Model 3 Will Push Tesla To Its Breaking Point



Tesla Model 3

Tesla Model 3

Tesla Model 3

Tesla Model 3

What doesn’t destroy you, makes you stronger…

There’s no denying that fact that for Tesla Motors, the Model 3 is its most important car to date.

A mass-market, long-range, semi-affordable electric car with a Tesla badge is certainly the plug-in we’ve all been waiting for, but will Tesla be able to pull it off?

Automotive News opines that it won’t be an easy task:

“…none of this is what keeps Musk or investors up at night.”

“It’s the Model 3 that does.”

“Tesla’s attempt at a mass-market, long-range electric car won’t have a groundbreaking powertrain or gull-wing doors. And yet this most mundane Tesla product will carry the highest stakes. It will push Tesla to its limits as a manufacturer and test investors’ patience with a perennially unprofitable company.”

To keep to the tight timetable, Tesla will blow through cash as it races to get the Model 3 into production. Any slip up along the way could be catastrophic, as that could lead to investors pulling out, according to several analysts.

“Tesla recorded $295 million in second-quarter capital expenditures and expects full-year capital spending to accelerate to $2.25 billion to support the ramp-up for the Model 3 and its goal of producing 500,000 vehicles in 2018.”

Musk is aware that being on time is vital. During the most recent Tesla conference call, Musk stated:

“I don’t expect us to be at full production on July 1. But I have to drive all suppliers and internal efforts to that date knowing that some will fall short.”

“And those that fall short will be cut out of the picture.”

Basically, either Tesla pulls off the Model 3 with a massive bang, or the electric car maker fails miserably. In a way, it’s getting close to do or die time now for Tesla Motors.

Source: Automotive News

Categories: Tesla


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175 Comments on "Model 3 Will Push Tesla To Its Breaking Point"

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Tesla is treatment for humanity’s oil addiction, therefore, Tesla should not be analyzed by the same criteria used for normal corporations.

Right, because profitability doesn’t matter. Being electric makes you immune from the harsh realities of math.

Not sure thats what he meant.

Sure sounds like what he meant.

I’m thinking thats what he meant.

Profitability doesn’t matter. This is a CLASSIC Market share strategy. It’s not like they don’t teach this in business school.
This strategy made Japan an electronic giant.
It’s also working very well for Amazon.

Until now, Musk prove us many times that he knows a lot more about math and finance than any “expert”.

Have you ever heard of Packard, Desoto, Willys, etc., etc. They were much bigger than Tesla was and maybe ever will be and hardly anybody even remembers them anymore. Tesla has a long ways to go before it’s proven anything other than it can get billions of dollars of investors money,

And in 50 years I expect Tesla will be gone too. So? Packard was a great investment *for a while*.

You left out that they make really awesome cars.

Really awesome $100,000 cars they can’t make money selling.

They absolutely could make money selling them. If Tesla had wanted to make the Model S and not develop future vehicles, it would be very profitable by now. The losses have nothing to do with the Model S. The gross margin per vehicle is big.

Um… you have heard of Tesla’s Gigafactory, I assume? If not I suggest you google it and then you might be able to figure out why Tesla ‘isn’t making any money’. But don’t feel too bad – hardly any other financial commentary on Tesla’s book-balancing mentions it either!

I see the parallels between Tesla and Packard, and that’s a good thing.

Packard built a hugely successful luxury car empire, which lasted over 50 years. Tesla holds the same promise of legendary excellence.

Ask the man who owns one.

Bad parenting is the cause of a whole lot of our oil demand and oil abuses. Who can tell me we “need” to use all the oil we do? Vacations? Car racing? Business travel to “see a customer” (ie. take them golfing), junkets, group meetings to talk about climate change, having more children becauase our religious leaders tell us to? How much oil did that little mistake use in their future lifetime? And did the little mistake cost his/her parents a quarter million to raise in 1st world?

Why don’t we look inside ourselves first to claim the reasons we all used oil in the first place. We can forgive but let’s not forget the gluttonous lifestyles we have lived, are living and probably will keep on living even when we buy an EV.

leaf blowers ….,grass cutters…huge SUVs(not taxed)huge cruise ships,powerboats(not taxed),outsourcing….(sending everything back and fort…..with uncontrolled shipping industry,,,,around the globe)antquitated diesel monster lorries etc.etc.Just a few examples of the tremendous wasting……..

Glad to know I’m not alone in asking whether we need to consume all that oil in the first place. This guy at work claims to be very green, rides his bike to the train station then takes it on the train and spends more than two hours a day commuting to work. Then for vacation he takes his family to the other side of the globe by plane. Also very pointless and annoying are all those noisy modified exhaust fossil cars and bikes driven just for the pleasure of the driver (I know some of them, they love their ridiculous loud bikes, irritate and intimidate other road users. Would love to smoke some of them quietly with a P100D) A real tragedy of the communs.

So to be green he shouldn’t ever splurge? Ever? What kind of logic is that?

I probably produce less solid waste, use less water, and less electricity than you… But I’m not green because I travel a couple times a year?


Rick said:

“Then for vacation he takes his family to the other side of the globe by plane.”

Well, if you had said a couple of times a year he rents a Lear Jet and uses that to take a vacation, then you might have a point. (Just like Al Gore and his private plane jetting around the world to talk about the evils of using fossil fuels.)

But taking a commercial flight, which in case you didn’t notice is a form of mass transportation, and considered on a per-passenger-mile basis is an extremely efficient use of fuel, certainly doesn’t wipe out all of his family’s year-round efforts to reduce their carbon footprint and their pollution.

Your post, sadly, amounts to the sort of “Perfect driving out the good”, all-or-nothing attitude which gives “greenies” such a bad reputation.

My personal favorite is Elon flying on his private jet, instead of a commercial flight, to attend a climate change in Paris. What a way to lead by example. 🙁

You found a bad one sven, good boy!

Kind of like when GM, Ford and Chrysler went to the Gooberment asking for bigass loans using their company Jets to get there?

Ford never did.

If their companies are on the brink of bankruptcy, I don want them wasting a day flying commercial.

Ford didn’t ask for a loan to my knowledge.

After all the CO2 reduction that his companies have save the planet from, he can flight on a carbon power plane if he likes.

With all due respect, that’s complete nonsense.

And, that viewpoint is exactly why the Prius and Leaf look and perform they way they do, because their auto execs believed that EVs are driven only by people who eat kale and dandelions by candlelight and then curl up in a ball at night to worry about the ocean’s boiling. So they made a car for those people — utilitarian, ugly, and slow. This is the Scarlet Letter theory — whip yourself in the back every night for your sins of gluttony, like mowing your lawn or playing golf.

The answer is not more austerity and guilt for everyone, but rather to just make a desirable and superior EV — which is exactly what Tesla has done.

That’s how you change the world.

Without Tesla, there would still only be the Leaf and the Prius (remember that the Volt was inspired by the Roadster) and they’d be selling ~30K units / year.

I’ve never been able to understand why so many people label the Prius and Leaf as “ugly”, particularly in a world full of SUVs. You want ugly? Hummer. F150. And I don’t mean because they’re gas guzzlers, but just because they’re so boxy and unstreamlined. How is that appealing? But I guess, to some eyes, it’s “muscular”. (sigh) They look like war machines, not personal transportation.

I kind of wonder if the perception doesn’t run the other way — that people hold a prejudice against “economy” cars, and therefore project ugliness onto them. But I dunno; all I know is that I don’t see it. You tell me.

Looks are totally subjective. I do agree with you.

Tall boxy hatchbacks are just not my thing. The Leaf has some curves the are a bit more offensive to me than the Prius. Many people agree, but not all.

But, the main point was that these are both utterly utilitarian, unexciting vehicles aimed at a very very specific demographic. Tesla is the first to blow the doors open to everyone.

Do you realize that TV and advertising catch much more attention of children and are much more convincing in 15 seconds than any parent or teacher is in a full quality time hour?
Do you realize how badly we are screwed by expert, well organized soft propaganda kindly call P.R. and Marketing?
Do you realize that this propaganda is the one telling you that parents are the only responsible?

Uh, don’t call your kids “little mistakes.” That is sickening and cruel, likely damaging. Seems like you could use a hug, though.

OK… but do you drive a Tesla?

It’s the new economy. We don’t need to make s profit. Lol

Only when the government pays your bills does making a Profit not matter.

Model S was “do or die”. They did, and lived.

Model X was “do or die”. Birthing that technological monster, was indeed even more painful– but they did and they lived.

Model 3. New platform, new batteries; basically a new vehicle architecture redesigned from scratch. Lots more potential for unanticipated pain. But, Tesla seems to be meeting milestones with the project, thus far. I think they took the lessons learned from Model X, to heart.

They will burn cash, they will certainly have some amount of delay, but Tesla now has a widely diversified product line with new services to offer consumers.

My Prediction: They will survive and the Model 3 will easily and quickly outsell the GM Bolt and Leaf 2.0 in total sales once production ramps, even being released earlier to market than the Tesla.

U are hopefully right. When do we get to see the finished M3?

I agree the M3 will outsell the Bolt. That’s an easy compare. There are unknowns yet that indicate many other makers will be making something also. And more of the financial shenanigans continue with a 15 Million share offering to come (SEC registration happened today).

“I agree the M3 will outsell the Bolt. That’s an easy compare.”
It is not a normal competitive market situation. GM is 100 times bigger with a lot more resources.
This is a cartel situation where the ICE car makers still write the rules and produce only a tiny amount of electric cars, even if they know for a fact that their behavior is worsening the climate crisis. The demand is overwhelming to get carbonless cars.

So why should they be allowed to do that?

The responsibility is with the governments and ultimately the electorates of rich democracies. Market-based-capitalist-communist China is doing the most to push EVs forward.

Complaining about corporations doing the profitable thing rather than the right thing is infantile.

Exactly… it is the goverments job to protect the people and the job of corporations is to make money eapecialy in the US where they are requieed by law to maximize profits for shareholders…

“requieed by law to maximize profits for shareholders” Often stated, but not true. Tesla would be breaking the law right?

Its a shame all Americans have to choose between to sort it all out is a lunatic and a female Mao Tse Tung. But… we’re straying into politics, here.

Not sure where you got the number GM is 100 times bigger, but the MarketCap of GM currently is 49.5Billion compared to Tesla 30.79Billion. It seems, GM is only a third bigger. Also, Elon owns SpaceX, which is quite profitable, and Tesla will shortly own Solar City.

Regarding the “perinnially unprofitable” comment, most companies would rather invest the money withing their company, rather than show profitability and pay taxes/share holders. Wouldn’t put too much weight on it.

Estimating the value of a company by the current market value of its stocks gives a very misleading picture of Tesla Motors. The overwhelming consensus of analysts is that Tesla’s stock is greatly overvalued. Even Elon has said something along that line in public, I think at least twice.

Tesla Motors has exactly one (1) auto assembly plant, and exactly two (2) models of car in production, neither of which is a high volume seller. GM has… well, a lot more, including some of the world’s best-selling cars and light trucks.

I think Tesla has a real chance of growing to the size of, say, the Ford Motor Company. But to grow as big as GM? Well, “never say never”, but I think the odds of that are not very good.

Eventually, Tesla will reach its limits to growth. It’s using the business plan, and Amazon continued to grow until it was the world’s biggest retailer before it became a cash-flow-positive company. But that doesn’t mean Tesla’s path to do the same in the field of automobile manufacturing is at all guaranteed.

Market capitalization is highly inflated for Tesla. Why don’t you compare the book value of Tesla with the book value of GM or are you afraid to face reality?

Stock market gave easy money. Much like a Trust Fund kid has his trust fund to leach off of every time they lose a few large at the casino.

Musk has said numerous times “Tesla will not need money” and then issue some billions in bonds or stock “for some reason”. They already spent the 2.4 Billion of Gigafactory money (was to be used for the full size of GF, not the 1/7 size they have now)

A tight credit market or share-running market and they’d be done like Fisker Motors. Money is lose – rain it down.

Musk said they wouldn’t need money??!?


Almost as amusing as you believing that Musk would ever really say such a thing.

They did say that they would not need to raise money for production of the Model 3. However, that was at least a full quarter before the reservation process began.

The following quarter, with 373k reservations at $1k each, they announced that they would cut the production ramp timeframe essentially in half. At that point, they said that they will have to raise capital in order to meet the accelerated schedule.

TomArt said:

“They did say that they would not need to raise money for production of the Model 3.”

I’m pretty sure you’re taking something out of context. Possibly you’re referring to an estimate that Tesla wouldn’t need to raise money over the next fiscal quarter, only. Nobody could seriously believe that Tesla could ramp up to about ten times its current volume of production without raising huge wodges of cash!

They didn’t “have to” do anything. They could have laid out a calm production ramp of 50k, 80k, 100k and so on into the future. The point of this article is that they get the money and build the Model 3 and somehow, start to move to profitability. If they cannot be profitable with Model 3 then their existence will continue to rely on selling stock to balance the books every year. That isn’t sustainable.

Yep. They spent money, but guess what? It didn’t disappear.
If you look at the balance sheet you’ll find it right there under ASSETS: 10 BILLION DOLLARS.

Another Euro point of view


So you found the total assets figure, $10B.
Now you need the find the total liabilities figure.

When found you deduct that figure from your $10B assets.

That will give you the net asset/net worth of the company.

Now you deduct from this net worth the total amount of cash obtained by raising capital (issues of new shares). In case what you obtain is a negative figure then it would mean that Tesla destroyed value, in case it is positive, it created value.

Just saying.

You beat me to it!

Actually, you should look at asset less liabilities. Some of the cash did disappear in the form of expenses exceeding revenue (Net Losses) excluding not cash expenses (ie depreciation). Hence the very large Negative Retained Earnings number in the Owner’s Equity section of the Balance Sheet.

That’s misleading. GAAP treats R&D expense as if it’s worthless, when in fact it creates valuable trade secrets. Which GAAP values at $0.

Another Euro point of view

Correct, those R&D expenses accumulated over the years needs to be added to Tesla fair value, maybe not 100% but a least a fair part of it.

Bonaire said:

“Musk has said numerous times ‘Tesla will not need money’ ”

I don’t remember Elon Musk ever saying that. In fact, just now I Googled that, and the only hit was your comment here.

Do you have a citation?

I don’t have a lot of time to go reading transcripts but he is quite coy. He will say “we don’t really need to…unless we might do something…” The Q1 2013 ER is almost apparent he is covering the cash raise of the first convertible bond that happened only days later to pay back the DoE. No, they didn’t pay back the DoE “9 years early” with profits. But with a new bond floated to do so and get out from the terms the DoE had imposed on them.

They need money, will need money and continue to need money. Is it for growth? Or survival? Was it intelligent money gathering or “impress the followers” money? Could they survive with a different ramp plan? Sure. But they need to look big “next year” to get big money “this year” to move into next year. This gets worse as time goes by.

They will sell some model 3’s but will they sell enough to start making a profit? It’s getting harder and harder for Tesla to raise more money and now with the SolarCity purchase they really have to show some real results. The competition is tightening, all car manufacturers are going into EVs in the 2018-2020 timeframe. People will get tired of feeding Tesla more money eventually.

Prove it’s getting “harder and harder”.
They’re having No Problem raising money.

Then why did Musk and his cousins have to buy Solar City high-yield bonds at 6% interest when Tesla is acquiring Solar City by the end of the year. Why did the bond market avoid purchasing Solar City’s high-yield bonds and require Musk and his cousins to pony up the cash for the bonds?

Huge upside in Solar City, once Tesla combines the solar panels, the battery, and the invertor, and sells the combined package in Tesla Showrooms. If I was Musk, I would have bought some as well. They would be the first company with an end to end product, and have the customer base(Tesla owners) to sell their product.

Why buy Solar City now at an exorbitant price/premium when Tesla could wait a short while for Solar City to be on the brink of bankruptcy, and acquire them for pennies on the dollar compared to what Tesla is paying to acquire them now?

Silevo factory in Buffalo is owned by the State of NY, and rented to SolarCity for something like $1/year for over a decade.

If SolarCity goes bankrupt then the state gets the entire factory back.

Musk wants the factory so he has to take the whole company before it goes bankrupt.

sven said:

“Why did the bond market avoid purchasing Solar City’s high-yield bonds and require Musk and his cousins to pony up the cash for the bonds?”

Wow, the anti-Tesla FUD trolls are getting really, really desperate to find something, anything to slam Tesla with.

The fact that SolarCity was in financial troubles is not even remotely connected to how easy (or hard) it is for Tesla to continue getting more investment money.

Anon said:

“Model X was ‘do or die’. Birthing that technological monster, was indeed even more painful– but they did and they lived.”

Actually, it wasn’t. Tesla could have survived the utter failure of the Model X. Unlike the Roadster, the Model S, and the Model ≡, Tesla didn’t have to “bet the farm” on the MX.

Elon’s visionary leadership is doing more to save our planet than all the blathering naysayers… We are behind him… The old guard just don’t get it…

Save our planet? Really? Please show your work. A lot of people “envisioned” electric cars and battery storage (basically grid storage in many forms) before Musk was at Paypal, in some cases even born. You give him FAR too much credit.

I always hated this logic “he’s not the first to think about it, so he’s no revolutionary” etc. etc. Yes, he’s not the first to think about it, but while everybody else just didn’t do anything, he actually did! It was the same with the Roadster/S/X, “it just uses a bunch of laptop batteries, there’s nothing new about it!” blablabla, then why didn’t anybody do it?

^^ Well said.

Well said 🙂

People who think are arm chair warriors who have never won a battle…
People who think and act are revolutionaries…

Sure he wasn’t first to come with those ideas, but no one else did that before Tesla. Good ideas are useless if not implemented.

Well, credit the founders of Tesla, then. JBStraubel was one of them. Musk was not.

AC Propulsion didn’t want to build a production car. That happened (Tesla) because of Musk and his PayPal money.

He’s the first one to understand that you save the planet by making things that are both SUPERIOR and DESIRABLE, which was unfortunately a novel concept to the entire car industry, Nissan and Toyota included.

It is absolutely not giving Tesla Motors (and Elon Musk) too much credit. Toyota marketed the Prius, and GM marketed the Volt, but does either company have the goal of ending the use of burning fossil fuels for transportation? Did either transform the public image of an EV from a ugly “punishment car” that only a die-hard “greenie” would drive, into a sexy and highly desirable car?

Heck no!

Go Tesla!

Since this Guy that wrote this article knows so much , he should offer to run Tesla ,,It’s easy to sit on the side lines & shoot off your mouth & “DRAMATIZE”. Everyone has an opinion ,& everyone tries to show he’s smarter than the other guy. Talk is Cheap . Keep in mind., this guy is writing simple articles , While Elon Musk is “Sending Rockets to outer space & Back” And building the “World’s Best” “EV’s ! So let’s “NOT” throw out the baby with the bath water Here! Elon has proven all the Nay Sayers Wrong so Far., Who should We Believe ?….l o l .. Tesla’s customers are patient & rally Tesla On & believe in the cause…So Too bad , for the short term shareholders & Day traders ! These people are “not” loyal to any cause, they are in it for “THE MONEY”..they would run this Company into the ground for a few cents of profit..Just Like the Drama Queen/King here that sells News/papers……What took ya so long!


“A mass-market, long-range, semi-affordable electric car with a Tesla badge is certainly the plug-in we’ve all been waiting for, but will Tesla be able to pull it off?”

While you wrote in the article concerning the product-intent Bolt:

“Range of the Bolt is still stated at more than 200 miles per charge, which makes this car the first affordable, long-range electric to hit the market when it goes on sale in just a few short months.”

Can you explain why the Bolt is affordable but the Model 3 only ‘semi-affordable’ (while being cheaper than the Bolt)?

The Bolt might actually come in cheaper for a while due to the tax credits.

Tesla will be very close to the end of theirs.

I also suspect the average selling price of the ≡ will be much higher than the Bolt.

arnenl said, “Can you explain why the Bolt is affordable but the Model 3 only ‘semi-affordable’ (while being cheaper than the Bolt)?” Without speaking for Eric, I think we are probably on the same page on this one. The Bolt EV will be available this December right out of the gate from ~$37,500 as a base, with most sales around this price-point. From this point, due to the dealership model, the price to the consumer will only be lower going forward. From this pricing, there will be deals, rebates, incentive programs, “you pay what we pay” days…nonsense like that. In a year’s time, you can bet people will walk into a dealership and leave saying “hey, I got a Bolt EV for $33,000…or a leased one for $299 a month with nothing down”. For the Model 3, yes the base is reported at $35,000…but Tesla has stated they aren’t making that out of the gate, they are making the premium trim levels for the world, then revisiting the base. No one will be leasing a Model 3 anywhere close to $299 in a year from now as they will on the Bolt EV…and leasing (with factoring in the fed credit… Read more »

Tesla recently raised the price of AutoPilot on the Model S by $500. There’s no word on whether the AutoPilot price increase will also apply to the Model 3, raising its $35,000 base price.

I did say “…and maybe a few more not mentioned”, lol.

My own 2p opinion (not speaking for the site at all), is that Tesla will make a $35,000 Model 3 available to order at some point, and they will deliver those cars at some point to make good on the promise…but it won’t last very long.

Quite honestly I’m not sure the base pricing (or “affordability” factor) for the Model 3 is terribly important. Most Tesla buyers probably won’t be looking for the base, and won’t be adverse to adding on ~$10k (or 20k) of options.

Those looking for the most affordable/cheapest long range EV money can buy a few years from now will certainly have other options than Tesla. Realistically, by the time Tesla delivers any volume of $35k Model 3s, the “value conscious” could probably pick up a slightly used Bolt for ~$20k.

As many seem to forget, there will be Stealership markups.
Remember when the Volt came out?
People were posting pics with $5K markups.

Yes, there were some dealer markups as high as $20K over MSRP at some dealerships. This forever left a bitter taste in the mouths of many PHEV buyers. Chevy dealers did a whole lot to damage Volt sales.

Meh. There’s a sucker born every minute. Some people have to be the first on the block to buy the latest gadget or trendy item. Other people waited 6 months or a year for the dealer markups to disappear and buy a Volt at or below MSRP. People also bought early VIN Tesla Model X’s to immediately turn around and flip them for a profit both in the U.S. and China.

Yeah right, a whole lotta if’s and maybe’s to justify this untenable position that is not justified by the numbers. It is 35k < 37.500k and there are many stories about early Volts selling for more than MSRP.

But let’s see what the future brings. For now, let’s deal with the facts that we have now.

Always happy to discuss and hear all opinions…even if they aren’t shared by myself, (= As you say, all things will be revealed in time. I was just explaining the viewpoint as you asked.

I would be thrilled to be wrong on this one and find tens of thousands of $27,500 ($35,000 less fed credit) Model 3s, leased for $299/month being driven all over the place in the US in 2018.

Sidenote: I have no doubt you are right that some of the first Bolt EVs will sell for a premium via opportunistic dealers (although the larger dealers in it for the long term won’t do it). Everyone wants the new hotness!

“although the larger dealers…”

Define larger dealers.

All the stealerships I visited when the Volt first came out all had unbelievable markups. These were from automall stealerships (I consider large) to older stealerships on main roads.

By “larger dealers in it for the long term” I mean those who have plans to sell several plug-ins or more every month.

Not “Joe’s Chevrolet” who sells 100 trucks a month, but currently only 1 Volt in the back, and no one who knows how to sell it. That guy will say “hey we can get an early allotment of 6 and mark them all up”.

The big name dealers who support/sell EVs (and there is still easily hundreds of these – Chevy has ~3,000 of them), for instance Rydell Chevrolet in California:

First 2016 Chevrolet Volt For US Arrives At Dealership In California

If you spend a few minutes doing some research before walking into a dealer, you will have no trouble finding the volume EV guys who will set at least as low as the MSRP…many will still sell below because its good for long term business.

No doubt that many dealers are sub-par when it comes to EVs/opportunistic gouging…but not all.

So, *all four* GM dealerships in the US who actually want to sell electric cars will offer great deals on the Bolt?

There really are only four or so.

That’s going to hurt GM’s sales.

Hey, thanks for giving your personal thoughts on all of this, Jay! Always interesting reading; I wish you’d write more op-ed pieces to give your personal views on the industry and the latest news.

“…could only exist for the briefest of moments (like the base 50k Model S)”

I’m guessing you’re referring to the Model S40?


Truth be told, I would enjoy writing more pieces with some additional depth/opinion to them.

Some day if I ever rid myself of the “editor-in-chief” hat and step away from looking after the day in and day out happenings at IEV, it would definitely happen. (I’d also enjoying being free of a few NDAs/hand-shake agreements that one unfortunately accumulates if one wants to deal directly with OEMs ahead of a particular news item, product launch or focus group)

Appreciate the positive feedback.

The dealership model can actually cause prices to be HIGHER than the official manufacturer’s recommended price. On popular cars this happens ROUTINELY. Ask first-year Nissan Leaf buyers.

Small sample size from my neck of the woods (literally), but I got 2011 LEAF #2 (or 3, or 4 depending on time of day you count the sale) and paid $1,000 under MSRP, (=

I found it fascinating to read a scholarly analysis of how the average sale prices of cars fall over time. At the beginning of a new model year, the prices are high as they are in high demand due to the “newness” factor. But prices fall as the months pass, until the dealers have “end of model year” sales when they sell at or even below inventory price.

Obvious in hindsight, but I’d never thought of it that way; as an industry trend, where the average sale price falls over time for each new model year of a car.

Of course, Tesla avoids all that by not having stealership markups, and not haggling over the price. In fact, Tesla doesn’t even talk about “model years” in their press releases and advertising.

Tesla Motor is innovative in many ways, some less obvious than others.

1) Average selling price have nothing to do with car being cheap or not.
2) Model 3 even with lowered tax credit is as expensive as fully subsidized Bolt.
3) To the rest of the world Bolt will be more expensive (though maybe Opel will have different trims, so this is not 100% certain point)

przemo_li said:

“Average selling price have nothing to do with car being cheap or not.”

Hmmm, I think most reasonable people would disagree.

I rarely speak up for Eric’s writing, but in this case, I will…

If you look at the Bolt and M3 base prices, the GM product appears to be more expensive. By several thousand dollars. That’s undeniable.

But don’t forget that the Tesla product, will likely (guaranteed, actually) have a range of amazingly pricey options (Second Motor for AWD, Battery Pack Options, AutoPilot, All Glass Roof, Super Charging, Wood, Carbon Fiber trim, and Leather Seats, etc.) that can be tacked onto that cheaper base price, shooting up the average sale price of the vehicle to (as Elon has previously posited) likely something around 42k per sale. More seems even possible.

So, I don’t really find Eric’s phrasing upsetting, just thin on explaining why part of the potentially higher costs of the Model 3 with options added, would be less affordable than a pricey base Bolt that won’t have comparable options for it.

Chevy’s MSRP includes ~10% of dealer margin, which is negotiated away except for cars in very high demand. Chevy also reduced the Volt’s MSRP over time.

TSLA, meanwhile, has a history of refusing to sell base price models for months (or years) after the promised launch date. If Model 3 demand is as high as it seems, $35k versions may not be available until 2019, by which time Bolt MSRP will probably be a good bit lower.

All that being said, I don’t consider the Bolt to be “affordable”.

I agree that the average sale price of a Model ≡ will almost certainly be higher than the average sale price of a Bolt.

The writer of this article, Eric Loveday, could have made that clear by stipulating that he was comparing average sale price, not MSRP. MSRP is the usual way that car prices are compared. That doesn’t make Eric “wrong”, but he could have avoided this argument by clarifying his comment.

To be fair to Eric, there is zero comparisons, or even a mention, of the Bolt here. This is an entire sub-thread/sidetrack on his use of a single world “semi”, lol

Ack! 😳

I offer my humble and sincere apologies to all the gentle readers here, and to Eric especially, for committing the same fallacy which I find more than a bit irritating when others do it to me: For responding to what others said that he said — that is, what they read into Eric’s remarks — rather than responding to what he actually wrote.

Mea culpa. And Jay, thank you for your correction.

Heeh, no worries. We are just having some fun debating the semantics of a thing whilst waiting for our Model 3s (…or maybe a Bolt), lol.

Arne-ni..,Excellent Point ! Bolt half the Car with No charging Stations for more money..Just because its coming out in a few short months …l m a o …two short months…NO THANKS !! I’ll wait for the Model3… BTW…Months are Basically the same length…GO AHEAD Buy a Bolt ….you’ll be So…..rry ….

Another Euro point of view

Am no specialist of Tesla but being a bit skeptical nevertheless. I mean I find those ever deepening losses and huge cash needs (shares issue to raise funds) a bit disproportionate to actual accomplishments. I mean, does BYD needs to make huge losses and raise funds all the time to achieve what they did ? (World nr 1 in pluggins), same with Nissan. GM quietly issued a “semi-affordable” long range EV (Bolt) without the tons of that (expensive) fuss Tesla is making. Being a media darling is one thing but for delivering an affordable long range EV in a sustainable way I would rather look to Nissan, GM or even VW. Then of course I am no West coast geek, just an old fashioned European believing that 50+ years in car manufacturing experience is worth something that Tesla will badly miss in coming 18 months.

I think we all know your point of view. It’s easy to see where you are coming from looking in the rear view mirror, that you are living in the past. Past European glories and laurels are nothing to dwell on, we are living in the world of what you have done lately, and Europe has done little.

No praise for the premium electric car company in the world. That’s typical of you.

Another Euro point of view

I will rely on West coast geekness to give a trend for my next smartphone design but will eventually buy it from the Koreans. For EV news fun I will rely on Tesla but for actually driving one, it will be a bit like for my next smartphone 🙂 🙂

While it is true that technology proliferates, after years you still don’t see any competition for the Model S, so you may be waiting quite a while to buy your knockoff Tesla. Tesla is not a smart phone. I wish people would stop using that inane analogy.

Why is it inane to compare one disruptive tech revolution to another? There’s a very good analogy there to be made. Toyota introduced the Prius, but then rested on its laurels, not improving the EV tech. And then Tesla came along and stole the leadership and media attention from Toyota… which went on to completely fail to make any meaningful effort to compete. That’s quite similar to the way Blackberry dominated the smart phone market, until Apple came along and stole the leadership from them. To be fair, Blackberry did try to upgrade to compete with the iPhone… but they botched the effort badly. Toyota didn’t even try, unless you count the Prius Plug-in… which wasn’t much of an effort at all. The PiP didn’t have any more all-electric range than an older Prius with a third-party modification to convert it to a plug-in! Of course, you can rightly point out that Tesla has not yet made a car that outsells the Prius, so in that respect the analogy fails. We’ll have to wait and see if the Model ≡ will outsell the Prius. Personally, I think it will. But Toyota certainly isn’t planning to make anything to compete with… Read more »

So you’re going to be buying a Hyundai Ioniq EV or a Kia Soul EV. 😉

Another Euro point of view

Could be Korean but most likely Japanese or German, am in no hurry. Wrong or right I am thoroughly convinced that affordable mainstream EV’s will be something of the 2020’s. I wouldn’t be surprised for the GM Bolt (Opel Ampera) to be priced around EUR 40K here in Europe when it comes (2017 ?) which is just way to expensive for what it offers. Model 3 if Tesla manages to find the funding to bring it to production in good conditions (not a few hand made like de X’s) won’t arrive in Europe sometimes before end of 2018 I bet and it won’t be cheap either (EUR 40k+ probably, we have VAT around 20% here). So 2020, that is the year I believe we will see something significant here about long range affordable EV’s, before that, lot’s of noise and hot (mostly Tesla made) air but nothing solid I am afraid.

What it offers is a very subjective question. If you drive in cities you may value its compact external dimensions yet spacious interior – that no ICEV is offering. If you value performance it is hard to find cheaper cars that come close at the price. If you value fuel economy only other EVs can touch it.

40k is first and foremost expensive when compared to the likely future EVs. Performance will become cheap. But the fact that cars will get better and more economical in a hurry will affect the second hand value of ALL vehicles – not just EVs. I would personally be more worried about buying a diesel in 2017 than an EV. And I’d worry about depreciation for any car.

If Norway didn’t have massive incentives for EVs making them cheaper to buy and to use than other cars, I would likely have chosen an older and cheaper car so it would at least depreciate from a lower base.

That sounds like a good buying strategy to me, along with looking for low mileage, mint condition pre-owned (used) EVs.

I think you will be proven correct in your estimation that Model ≡’s won’t be seen in significant numbers in Europe until 2020.

I also agree that, should the M≡ turn out to be the huge success that Tesla hopes, other auto makers will rush to produce competing semi-affordable EVs. (Hafta agree with Eric Loveday’s assessment here: $35k-42k is too pricey to be properly characterized as a truly “affordable” car. “Semi-affordable” seems to be an apt description.)

Sound like a hell of a downgrade.

Well the old paradigm with regard to Tesla doesn’t apply.
If you think Nissan, an establishment automaker making EVs as an aside, is more important than the company that’s trying to get EVs to be the MAIN thing, then you’re not looking or listening close enough.

Musk has been on this crusade to change hearts and minds. It’s working. Who do people compare their electric cars to now? What’s the electric car to beat? It ain’t BYD!?

I’ve been in a BYD e6 in person, first of all it’s not available everywhere in Western Europe but who knows maybe you live close to a BYD dealership. More importantly, if you expect better quality and manufacturing than Tesla you’ll be greatly disappointed (everything is plastic, layout and seating is mediocre and uncomfortable, no info on battery technology durability), so let’s not even mention German build quality…

BYD e6? What does the e6 have to do with anything? That’s like talking about the GM EV1 as if it were relevant to anything GM is building today.

The e6 is a tiny fraction of BYD’s sales, and is relegated to being sold as Taxi’s.

BYD’s actual consumer sales are coming from much, much better vehicles, like the Qin and others.

The e6 is ancient history.

But the e6 is the only car that BYD attempted to sell in the USA. From what little I know, it appears it failed because of the abysmal (by American standards) build quality.

If other BYD cars have a significantly better build quality, then why haven’t they at least test marketed them here?

BYD was a huge company well before they even started building EVs. GM has 99 factories, Nissan 39, Tesla : 1

You’re comparing David with an bunch of Goliaths

Another Euro point of view

You have a point there but it further emphasizes the up coming challenges that Tesla has.

David won.

You’re not paying attention – GM has the volume production to cover development of a halo vehicle like the Bolt. They are only gearing up for 30k to 50k /year production. They are not supporting the Bolt with a worldwide DCFC network, nor are they ensuring a reliable supply of battery packs and innovations. Tesla Motors is ramping up for 500k /year production in two years – a capacity that they currently do not have. They only have about 1/10th. They are building the world’s largest battery factory in order to ensure supply of this crucial and costliest component, in partnership with an established battery developer/manufacturer (Panasonic). They are continually improving their existing vehicles with software and hardware upgrades that did not exist when the Model S first went on sale in 2012 (improved pack design to get to 100kWh; dual motors for AWD; seat upgrade; autopilot development and ongoing improvements; etc., etc., etc.). Other automakers usually wait until the new model, or the refresh timeframe, to make such changes. Tesla does them continually and rolls them out into existing models as development is completed. These sorts of capital investments require billions in cash, and servicing that debt will require… Read more »

And, of course, building out a world-wide DCFC network, the fastest available, to support their vehicles, since “the market” has not done so…building stores and service centers in order to avoid the money siphon and lack of control that dealerships represent…it’s expensive.

“…does BYD needs to make huge losses and raise funds all the time to achieve what they did ?”

That’s definitely an apples-to-oranges comparison. China subsidizes its industries heavily (see link below for details on how BYD takes advantage of numerous subsidies). Tesla did get a very important government loan that it needed to put the Model S into production, but Tesla had to repay that… and already has.

The soon-to-end U.S. tax credit for EVs — which maxes out at $7500, and many buyers don’t qualify for that much — is tiny in comparison with how much money BYD and other Chinese manufacturers get from their government.

BTW — Tesla isn’t experiencing “huge losses”. Money prudently invested in future growth isn’t a “loss”; it’s an investment. It’s too bad that far too many so-called “financial analysts” mis-characterize sound capital investments as “losses”.

BYD did make huge losses and raise lots of funds, just FYI…

Eric just can’t win. If he is a Pollyanna for Tesla, he gets blasted. If he takes off the Rose-colored glasses he has Tesla fans gouge out his eyes. SMH.

The reality my fellow posters is that Tesla has a huge challenge before it with the model 3. Can it raise enough money? Can it meet the production schedule? Will the initial build quality be there? Or will it be like the model X where it was not and where service and parts aren’t available?

Good luck Tesla, but you can’t just kick things down the road this time.

Problem is – EVs are becoming not only a social, cultural and economic football. They are almost religion in nature now. Tesla is the Joel Osteen of EVs today – big church, big hair, big money. What is worse – religious leaders battling each other for “our god is better than your god” or EV advocates arguing over which EV “stance” is better. What bigger business is there than church? Asking people to donate 10% of their income to God “because it is his to begin with”. I can see Tesla fans acting in this way.

“Should be more range per car – load up more batteries!!” or “let’s be realistic, the EV will only succeed when consumers can afford it and fewer batteries on board is best to lower prices”.

This isn’t much different than the car-wars of the 1960s-1970s. Nobody won that one. I don’t see the EV landscape getting any more friendly as the competition comes out to play in the next couple years.

“let’s be realistic, the EV will only succeed when consumers can afford it and fewer batteries on board is best to lower prices”.

Let’s be realistic: PEVs with a real-world highway driving range less than about 150 miles will be perceived as completely inadequate for normal use by the average driver, and therefore will have a very limited market and abysmal resale value. Furthermore, larger battery packs allow faster charging, and allow a “buffer” for the battery pack to lose capacity as it ages, in addition to making side trips and occasional long trips much more do-able and free from range anxiety.

Putting a small battery pack into a PEV is false economy, because it makes the average car buyer perceive the entire car — not just the pack itself — as pretty worthless.

I don’t think anybody is bashing Eric. Posters are bashing each other, as usual, but primarily not Eric.

Nobody in their right mind can deny the simple fact that Tesla Motors will be fine, if they pull off the Model 3 on approximately the timeframe they promised, at the price they promised and as long as they aren’t a bushel of lemons.

However, Tesla will most certainly fail if the Model 3 never comes to market (which is not likely).

Tesla will certainly be in a heap of hurt if the Model 3 is delayed for multiple quarters (possible), but it might not be the end IF mass production does start by mid-2018, at the stated price, and works properly.

How can I say that? All previous models were delayed by years, without much of a track record of any kind, and yet, the company is doing perfectly fine in sales and raising capital. If investors have been interested this long, then they will not scare so easily if the Model 3 is delayed until early 2018.

Thanks for that summary, TomArt. But I think you underestimate the cost to Tesla of delaying getting the Model ≡ into production by multiple quarters. Sure, Tesla survived an approx. 2 year delay at getting the Model S into production, but that was back when the company had far lower monthly expenses… including paying interest on its debt, which will grow very large as Tesla quickly ramps up to produce the Model ≡ in high volume. And the delay of the Model X hardly counts, as Tesla had not yet maxed out the sales potential of the MS. The Gigafactory is another big bet which will only pay off when the M≡ goes into high volume production, and will be a drain on Tesla’s cash flow until that happens. Now, that said, I agree that Tesla can survive if the M≡ is delayed until 2nd quarter 2018. But there’s a wide gulf between mere survival, and being able to grow at the pace that Tesla plans to over the next five years. A long delay means Tesla’s growth will be stunted, and the company may miss out on capturing a lot of the market as other auto makers produce cars… Read more »

@OP Eric Loveday said:
“…Basically, either Tesla pulls off the Model 3 with a massive bang, or the electric car maker fails miserably. In a way, it’s getting close to do or die time now for Tesla Motors.”

That’s incorrect.

Model 3 will likely have its share of launch challenges that will take time to iron out (as did Roadster, Model S, & Model X) and Tesla will survive those challenges just fine. Some turbulence is always expected when ridding the leading edge of innovation. In some respects it would be more a liability than an advantage if Tesla were to have a Model 3 launch without a few bumps in the road.

Bezos was not in the early years of Amazon deterred by the many pundits making similar binary “do or die” predictions…nor will be Musk.

I’m a Tesla fan as much as anybody, but if they don’t do a solid pre-production run more like a traditional automaker, there will be a lot of customer problems. Maybe they will put employees at the beginning of the delivery queue to be the guinea pigs, but somebody has to test the first few hundred cars to work the bugs out. Traditional automakers produce these cars, test them for about 6 months and then start the real production. Tesla certainly did not do that for S and X.

Wasn’t it said employees get theirs first? Some rumor said 12,000 pre-orders from the Tesla employee base. Not sure that is correct, however.

They are doing a 300-car preproduction run according to leaks, and Tesla and SpaceX (and SolarCity?!?) employees are at the head of the queue after that. So I think they’ll be OK on build quality when they get to the general public.

Nathanael said:

“They are doing a 300-car preproduction run according to leaks…”

Good to know, but I can’t see Tesla waiting for 6 months between making those pre-production models and starting actual production of the Model ≡.

It appears unavoidable that Tesla will have the same high-profile problems with early production units of the M≡ as they have had with each of their previous models, right back to the Roadster.

We can at least hope that those problems will be fewer and less significant than problems with the Model X, as Tesla plans on making the M≡ a simpler car with far less newly developed tech.

“Mike I.” said:

“Traditional automakers produce these cars, test them for about 6 months and then start the real production. Tesla certainly did not do that for S and X.”

I think Tesla has pretty clearly signaled it’s not gonna do that for the Model ≡, either. I completely agree that ideally Tesla should do that, but it’s not going to with the Model ≡. Early buyers of Tesla cars have proven that, with a relative few rather noisy exceptions, they are willing to put up with being treated as “beta testers”.

I look forward to the day that Tesla grows up and starts testing its cars for a few months before they start delivering to regular customers, as more established car makers do. But asking Tesla to start doing that just as it’s putting its very first high-volume car into production, is asking too much of a company that is still spending more money on growing the company than they are earning in profits on selling cars.

Tesla simply can’t afford to wait for 6 months between start of production and when they start earning income from selling the M≡.

Eduardo Pelegri-LLopart
I agree the Model 3 is a make or break release. I’m rooting for Tesla and I put my deposit a while back. I want to point out something for people that say: “other manufacturers can catch easily catch up with Tesla”. Tesla has disadvantages but also has key advantages. People often mention that Tesla is solely committed to EVs and does not have to worry about ICE products in their portfolio, but what I don’t see mentioned often is that Tesla is the only company that treats their products as connected, continuously upgradable, devices. Tesla has Over-The-Air upgrades embedded into their architecture, and they can, and have, improved features and performance just via a software upgrade. They can unlock extra battery on some cars OTA. In some cases they even upgrade physical hardware, but mostly it’s software. This relationship with the customer and the product is, as far as I know, unique in the automotive world. It’s somewhat similar to what Apple has with the iPhone – I still have an iPhone 5s and every new OS gives me improvements. I am a happy customer… and eventually I will buy a new iPhone from Apple. I also like the… Read more »
Despite the double digit whining posts by carpet-bombing sven along with the other haters and cynics, Tesla will be fine as long as they start producing Model 3s by the end of 2017 or beginning of 2018. The car was purposely designed to be easier to build and the Giga is being built/equipped to dramatically lower the costs and supply the massive quantities of batteries necessary. Tesla will obviously build assembly lines sequentially starting with the first one and scale from there. They have already proved the tremendous demand for this car and have the unprecedented numbers of reservations to prove it. This is the main reason Tesla needs to raise more money to meet the massive demand for this vehicle. They will have no problems raising more money if necessary to implement production based on this unprecedented demand. Starting with the Model 3, already fast-growing Tesla will rapidly accelerate its growth and while their may be some hiccups in the big picture they will be minor. Thanks to Tesla, EVs are on the cusp of exponential growth over the next 5 years and everybody here who is not a d-bag shorter or shill for Big Oil or NADA should… Read more »


Another Euro point of view

“Thanks to Tesla, EVs are on the cusp of exponential growth over the next 5 years and everybody here who is not a d-bag shorter or shill for Big Oil or NADA should celebrate that when it happens”.

On the stock valuation side I am closer to the “short” than the “long” opinion but I nevertheless mostly agree with what you wrote above.

“Another Euro point of view” said: “On the stock valuation side I am closer to the “short” than the “long” opinion but I nevertheless mostly agree with what you wrote above.” One of the most irritating things about people who write about Tesla Motors (and other companies) from the investor viewpoint, either “short” or “long”, is that they keep confusing the valuation of Tesla’s stock with the performance of the company. I’m not saying the two are completely unrelated, but it’s foolish to assert that just because Tesla’s stock is significantly over-valued, the company must not be doing as well as it appears. Tesla as a company isn’t merely doing well; in a few short years, it has done astonishingly well at vastly out-performing expectations of the vast majority of financial analysts. It has not only survived in a very competitive market, it is growing far faster than any other auto maker outside China, where industries are much more heavily subsidized than any in the USA. So yes, the stock shorters are right to point out that Tesla’s stock is seriously over-valued. And so what? Tesla is making and selling highly desirable cars, and they are ramping up production at… Read more »
Another Euro point of view

Of course you can have a very successful company with an overvalued stock. No question of that. If I am at times skeptical of Tesla is not because of stock valuation. It has to do with what seem to be a bit of a erratic management and cash management problems (buying that loss making solar panel company for example). I would prefer a Tesla company with a bit of focus, as Getreal wrote, we do need a strong Tesla.

If Musk did better with Model X, the dangerous acceleration of Model 3 planning would not have been as necessary. I see the low hanging fruit, in 2018, but who’s to say Tesla will have the economies in battery production that allow him to take advantage without more losses?

Capital raises could get bumpy.

If strong man Trump gets in capital raises will get bumpy…BELIEVE ME

If crooked Hillary gets in Big Oil and Wall Street Banks will want a quid pro quo on the big bucks spent paying Hillary and Bill astronomical sums of money for “speaking fees,” donating bags full of money to the Clinton Foundation, writing big checks to the Democratic National Committee, writing big checks to various pro-Hillary Political Action Committees, and having all their execs donate the maximum amount allowed to Hillary’s presidential campaign.

Whoever wins, it’ll be a sh!tshow for the next four years. 🙁

Have fun voting for Trump sven!

Who said that I will vote for Trump or that I even support Trump? Not me.

Your reading comprehension is awful. Try reading my entire comment again, but slowly this time. You can even mouth the words as you read if that will help your reading comprehension. 🙁

When logic fails you can always fall back on Trump like insults sven.

Bur hey, if you hate Democrats so much you could always move to a red state like N Dakota. As a bonus you could look out your window at the oil derricks!

Get Real, you’re fired!

Once again, your reading comprehension sucks. Who said I hate democrats? Not me. But I do hate Hillary.

Well that’s funny because you have also repeatedly posted how much you hate the NY Democratic party.

But hey, you also used to claim that you “liked” Tesla!

Are you off your meds? You’re delusional. I have never once posted that I hate the NY Democratic party. Why would I even bring up the NY Democratic party in the comments section of InsideEV?

I sure as hell liked Tesla a lot more before the cultist, obnoxious Tesla fanboiz and Elon worshipers started polluting EV discussion forums with their zealous attacks on any criticism of Tesla, no matter how mild. People like you turn people off to Tesla.

Another Euro point of view

“People like you turn people off to Tesla”

You raise a real perception problem here that probably do more arm to Tesla than one think. I heard more than once comments from people that knew very little about Tesla having positive comments about the car but very negative comments about some Tesla fans (a vocal minority), with words like arrogant, rude, obnoxious etc…” coming up This is a problem as no matter how much some people do like the car they might not want to be associated with those people by owning one. Tesla should perhaps do something about it for its own good as I believe it is very detrimental to this brand to have to drag this reputation all along.

sven said:

“I sure as hell liked Tesla a lot more before the cultist, obnoxious Tesla fanboiz and Elon worshipers started on any criticism of Tesla…”

Gosh yes, that must be the reason you started carpet-bombing InsideEVs comments with repetitive Tesla bashing posts. And not because you started short-selling Tesla stock, as well as reading and copying Tesla bashing FUD posts from stock investor forums like Seeking Alpha. /sarcasm

Phrases like “polluting EV discussion forums” and “zealous attacks” seem pretty hypocritical when coming from someone who has knowingly and repeatedly helped spread an outright smear campaign against Tesla Motors. You knew the “suspension problem” smear campaign was completely false, based on nothing but a pack of lies including much manufactured “evidence”, but you supported and repeated it anyway.

“Who said that I will vote for Trump or that I even support Trump? Not me.”

You’re heavily in denial, dude. By parroting “The Donald’s” insults and his blissfully fact-free propaganda, you’re certainly supporting him. Thank goodness none of my friends eagerly lap up the manure “The Donald” keeps shoveling out, the way you obviously do.

But thanks for letting us know that you’re a supporter of “The Donald”. That certainly does shed some light on the B.S. that you keep shoveling out in your carpet-bombing anti-Tesla FUD and your incessant shilling for “fool cell” cars, here on InsideEVs.

For the record, I hate Donald Trump, and I think you’re a dumba$$.

Strong man Trump arrives in Mexico…let’s BUILD THE DOME QUICKLY BELIEVE ME

No dome can contain The Donald. We’ll need our greatest scientific and engineering minds to construct a giant blond Toupée to contain him. It’ll have to be the size of an entire city block, at least. Below is a pic of the giant blond Toupée containment field (not to scale) that is needed. We have no time to waste; the election is only 2 months away! 😀


“Dangerous acceleration of Model 3 planning”???

Tesla has something on the order of 20 BILLION dollars total in orders for the Model 3 just based on reservations up to this point.

It is very reasonable to expect lots more people wanting this car as they do their 2nd reveal and get to production and production cars start to hit the streets.

Any savvy business person would also “accelerate” the production targets for a product in such a demand and investors likewise will be eager to get in on this.

It’s dangerous insofar as they botched the Model X production, still expecting their customer base to be willing beta testers. It is reasonable to assume that the commercial success of the Model 3 will have a lot to do with whether they aren’t full of problems. Sure, there will be some (as there are with any vehicle), but they can’t have the magnitude of issues that the X has had. The design of the Model 3 is much simpler, so the odds are favorable toward a successful launch. The other reason why it is dangerous is, after already announcing a barely-credible timetable (2 years to volume production), they then halved it after the reservations poured in!! They are targeting 500k Model 3s in 2018…right now, their entire operating production capacity is a little over 1/10th of that!! And, the Model S and X were both delayed by multiple years (depending on your choice of benchmark). The Model 3 date of late 2017 has not moved appreciably in a few years. All of this together is rather frightening. Tesla Motors has not demonstrated that they can pull this off. So, yeah, it’s a dangerous proposition, or more accurately, a massive gamble!… Read more »

I see all the hydrogen fuel cell fanbois have all shown up to bash Tesla again…..

Fixed that for you Nix:

I see that sven (hydroegen fuel cell fanboy) has shown up to bash Tesla again…

I was about to say: “All of them? You should check again. It looks like most of the gang have yet to arrive.”

When are the rest of your sock puppet Tesla shill friends going to show up? 😀

Startups and especialy auto start ups have a hard time turning profit while buying land factories manufacturing equipment and etc etc…
So essentialy Tesla has operated at the breaking point since day one…

the sensible thing for tesla to do (which i suspect they will do) is to have a gradual phase-in of model 3 deliveries.

a “massive bang” approach makes no sense financially because it would eat prohibitive amounts of cash very quickly. the ability to engage in mass sales and distribution of automobiles takes a lot more than just production capacity. it is better to take a more gradual approach of building their delivery schedule.

So please explain to me, how exactly “could” got changed to “will” in the headline of this article.

Because analysts are saying this “could” happen, that deadlines “might” not be met, and that investors “might” pull out, *if* that happens.

I didn’t hear any of them ever say anywhere that this *will* happen.

You might as well say that D-Day was too big a logistical problem to pull off, and that it won’t succeed, 3 weeks before they actually, um, did.

Predictions are hard. Especially about the future.

Investors aren’t in the profits business. They are in the future business. They care about if the stock will be more valuable… in the future.

Elon has shown several times that he can bet big and gain big, both with Telsa and with SpaceX. This matters to investors.

huh???? one of the problems with the invenstor-driven culture is that it promotes short term thinking by executives. it appears to me that you are suggesting that the opposite is the case.

Agreed; however, companies like Tesla tend to attract the type of investors that do look to the future, and are willing to support a venture like this, even if the return is zero for several years, as long as key sings are improving, like reliability, demand, etc.

“Any slip up along the way could be catastrophic, as that could lead to investors pulling out, according to several analysts.” Wow, talk about sensationalized writing! Tesla also “bet the farm” on both the Roadster and the Model S. Both were delayed, and came out later than planned. You may notice that Tesla is still in business, and is still a growing company. Now, it’s true that there is more capital at stake with the Model ≡. Tesla is going “all in” for the third time with this bet, with a multi-billion dollar battery Gigafactory as well as being the first company to attempt high-volume manufacturing and sales of a BEV. So absolutely there is a lot of money riding on this bet. But the idea that if the timeline slips, Tesla will come crashing down… well, that’s exactly the sort of FUD that Tesla short-sellers have been telling us for years. And it’s still wrong. In fact, we can be very nearly certain that the timeline will slip from Elon’s overly optimistic timeline of ramping up Model ≡ production. In fact, he’s made it very clear that his announced timeline is practically impossible. So “failure” is almost guaranteed, if… Read more »
Another Euro point of view

PP, for a Tesla Fan boy you do seem to have (IMHO) a realistic view of what lies ahead. I wish more Tesla fanboys would be like you.

I have read a lot of posts here where it is inconceivable that a visionary would not have that historical mind set of profits over creating a livable planet. That financial enhancement is always the end goal. I suggest perhaps we need to discover a paradigm shift in traditional thinking if we are to survive as a living/thinking race. The time has finally come where rapid advancements in technology will now permit us to develop solutions to those problems which have been caused by those who came before us. We have now recognized the fatality of our existence without immediate and lasting change. Musk is one of these visionaries. Humanity needs Musk. Humanity needs many of these pioneers that dare to innovate in the face of conventional mind set. Always the fear is “do we have enough financial resources to outlast those that will always resist change…those that say if it ain’t broke, don’t fix it”. Aside from the Musk’s in our midst, if you dig deep enough, you will find a whole other world where financial visionaries are preparing for a new world order whereby the use of huge stored capital resources will be made available to specifically solve… Read more »