about 7000 Model 3’s until they can bring the Shanghai Gigafactory online, which (despite Elon’s over-optimistic projections) won’t happen until late 2020 at the earliest.

This is what I think, for as long as the model 3 demand exceeds supply, we won’t see a cheaper option, simple economics. Once model 3 supply starts to exceed demand, walla a cheaper option will be available and maybe leases once that demand goes down. Naturally that is if a cheaper model 3 can be made profitably.
Have you ever walked in a car dealership and they try to sell you the base model? No.

Yup. That “three to five months away” for the $35k Model 3 is a floating target, which probably will keep receding until Tesla has exhausted the pent-up initial demand for high trim level Model 3’s.

Not walla. Voila, it’s French.

BS it would hurt Tesla’s profit to launch the 35k USD now. Not coming until it can be done profitable and not deminish sales of higher priced versions. So sometime next year.

I’m afraid that will be too late. Being a public company, he can’t drag it out forever. It has to come out this calendar year, I would think, or the stock will slip and maintain a lower 52-wk average. I would think that they can’t afford that, even if it means reporting a net loss in Q3 2019 due to prioritizing domestic sales of the base trim. My guess is that the markets will be more tolerant of that than simply not offering it at all in 2019.

Lol

Fortunately for Tesla, most actual investors in Tesla stock don’t agree with you.

The price of TSLA won’t suddenly plunge if the $35k Model 3 doesn’t appear for a year or two.

So investors would prefer Tesla sell 35K Model 3’s at a loss earlier, than Tesla sell 35K Model 3’s at a profit in 6 months or even a year?

Buyers might prefer that (and shorts who like to talk down the stock), but not stockholders!

Bingo! It’s the same basic mechanism at play with Legacies not wanting to embrace EVs because they don’t want to cannibalize their higher profit sales. (I would also contend that they don’t want to put their dealers in jeopardy — lots of EV sales = greatly reduced dealer profits from the service department = dealership armageddon.)

I doubt Tesla is interested in burdening its production resources with a cheap interior option that might not be all that popular and a 220 miles battery that is lower than your average Korean ICE conversion offers in range these days. Maybe keep it simple, discount the current medium range to just below $40K and call it a day. Tick even a few boxes on the SR and it would have been north of $40K anyway.

I bet they will with all that roll out of the gigafactory 3. Your point is solid for Fremont though and they are gonna have to do something for the second half of 2019 from that facility.

“Seeking Alpha seems to think…”

This makes no sense at all. Seeking Alpha — or as I like to call it, to prevent any mention in my comments from driving up its Google rating, “Reeking Alpha” — isn’t a news source, it’s just a social media site for those promoting stock investments, long and short… when it comes to Tesla, mostly short.

Saying “Reeking Alpha thinks” it’s like saying “Facebook thinks…” Null logical value.

So, if a bunch of people posting to Reeking Alpha think that Tesla will soon put the Standard Range Model 3 into production, then the question should be: What is their reasoning for this? What evidence or logical inference points in that direction? Those are the pertinent questions.

“The story predicts that Tesla will release a related statement by March 15, 2019.”

Now this is at least grammatically correct: A story on Reeking Alpha predicts this. Not the site itself.

But that’s just a reference to Elon’s “Ides of March” tweet. Just a tease. Will Tesla make an important announcement, or do a Reveal, on March 15? Who knows? This is just playing Elon’s game; obsessing about his tease.

Personally, I’m content to wait and see.

“…….one note worth covering its Tesla’s 2019 convertible bonds. On March 1st, $920 million worth of convertible debt will come due. If Tesla stock is trading at or above $359.88, the company can elect to pay back that debt with stock rather than cash.”
https://www.thestreet.com/investing/stocks/tesla-decline-causes-concern-for-almost-1-billion-in-bond-payments-14839130
————–

So, if he’s going to bounce the stock price with an announcement, .. it needs to be done tomorrow, … no?
?”Elon Tusk” ,… as in an elephant remembers ? (his promises)

That’s completely wrong. Tesla already elected to satisfy conversions with a 50/50 mix of cash and stock. So even if all bondholders converted Tesla would still pay roughly 460m in cash. But nobody will convert. The formula for the amount of shares delivered is based on the 20 day trailing VWAP. The stock would have to trade at something like $1500/share tomorrow for conversion to make sense.

Tesla will pay 920m in cash.

Edit: I also think the deadline for bondholders to notify Tesla if they want to convert or simply redeem was yesterday, or possibly today. Don’t quote me on this part.

Ok. Thanks for the info.

From an article updated 1 hour ago:

“According to regulatory filings, Tesla has $920 million in convertible senior notes set to expire on March 1, at a conversion price of $359.87 per share. Tesla’s stock hasn’t traded above $359 for weeks, and closed Tuesday at $297.86.

If the shares were valued at the conversion price, the bonds could convert into Tesla stock, and Tesla wouldn’t need to pay the debt in cash. But in the absence of a major share rally this week, the electric vehicle maker will have to make the payment in cash.
https://www.cnbc.com/2019/02/27/tesla-faces-a-cash-crunch-with-a-920-million-debt-payment-due.html

Which I think means I’m not completely wrong?

The article is wrong. Details of these things are buried in the indenture and prospectus. Journalists never read that stuff.

Had the stock traded above $359.87 often during the past 20 days a lot of bondholders would have converted. But that ship has sailed and not even a “major share rally” can bring it back to port.

Ok. I see a more detailed article here, which is as you say (20 days, so too late for stock price rise to make a difference) :

Tesla to Pay $920 Million Bond as Musk Tweet Bars Stock Rise
https://www.bloomberg.com/news/articles/2019-02-27/musk-s-tweets-all-but-assure-cash-payout-for-920-million-bond

It will be funny if the stock price jumps above $360 between now and when the bond distributions actually become available to bondholders, and stays above $360.

If that happens, bondholders would have been better off to get the shares.

But the funny thing is that the goalposts have been moved yet again. Now the folks who opined loudly that Tesla would go bankrupt if they had to pay these bonds, have all been proven badly wrong.

What you won’t see, is these folks posting about how wrong they were….

Most of what I’ve ready on Seeking Alpha is pretty much garbage analysis, both bullish and bearish Tesla. I would suggest not paying attention to it, let alone using it as a source for a story.

Seems that the Mid range will be $35k in a few months. 220 miles for a Tesla in 2019 is too little. Why else would they remove it from the website.

Mid range is $37,900 without premium package right now, heck probably less now.

Seems plausible

“Mid range is $37,900 without premium package right now”
Tesla does not offer a mid range without PUP, so this $37.9k Model 3 is fictional.

Elon said less than 9 months ago that Tesla would “die” if they released a $35k Model 3. To go from “dying” to releasing a more equipped version of the Model 3 for $35k in less than a year would be a miracle.
Don’t confuse what Tesla can theoretically do with what they will actually do.

Sometime this Summer. Musk has an incredible ego. What is that supposed to mean. If he thinks highly of himself, at least he deserves to do so. Or does it mean that detractors and mean spirited individuals who themselves make little to no contribution, except to question everything he does, find him irritating.

“notoriously Tesla-negative outfit Seeking Alpha”. I see this kind of comment often here. I don’t know if this inaccuracy is due to ignorance or it is willful, but the truth is this: Seeking Alpha is just a platform where hundreds of authors publish for a fee. You don’t have to be an expert, just provide content that attracts clicks and gets you $50. While the majority of the Tesla articles and comments are negative ( as a Tesla investor I read those almost daily and often comment on their hatred and stupidity), a sizable minority ( including today’s author) are pro-Tesla. So it all depends on the author.

The percentage of positive vs. negative comments doesn’t tell the whole story. It’s true that, at least when I was reading Tesla-related comments on SA on a daily basis, perhaps 18% of the comments were pro-Tesla, about 80% were negative, with maybe 2% neutral. Regarding the blog posts — that is, extended personal comments pretending to be “articles” — those were very slightly more often pro-Tesla, but very, very seldom objective neutral analysis by someone who was actually knowledegable about the subject. Perhaps 1% were both objective and well-informed.

The real problem isn’t merely that 80% are negative; the real problem is that the 80% were mostly composed of outright lies, intentional FUD (for those who don’t know, that means disinformation as part of a negative propaganda campaign), and at best half-truths. The pro-Tesla comments mostly stick to the truth… because, really, there’s no good reason for Tesla supporters to lie. The truth serves Tesla fans quite well.

I occasionally look back in a SA; I don’t see than anything has changed about the ratio of Tesla basher vs. Tesla cheerleader comments, nor the tendency of negative comments to be composed mainly of outright lies or, at best, half-truths.

I agree that your percentages (80-18-2) and your overall assessment are right on. Some of the commentators are concerned about Tesla’s financials but I think that most have an ideological ax to grind since they are against ALL EVs.

Tesla could easily offer a $35,000 model if it was imported to the United States from the new plant in China. I am sure the production costs there would justify the promised pricing level. Let’s see how trade costs go – I am sure Ford (Focus) and Buick (Envision) are also in the game.

Seems like we heard that “soon” word some 3+ years ago.

Why is this even an „article“?

Isn’t he due to make a statement in the next few days ?. Who knows, perhaps the release date for the $35k Model 3 is it.

The company is clearly focused on cost efficiencies right now. I suspect they have a treasure trove of savings to be found given the mad chaotic rush last year to ramp up. I wouldn’t be surprised to see them get close in Q4 with very little compromise to margins.

Ron Swanson's Mustache

I just checked out the Tesla configurator on their website, and if you go with all of the base options, the price “after savings” is shown as $34,850.

Has that been the case all along?

Granted, the price before savings is $42,900, but that other number does appear to hit the $35K mark, even if it’s a little bit disingenuously incorporating cost savings from fuel and maintenance.

Thoughts?

Yes, it’s been the case for some time. The after savings price was even lower late last year as the after-tax price was 650 less and I think they had slightly a higher number for gas savings.

Look closer. That’s not the actual price; that’s the claimed total cost of ownership, including estimated (and probably optimistic) savings over using gas as fuel.

Last I saw, you could find the actual price at the bottom, in a smaller font.

I’m very, very sad to see Tesla resort to such misleading advertising. It used to be that they didn’t pull that kind of crap.
🙁

Speaking of ‘selling at a loss’ the question has to be whether there is any reason to assume costs have been lowered enough from Musk’s statement that there would be a loss if it went in to production – not that long ago. And could Tesla produce at break even? I doubt that. These aren’t ‘choices’ or ego, these are financial issues. But we’ll certainly see. I’m guessing late 2020, if at all.

Tesla will probably have to repay a loan of $1 billion soon as the stock price (one of the conditions) is below the required amount for a continuance. Given Tesla patterns I’d guess a ‘Y’ would be no earlier than some time in 2021.

But using business dynamics to predict Tesla is no popularity contest even if you’re right, speaking of egos.

First, I’m not sure why anyone waited for a stripped $35k version, last year was the time to buy, when they still offered the LR RWD. After federal & state tax credits, mine cost $40k (plus delivery, taxes, title). If an SR is released, it will be after the federal tax credit is mostly/completely expired. And, my state’s credit has been exhausted. So, for an extra $5k I got all the features and 100 miles extra range. That’s what made me jump last year and go to the dark side!

Second, I believe they’ll sell the SR. But, a $35k version will not sell in more than token quantities anytime soon (if ever). Tesla just can’t afford to do it. If you still have $1000 sitting with Tesla, it’s time to either buy the MR, or request your money back and buy something else.

I’ve Been predicting for awhile, Q2 for the SR battery+PUP, and near end-of-year for true base model.

I don’t know if they are going to add AWD to mid-range and standard-range. I hope so.

$35,000 SR plus PUP, which was $5,000 when it was a line item, would be $40,000. MR is now $42,000 including the PUP features. If it were to exist, that SR plus PUP would be a foolish purchase.

Do Not Read Between The Lines

$2.9k + taxes less, a bit cheaper to insure and more efficient.

A more expensive option is always a foolish purchase if the extra price doesn’t provide you with matching extra value.

The MR’s key benefits over the SR would be range and Supercharging speed. So whether it would be “foolish” to purchase the SR would depend on the balance between the additional cost and your need for extra range and faster Supercharging.

I just want to point out that Seeking Alpha is an investment site. It has both Tesla bull and bear articles. Most of them are based on conjecture simply to move the share price one way or the other depending on the investment thesis. I would not use them as a source for the 35k Tesla Model 3

Tm3 SR arrive in 3-4 months in usa

If Tesla could pull it off, it would work wonders for them to announce open ordering of $35,000 Tesla TODAY.

I ask for my Tesla model 3 deposit back last week.

Tesla VW

If I can get one within the next 6 months I would take it instantly. For now I’m eyeing the Kia Niro EV.

Orders starting on March 1, delivery guarantees ahead of Q3 gets the full (half) tax credit. A $2,500 deposit from 200,000 buyers in Q1 equals $0.5B. Pay the bonds and still eke out a small profit for Q1 to get listed on the S&P500, then it’s smooth sailing to world domination.

However, Elon Musk has an incredible ego, and to admit even slight failure would crush him

amazing.
Just amazing.