Elon Musk Down Sells Model 3, Tells Potential Tesla Buyers To Buy S

Tesla

MAY 25 2017 BY ERIC LOVEDAY 68

S Over 3 Tweet

S Over 3 Tweet

It almost seems as though Tesla CEO Elon Musk doesn’t want would-be Tesla Model 3 buyers to choose the lesser car.

In a series of Tweets and the release of a Model 3/Model S comparison chart to Tesla salespeople, the automaker is clearly trying to get potential Model 3 buyers to opt for the Model S instead.

From a financial point of view, it’s obvious why Tesla is taking this approach, but is there some other reason why the automaker is so dead set on pushing likely Model 3 buyers towards the S?

Tesla Model S vs Model 3 Comparison sheet (via TeslaModel3OwnersClub/Imgr)

While Tesla would prefer you choose the S over the 3, for some the sheer size of the S is just overwhelming. And this seems to be the only reason Musk believes you should pick the 3 over the S.

Basically, Tesla is saying the S is better in all regards. Only choose the 3 if you must have a smaller car. From this we can conclude that the Model 3 will not beat the S in any category, including range, despite being lighter. Tesla will keep the S as the halo car. The 3 will always play second fiddle…that is, unless cost is a major decision in your buying process.

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68 Comments on "Elon Musk Down Sells Model 3, Tells Potential Tesla Buyers To Buy S"

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Makes sense to sell what you actually have to sell. Especially when the profit margins are much higher with the S/X.

Now is this a sign that S/X demand is waning a lot more than Tesla wants? So Elon has been pushing S/X sales hard lately by undercutting the 3? It’s one thing to promote one product over another. What Elon seems to be doing is actively discouraging people from waiting to buy a 3.

Paul Stoller

Certainly sounds like soft demand for the S, which isn’t surprising as the design is starting to become a bit stale. It will be a challenge for them to keep demand up in the longer term without a full refresh of the model.

mrdoubleb

Maybe… maybe not.

Every Model 3 reservation made today is a sale in 2019. Every Model S/X reservation made today is a sale in 1-2 months (depending on your region).

Until they start working off the M3 backlog, there is no point in further increasing it. This doesn’t necessarily mean there is a significant drop in S/X reservation numbers, but there can still be some production capacity there vs. selling 2019 production.

Pushmi-Pullyu

Bravo, sir!

If the world were a better place, your post would end all the speculation about why Tesla is trying to encourage more Model S/X sales over Model 3 reservations. You have hit the nail precisely on the head.

Sadly, it won’t.

Plus, EV Insurance Rates, or Tesla Rates, as shown for current Model S, can be less, too!

See http://www.businessinsider.com/how-tesla-self-driving-cars-are-changing-insurance-industry-2017-5

And since Model 3 AP has been said to be as capable as it is in the Model S or X, this benefit should follow to the Model 3 quickly, as well!

However, if the Model S could be leased for just a small Premium over the Model 3, like say, $50 a Month, even if such rates required long leases, like 5-7 years, the ‘Go Model S, & Get it Now!’ Pitch could be a lot more powerfull!

As I don’t currently see such as a reality, let’s see if such a Busines Model appears at tesla.com before December, 2017, when Model 3’s are actually out there, in rapidly increasing numbers!

needa

Why buy today when you know interior options, maybe even a refresh, is coming in a few months? Seems like he is anti-selling both.

unlucky

Many Model 3 reservations today are sales in 2019. Certainly not all. Audi will have their EV SUV out by then. Other companies will siphon off Model 3 reservation holders before 2019.

Taser54

Elon doesn’t care about profits, try again. 🙂

pjwood1

Yeah, but he cares about expanding. The >20% MS gross margins have helped do that, a lot, without much larger capital raises. If M3 pulls a cannibal on MS, Tesla loses internal funding.

Get Real

More fact-free FUD from a serial anti-Tesla troll.

Taser

More personal attacks violating the sites TOS. Well done.

TomArt
I do not understand the ongoing orgy some people have of jumping on the conclusion that S sales are soft…seriously, people?!? Back in 2015, the S took the crown as the top seller in North America and western Europe. The market is already saturated!!! Do NOT expect S sales to keep growing like they used to!!! Steady-state sales for the S have been reached, at least in the developed world where the S is available. It’s too soon to determine whether that has happened for the X, since it’s only been available for about a year. My guess is that Musk is making sure that people understand that the 3 is not better than the S. Of course it’s not, but there seems to be a perception (or at least Musk thinks it’s there), that the 3 is going to be superior in any way other than a more convenient size and lower cost. A 5-series BMW isn’t better than a 7-series! Less luxury, less speed, less horsepower, smaller size…etc. why would it be any different for Tesla? At half the starting price, they can’t afford to have the 3 better than the S! If anything, the reasonable read between… Read more »
Miggy

But the Model S can’t Tow.

Not being ‘Tow Rated’ is not the same as ‘Can’t Tow!’ Many people put hitches on the 2 Seat Honda Insight, people put Hitches on the Prius, too. These are not tow rated either!

I have seen video’s on hiw to put a ‘Hidden Hitch’ on a Model S, too!

Now, as to Towing, Elon did say the Model 3 will be able to Tow, but how much is yet unknown!

Pushmi-Pullyu

I suggest you look at it from a different perspective. It’s not that demand for the Model S is softening; it’s that Tesla is continually ramping up production, and it needs demand to ramp up at the same rate.

Clearly there is a limit to MS demand, or at least a limit to how much demand there is without using paid mass media advertising. And it seems Tesla has already approached that limit, or else Tesla wouldn’t have recently sold a new, lower-priced Model S60. Tesla has now phased that out, perhaps for the purpose of creating a very clear difference in the market for the MS and the M3, or perhaps to temporarily reduce demand for the MS so Tesla can concentrate on tooling up for the M3… or more likely, some combination of motives, some of which I may not be able to guess.

Bottom line: Demand for the Tesla Model S isn’t “softening”, but neither is it unlimited.

Al

Check ModelS/X sales numbers. US sales peaked 3rd 2016 and have declined every quarter since. World wide sales to follow same trend shortly.

Pushmi-Pullyu

Al said:

“Check ModelS/X sales numbers. US sales peaked 3rd 2016 and have declined every quarter since.”

Huh? Dude! 2016 was last year. Perhaps you’re not aware that automobile sales are highly seasonal?

“World wide sales to follow same trend shortly.”

Sorry to squelch your Tesla basher fantasy, but in the real world, Tesla keeps expanding its production — and sales — at about 40-50% every year.

CLIVE

Model S is huge.

I do not have a soccer team of a family to haul around like Elon does.

(⌐■_■) Trollnonymous

It’s a Boat!

I like to refer to it as a land yacht. 😉

GeorgeS

It’s a land yacht. It’s a boat. Its huge!

Yeh yeh blah blah blah.

I can see why bro would say that since he drives that little teeny bolt. Its all relative. IMO it’s not huge.

Try parking your S in DC somewhere, then come talk to me. 😉

GeorgeS

Hey bro,
It’s a long drive. Besides i have no desire to go to DC. I don’t have any problem in phoenix parking it.

The article is about elon down selling the m3. last time i looked Gm wasn’t having that problem with the boltev:)

“last time i looked Gm wasn’t having that problem with the boltev:)” and yet, BoltEV sales, are not yet lined up and rolling off the lot faster than they can deliver them, in California markets, yet!

Get Real

And I suppose that makes your Bolt a dinghy!

TomArt

Here in the US, the S is rather average when you factor in all the SUVs, minivans and urban cowboys.

My grandparents’ ’92 sedan de ville is a land yacht by comparison. Sure, the S is a “full-size” sedan, so it’s going to be bigger than average for sedans, but not for the US consumer fleet as a whole.

Hahaha…. like I’ve been observing for years, Musk is not in the car business in order to sell affordable cars at a slim margin.

Expect the Model 3 to skirt the very top edge of what people would consider “mid-price” or “affordable”, and that too, only after rebates, and only for the most bare-bones bottom trim of M3.

Dimensions reality check:

The M3 is 10″ longer than the Leaf (which is nominally a midsize, albeit an unusually-shaped one), and 21″ longer than the Bolt.

It is 9″ longer than the Hyundai Ioniq, its only current rival in the midsize sedan-like BEV segment. The Ioniq looks decent-sized (and sleek!), I spotted an ICE hybrid one in Jerusalem a couple of weeks ago.

The M3 is a tad longer than the Prius V, that inflated station-wagon-like version of the Prius. Of course, it is longer than all other Prii.

The M3 is an inch longer than the 2017 RAV4, which is longer than its predecessors.

It is a few inches shorter than the Camry and the Accord, which keep growing every model update.

In short, the M3 is a pretty longish midsize. It may be a “smaller sedan” in Elon’s world, but not in the world of the rest of Humanity 🙂

(⌐■_■) Trollnonymous

Good perspective!

alohart

The Model 3 is 27″ longer, 4″ wider, and maybe as much as ¾ ton heavier than our BMW i3 BEV which, for us, rules it out completely. But then, we don’t need or want to drive a large car. Tesla doesn’t seem to have plans for a compact EV, so by the time Tesla builds one (if ever), we’ll probably no longer want to own a car.

Boris

Where did you get those Model 3 dimensions from?

From this very blog post. It’s in the side-by-side S vs. 3 image. Look up 🙂

Boris

Thanks 🙂

GeorgeS

“From this we can conclude that the Model 3 will not beat the S in any category, including range, ”

Hmm. Not sure about this. The rumour is that enen though we will be limited in options, there will still be 2 battery sizes. I was hoping the larger battery would push the m3 range close to 300 miles.

TomArt

They can’t do that and justify the price gap. I have never assumed that a loaded 3 will overlap a base S for range. This is particularly true now that the base pack for the S is up to 75kWh.

GeorgeS

Tom,
I think elon said m3 only has room for 75 kwh of batts. I’m just guessing but i would think the m3 could get pretty close to 300 miles with 75 kwh.

As good as the Cd is on the Model 3, it may inspire aftermarket mods to even improve on that 0.20 number, or at least, try to!

Pushmi-Pullyu

“I have never assumed that a loaded 3 will overlap a base S for range. This is particularly true now that the base pack for the S is up to 75kWh.”

I don’t think it’s realistic to expect no overlap at all between M3 and MS. Assuming the base M3 pack size is 55 kWh, the larger size will surely be at least 70 kWh, and quite possibly 75 kWh or close to it. A M3 with 70 kWh is going to have a longer range than a MS with 75 kWh… you can bet on that!

But we can also be sure that the highest-trim M3 will never, ever have as long a range as the highest-trim MS in production at the same time. That’s not an engineering limit, it’s a marketing thing.

Priusmaniac

It would be nice to let both cars team internally compete against each other on simple physics possibility ground and see what comes out of it. It would be more fun than a blunt marketing decision to always have the 3 range lower than the S range.

agzand

Let me guess, it makes more sense to sell something for $69k, vs selling basically the same sort of thing for $35k? Doesn’t it?

TomArt

😀

Pushmi-Pullyu

I think the appropriate aphorism (or cliche) is “What the market will bear.” 🙂

Victor

He has to be very careful how he does this. By discouraging someone from buying the model 3 he may discouraged them from buying anything that Tesla makes period. When there is such a great price difference. It isn’t that easy for someone to change from the model 3 to the Model S or X.

orinoco

No official trailer hitch is actually a deal breaker for Model S. At least for people in Europe. As expensive as it is Tesla even should offer a high power socket (400V AC 3L in Europe) to use the car as a mobile power source for electric tools e.g. chain saw, mobile saw mill etc.

GeorgeS

Orinco,
Then buy a model X.

unlucky

US companies don’t tow-rate their cheaper vehicles. While you may be able to tow with them if you want to tow they want to sell you a more expensive car to do it with.

There’s essentially zero chance the Model 3 will be tow rated in the US and a very small chance it’ll be tow rated anywhere in the world.

So, when Elon says the Model 3 will be able to Tow, you figure, he will not sell it ‘Tow Rated’?

unlucky

I didn’t see him say that. But either way, yes I don’t expect it to be tow rated.

Musk says a lot of things.

Pushmi-Pullyu

“No official trailer hitch is actually a deal breaker for Model S. At least for people in Europe.”

Then Europeans need to stop being so provincial. No American auto maker makes a trailer hitch for sedans, and the Model S is labeled a sedan.

Can the Model S tow? Yes, it can; see link below.

The lack of “official” trailer hitch doesn’t mean you can’t put one on an American-made sedan, it just means a sedan’s frame (or unibody) isn’t specially reinforced for towing. If the trailer is light enough, any street-legal car at all can tow it. Heck, even motorcycles can, and do, tow small trailers.

If you really think you “need” an official trailer hitch from the auto maker, then as GeorgeS already said: Buy a Model X (with the towing package).

See: “Yes, Teslas Can Tow: Model S Trailer Hitch Installation”

http://www.greencarreports.com/news/1085475_yes-teslas-can-tow-model-s-trailer-hitch-installation-video

Priusmaniac

My comments are missing or censored. 1984?

I’m not sure if you are actually referring to something on the site…but we havent moderated anything specific.

However, we did migrate to a new server today, which took about 8 hours…and over that time any comments on the “old” server” were lost to the netherworld.

Priusmaniac

All right that’s fine.

I would have been surprised you could not say that even a VW Golf often has a hitch to tow a small trailer for a Jet Ski, a motorbike of some other goods; or that pick up trucks were rare in Europe and more a luxury leisure thing like a Harley Davidson.

Heeh, no you are fine, (=

You just got caught in the “IT black hole” of server migration. I tried to mention it on a lot of the threads on the “old server” but I guess I missed this one.

/apologies

WadeTyhon

I mean, I don’t read this as a knock against the model 3.

In the quotes shown here, he is talking about a man who is 6’6″. (Honestly, I might suggest a Model X for him.)

And another who is an existing Model S owner. Why would Tesla want to down sell the current Model S owner to a vehicle that sells for half as much.

And also importantly… they could buy an S right now. If they haven’t ordered a Model 3 yet then it could be a year or two. There is a chance Tesla might lose a sale if they wait too long.

It is just like a car dealer. If that dealer hasn’t gotten any Bolt’s in stock, or they find out the customer’s needs are better suited to a PHEV, then they might push you to a Volt instead.

unlucky

It’s been true all along. If you want a Model S, get a Model S. If you think you’re going to hold out and get a Model S equivalent for $35K you’re sorely mistaken.

The Model 3 will be a lower-end car. And I don’t just mean 6 seconds to 60 instead of 3.

Disappointed

I believe that you are much more likely to discover that the Model 3 is better equipped than it’s $35,000 competition !

I believe the Model 3 will be a $60,000 car
that you will cost you $60,000.

A $35,000 MSRP is the most unlkely “Promise”!

Pushmi-Pullyu

Another Tesla basher “Disappointed” that he lost his shorts. 😉

Get Real

Yep.

Undoubtedly just one of the existing serial anti-Tesla trolls posting more of their fact-free FUD under multiple usernames here.

Volt

I mean I’m going to get a 2014-2015 pre face lift CPO Model S once my Volt is done next year

I honestly do not want a Model 3. Happy its coming out but Model S is Daddy and the full package. Model 3 is the son.

I want Daddy. Model Superior. ha

Daniel

That’s exactly what I was thinking. My Nissan Leaf’s lease is ending. I was going to get a CPO S. But for fun, I test drove a Model S and used Autopilot.

That changes everything. Older Model S’s don’t have Autopilot.

So I wait for the Model 3 to come out so that I can get Autopilot.

Features for features is important… but Autopilot one ups them all.

GeorgeS

Volt,

“I mean I’m going to get a 2014-2015 pre face lift CPO Model S once my Volt is done next year

Model S is Daddy and the full package. Model 3 is the son.”

Right on Volt!

I still say a used S is the biggest bang for the buck….especially if you can find one from a previous owner. In some states that means you don’t have to pay sales tax. So you can be out the door at around 50k$. I’m very happy with my 2012. Plus you get free super charging. Get a 2014 and you have AP also.

Daniel

I’ve been checking CPO sites for a while. The cheapest Model S CPO with AP I’ve seen was around $70k. At that price point, it’s not worth it to get that over a new Model S.

But if you can live without AP, then you can get a P85 CPO for a hair over $50k.

fasterthanonecanimagine

IMO Model 3’s range will be above Bolt’s 238 miles – from a marketing perspective 241 would just be fine 🙂

Tesla 2-4-1 Pizza Model? “241 would just be fine”

Jason
Range has to become a non issue for EV adoption. When was the last time you bought an ICE car and asked for the same model with a bigger tank, or really compared the range of one over the other? For the majority of people you just know it goes about 600-700km on a tank, and that is plenty. Model 3 going 10mi further than Model S is not a problem. All the other factors that make them different are the real factors. Model X doesn’t go as far as Model S and you don’t hear a whole lot of blather about that, people understand they are a bit different, one is heavier and not quite as aerodynamic. I bet BMW 3 series and 5 series have about the same range, it is all the luxury and other features that set then apart. The biggest challenge for Tesla is repricing their cars as their battery prices drop. We all know battery prices are dropping,Elon makes a big deal about it all the time, so why has Model S price risen? Surely it should be stable or dropping. Anyway, so what if someone tells you to buy the model S over… Read more »
Pushmi-Pullyu

“We all know battery prices are dropping, Elon makes a big deal about it all the time, so why has Model S price risen? Surely it should be stable or dropping.”

If you read comments by Daniel above, you’ll get a hint! 😉

“Elon makes a big deal about it all the time, so why has Model S price risen? Surely it should be stable or dropping.”

Model S 60 cost $70k in Jan 2013.

Model S 75 cost $70k in May 2017. Has supercharging, autopilot hw, effectively the 2013 tech package, glass roof, led lights, power liftgate, etc. It’s faster, quicker, goes farther, charges more quickly, etc.

Not sure what you mean about risen.

JIMJFOX

Surprising how many people can’t tell apples from oranges, isn’t it?