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I wonder if Tesla is worried that this new model might cannibalize its more expensive, more profitable model S? Also, I should think that the level of automati

• philjohn 9y ago
  I doubt it, suspect it's more likely to open them up to a whole new market. For example, I would never consider dropping $90k on a car (unless I was earning many multiples of that a year), but $35k on a car that has the right range for me, and many of the mod cons of the grown up version? That's more likely. Ask yourself this - why would anyone buy an A1, A3 or A4 when there is the A5, A7, TT and R8/RS8 from Audi? Because people want different things from cars.
  • jondubois 9y ago
    Maybe a lot of people wanted to own a Tesla so badly that they were willing to stretch their finances to get it. Tesla has had a lot of hype, it can have that effect on people. In some European countries, there are Taxi drivers who drive Teslas (often for economical reasons). Now these people can own a Tesla without hurting their bank account. I think that there is a reason why car brands are either luxury or mass market but not both.
    • gambiting 9y ago
      I live in UK and I see loads of Teslas as taxis, which is almost unthinkable considering the cost of the car - and I don't mean luxury taxis, I mean it's common to see a normal curb-side taxi as a tesla. I suspect the fact that it's extremely cheap to run and tax balances off very high leasing cost and makes it worth it. I imagine nearly 100% of those sales will turn into Model 3s as soon as it's available.
      • philbarr 9y ago
        Where do you live in the UK?! I'm in the north and have never seen a Tesla once (taxi or otherwise)!
        • gambiting 9y ago
          I'm in the North(Newcastle) - there's plenty of Teslas as taxis around here, I see at least one on my way to work every day.
      • mcv 9y ago
        Tesla taxis are all over Amsterdam too. Mercedes used to the the standard for taxis here, but now Tesla seems to be taking over.
      • thorin 9y ago
        Using EV/Tesla as a taxi seems strange due to the charging time involved, you think it would limit the flexibility in terms of range or working hours although I believe the fast charging of the Tesla might be much more viable than a Leaf for instance. Tesla has the early apple effect where people want it even though they don't know why they want it. Great marketing!
    • icelancer 9y ago
      Acura has the exact same strategy price/model wise as Tesla, and they've done extremely well. They have their nicer-than-average entry-level car that shaped sport compact cars forever in the Integra, which became the RSX, and is now relaunched as the ILX. It was in the same price range as the Model 3 was for the same idea - average people who wanted to stretch to have a nice car. Then they have the (now current) TLX, RDX normal SUV, MDX luxury SUV, etc etc and their Model S is the flagship Acura NSX. Yes, Acura is a "luxury" brand, but so is Tesla, even with the Model 3 out. (Pretty sure Lexus is similar in branding/pricing with the Integra being equivalent to the IS 300 as the entry-level car, with it being a predominantly luxury brand. Obviously both Acura/Lexus are spinoffs of Honda/Toyota for the US/CAN market.)
    • jclardy 9y ago
      We are still talking $35k-$100k, in essence, the exact same price range that BMW lives in.
    • Broken_Hippo 9y ago
      I'm in Norway. I've ridden in a Tesla taxi. Yes, the upfront cost of the car is high. But on the other hand, the gas and maintenance costs make up for it. I completely understand the switch. Plus, the ride is nice, comfortable, and quiet for the passenger.
      • csdreamer7 9y ago
        Do you have numbers for the maintenance? Consumer Reports and insurance companies claim that maintenance is expensive for Teslas, even among luxury cars.
        • bowersbros 9y ago
          As I understand it, repairs are expensive, but general maintenance is less, because there isn't as much to maintain.
          • dsfyu404ed 9y ago
            A Tesla has all the same bearings, bushings and whatnot holding it off the ground and putting power to the road. EV gets rid of a ton of leak points compared to ICE. All the normal wear and tear stuff is exorbitantly expensive with Tesla because of how few shops can service them and you usually have to go through Tesla for parts.
          • base698 9y ago
            You're parroting Tesla's Marketing. Any mechanical product with 1000s and 1000s of parts made by complex machines also, with 1000s of ways to make mistakes is going to have lots of opportunity for problems that need fixing.
• skgoa 9y ago
  The robots are mostly build by german companies. Tesla aquired one such company a while ago.
• cjrp 9y ago
  > I wonder if Tesla is worried that this new model might cannibalize its more expensive, more profitable model S? Obligatory "If you don't cannibalise yourself, someone else will" Steve Jobs quote! I see them aimed at different markets though; I could never justify buying a Model S, but a Model 3 is definitely feasible (especially in the UK where petrol prices are high).
  • agumonkey 9y ago
    -- Kodak
  • mcv 9y ago
    We only buy cars second hand (I think we paid €11k for our Prius), so I'm afraid we've got to wait a bit longer.
• headmelted 9y ago
  Not sure how much patents would be a problem. They aren't selling car assembly robotics, so the biggest issue (one would think) would be acquiring the robotics in the first place, as it would be the theoretical company selling the robots that would be infringing any patents. Tesla is (to my understanding) free to use whatever technology they like in their factories, patented or not, so long as the products they're selling are non-infringing.
• izacus 9y ago
  How can a 100.000EUR car (ultra-premium market) be cannibalized by a 35.000EUR car (family limo / hatchback market)? I don't see people that can easily drop a 100k on a car decide that they're suddenly buy an average Joe car.
  • gambiting 9y ago
    I have some people at work who really want a Tesla. Like they would never ever consider spending 100k Euro on a Merc S class or an Audi A8, but they are willing to take on a huge financial commitment just to drive a Tesla - it's a brand + hype thing. I suspect that most of them will end up getting a Model 3 instead since that's far more into their price bracket. I still think you are right - if you can "easily" drop 100k on a model S you are not going to buy the Model 3 instead. But if you were saving up for a model S and would have eventually bought it had Model 3 not became available, then yeah, Model 3 has just cannibalized those sales.
    • csomar 9y ago
      I don't think these people are a big segment of the market. When you drop from 100k to 35k you are opening the doors for a whole bigger market.
      • mikeash 9y ago
        They wouldn't be a big segment of the typical market for a car in this price range, but Tesla is different. A huge number of Tesla owners upgraded from Priuses or similar, and never would have considered a $70,000+ car otherwise. I was one of them, and if the Model 3 had been available a couple of years ago I really doubt I would have purchased a Model S. (Not that I regret it in the least, I just would have taken a cheaper option if there had been one.)
• Shivetya 9y ago
  The power of the other companies would not be their patents or such related to production, its their ability to produce in any number they choose to do so. Hell GM proved they could pivot/etc with speed when they delivered a well developed and beat expectations "affordable" two hundred mile range EV before Tesla. While its cool Tesla has entered "production" with the model 3 I haven't seen one story on what the actual production line looks like. How many people are hired for it and trained? Did they get all the equipment in, installed, and certified? Surely these can be found out. I hope this is not like the X launch where some insiders made jokes about the paint being practically wet in regards to how close they cut it getting just the stage vehicles delivered. the big concerns going forward are obviously cannibalization of the S sales and the fact these cars will be in the hands of people who won't be as accepting of issues as the early adopters have been. its easy to dismiss issues with your third, fourth, or fifth family vehicle. However some of the 3 buyers will be likely pushing their finances and this will be their only or second.
• Broken_Hippo 9y ago
  I remember hearing some time back that Tesla's entire electric car plan was to produce the more expensive, luxury cars first, using the benefits (monetary and production improvements and so on) from those to start making more affordable electric cars - because understandably, most folks can't understand the more expensive ones. The vision is more to make sure everyone can own an electric car, hence the cheaper models. So no, I truly don't think that is a worry. I think this is just continuation of the bigger picture and a calculated risk.
• mikeash 9y ago
  They clearly are worried about exactly that. They've spent the past year discouraging people from reserving a Model 3, in a clear attempt to drive more Model S/X sales. Elon has gone on a couple of Twitter sprees to tell people that the Model 3 exists to be cheaper, won't be as good as the S, and that you should buy an S or X if you want the best Tesla has to offer. Just the other day Tesla shaved a full second off the low-end Model S's 0-60 time, which is likely intended to give the S a solid performance edge over the 3.
• takeda 9y ago
  My fear is more that due to model S many people have unrealistic expectations about a $35k car and end up disappointed.