Price war @35k?

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Lars

Lars

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It was inevitable. With the number of EVs in 35k price segment something must give. Dropping 7k of the price of the Bolt is just a starter. This car with its ageing design is no longer on the top.

The interesting thing is that normally these ''affordable" models would/could be viewed as targeting different markets; sedans, hatchbacks, small SUVs. But for now is not nessecarily the case. There is a lot of new early adopters, who can afford to pay 35k for a car and want to drive electric. And most will likely pick Tesla. Even if the 35k model is 'bling poor', it is a solid choice and it is still a Tesla on your driveway :) . The supercharger network is the cherry on the top of the cake. I would say it is clearly the best value for your 35k.

Under normal circumstances if you have a product ready you want to sell as many as you can. Strangely restricting availability (Kia/Hyundai) does not match this desire. It is possible that these guys are struggling with battery shortage and/or slim, if any, margins on their EVs. Either of these issues creates a serious challenge to convert the sedan buyers, backed up by Superchargers, to SUV buyers.

It will be interesting to see how the pricing/feature game will develop. I still think Elon will, at some point, discontinue the base Model 3 and drop the price of of the base+ to 35k. For now he not only delivered on his promise, he has also managed to shake up the EV world - again. Good for him.
 
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It is a brilliant strategy for dealing with the 'honorable' competition. Lutz claims traditional car makers are losing money so they transfer the costs to their better selling pickups and other cars. Lowering the cost of the Model 3 to $35k exacerbates their losses.

Lutz makes an interesting but understandable mistake in claiming 'everybody has EV technology.' Except he omits having outsourced EV technology to LG Chem as have many others. His and his fellows have spent a lifetime on pistons and transmissions and such old habits are hard to walk away from.

Bob Wilson
 
EVs made in relatively low numbers, 20,000 per year or less, aren't making the auto maker enough money to be significant anyway. So if they slash the price on a Bolt EV, that just means GM loses a little more money on each car. It seems to me this is more for show than anything else. GM doesn't want Tesla to be seen as beating them on price when they're beating them on everything else, so GM is accepting the loss in what, for them, is a fairly low-volume production.

Things are gonna heat up when multiple legacy auto makers appear to have some serious contenders entering the EV market; serious contenders meant for volume sales. Then, slashing the price by a few thousand dollars will actually mean something. I'm expecting that to start in 2020, but we'll have to wait and see how many of those promised high-volume EVs actually appear next year.

In 2020, Tesla will also be selling the Model Y, and by the second half of the year will likely be ramping up production of the Model 3 at the Shanghai Gigafactory, too!

Did I say it's an exciting time to be an EV enthusiast? Yeah, I might have mentioned that once or twice.
:)
 
My problem with the price war statement is we are not comparing apples to apples. I have not seen any manufacturer respond to Tesla's $35K car yet. May be they are still reeling from the shock, or they do not have a good response yet. The Bolt was overpriced at $36K and BMW I3 even more.

Tesla Model 3 is far more advanced when compared to the others and is a mid/full size sedan, not a hatchback. The other manufacturers were going on a low volume/high price strategy where the $7500 tax benefit was the selling feature. GM does not have that tax credit any more (it is half that). Now Tesla has bought down the price from $49,000 last year for the regular model to $35K for a down graded model which still has more features than the Bolt, what does GM do. Their strategy has gone out of the window. This applies to others also. Lower the price of the Leaf, the Bolt etc? Kill those models and come up with something new which can take Tesla head on? Cede the $35K market to Tesla and compete at the higher level? I have no clue
 
Pushmi-Pullyu said:
Did I say it's an exciting time to be an EV enthusiast? Yeah, I might have mentioned that once or twice.
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You are right. But I have a small problem. I am 74. How long can I wait to drive (safely :( ) one of those promised concepts???

I was born a few years to soon - lol
 
Lars said:
You are right. But I have a small problem. I am 74. How long can I wait to drive (safely :( ) one of those promised concepts???

I was born a few years to soon - lol
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But you certainly may live long enough to take advantage of fully self-driving cars! Travel in style, with a robotic chauffeur who you don't have to pay, and who doesn't require room and board!
:)
 
bwilson4web said:
I don't think they really compete at the Model S and X level. There are some hand-built, super cars but their price is so high and numbers so low ...

Bob Wilson
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There is no one competing at the S and X level but that is where people want to. I-Pace did not live to expectations (at least mine), Audi, Mercedes, Cadillac etc want to get there but every day they wait, Tesla gets stronger. Rivian wants to attack from a different angle and not sure what Hyundai is doing (to me they are the dark horse as they could come out with a sub $35K version).
 
Pushmi-Pullyu said:
But you certainly may live long enough to take advantage of fully self-driving cars! Travel in style, with a robotic chauffeur who you don't have to pay, and who doesn't require room and board!
:)
Click to expand...

I certainly WILL long enough for that. But how will I tell the robot to put "pedal to the metal" to enjoy the G force?
I know Elon is quite busy but I hope he will put in some sort of command into thew Autopilot+ for old farts.:)
 
Lars said:
I certainly WILL long enough for that. But how will I tell the robot to put "pedal to the metal" to enjoy the G force?
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When I took my test ride (I can't drive any more, so it wasn't a test drive) at the local Tesla Store a few years ago, the Tesla rep drove to the nearest (fortunately straight) freeway on-ramp, where she parked on the shoulder, to give me some warnings before she did the "launch" event. (Warnings such as "keep your head back firmly against the headrest" and other mostly unnecessary safety warnings no doubt required by Tesla's lawyers.)

The acceleration from 0 to whatever top speed she went to was, believe me, quite exhilarating even tho I presume she didn't exceed the freeway speed limit! ...or at least not by much. Altho I had seen many "Tesla grin" videos of people experiencing Tesla g-force for the first time, the actual gut reaction from the real experience was quite another matter, and an entirely involuntary "Holy s##t!" escaped from my mouth, much to the laughing delight of the Tesla rep. :)

Presumably, if you have a Tesla car or an EV with similar straight-line performance, you could instruct your robot chauffeur to do the same sort of entirely legal launch on a freeway on-ramp.

Lars said:
...some sort of command into thew Autopilot+ for old farts.:)
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I prefer to call myself an "old phart", thank you!
:cool:
 
No problem. I've put in a sell for KL shares at $36.00. If it completes before Monday, Mar 25, I'll have enough to add to my TSLA holdings.

Bob Wilson
 
Pushmi-Pullyu said:
But you certainly may live long enough to take advantage of fully self-driving cars! Travel in style, with a robotic chauffeur who you don't have to pay, and who doesn't require room and board!
:)
Click to expand...

@Pushmi-Pullyu my friend, you are going to pay for robotic chauffeur but not in the way we normally pay for them. No paying for Overtime and Healthcare benefits and 401k plans. You will pay licensing fees and one time costs and annual maintenance agreements and software upgrade fees and diagnostic fees and support fees.. (all the creative fees that credit card suppliers now use)..... I can bet you the companies that are developing this technology will be forced by their investors to find a way to monetize their Intellectual Capital. Tesla is asking about $5000-7000 as a one time cost paid upfront and I am not saying it is unreasonable. However, over a period of time, manufacturers will find a way of making this an annuity revenue instead of just a one time payment. Been around the block too many times and I can see it coming. And to be fair there are real costs in developing and maintaining the software and the manufacturer needs a return on investment.

One could argue those costs will be much less than a chauffeur with 24x7 availability and will give you a safer drive and I would agree with that. What I would challenge is that it is really Free, Free, Free. As they say, there is no Free Lunch.
 
interestedinEV said:
Tesla is asking about $5000-7000 as a one time cost paid upfront and I am not saying it is unreasonable. However, over a period of time, manufacturers will find a way of making this an annuity revenue instead of just a one time payment. Been around the block too many times and I can see it coming. And to be fair there are real costs in developing and maintaining the software and the manufacturer needs a return on investment.
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There certainly is a trend among manufacturers to get you to pay for anything by a monthly fee or per-use fee, rather than actually own it. As a film buff, I find this most noticeable in movies; the studios are really pushing the fee-per-view business model. I'd much rather buy a DVD or Blu-ray. That is, I'd much rather actually own it and be able to watch it any time I want without paying an additional fee. But I must admit that Netflix, with its vast library, is worth paying the monthly fee.

I note that Volvo has starting advertising its car subscription service in TV commercials. Is this a sign of things to come, or will it be just as unsuccessful as (Project) Better Place's attempt to sell charging your EV and/or battery swapping as a subscription service?
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Pushmi-Pullyu said:
Presumably, if you have a Tesla car or an EV with similar straight-line performance, you could instruct your robot chauffeur to do the same sort of entirely legal launch on a freeway on-ramp.
Click to expand...

After some thinking I came up with this command: "Alexa, Elon, when safe, show me what this baby can do!" :p Considering all the other fun stuff Elon and his team came up with in their spare time, Easter eggs, like farthing seats, this should definitely be doable.
 
I actually don't mind the idea of subscription, or some sort of membership instead of actually owning a piece of machinery. But it has to be priced right. Perhaps the only concern I have is the state of the car when I get into it. I mean cleanness. What if someone just took his kids home from the movies and their left popcorn and sticky seat behind? Some guys who rent their cars say it is an awful lot of work to prep the cars between customers. And I believe them.
 
Lars said:
Some guys who rent their cars say it is an awful lot of work to prep the cars between customers. And I believe them.
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Yeah. It amazes me how many people posting comments to IEVs News articles say that once we get reliable self-driving cars, they would be happy to rent their cars out thru a ride sharing service. Really? I suspect about the second time someone throws up on the carpet (or the upholstery), or the second time someone doesn't return the car at the appointed time and they wind up having to call Uber for a ride, they'll rethink that decision.

Owning a car means the freedom to go where you want, when you want. That's not going to change just because cars become self-driving.
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