
Tesla's $35k Model 3 Sedan to Start Production in 2 Years - ggonweb
http://techcrunch.com/2015/09/02/teslas-35000-model-3-sedan-goes-into-production-in-two-years-preorders-start-next-march/
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grandalf
Just enough advance notice to help would-be buyers time their leasing and
trade-in behavior.

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Vik1ng
Except that Tesla is notorious for not meeting deadlines.

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rebootthesystem
Well, this is a tried-and-true technique used to damage competition. I have
personally been the subject of such attacks in a prior tech business when our
product started to threaten that of one particular multinational.

What did they do? They had sales people go to every single dealer to
communicate they were going to show a next-generation product at the next
major trade-show. This was six months away.

What happened? Anyone who was on the fence and could wait, decided to wait. We
had a major order (about $2.5 million in product) go on what I call "soft
hold" because of this. Soft hold is when your customer waffles around instead
of pulling the trigger. They want to hedge their bet, so they keep you in the
loop and dangle a big order while they think it through or wait for an
alternative.

It is hard to say how much money we lost through such a simple technique.
Hardware products are very different from software. You have to preload supply
pipelines and fill warehouses with components, assemblies and finished
product. Your purchasing has to be predictive (a nice to way to say "you have
to get good at reading crystal balls"). In some cases you have to make
purchasing decisions 10, 12 or 16 weeks before you can ship any product.

As a small company with just a dozen people or so the tsunami they created
really hurt us financially. This multinational's marketing budget in our niche
was probably larger than our annual revenue. Which meant they could play all
kinds of games.

Our product was very good but heavily funded FUD and dirty tactics served to
delay revenue and cause financial damage.

Six months later they brought this "next generation" product to the main
industry trade show. Of course, people trusted a well-known brand. And they
placed orders. Our orders tanked. Some got cancelled. We lost tons of money.
We survived, but it was very rough.

We knew their product wasn't good but customers didn't want to believe this.
Delivery timeline was something like six months. Which meant we were denied
sales and revenue for at least a year.

As product started to ship and now customers started to use it in the wild the
reviews came in: The product was crap. Not good. Not usable. Overpriced. Not
worth it. In other words, exactly what we told our customers a year earlier.

The problem at that point we had suffered so much financial damage that we
simply could not spin things back up. And, to boot, this was at a time when
money had dried up, which means there was no way to find a loan or an investor
to get us healthy again to make a run for the market.

The end result was that this company played the market masterfully with a
bullshit product, future promises and bad delivery yet succeeded to destroy
it's main competitor. I think it was another year before they actually
delivered a product people wanted. We were done. They won. Lesson learned.

I can't say with any degree of certainty Tesla is playing a similar game but
announcing something that is two years away with a reservation date just a few
months from now sure brings back painful memories.

Cars are a displacement market. This means that when someone buys a car that
buyer is, generally speaking, no-longer in the market for another car. Whoever
sold them that car effectively displaced that opportunity away from any other
seller.

Promising something two years away and locking people in with a deposit is
most-definitely a displacement move of the first order. That person will not
buy another car and will wait two years to get their pre-order. Which means
Tesla pre-displaces, BMW, Toyota, Audi and anyone else who might have a
$35K-ish car in two years.

Brilliant, if you can pull it of.

Slimy? Sure. Business is war.

~~~
butwhy
Thank you for the insight. I have noticed they have a habit of making big
announcements very early and even if they end up being late a lot of the time,
they continue this practice. So it must be worth it.

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grandalf
It's interesting that a $35K price point even makes sense for a car that could
conceivably be designed to last 400K miles.

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Vik1ng
400 miles? Even Tesla's Model S doesn't go anyway close to that under normal
driving conditions. Model 3 will get 200+ miles, at best maybe around 250 for
the top model.

Edit: Yeah missed the k. Never heard that one brought up. Also doubt Tesla's
will last much longer.

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mikestew
I think you missed the "K" at the end of the "400" in the post you replied to.
The part I'm wondering about is why the Tesla could "conceivably" go 400K. A
modern diesel could go 400K, but a Tesla will suffer the same problems the
diesel would with rotting body panels and interior, and a whole host of
problems not related to the drivetrain.

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ericb
I have no idea what makes a diesel die. Can you give me details on diesel
death and what the other problems not related to the drivetrain that one would
expect are.

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mikestew
> I have no idea what makes a diesel die.

Mechanical wear, the rings don't seal as well against the cylinder walls as
they used to. Valves don't sit in their seats as tightly as when new. And so
on. As for other problems, I already listed a few. Think of the niggly things
your last old car had. A Tesla, diesel, or any other car is not immune to
those problems.

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secabeen
With pre-orders to open in March!

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stdgy
This title is horrendous. It's missing the most important piece of
information, which is '...Production in 2 Years...'.

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chambo622
> "Tesla’s $35,000 Model 3 Sedan Goes into Production, Preorders Next March"

Yikes, very misleading title - the Model X is currently going into production,
not the Model 3.

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somerandomone
Yeah, >Model 3, our smaller and lower cost sedan will start production in
about 2 years. -- Elon Musk

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Animats
"Pre-orders". This isn't a Kickstarter. Why should customers finance a
billion-dollar business? Tesla can borrow at better rates than individuals.

~~~
toomuchtodo
Unit commitment. Anyone can make a free reservation. Serious buyers put $5K
up. It gives you better signals about what your production pipeline is going
to look like.

EDIT: If you can't fork over the $5K, you probably should wait in line to get
your Model 3 after priority orders are delivered.

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jsprogrammer
Can you fork over 35K to get in front of the 5k plebs?

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toomuchtodo
They _might_ have a Signature deposit offering, where the 3 comes fully loaded
in return for you fronting most of the vehicle cost upfront. This hasn't been
announced yet to my knowledge, but was done for both the S and the X.

Sidenote: If you can't afford a $5K deposit for a vehicle, you probably
shouldn't be buying a vehicle new.

~~~
jsprogrammer
How about putting up the money for the entire run to resell it at a markup to
all the people who were willing to put 5K down? Surely they can afford more
than 35K if they can let 5K sit around for the opportunity to pay another 30K
to get the car when it is actually produced?

Would that get me to the front of the line?

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toomuchtodo
Deposits are non-transferable. If you want to venture down some whacky scam to
get around that, I'm sure you could try.

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jsprogrammer
Ah, I mistook your first post as saying you could jump to the front in a
previous offering. It seems you were only saying that you might be able to
purchase from the more expensive pool.

Please accept my apologies.

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toomuchtodo
No need to apologize whatsoever! I apologize if my tone came off as abrasive
or combative.

~~~
jsprogrammer
Nope, not at all. I just didn't want to be ambiguous.

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xacaxulu
I was sort of hoping the brand would stay in the elite space and not make an
everyman's car. A 35k electric car is cool, but I like the wow factor that
Tesla currently has. Like saying "I bought a Porsche" and it turns out to be a
Boxster, not a 911.

EDIT: I'm not saying this is a bad strategy for Tesla - it's great for them,
I'm saying it makes it less valuable to me, one lone consumer since a Tesla
will become less and less of a status symbol. That's it.

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gt565k
I'm positive a 35k electric car made by tesla will not disappoint. 35k is
quite a bit of money

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webXL
Especially when much less of that money is going into a battery.

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patrickaljord
Looks like a great car but not sure it belongs to the future. I think the
future is mostly in rented car services à la Uber/Lyft, most people live in
big cities where the cost of owning a car is getting closer to just taking a
cab, not to mention the hassle. And this will accelerate once self driving
cars become more common. So yeah, buying cars especially $35k ones doesn't
seem like a business I'd invest in but I may be totally wrong here. The
battery part of it is great though.

~~~
toomuchtodo
"Listen To Elon Musk’s Awkward Silence After A Question About Tesla’s Self-
Driving Fleet"

[http://techcrunch.com/2015/08/06/listen-to-elon-musks-
awkwar...](http://techcrunch.com/2015/08/06/listen-to-elon-musks-awkward-
silence-after-a-question-about-teslas-self-driving-fleet/)

TL;DR Based on Elon's response, they're considering released an Uber
competitor with their own self-driving electric cars.

EDIT: Uber has an app and drivers. Tesla is going to have enough manufacturing
capacity to build 100K cars/year. Numbers I've found indicate that 90-95% of
the time, cars are in a garage or parked. That's a lot of idle capacity
society doesn't need out there.

What does that mean? Tesla doesn't need to churn out enough cars to replace
existing cars being sold; they just need enough that can replace current
_miles_ traveled by people.

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ssharp
Demand for cars is still huge during rush hours. Lots of cars sit idle during
low demand times, but that capacity is still needed to meet high demand times.

The problem isn't getting people into the same car. The bigger problem is
getting people into the same car at the same time. Sure, self-driving cars can
work with each other in ways human drivers can't to minimize congestion, but
until you start removing cars from the road, it will still be an issue.

~~~
dublinben
Uber Pool and Lyft Line are already paving the way for car sharing along
popular commutes. In the future, you will face the option of a ride home in a
self-driving car either alone for $15, or with two other passengers for $5.
The decision will be pretty easy for most people.

~~~
toomuchtodo
Or Google Now will simply suggest people in your area you could commute with,
based on its aggregation of your daily commute data with the data of others,
based on the time you leave every day.

Or perhaps Google Maps will do that. It supports Uber internally as a travel
option, no? Wouldn't it be interesting if that dropped away and was replaced
with Google's self-driving car scheme one night?

~~~
dublinben
Excellent point. The actual service providing this transportation shouldn't
matter. Passengers just want to arrive at their destination. Let the system
figure out how to get them there.

