[Ladogaboy]

The Model 3 production is about to ramp up, and if the figures are still current, there should be somewhere between 400,000 and 500,000 reservation holders. Even without those numbers, Tesla is likely to trigger the phase out for the Federal Tax credit by Q2 of 2018 at the latest. That means that, even if Tesla can meet their production goals, the $7,500 credit will be gone by the time non-reservation holders could buy one. All of that is a bit of old news.

But something else is happening. Many states are starting to offer EV credits (some even at point of sale); however, those states are also placing a cap on vehicle purchase price. For example, the Oregon credit has a $50,000 vehicle price cap and the Maryland credit has a $60,000 vehicle price cap. So, in addition to losing out on the $7,500 Federal credit, Model 3 buyers who option their cars in a way that the exceeds the $50,000 price point might lose out on another $2,500 or more in incentives.

So the questions are: Can Tesla get the cost and price of the Model 3 down? How many prospective buyers will they lose if the Model 3 option they want is $50,000 or more after all incentives? When will Tesla have a truly affordable EV option?

I don't want this to devolve into a Bolt EV versus Model 3 debate, but I've seen numerous reports of Bolt EV buyers getting $6,000 or more off of MSRP. If that is happening now, I think it is reasonable to believe that GM will be able to drop the price of the Bolt EV to compensate for the loss of the Federal Credit, which GM will also likely trigger in Q2 of 2018. Will Tesla be able to do something similar? After all, they are going to have to compete against Audi and BMW who will still have access to the full $7,500 credit far into the future.

 

[Shivetya]

price isn't the important area where Tesla will be competing, if the big companies get into the market they will pick up a lot of sales even from 3 rsvp holders simply for brand loyalty

 

[viking79]

price isn't the important area where Tesla will be competing, if the big companies get into the market they will pick up a lot of sales even from 3 rsvp holders simply for brand loyalty

The issue I see is the traditional brand loyalists aren't the ones buying these vehicles (and they won't until price parity) Volt for example is a car for GM that brought more non previous GM owners than any other model. The current EV buyers are largely doing it for environmental and technology reasons. GM has a huge perception issue on these regards as people perceive them as a gas loving cheating lying company that hid ignition switch defects and crushed that ugly little EV1. My point is many of these people won't consider GM (or any legacy maker's EV) no matter how good. They are already Tesla fan boys as they see them as sticking it to the institution. A lot of this is perception, but GM really needs to work on their image.

So my point here is all the other big companies are playing catch up to Tesla, some don't know it yet. Assuming some event doesn't stop the inevitable shift to electric.

 

[Off Oil]

Define "affordable". Although this is different for each person, the average selling price for a new car in the US is in the mid-thirties. My Gen2 Volt fully optioned had an window sticker price of $42,400 and a base is $33,200. The Bolt and Model 3 are right around 35K. Based on the numbers, the base trim version for all 3 models is already affordable without the tax incentive.

I've said this before, however I would have bought my Volt even if the credit expired. What needs to be fixed is the structure of the tax credit. The prior administration really screwed this up when they changed it from a fixed number for all manufactures to a per manufacture allocation. This is going to create a disparity when Chevy and Tesla hit the phaseout, which is unfair for both of these early adopters. I would rather see this go back to a fixed macro number, or get rid of it entirely when the first manufacturer hits the phaseout.

 

[Upper5Percent]

Define "affordable". Although this is different for each person, the average selling price for a new car in the US is in the mid-thirties. My Gen2 Volt fully optioned had an window sticker price of $42,400 and a base is $33,200. The Bolt and Model 3 are right around 35K. Based on the numbers, the base trim version for all 3 models is already affordable without the tax incentive.

I've said this before, however I would have bought my Volt even if the credit expired. What needs to be fixed is the structure of the tax credit. The prior administration really screwed this up when they changed it from a fixed number for all manufactures to a per manufacture allocation. This is going to create a disparity when Chevy and Tesla hit the phaseout, which is unfair for both of these early adopters. I would rather see this go back to a fixed macro number, or get rid of it entirely when the first manufacturer hits the phaseout.

https://electrek.co/2017/04/06/tesla-model-3-average-sale-price-data/

<But $35,000 is for people willing to get a bare Model 3 without any option. The actual average sale price after options is expected to be much higher. Tesla CEO Elon Musk said last year that he expects it to be close to $42,000, but new data suggest that reservation holders are preparing their budgets for a significantly higher price.>...Even Musk knows that $35K is a myth...

<The results are that most reservation holders are preparing to pay between $45,000 and $55,000, which makes sense since the bare Model 3 or nearly bare Model 3 are very rare options among the reservation holders surveyed. Most of them are looking for a battery pack upgrade from the base model, which is expected to offer 215+ miles of range, to bigger packs that could allow up to 300 miles of range.>

 

[Ladogaboy]

Define "affordable".

Average new car MSRP is $34,000, so "affordable" would be somewhat less than that. All I'm saying is that, without the $7,500 rebate and with other rebates unavailable, the Model 3 might not be competitive in its target market.

 

[scrambler]

For people buying a niche 50k / 60k car, I doubt $2,500 would break their decision

 

[Ladogaboy]

For people buying a niche 50k / 60k car, I doubt $2,500 would break their decision

Well, the whole point is that the Model 3 is supposed to be mainstream. Also, it's not just the $2,500. They will be missing the $7,500 as well. That's a whole lot of price advantage for an EV 3 Series.

 

[Off Oil]

Average new car MSRP is $34,000, so "affordable" would be somewhat less than that. All I'm saying is that, without the $7,500 rebate and with other rebates unavailable, the Model 3 might not be competitive in its target market.

IMO the target market for any EV at this point in time is middle to upper middle/upper class income brackets. I don't believe the Model 3 or Bolt changes this. To buy an EV one (should) be a home owner for charging capabilities, which would mean in most circumstances a single family house or a town-home with a garage. This would eliminate most renters/condo owners. I think this is the biggest limiting factor over the purchase price. That said, there is still a lot of growth potential, as there are a lot of single family home owners without an EV.

The importance of the tax credit is, in my opinion an incentive to get individuals to try the new technology. Once people get their toes get wet, they're usually sold.

I agree that most will likely be optioning up their Model 3 over the base version, therefore increasing the cost. I don't believe this will affect the target market when it expires, other than maybe they don't add so many options in the future.

The real concern with the tax credit is when Tesla or Chevy hit their limit, the tax credit will shift people to other manufactures who still have the full credit remaining. This would hurt both Tesla and Chevy through the diverted sales. As I noted before, I will buy again even without the credit. However if Chevy has no tax credit available but another manufacture does, this could move me.

 

[accelerus]

i'm more pissed about GM pussing out when it came to screwing up my private offer code than anything tax credit related. (had a valid 1K private offer code, the build process for my 2017 took longer, was told "sorry, no dice" by the GM rep on the phone when I was taking delivery.

Literally as I'm driving my new volt home the rep calls and says "hold the phone! you can totally use the code to get 1k off your volt", did GM or the dealership do anything to make this happen? Nope.

All GM did was send me a Volt hat and some pens. So I have to say, screw em'. I can't wait till 2019 when I plan on moving to a model3, I know that 35k model3 will probably cost closer to 50 once I put the options I want on it, but at least I won't have to deal with GM anymore. The volt is some great tech in a decently sexy package, from advertising (or lack thereof), to the way they treat customers they have screwed up at pretty much every step when it comes to keeping me as a customer.

The old school way the company thinks and does business is what's going to screw them long term. And the only reason Bolt buyers are getting chunks of cash off now is because they simply aren't selling that many. The underlying tech of the car is great, but it was packaged into an ugly frumpy little box. Elon is right "sexy" sells... which is why there are 400k people waiting in line to get a Model3.

 

[Ladogaboy]

IMO the target market for any EV at this point in time is middle to upper middle/upper class income brackets. I don't believe the Model 3 or Bolt changes this. To buy an EV one (should) be a home owner for charging capabilities, which would mean in most circumstances a single family house or a town-home with a garage. This would eliminate most renters/condo owners. I think this is the biggest limiting factor over the purchase price. That said, there is still a lot of growth potential, as there are a lot of single family home owners without an EV.

Unfortunately, I agree for the most part. (That is also why I don't understand the criticism of the Bolt EV not selling in the same volume as the low $20k Cruze. It's not an entry-level vehicle.) Outside of a few forward thinking states, most of the EV credits and perks are regressive (they are less significant the lower the buyer's income). In fact, if you don't make at least $50,000 a year, you aren't likely to benefit from the $7,500 credit regardless.

However, we are a nation of struggling middle class, so even those making enough to qualify for the credit (and those who have mortgages, as you pointed out) should probably be buying cheaper cars. We are up to our gills in debt, and most Americans spend the better part of their lives paying off student loans and mortgages. Then we're asking them to throw another year's wages away on a car.

I'm really hoping a few things change that paradigm.

• Competent, affordable vehicles hitting the used car market. Lower working class families can certainly afford used EVs, but the affordability still doesn't address the fact that the average small battery EV isn't viable for the average American.
• Progressive incentives, including point-of-sale credits that make EV ownership a reality for those with lower income.
• A drop in the overall price of EVs that makes them affordable for those with lower income.
• Legal requirements that multi-unit dwellings, apartment complexes, condominiums, etc. must install L2 charging and make those spaces available to residents.

i'm more pissed about GM pussing out when it came to screwing up my private offer code than anything tax credit related. (had a valid 1K private offer code, the build process for my 2017 took longer, was told "sorry, no dice" by the GM rep on the phone when I was taking delivery.

Literally as I'm driving my new volt home the rep calls and says "hold the phone! you can totally use the code to get 1k off your volt", did GM or the dealership do anything to make this happen? Nope.

All GM did was send me a Volt hat and some pens. So I have to say, screw em'. I can't wait till 2019 when I plan on moving to a model3, I know that 35k model3 will probably cost closer to 50 once I put the options I want on it, but at least I won't have to deal with GM anymore. The volt is some great tech in a decently sexy package, from advertising (or lack thereof), to the way they treat customers they have screwed up at pretty much every step when it comes to keeping me as a customer.

The old school way the company thinks and does business is what's going to screw them long term. And the only reason Bolt buyers are getting chunks of cash off now is because they simply aren't selling that many. The underlying tech of the car is great, but it was packaged into an ugly frumpy little box. Elon is right "sexy" sells... which is why there are 400k people waiting in line to get a Model3.

Exactly what does that rant have to do with the Model 3 or this conversation in general?

 

[Slotracer577]

For me, even a $35k car is a deal breaker. Our family usually buy a new car every 2-3 years, drives it 100-125k and moves on. That works fine with a car in the low to mid 20's. Costs about 15k to drive 100,000 miles with nothing other than a set of tires and oil changes. both the volt and bolt were able to achieve a reasonable price with state and federal credits. I can't imagine a m3 with options coming close to that economy. That would be almost $2k/month in car payments with two of them.
I think leasing really distorts what is sold. I am not sure that ev's will have the resale to support low cost leases.

 

[hellsop]

• Competent, affordable vehicles hitting the used car market. Lower working class families can certainly afford used EVs, but the affordability still doesn't address the fact that the average small battery EV isn't viable for the average American.
• Progressive incentives, including point-of-sale credits that make EV ownership a reality for those with lower income.
• A drop in the overall price of EVs that makes them affordable for those with lower income.
• Legal requirements that multi-unit dwellings, apartment complexes, condominiums, etc. must install L2 charging and make those spaces available to residents.

At this point, 2011 and 2012 (and a few 2013) Volts can be had for <$10k. That's a short-range EV that is uncompromising in capacity for just about everything except rear-seat legroom. And while that' still not in the market range for "low income" households as such, it's not particularly more expensive than other 5-year-old cars with the provision that we do have an education issue that a 90k mile Volt is probably not on its last legs and in fact is probably only middle-aged.

The legal issue EV charging should at least be a "must permit" and a provision for non-portable improvements to be reasonably made.

 

[Ladogaboy]

The legal issue EV charging should at least be a "must permit" and a provision for non-portable improvements to be reasonably made.

California has a Title 24 that requires new business parking lots and structures to have a certain number of EV charging stations. I think it's a good program. I can see the issue with push back for people who own apartment structures in areas with low EV populations, but the chicken-egg situation needs to be addressed at some point.

 

[ChiVolt]

I don't think the Model 3 is shaping up to be the "common man's car". Not gen-1 at least...

 

[BAZINGA]

The good thing about the M3 aka Mini Me to the MS is that it looks so much like the current MS that one could safely buy a 2/4 year old CPO MS and still have the CURRENT Tesla look for YEARS to come. If I had $45K to $50K to spend on an EV I'd opt for a CPO MS right now and for the foreseeable future.

 

[Barry]

California has a Title 24 that requires new business parking lots and structures to have a certain number of EV charging stations. I think it's a good program. I can see the issue with push back for people who own apartment structures in areas with low EV populations, but the chicken-egg situation needs to be addressed at some point.

I think this is a good approach. Focus requirements on new construction rather than just how to retrofit existing parking lots. New construction is when it is the most affordable to add it, there is no issue of stealing legacy parking from ICE vehicles, and it can be laid out in a sensible way rather than being squeezed into a compromise spot as an afterthought. This should be more widespread outside of CA, especially for residential development like apartments and condos.

Also, new single-family residences should have a code requirement for a 220V outlet in the garage or accessible from the driveway. Very cheap to do during construction. The electrician is already on-site with a permit and the walls are uncovered.

 

[bro1999]

The $35k ($36.2k after $1,200 delivery fee) base Model 3 is a unicorn. A few will be delivered so Elon can say he delivered on his promised, then it will be killed for a new $40k+ base model.
Tesla would go bankrupt if every single reservation holder ended up buying a base 35k Model 3. There is no profit at that price point.

 

[Off Oil]

I would like to see the building codes updated to require a minimum of an L1 socket at each parking space metered to the unit for new construction (for condos & apartments). I think this is a better approach than requiring charging spots or equipment, and it also alleviates competition for the spots.

A used Volt IMO is a great value for a lower income individual, however this doesn't change the charging problem. I own a condo, and I paid a lot to have my spot wired. Where it's located, it was feasible, however for most in the building it isn't practical. There are others in the complex who would buy an EV, however there is no way they could wire their parking space. We have one guy who has his parking spot by his bedroom window, and he runs an extension cord through.

The potential market is there, step one is getting a good percentage of the homeowners.

 

[11715]

The $35k ($36.2k after $1,200 delivery fee) base Model 3 is a unicorn. A few will be delivered so Elon can say he delivered on his promised, then it will be killed for a new $40k+ base model.
Tesla would go bankrupt if every single reservation holder ended up buying a base 35k Model 3. There is no profit at that price point.

My Volt stickered for $45K. I wouldn't buy a stripped Volt and it is unlikely most people would buy a stripped Tesla.