I think all of Tesla's cars are profitable, and Model 3 will probably be even more so thanks to all the software "upgrades" Tesla will likely charge for.
The "problem" is Tesla is trying to become the GM or VW of EVs before GM or VW get a chance to use their massive cash cows to dominate the market. So they're trying to cover the market with as many different models as their financials allow them, as well as trying to build the SuperCharger infrastructure globally. All of that R&D and infrastructure costs a lot of money and it has to come from somewhere -> current cars' profits.
To make things even simpler to understand, Tesla will operate on an Amazon model of not giving a damn about quarterly profits for the next decade or two, while building the biggest (Tesla-only) fast-charger network in the world (huge competitive advantage) and at the same time trying to grow as a company as fast as possible and entrench itself in the car market as the Apple of EVs.
Oh, and almost forgot about the whole Gigafactory thing. And one of those isn't even going to be enough by 2020 (don't forget it also has to make PowerWall batteries). That alone cost $5 billion and Tesla couldn't even build it all itself (just goes to show how much money Tesla needs to invest in its future, not pay dividends or brag about its 30%+ profits every quarter).
I suspect that they're going to run out of lithium (or at least run out of affordable lithium) before they can accomplish this goal.
Electric cars are not the future, there just isn't enough lithium on earth to do this. The US might be able to, but not worldwide.
Powerwall is definitely not ever going to get off the ground - cars are more profitable, and they will never have enough extra supply to shunt some to powerwall.
I feel like Elon Musk is generally well-informed and thinks pretty far into the future.
While I don't know the answer myself, I am inclined to think that Elon's not just planning on running the company straight into a widely foreseeable dead-end. Seems unlikely, don't you think?
Like, imagine this interview:
Interviewer: What is your plan for when lithium reserves run out?
Elon: Wait, what? There's a limited supply? Hold on, need to google this.
Take 2:
Interviewer: What is your plan for when lithium reserves run out?
Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there.
(Has he EVER given an answer like that, politician-style? No. Never.)
Seems like a safe bet that this imagined problem has a solution which hasn't been shared with us because nobody's asked him.
> Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there.
Why do you think this is wrong? He'll have many years to figure this out - this is a longterm problem, not a short term one.
It's not like you can't do the math yourself on global extractable lithium supply, and how many cars you can make with it.
I'm betting, not on new battery technology (any element except the big 10[0] would run into the same problem), but rather on a new engine that can burn very clean synthetic hydrocarbon fuel.
But if I did have to do research on battery tech today it would be on an aluminum ion battery.
I know I said fuel, but it's not really a fuel. The synthetic hydrocarbon would be energy storage. The energy source would be something else - nuclear or solar thermal probably.
"according to a 2011 study conducted at Lawrence Berkeley National Laboratory and the University of California, Berkeley, the currently estimated reserve base of lithium should not be a limiting factor for large-scale battery production for electric vehicles, as the study estimated that on the order of 1 billion 40 kWh Li-based batteries could be built with current reserves. Another 2011 study by researchers from the University of Michigan and Ford Motor Company found sufficient resources to support global demand until 2100, including the lithium required for the potential widespread transportation use. The study estimated global reserves at 39 million tons, and total demand for lithium during the 90-year period analyzed at 12–20 million tons, depending on the scenarios regarding economic growth and recycling rates."[1]
In that time period a lot of the ongoing research in batteries is going to mature and alternative or more effective ways of using materials will happen.
There are probably a lot more reserves out there that no one's found yet because the current reserves were sufficient for the demand. In the longer term there will be plenty.
In the short term, though, existing reserves are mostly in Argentina, Chile, and Bolivia. I wonder how difficult it would be for a cartel to manipulate pricing?
I'd like to see your calculations... There's no solid numbers about the total amount of easily accessible lithium reserves, but the lower bound would be 13 million tonnes. It's about 0.8kg Li2CO3/kWh, so that's enough to replace all US light trucks and cars with a 60kWh battery. So as it becomes more important, I have a feeling that we're going to find 4-10x as much lithium, or make other lithium extraction procedures more affordable, just like oil extraction has changed so much in the past decade.
And since lithium batteries are recyclable, we pretty much just need to extract it once.
But extra battery technologies will be good. Batteries will be a commodity, lithium ion batteries will be used both in grid storage, home storage, and car storage. Batteries are the oil of the 21st century.
There's always risk. The biggest risk I can think of is a battery invention completely disrupting the industry and making the Gigafactory obsolete. Losing a few billion dollars (I am not sure how much Panasonic invests of the reported 5B figure) would be a gigantic blow. Now, how likely such a thing is? Beyond the bombastic media reports, not at all likely but it exists. There are quite a few companies and university teams chasing this particular Holy Grail.
For example, Graphenano claims they will ship graphene batteries this year.
This entire comment makes less sense than a llama driving a taxi.
This "biggest risk" you've named is....entirely fantastical. A battery invention making the Gigafactory obsolete? What?
1. What kind of invention are we talking here? A new battery that stores 100,000mi per charge, is lightweight (magically), and charges in 10 seconds? Great, then the Gigafactory can start manufacturing that instead. It wouldn't be obsolete.
2. Even if such a thing as #1 were invented, great, now Tesla's product is infinitely more compelling. They'll sell that many more cars. The car now has enormous range and charges very quickly. This is a bad thing? What??
3. Even if #1 were invented and somehow intellectual property'd out of Tesla's reach, how's it going to hurt them? Are we imagining one of their competitors magically coming up with this, and conjuring an equally compelling but superior car out of thin air, using technology Tesla has no access to? That's an incredible turnaround time, this new tech being revealed AND reaching mass production AND having a car designed around it which ALSO reaches mass production...all before 2017. Incredible! Unheard of!
4. #1 is a joke. That won't happen, can't happen, has never happened. New revolutionary hardware technologies don't just appear. They gradually work their way into society, and it takes a lot of time before methods are found to cheaply mass produce new hardware technologies.
Given that your "biggest risk" is an absurdist fantasy, I think we can safely say Tesla's in a good position!
> Great, then the Gigafactory can start manufacturing that instead. It wouldn't be obsolete.
The Gigafactory IIRC has a $5B budget. The building and the land isn't expensive, especially given the preferential treatment by the government. The machinery and infrastructure, tailored for lithium battery production, are the biggest part of the budget and you won't be able to "just switch it out". The Gigafactory is a lithium battery factory on a massive scale, nothing else.
> New revolutionary hardware technologies don't just appear
Do you remember the revolution that got sparked by the iPhone? That one needed half a year to totally turn over the mobile phone market. It's not uncommon.
On the other hand, I agree that a revolutionary new technology is unlikely to appear - and with the Gigafactory, Tesla and Panasonic can basically control battery prices for the rest of the world.
The iPhone was a revolution in product design, but its hardware was all off-the-shelf technology. There was no fundamental hardware invention like new battery technology. The iPhone's most radical departure from existing smartphones was its use of a capacitive multitouch display, but Apple got that tech from a startup they acquired in 2005 that had been founded in 1998 by academics who had been researching uses for multitouch. So that revolutionary advance was brewing for more than a decade.
what was/is distinguishing apple products from the rest, many years (even now I think), is the battery life; and that was also in part because the software developed for iOS was tested and maintained and designed to consume as less possible processor cycles; there was special attention given to this aspect (I am not sure if they are still doing it, but I know they were doing it in the past), which the rest I never heard of doing it.
1. Yes it would be. You can't manufacture graphene (most likely) batteries in a factory made for lithium batteries.
2. Sure, the cars have better range and probably Tesla can sell more cars but that's capital intensive and they just pissed away 15% of their market cap. Not great capital wise.
3. It hurts them because, as I mentioned, they spent a fortune and they might as well have lit a fire with the money. At least they'd be warm for a bit... Investors typically are not happy when a company makes a bad bet to the tune of a couple billion bucks.
4. How long have you been reading about graphene batteries? What about the company I mentioned which promises them this year?
The original point was that there is risk. Its very unreasonable to claim that the risk is zero. Perhaps you don't believe this is the primary risk to Tesla, although it seems more like you think Tesla is unfailable, but your counterpoints aren't particularly convincing.
New battery technology is very expensive to research and create in mass production, but we have a long road of potential improvements to catch up with the energy densities of most other fuels and research has batteries that improve upon lithium ion.
The article itself (despite the sensationalist title) is not extremely insightful - investors aren't expecting an auto-manufacturing startup to be cash-flow positive while quickly scaling production.
In addition the content at times even contradicts the title...
"RBC analyst Joseph Spak, who has a $180 price target, said strong initial orders for the Model 3 could help Tesla achieve positive free cash flow"
...
"In February, the company said it expected to be cash-flow positive in March."
A more accurate title might be: "High Model 3 demand poses growth challenges and an increased need for capital."
Preorders are also not binding. Depending how long it takes, impatient customers or those who need a new car sooner could look at alternatives.
By the time the Model 3 goes into production, it could face stiff competition from several entrants.
The Model 3 might not have a lot of competition today, but it likely will in a few years time and it remains to be seen how many of the preorder customers will stick with their decision if/when other choices are available.
This has always been the most laughable thing for me. Stiff competition.
As if anyone is likely to come up with a car this compelling in the same time frame. Like some mass-produced awesome car is just going to appear out of nowhere. Yes, the big manufacturers have some things like the Bolt in the works. Have you seen it? It's pretty meh. You wouldn't expect any of them to rack up hundreds of thousands of pre-orders before anyone's even gotten their hands on the car in person, non-binding or not.
Yet somehow all these internet analysts seem to think somehow all this incredible passion for the Model 3 will just magically fade away in favor of the exceptionally meh cars released by Chevy and Nissan and others. That's just not how things work. People have waited 12 years for this, you don't think they can wait two more?
I swear to god, even after Tesla is selling 10 million cars per year, you're still going to have people sitting here saying "But can they keep it going? Here comes the Tesla-killer~"
Extreme analogy, I know, but reminds me of Holocaust denialism. Some people are just determined to see past all available evidence to focus on one outcome which suits their personal biases.
In the real world, I've been listening to people like you predict Tesla's failure for ten million increasingly humorous reasons for 10 years, while I've watched my stock go up twelve times over.
"Extreme analogy, I know, but reminds me of Holocaust denialism. Some people are just determined to see past all available evidence to focus on one outcome which suits their personal biases."
-very extreme analogy to the say the least, seems someone else here has a strong personal bias to use a crazy analogy.
its great that you believe in a company strongly, but to downright shoot down any other possibility is bias.
personally not ordering model 3 as:
-dont want to be driving first iteration
-contrary to your comment, alot can happen in 2 years.
-i dont think they can meet demand, probably 2-3 years realistic
-i will likely be in a comfortable spot (hope) to afford Model S by end of 2017
A lot can happen in 2 years indeed. Can't wait to see what Tesla and SpaceX have accomplished by then. It's going to be nuts.
I am indeed biased: I focus on available evidence. That's my bias. And all available evidence screams that Elon Musk's companies succeed at the things they set out to accomplish.
I guess it depends on how you define success. Certainly it includes the word, eventually, because it's not ever happening on the 1st, 2nd, or 3rd expected by date. The analysts do tend to be conservative but they're also advising on a lot more than $1000 buy-ins, so a lot of their hesitation is completely legitimate "show me the goods". Investing isn't exactly like gambling on chance you know?
Because Nissan cannot make a car as great as a Tesla. It's that simple. They are the wrong company. It's not different from Windows Phone trying to play catchup with iOS. It was never going to happen, and everyone knew it.
Tesla has already checked their box. The car is $35k. The price isn't going to magically change. Musk isn't going to be like, "Sorry guys, turns out it's $50k."
Nissan has not checked their box and there is zero reason to think they ever will.
If Tesla can't meet their production schedule, many of those pre-orders will evaporate. Tesla now has to get a huge factory up and running, and then learn to run it cheaply. That's not easy. Fast, cheap, good - pick two. My guess is they'll be a little late with the new cars, they'll be OK, and their manufacturing cost per unit will be higher than expected.
Either they have properly modeled the cost of building a car they claim to be able to sell for $35k, or they are another failed Kickstarter making empty promises.
They know what they are doing with regard to expensive, luxury, low-production volume vehicles. The question is whether they know how to scale and make money.
> "High Model 3 demand poses growth challenges and an increased need for capital."
which is a good problem to have. Especially for a company with the popularity and positive image of Tesla -- they should have a fairly easy time raising capital from outside investors, if they so desire. It's a challenge, to be sure, but not as difficult as the headline makes it sound.
(After a nearly 3-year hiatus, it's good to have you back on HN.)
The problem, as is often the case with stories like TSLA, is that the "investors" are often momentum chasers and unsophisticated. If you doubt it, go read some message boards in Reddit or elsewhere. Very little analysis is actually performed.
Including maintenance. Model S is $400 and $700 for the 1st and 2nd years. I know of no mass market car in the ~$35k price range with such high maintenance. Will the car get 10 years of software bug/security updates? 20 years? What sort of after market modifications will be allowed? Will 3rd party maintenance be permitted?
The worst thing is that Tesla can at any point decide your vehicle is no longer fit for use and disable it completely. They already do that in case of accidents - the car is completely disabled until you bring it to a Tesla dealership where it has to pass their standards to be reactivated.
The extended warranty is 4 years after the included 4 years. That's 8 years. There's presently no option beyond 8 years. At the moment, Tesla literally owns the keys to the car in the form of activation, and at the moment there's no way to know what 3rd party parts or repairs are acceptable. It's also unknown what happens if a significant software problem is found after 8 years, whether there will be a software upgrade service beyond 8 years and what that will cost. In theory the car could cost less than a regular car, but a huge part of the reason why specific traditional model cars end up being inexpensively and safely maintained is the wide availability of service parts and manuals. None of that is true yet for Tesla. That's workable for a unique high end vehicle, I don't think it is for mass market.
You references the cost of maintenance for a Model S, but then compared to to ~35K cars. You should probably compare it to what BMW charges for a 5 or 7 Series.
Also, according to Edmunds.com, a 3 Series BMW will cost you about $2,000 in annual maintenance after the 3 year warrantee expires.
Consider the list of maintenance items for a Model S, the Model 3 would hardly be any different. So it's reasonable to compare to a $35K car. And saying I should compare it to a maintenance hog of a car like a BMW isn't reasonable. Maybe it's not reasonable to compare it to my own sample size of 1 either, which is my Audi A4, which had free maintenance for 3 years, and the most expensive it got after that was one year for 60K mile service getting a new timing belt. On average it's been less than $500 a year to maintain.
Barclays analyst Brian Johnson, with a bearish $165 price target, believes the surge of Model 3 reservations - each accompanied by a refundable $1,000 deposit - could reach 300,000 by the end of June.
Heh. Elon Musk tweeted earlier today that they already had 276k reservations by the end of Saturday. So Tesla may reach this analyst's "end of June" target tonight.
These analysts always make me laugh. Their "insights" are just random guesses picked out of a hat. "Maybe THIS will happen! Then again, maybe it won't!" And they're proved wrong, over and over and over, but they keep at it. What are their credentials? Why are these people writing headlines?
Most meteorologists gather their data from the same place, the National Weather Service. All they do is basically create pretty charts around it and put on a suit.
Depends on the area and timeframe. If you look areas where there are lots of sensors around - say Europe, forecast for next 2 weeks will be very accurate.
If you are looking at the ocean, where sensors are only placed every 500KM - your accuracy will be very low.
Source: I sail boats and study forecasts occasionally.
It really seems like the best thing a company could do for its share price is conspire with analysts so they have consistently low expectations, and then it can constantly "beat analysts' expectations" which is apparently how most people value companies.
Is there a trend curve appearing? It is obvious that the 3 had massive pent up demand -- it was advertised for over year already! And with roughly first come first served, anyone who thinks they might want one between now and 2018 is going to get in line immediately at preorder launch.
Are there any plans for models after the Model3? Feels like we have been waiting for the "affordable model" for years and now that it's here there are no rumors for future models, correct?
I'd kill for a practical family wagon (I consider the Model X as being too small and without good storage, and the S as being just too expensive). The Model3 has nice looks, but it's pretty compact and it's a sedan so a complete no go .
The VW GTE wagons are perfect but they are hybrids. I suppose they will be fully electric soon, the question is how long it will take before VW and others have a similar price for batteries as Tesla?
I haven't seen the Model X in the flesh yet, but I got the impression that storage was only medium-crossover and not big-ass SUV volume (especially with the lack of roof storage). I could be wrong though. But either way, as you point out it's in the same price range as the S so it's way too expensive anyway.
I've seen a test version of the Model X driving around San Francisco. Its looks are pretty retch. I'm not going to say it will be a flop, but its sales won't be anything close to the 3 nor S.
That would be neat. However I'm not really interested in the models that are viable in the US market i.e. sedans, SUV's and crossovers, I want a euro-style wagon or crossy-wagon (Like the A6 avant/allroad, VW passat estate, V90, ...).
I just can't understand why someone would want an X5 or similar just to get more "utility". Most utility per dollar was always the wagons/estates. I realize there is a thing with culture and traditions (wagons seen as boring in the US etc) but you can't deny the fact that a SUV that loads like an A6 or 5-series wagon is a Q7 or X5, which is twice the price of the wagons! Don't get me wrong I'd be happy to drive a Q7 but I don't want to pay more than A6 money.
Ugh a pickup would be a very US centric market decision (again!). A smaller utility vehicle (van or caddy-type car) would make a lot of sense as there are tons of business like plumbers and who could want one.
Wagons and hatchbacks is a huge market share in the EU, and most the wagons are built on the same base as the sedan models (5-series, E-Class, Passat, A6 etc). There is a reason everyone does that - to get more models at lower cost. If I were tesla my next car after the compact sedan would be a hatchback made on the same platform as the 3-series, then a full size sedan+wagon like an E-class built on the model S base.
This seems smart, there doesn't seem to be too much wrong with opening the door to investors. Once the investors start supporting the Tesla M3 and EV entry luxury cars, they will be also interested in investing in the infrastructure to support these kinds of solutions.
If sales and orders continue rising, and he requires investments, then he's already hooked in investors. Tesla might just prove themselves to be the gateway to a new infrastructure model.
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[ 4.4 ms ] story [ 142 ms ] threadThe only thing that matters now is whether Tesla can build a great car profitably and cheaply in high amount, not cash-flow.
The "problem" is Tesla is trying to become the GM or VW of EVs before GM or VW get a chance to use their massive cash cows to dominate the market. So they're trying to cover the market with as many different models as their financials allow them, as well as trying to build the SuperCharger infrastructure globally. All of that R&D and infrastructure costs a lot of money and it has to come from somewhere -> current cars' profits.
To make things even simpler to understand, Tesla will operate on an Amazon model of not giving a damn about quarterly profits for the next decade or two, while building the biggest (Tesla-only) fast-charger network in the world (huge competitive advantage) and at the same time trying to grow as a company as fast as possible and entrench itself in the car market as the Apple of EVs.
Oh, and almost forgot about the whole Gigafactory thing. And one of those isn't even going to be enough by 2020 (don't forget it also has to make PowerWall batteries). That alone cost $5 billion and Tesla couldn't even build it all itself (just goes to show how much money Tesla needs to invest in its future, not pay dividends or brag about its 30%+ profits every quarter).
Electric cars are not the future, there just isn't enough lithium on earth to do this. The US might be able to, but not worldwide.
Powerwall is definitely not ever going to get off the ground - cars are more profitable, and they will never have enough extra supply to shunt some to powerwall.
While I don't know the answer myself, I am inclined to think that Elon's not just planning on running the company straight into a widely foreseeable dead-end. Seems unlikely, don't you think?
Like, imagine this interview:
Interviewer: What is your plan for when lithium reserves run out?
Elon: Wait, what? There's a limited supply? Hold on, need to google this.
Take 2:
Interviewer: What is your plan for when lithium reserves run out?
Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there.
(Has he EVER given an answer like that, politician-style? No. Never.)
Seems like a safe bet that this imagined problem has a solution which hasn't been shared with us because nobody's asked him.
Why do you think this is wrong? He'll have many years to figure this out - this is a longterm problem, not a short term one.
It's not like you can't do the math yourself on global extractable lithium supply, and how many cars you can make with it.
I'm betting, not on new battery technology (any element except the big 10[0] would run into the same problem), but rather on a new engine that can burn very clean synthetic hydrocarbon fuel.
But if I did have to do research on battery tech today it would be on an aluminum ion battery.
[0] https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth... [1] https://en.wikipedia.org/wiki/Aluminium-ion_battery
"according to a 2011 study conducted at Lawrence Berkeley National Laboratory and the University of California, Berkeley, the currently estimated reserve base of lithium should not be a limiting factor for large-scale battery production for electric vehicles, as the study estimated that on the order of 1 billion 40 kWh Li-based batteries could be built with current reserves. Another 2011 study by researchers from the University of Michigan and Ford Motor Company found sufficient resources to support global demand until 2100, including the lithium required for the potential widespread transportation use. The study estimated global reserves at 39 million tons, and total demand for lithium during the 90-year period analyzed at 12–20 million tons, depending on the scenarios regarding economic growth and recycling rates."[1]
In that time period a lot of the ongoing research in batteries is going to mature and alternative or more effective ways of using materials will happen.
[1] https://en.m.wikipedia.org/wiki/Lithium#Production
In the short term, though, existing reserves are mostly in Argentina, Chile, and Bolivia. I wonder how difficult it would be for a cartel to manipulate pricing?
And since lithium batteries are recyclable, we pretty much just need to extract it once.
But extra battery technologies will be good. Batteries will be a commodity, lithium ion batteries will be used both in grid storage, home storage, and car storage. Batteries are the oil of the 21st century.
I did say it's enough for the US - but the entire world is 10 times that number - not enough.
Plus using it for household storage (powerwall) would be far too much.
Extracting other deposits could come with steep costs both economic or environmental.
It's a good stopgap and worth doing! But lithium batteries should not be viewed as a longterm answer, that's all.
For example, Graphenano claims they will ship graphene batteries this year.
This "biggest risk" you've named is....entirely fantastical. A battery invention making the Gigafactory obsolete? What?
1. What kind of invention are we talking here? A new battery that stores 100,000mi per charge, is lightweight (magically), and charges in 10 seconds? Great, then the Gigafactory can start manufacturing that instead. It wouldn't be obsolete.
2. Even if such a thing as #1 were invented, great, now Tesla's product is infinitely more compelling. They'll sell that many more cars. The car now has enormous range and charges very quickly. This is a bad thing? What??
3. Even if #1 were invented and somehow intellectual property'd out of Tesla's reach, how's it going to hurt them? Are we imagining one of their competitors magically coming up with this, and conjuring an equally compelling but superior car out of thin air, using technology Tesla has no access to? That's an incredible turnaround time, this new tech being revealed AND reaching mass production AND having a car designed around it which ALSO reaches mass production...all before 2017. Incredible! Unheard of!
4. #1 is a joke. That won't happen, can't happen, has never happened. New revolutionary hardware technologies don't just appear. They gradually work their way into society, and it takes a lot of time before methods are found to cheaply mass produce new hardware technologies.
Given that your "biggest risk" is an absurdist fantasy, I think we can safely say Tesla's in a good position!
The Gigafactory IIRC has a $5B budget. The building and the land isn't expensive, especially given the preferential treatment by the government. The machinery and infrastructure, tailored for lithium battery production, are the biggest part of the budget and you won't be able to "just switch it out". The Gigafactory is a lithium battery factory on a massive scale, nothing else.
> New revolutionary hardware technologies don't just appear
Do you remember the revolution that got sparked by the iPhone? That one needed half a year to totally turn over the mobile phone market. It's not uncommon.
On the other hand, I agree that a revolutionary new technology is unlikely to appear - and with the Gigafactory, Tesla and Panasonic can basically control battery prices for the rest of the world.
2. Sure, the cars have better range and probably Tesla can sell more cars but that's capital intensive and they just pissed away 15% of their market cap. Not great capital wise.
3. It hurts them because, as I mentioned, they spent a fortune and they might as well have lit a fire with the money. At least they'd be warm for a bit... Investors typically are not happy when a company makes a bad bet to the tune of a couple billion bucks.
4. How long have you been reading about graphene batteries? What about the company I mentioned which promises them this year?
New battery technology is very expensive to research and create in mass production, but we have a long road of potential improvements to catch up with the energy densities of most other fuels and research has batteries that improve upon lithium ion.
In addition the content at times even contradicts the title...
"RBC analyst Joseph Spak, who has a $180 price target, said strong initial orders for the Model 3 could help Tesla achieve positive free cash flow"
...
"In February, the company said it expected to be cash-flow positive in March."
A more accurate title might be: "High Model 3 demand poses growth challenges and an increased need for capital."
By the time the Model 3 goes into production, it could face stiff competition from several entrants.
The Model 3 might not have a lot of competition today, but it likely will in a few years time and it remains to be seen how many of the preorder customers will stick with their decision if/when other choices are available.
As if anyone is likely to come up with a car this compelling in the same time frame. Like some mass-produced awesome car is just going to appear out of nowhere. Yes, the big manufacturers have some things like the Bolt in the works. Have you seen it? It's pretty meh. You wouldn't expect any of them to rack up hundreds of thousands of pre-orders before anyone's even gotten their hands on the car in person, non-binding or not.
Yet somehow all these internet analysts seem to think somehow all this incredible passion for the Model 3 will just magically fade away in favor of the exceptionally meh cars released by Chevy and Nissan and others. That's just not how things work. People have waited 12 years for this, you don't think they can wait two more?
I swear to god, even after Tesla is selling 10 million cars per year, you're still going to have people sitting here saying "But can they keep it going? Here comes the Tesla-killer~"
Extreme analogy, I know, but reminds me of Holocaust denialism. Some people are just determined to see past all available evidence to focus on one outcome which suits their personal biases.
This is business, there are a number of realistic possibilites and not all are favorable for Tesla.
Holocaust denialism? Join the rest of us in the real world please.
Welcome to the real world.
-very extreme analogy to the say the least, seems someone else here has a strong personal bias to use a crazy analogy.
its great that you believe in a company strongly, but to downright shoot down any other possibility is bias.
personally not ordering model 3 as: -dont want to be driving first iteration
-contrary to your comment, alot can happen in 2 years.
-i dont think they can meet demand, probably 2-3 years realistic
-i will likely be in a comfortable spot (hope) to afford Model S by end of 2017
-too much unknowns for Model 3
I am indeed biased: I focus on available evidence. That's my bias. And all available evidence screams that Elon Musk's companies succeed at the things they set out to accomplish.
Both have one of two boxes checked, why is Tesla obviously better a getting their second check?
Tesla has already checked their box. The car is $35k. The price isn't going to magically change. Musk isn't going to be like, "Sorry guys, turns out it's $50k."
Nissan has not checked their box and there is zero reason to think they ever will.
[1] https://www.teslamotors.com/careers/job/project-manager-gen3...
I'm pretty sure they know what they're doing, given they made the highest rated vehicle, ever.
which is a good problem to have. Especially for a company with the popularity and positive image of Tesla -- they should have a fairly easy time raising capital from outside investors, if they so desire. It's a challenge, to be sure, but not as difficult as the headline makes it sound.
(After a nearly 3-year hiatus, it's good to have you back on HN.)
also curious to see if the model 3 will represent greater reliability for their vehicles...
Current level of reliability + current service model @ model 3's volume == nightmarish owner experience.
Anecdotally currently at 26k with zero issues.
Also, according to Edmunds.com, a 3 Series BMW will cost you about $2,000 in annual maintenance after the 3 year warrantee expires.
http://www.edmunds.com/bmw/3-series/2015/cost-to-own/
Heh. Elon Musk tweeted earlier today that they already had 276k reservations by the end of Saturday. So Tesla may reach this analyst's "end of June" target tonight.
If you are looking at the ocean, where sensors are only placed every 500KM - your accuracy will be very low.
Source: I sail boats and study forecasts occasionally.
I'd kill for a practical family wagon (I consider the Model X as being too small and without good storage, and the S as being just too expensive). The Model3 has nice looks, but it's pretty compact and it's a sedan so a complete no go .
The VW GTE wagons are perfect but they are hybrids. I suppose they will be fully electric soon, the question is how long it will take before VW and others have a similar price for batteries as Tesla?
If they're smart, they'll cancel it in year 3.
I just can't understand why someone would want an X5 or similar just to get more "utility". Most utility per dollar was always the wagons/estates. I realize there is a thing with culture and traditions (wagons seen as boring in the US etc) but you can't deny the fact that a SUV that loads like an A6 or 5-series wagon is a Q7 or X5, which is twice the price of the wagons! Don't get me wrong I'd be happy to drive a Q7 but I don't want to pay more than A6 money.
It's rumored the next vehicle will be the Model Y (To complete "S3XY"), and will be a pickup, or some form of utility vehicle based on the X
Wagons and hatchbacks is a huge market share in the EU, and most the wagons are built on the same base as the sedan models (5-series, E-Class, Passat, A6 etc). There is a reason everyone does that - to get more models at lower cost. If I were tesla my next car after the compact sedan would be a hatchback made on the same platform as the 3-series, then a full size sedan+wagon like an E-class built on the model S base.
If sales and orders continue rising, and he requires investments, then he's already hooked in investors. Tesla might just prove themselves to be the gateway to a new infrastructure model.