This week, UBS analyst Colin Langan suggested his research indicated that any base Tesla Model 3 cars sold at $35,000 would be done so at a significant loss; mainly due to the still relatively expense costs of the e-drivetrain and advanced production parameters of the car - a statement that I think many of can agree with.  The money is in the options

For his part, Elon Musk earlier suggested the day of the Model 3's introduction that he believed the average selling/optioned Model 3 would net the company about $42,000.

Elon Musk Thoughts On Average Model 3 Selling Price (@elonmusk)

Elon Musk Thoughts On Average Model 3 Selling Price (@elonmusk)

UBS' Langan hosted a call on the Model 3 with Jon Berisa (President & CEO of Auto Lectrification), who also served 35 years with GM, some of which as a chief engineer on the Chevy Volt.

Mr. Bereisa noted a "best case" for final battery pack costs (not just the cells) comes in at about $133-155/kWh in ~9 years times.

Tesla Model 3 Debuted March 31st, 2016 - 215 Miles Of Range, From $35,000

Tesla Model 3 Debuted March 31st, 2016 - 215 Miles Of Range, From $35,000

Reports the StreetInsider:

"In a detailed breakdown of factory variable cost (FVC), Jon sees the Model 3's FVC $1,510 above base price of $35k vs. the Bolt's FVC $4,980 below base price of $37.5k. Compared to the Bolt, the Model 3 adds incremental variable cost from its aluminum content, lack of scale, extra sensors, a faster propulsion system, and higher pack costs. Jon estimates TSLA's pack costs at $260/kWh and GM's at $215/kWh (due to GM sourcing the cell at-cost from LG)."

So an interesting report to be sure...and then Tesla's head of Investor Relations, Jeff Evanson called in to take it up a notch, and to dispute some of the conclusions of the pair.

The first issue taken with the report was that the Model 3 is actually only partially aluminum, not all-aluminum to the extent of the Model S, and the second issue was on the size of the Model 3 battery, and what the actual battery pack costs are today for the Model S/X, and how the "maths" based on all those figures work out on the Model 3.

Specifically:

  • the Model S/X "all-in" battery pack costs today is less that $190/kWh, and
  • that the Model 3 will have a base battery sized smaller than 60 kWh
The question now of course is how much below 60 kWh can the model 3 actually be to net the estimated 215 mile range pegged by Tesla at the vehicle's launch last month?

Given the upcoming Chevrolet Bolt EV has a 60 kWh battery and early estimates by "sources" for that car have its EPA rating landing around 210-220 miles, it could not be too much less.  Perhaps ~55 kWh?  Nissan's 2016 SV/SL LEAF achieves 107 miles of range on 30 kWh...but is aerodynamically a laggard in the EV space compared to many of its peers.

StreetInsider