Model S

Model S

Chris Porritt, Tesla's vice-president of engineering, told Autocar that Tesla Gen 3 will be "realistically" priced to compete against German sedans of similar size (BMW 3 Series, Audi A4, for example), but in getting to that realistic price point, some sacrifices will be made.

Porritt says that Gen 3 will use "appropriate materials" to keep its price in check, meaning that expensive aluminum may be mostly out the door:

“I expect there will be very little carry-over. We’ve got to be cost-effective. We can’t use aluminum for all the components.”

Autocar suggests that Gen 3 will turn mostly to steel in its construction, though we are doubtful that Tesla will take this approach.  It's our belief that the frame/platform/skateboard will be all aluminum, as it is in the Model S.  What Porritt is implying is that body panels, suspension components (control arms) etc. won't be aluminum.  This makes perfect sense to us and reinforces what Tesla CEO Elon Musk has stated on several occasions in regards to the robustness of the Model S' aluminum frame.  We don't see Musk allowing Tesla to stray from aluminum for the Gen 3's platform.  Elsewhere, steel may be utilized, but aluminum will certainly be employed where it matters most.

Porritt adds that right now, the biggest cost factor for Gen 3 is batteries.  If Tesla can't get cells prices down, then the entire engineering of process of Gen 3 might have to start from scratch.  Porritt says price of batteries was the key calculation in engineering Gen 3.  So, we think Tesla has a cell price in mind for Gen 3 and if that price doesn't become reality, then it's back to the drawing board for Tesla.