The Tesla Model 3 Myth
Musk Melon says the Model 3 is for the poor people. Actually, he didn't say that. He said something to the effect that the Model 3 is "mainstream." For me, "mainstream" is the Chevrolet Bolt, and at $34,000, just barely.
But the guy that knows best, Phil LeBeau, says the Model 3 will compete with the BMW 3 series and the Mercedes C-class sedans. A little secret: neither the BMW (any series) or the Mercedes (any class) is considered "mainstream" in the US. On the way to work today, count the number of BMWs and Mercedes you see on the highway. Then count the number of Honda, Kia, and Toyota sedans. Those are mainstream.
The BMW EV, the Mercedes EV, and the "real" Model 3 all sell in the $44,000 range.
Now we have a "green site" that says the same thing:
A decade ago, Tesla CEO Elon Musk envisioned building an electric car that would be both thrilling to drive and affordable.
Does the Model 3 car that Musk handed off to Tesla’s first 30 customers last Friday meet that description? Almost. But Tesla still has more work to improve affordability.
The basic version of Tesla’s Model 3 car starts off at $35,000 (before incentives), which is the average transaction price of a car in the U.S. today. But the Model 3 can quickly run up into the $50,000 range if a customer adds on a few of the extra features. The fully loaded version will cost $57,000.
If a customer wants a paint color for the Model 3 that isn’t black, that’s an extra $1,000. A version with a longer battery range adds on an extra $9,000. Autopilot technology (Tesla’s self-driving car tech) will cost an extra $5,000 to $8,000, depending the level of sophistication.The other news that the "green site" failed to mention: Teslas around the world, and certainly in the US, run on coal.
A contributor over at SeekingAlpha says the same thing: the Tesla Model 3 is not a mass market car.
The Tesla (TSLA) Model 3 launch on Friday was a big disappointment in Tesla fan circles as can be seen from fan sites such as Elekrek, TMC, and Inside EVs.
Much of the disappointment has to do with Tesla delivering a $50K car and not the $35K as it has been promising for years.
The production ramp and the delivery dates that are now being suggested by Tesla also are also causing considerable heartburn among reservation holders.
None of these and other Model 3 shortcomings should be news to our readers. We have consistently found CEO Elon Musk’s promises on Model 3 pricing and ramp to be not credible. Therefore, it should not be surprising to readers that the Model 3 launch landed with a thud.On another note, the earnings, revenues, "surprise" history for Tesla over at Market Watch.
On another note, Bloomberg quotes a hedge fund billionaire who suggests Tesla could run out of cash making the Model 3.
“The company is expected to burn over $2 billion this year as it begins production of its Model 3,” Einhorn said Tuesday on a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based insurer where he oversees investments.
“It’s currently only capitalized for the next three quarters. As Tesla attempts to achieve scale for the Model 3, it will depend on the capital markets’ willingness to fund it.” Tesla, which began production of its more affordable Model 3 in July and handed over the first 30 cars at an event Friday, expanded credit agreements and raised capital through equity and debt offerings ahead of the launch.
Tesla wants to make 500,000 cars in 2018, then a million in 2020. The company produced almost 84,000 vehicles last year.
With equities trading at record levels, Einhorn has endured losses on bets against stocks such as Amazon.com Inc., Athenahealth Inc. and Elon Musk’s Tesla. All have gained at least 30 percent this year.Einhorn did benefit from a bet on the decline of oil exploration company Continental Resources Inc., and his holding of pharmaceutical company Bayer AG. The hedge fund manager lamented that his strategy of favoring value over growth -- while historically a winning formula -- hasn’t worked as well in the recent rally.
Noes To The Granddaughters
The 2028 Summer Olympics has (have) been awarded to Los Angeles.
Our oldest granddaughter, age 14, played for the Texas Thunder water polo team in the National Junior Olympics held in Huntington Beach, CA, last week. In 2028, she will be 25 years old.
Our middle-aged granddaughter, age 11, plays soccer for FC Dallas. She plays with the twelve-year-olds. In 2028, she will be 22 years old.
Sophia, age 14, will handle the family itinerary.
Assuming I have their correct ages and did the math correctly.