Well, yeah, he said they weren’t selling it yet… but whether one takes Elon’s statements as uncharitably as I do (I personally think he regards being exciting as much more important than being reliable) or more charitably as others (thinking of your comments about how hard it is to predict the future), I still question whether a $35k car is a good bet. I note that there was far more discussion on the call about the Model Y than the one sentence on the base model.
My swag right now is that there’s maybe a 35% chance it never happens, and maybe even money that buyers will have to also purchase some upgrades, or they will just truncate the production and force buyers to upgrade.
And in my particular situation, it could well be that production of the non-base models continues to be prioritized, meaning when I need to get a new car, my option will be $49k or more, or buy something else. Since there’s no way I can afford a car that costs like ten grand more than I feel comfortable stretching my budget for, well… poop.
You may want to consider just getting a dedicated set of winter tires. RWD+winter tires will give better ice/snow performance than AWD+all seasons , especially in braking. The $5k extra for AWD will buy a lot of tires.
I don’t particularly disagree with your swag–sure, there some non-trivial chance at forced bundling or whatever–but I see this as the bigger risk. If demand for the other models stays high relative to production capacity, they could deprioritize the base models for a long time.
I’d be shocked if they actually reduced production (or failed to increase it) just to avoid producing the base model. And I think they will at least put out some token number of them. But as long as they have a queue of buyers for the more expensive ones, they’ll almost certainly focus on those.
I would advise ordering as soon as the configurator opens. As one would hope, Tesla doesn’t raise prices after one locks in the order. But I could see them raising prices before the first one has actually shipped.
Interestingly, I just read something from a short/FUDster that was… maybe not good news for me but interesting (and also relates to our earlier guesses at average prices of the 3).
First, there’s this exchange:
So Elon’s saying the average transaction price will be low $40s.
And then from the investor letter:
But it sounds like there won’t be significant sales of sub-$49k cars until the second half of next year.
Grain of salt and all, but I’m starting to wonder whether my $1k interest free loan is worth it.
That doesn’t seem to follow–even if the average was as high as $50k, I’d expect significant sales at the $35-40k mark. They’ll still be selling plenty of high-spec models, and those will be balanced out by the low end.
I’d expect that most buyers will get at least one “big” option–Long Range, AWD, PUP, or Autopilot. That pushes the average up, but doesn’t mean the base model doesn’t exist.
BTW, the statement after your quote adds a bit of context:
It seems to me that they’re putting more emphasis on the 25% figure than the low-40k figure. Ahuja just says the ASP will be lower than today, but repeats the 25%.
Finally got the new 26.3 update (from 21.something). The big new feature is summon, which I tried in my garage, but unfortunately the networking sucks there and I can’t reliably connect. I’l have to try it out somewhere else.
It adds a few other nifty features, like WiFi support, a lock confirmation sound, and cabin overheat protection.
To be fair, as I see it, the absolute bare minimum price I would pay for a new Model 3 would be 46k. The reason is that buying a 35k vehicle capable of autopilot and then not paying for the feature isn’t something I would be able to do. And the premium interior - buy a car that has the capability of a full glass roof and then not pay for it? Yeah, no thanks. And black? Do you know how hot a black car gets in the summer? Can’t do that either.
So it’s really a 46k car. And even if I gave up on the improved sound and glass roof and went with black, the autopilot is basically a minimum functionality feature. So Model 3s start at 40k.
Are we saying the same thing, though? That base Model 3 (or a base plus one option, whichever it is) will not really be a thing until late 2019?
SamuelA - that’s interesting because Autopilot is the one option that I would never order, even if money was no object. Primarily because I do like 80% driving in the city, but also a bit because I just don’t trust it one bit.
I’m also in the camp that says “auto pilot” is a non-starter. Calling an assisted driving option “auto pilot” gives the impression the car can drive itself. It can’t. It does not have the capacity to think for itself and no amount of programming can compensate for that.
I was also pretty weary of autopilot, but after using it on the freeway I’m sold. Stop and go traffic is the absolute best application of the feature. It eliminates foot fatigue, and the mental fatigue of focusing constantly on keeping distance.
If you drive in an area of freeway traffic often, I’d say autopilot is an absolute selling point.
Remember, though, that Tesla doesn’t use dealers. Whereas for a normal car, any given dealer might simply not have that model on hand, and give you the run around when you tell them to search their dealer network, with a Tesla you just uncheck those boxes.
That said, clearly those boxes don’t yet exist, but so far I don’t see evidence that Tesla plans on making the current option set permanent.
That’s one thing that actually isn’t a problem at all. The car has “cabin overheat protection”, limiting cabin temps to 105 (it’s mainly intended to protect children and pets that have been locked in). And you can set the climate control from the phone app, so if it’s a hot day you just turn it on 10 minutes before your errands are done and your car will be a comfortable 70 degrees when you get there.
Autopilot is great, and absolutely worth it–but I went 25 years without it. So if I were budget constrained I’d absolutely skip it. You can always add it later, too, if your budget opens up later on.
Let’s say that the ASP in late 2019 is $43k. That’s basically one big option plus maybe one small–say, Long Range, or AWD+paint, or Autopilot+wheels, etc. But lots of people are going to get two or three big options (LR+AWD, etc.), and for each of those there will be at least one base model sold. Or at least one without any of the big options.
Today, the ASP is probably around $55k. Tesla hasn’t said for sure, and AWD probably bumped it up a bit, so it might be close to $60k now. Regardless, it’s a cut above the $49k minimum price.
Early 2019 is halfway between those points, so I don’t think it’s too crazy to assume the ASP will be as well–around $49k. That’s two of the big options–LR+AWD, etc. But people will still be buying super-premium models; either fully optioned normal ones or performance. So there’s still some balance against the ASP.
Sure, in principle they could require one big option. That would balance the a ~$43k model against the high-spec ones to average $49k. But which one? Maybe they offer several “base” models, each of which bundles one of the big options, so that you can’t just unselect all of them. It’s possible but I don’t think it’s super likely.
So as I said, come early 2019 I think the base will be on offer but will not sell that many units. It would not surprise me if Tesla plays games with the production priority, though.
Here’s a really weird thing. The Insurance Institute for Highway Safety did an analysis of claims data for the old and new Autopilot on Model Ss. They found that cars with the newer system “lowered the frequency of claims filed under property damage liability (PDL) coverage by 11 percent and the frequency of claims under bodily injury (BI) liability coverage by 21 percent.” So that sounds like good news for the safety of Autopilot, right?
Here’s where it gets weird: the study “found a 29 percent increase in the frequency of claims under medical payment (Medpay) coverage and a 39 percent increase in the frequency of personal injury protection (PIP) claims.”
What does this mean? “The findings for PDL, BI and collision claims are in line with prior HLDI research on forward collision warning, autobrake and blind spot monitoring. For MedPay and PIP, it is unclear why the driver assistance technologies are associated with increased claim frequency.” And of course there’s a caveat on the numbers, too: “Since Autopilot is an optional feature, analysts couldn’t discern which vehicles had Autopilot and whether it — and other available driver assistance features — was on at the time of the crash.”
There’s nothing remotely erratic here. Musk has said over and over again (for many years) that he hates the “perverse incentives” that come with being a public company. SpaceX is private and runs much more smoothly than Tesla. I don’t think anyone can deny that the constant financial news coverage of Tesla is a massive distraction at best.
I certainly hope they can pull it off. They need about $35B worth of investors to vote on it. Doesn’t sound too crazy.
