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Musk: Osborning His Model 3
- mehrdada 8y agoModel Y was a known character before the announcement, so its official unveiling if anything had kind of the opposite effect. It put a pin to hoping for it to be available soon enough to hold off buying a Model 3 today and it is sufficiently advertised at a more expensive price to deter some more. Tesla's currently in a weird situation where it is in a local minimum of US purchases that it needs to book to make the quarter, while it has unsatisfied demand in EU and elsewhere but the delivery pipeline is not mature yet. Once that global shipping pipeline starts to fire on all cylinders (pun intended), it probably gives them enough runway to get to the Model Y without too much worry of shrinking demand in the US.
- fragmede 8y ago> Once that global shipping pipeline starts to fire on all cylinders (pun intended) What's the pun? Electric cars don't use exploding dinosaurs, so there are no fires in cylinders here.
- bryanlarsen 8y agoExactly, the stock market's reaction to the model Y showed that many people were expecting "one more thing" from the announcement. And if you read the reddit thread, you will find exactly what you suggested; there were several people waiting for the model Y announcement who decided to order the 3 immediately instead.
- taneq 8y agoThe Model S was their flagship mass market car, and the Model 3 is a "Budget Model S". The Model X is their flagship SUV, and the Model Y a "Budget Model X". I don't get why this is "Osborning the Model 3". They serve different market segments.
- dagw 8y agoThey serve different market segments. Do they really. They're basically the same size and visually quite similar (There seems no reasonable definition of SUV where the Model Y would qualify). I cannot think of many scenarios where the choice between a Model 3 and a Model Y is an easy and obvious choice (assuming both are actually available at roughly the same price point).
- davedx 8y agoThe Model Y has a 7 seat option, the Model 3 does not.
- ealexhudson 8y agoThat's much more an option than a segment, and many other manufacturers have served both needs with a single model (e.g. Nissan). I think JLG's point is that many potential 3 buyers may well prefer the higher styling of the Y, and the data in the marketplace is definitely demonstrating that SUV-type models are incredibly popular. Clearly people who need 7 seats will wait for the Y. Are people thinking about a 3 going to be put off by 7 seats? Probably not in massive numbers.
- mprev 8y agoThat is only relevant if you expect most Model Ys to be sold as seven seaters. The point of the analysis piece was that CUVs are more popular than traditional sedans. Their popularity, at least here in Europe, has nothing to do with their similarities to true SUVs. Instead, people buy them because they want something that looks like an SUV (or true off-roader) but they can't afford the purchase or running costs. The Nissan Qashqai, Citroen C-Crosser, VW T-Roq etc sell well not because they have seven seat options, or whatever, but because they look sturdier/safer than their traditional rivals. That's the point of the Monday Note piece: the market has shown that there's strong demand for crossover cars and, in the author's opinion, buyers might wait for their prefered format of car rather than settle for the sedan today.
- dvh 8y agoI can only read first two sentences of the article. How am I supposed to comment it? Edit: I think I'll write link based rss filter, it seems that all medium links are either from medium.com or they match this regexp: /^http[s]+:\/\/[a-zA-Z0-9]+\.[a-z]{2,3}\/[a-zA-Z0-9-]+-[a-f0-9]{12}$/
- iainmerrick 8y agoTry turning off Javascript.
- brisance 8y agoTesla is done. They have not done a capital raise and CapEx is too low for Model Y. You can't produce cars without first investing in plant & equipment.
- sschueller 8y agoMaybe so but the Model Y is so similar to the Model 3 it may not require that much more than what they already have.
- xbmcuser 8y agoWith 75% of parts the same for Tesla Y and X. I don't see why they needed to raise more capital. 2-3 more profitable quarters will increase share price and better prices when they raise capital for the Pickups and Trucks.
- CamperBob2 8y agoThis time for sure, right?
- rcMgD2BwE72F 8y ago>CapEx is too low for Model Y Source? They said multiple times that they have enough cash already to start and ramp up Model Y production. NB: the Nevada Gigafactory is already built (that's where Model Y will be assembled), they already got the money for the Shanghai factory (enough for 3K/week vehicles and battery packs at end of this year). They will soon announce the European factory (hints of European production for end of 2020 in the Model Y press releases, probably financed with local bank loans just like in China). We've heard "Tesla is done" since 2009 and yet, they keep eating into the competition's profits, and keep increasing their market share in the EV market at an evergrowing speed.
- marvin 8y agoTesla recently took a $2 billion loan to finance their Shanghai factory. Capital shouldn't be a problem if they keep selling like hotcakes at decent profit margins.
- spectrum1234 8y ago
- newnewpdro 8y agoOne could argue the future Y buyer wouldn't have bought a 3 anyways, this could be keeping them out of competitors CUVs in the interim.
- flexie 8y agoI doubt that Tesla needs much more demand at the moment. The demand for Model 3 already exceeds Tesla's production capacity. Until the Chinese Giga Factory 3 is up and producing large numbers, Tesla cannot use an increase in demand for much. Next year, Giga Factory 3 will be producing significant numbers, but that may still only be sufficient to meet the demand from the Chinese market. So Tesla will likely have to build a Giga Factory 4 in Europe or America to really meet the Western demands. Such factory, which is still not formally announced, needs to be built first and will not produce large numbers until 3-4 years from now. Apart from the obvious production constraints, Tesla has the constraint of expanding the supercharger network and the constraint of expanding their workshops, so that they can service the huge amount of new cars on the roads.
- elisharobinson 8y agoI disagree with a few of the assumptions made here. > germans will never come out with cost-competitive electric cars 1. because they don't have a Giga factory 2.because they would cannibalise their own petrol car demand 3. they want to push hybrids as the future but its never going to be cost effective as a pure electric tesla 4. china could level the playing field but due to large tariffs, it is unlikely they would make a significant impact in the next 5 years in US and EU. > tesla stands to make the most amount of money from its performance variants of the model 3 ( which is a cheaper porche in terms of performance). producing cheaper model 3 puts pressure on the balance sheet by unveiling the model y it reduces some of that pressure but keeps the company profitable for longer.
- Brakenshire 8y agoYou’re not going to have to wait long, the first VW electric cars on the new modular platform are entering production by the end of the year, and scaled up at the start of next year. VW in fact has a regulatory requirement to reduce average fleet emissions which will force a massive scaling up of its electric production. And its board have already signed off on tens of billions of Euros of investment over the next five years to that end.
- nikanj 8y agoThe German car industry has been doomed every other decade by various factors such as Japanese cars, American cars, the oil crisis, etc. I have full faith in their ability to overcome this one as well
- elisharobinson 8y agoI can't disagree with you on that, the German education and integration with industry is a well-oiled machine. my point is they have too many factors some even geopolitical to keep making ice cars and my personal opinion is we won't see real competition from German carmakers for another decade in the electric car space.
- rebuilder 8y agoI see it completely differently. The Germans in particular seem likely to get big into EVs. They have a traditionally strong auto industry that's having the message that fossil fuels are a thing of the past hammered into them on multiple fronts. Diesel has become a pariah, and VW in particular has paid dearly for making diesel cars. The EU regulatory environment is signalling quite strongly that they want to take petrol cars off the streets as well. What conclusion does that leave auto makers in Germany other than that they need to switch to EVs ASAP?
- agumonkey 8y agoslightly different market, very common infrastructure and design
- kumarvvr 8y agoOne is a 7 seater, one is not. One is costly, one is not. One is not a replacement for the other. What is the Osborne effect here exactly?
- cm2187 8y agoYou may have missed that part of the article: > Once derisively called Cute Utes, CUV’s have become a wildly popular car genre, so much so that Ford will stop selling conventional sedans — with the exception of the still-loved Mustang — due to the “unstoppable crossover onslaught”. The author doesn't argue that they are the same, but that one is cannibalizing the other.