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Tesla Model 3 and high-volume production: streamlining options might be the key

Discussion in 'Reserving, Ordering, Production, Delivery' started by TrevP, Nov 16, 2016.

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Do you think these bundles will help make it easier to build Model 3 quickly?

  1. Yes

    71.8%
  2. No

    7.1%
  3. Undecided

    2.4%
  4. I prefer to chose my own options

    18.8%
More threads by TrevP
  1. TrevP

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    From an article I wrote for EVAnnex.com:

    Since the reveal of the Model 3 on March 31 2016 we’ve seen the reservations number balloon from over 115,000 in 24 hours to over 373,000 at last count. This unprecedented demand surprised even Tesla’s internal estimates and Tesla officials had to scramble to come up with ways to increase their production forecasts and ramp-up by 2 years and produce 400,000 cars by 2018 instead of the original plan of 2020. While Tesla has been rather silent on the actual details of how they will achieve these targets some interesting changes to their options, specifically for the Model X, have recently been updated that could point to how they will streamline the offerings for Model 3.

    If you haven’t visited the Model X online configurator lately you might have missed a significant change to the interior options. While the Model S configuration options remain unchanged (for the time being) Model X interior choices are now bundled into packages. Surely Tesla has ample data on what buyer’s have been overwhelmingly been selecting and has streamlined the interiors by applying these popular combinations. Doing this allows them to better optimize the production process and smooth out the supplier chain. This is not a Tesla-exclusive feature, just about every car manufacturer of high-volume cars offer such packages and bundles of not only interior choices but in many cases they’re coordinated with exterior color choices.

    I think this is pointing to a logical direction that Tesla will be taking with the Model 3. But not just for interior colors but also the whole car as far as battery sizes, features, autopilot etc…

    By doing some simple back of the napkin calculations we can extrapolate some possible “Good, Better, Best” combinations, much like Apple does for it’s computers and devices, and this is no coincidence given that Tesla has used many of the same business tactics pulled from Apple’s playbook (Galleries, made to order cars, superior customer service etc…).

    Consider the following image showing possible configurations.

    Model 3 Configs.png


    In the “Good” configuration we could see a base battery pack of 60kWh, a single rear motor, metal roof, textile seats, keyless entry, active safety (present in all configs), autopilot hardware, 400kWh Supercharger yearly allowance, a 220 mile range and a 0-60 mph performance of 5.8 seconds. This car would be the base configuration coming in at the set-in-stone-price of $35,000 USD before incentives. Keep in mind your exterior color and interior colors are still up to you as well as a few other basic options like cold weather package, tow hitch and maybe a high-amperage charger. I don’t mention air suspension at this time because it’s not a confirmed option and would fit into Elon’s usual “not as many bells and whistles as Model S”.

    The “Better” options bundle at a $10K premium before incentives, which coincidentally is very close to Elon’s comment of the average sale price (ASP) of a Model 3 would be close to $42,000, would offer a larger 75kWh batter pack (possibly a software locked 90kWh if margins allow for it), dual motors, all glass roof, leather seats, tech package, active safety, Enhanced Autopilot, 400kWh yearly Supercharger allowance and a 260 mile range with 4.8 second 0-60 mph performance. As with many Apple configurations this would prove to be the most popular choice with buyers giving them the extra range, performance and creature comforts they’d want.

    The last config, “Best”, is essentially selecting every option possible. In the top end we could see a 100kWh battery with Ludicrous, dual motor, panoramic roof, leather seats, premium package, active safety, Full Autopilot (including self-driving), Lifetime Supercharger allowance (if they offer it considering the switch to a credit system) and a low 3.0 second 0-60 mph performance.

    p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 14.0px Helvetica} p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 14.0px Helvetica; min-height: 17.0px}
    I want to reiterate here that the prices and combinations are “guesstimates” but logistically make sense to allow Tesla to offer compelling Model 3 configurations, with the caveat that lower profit margins than Model S will dictate what they can do, that will also serve to streamline production and smooth out the supplier chain. While some may wish for a more a-la-carte opportunity for options choices like Model S, the time frame for start of production (about 10 months away from now) and Tesla reaching 200K cars sold in the US by the end of 2017 is most likely weighing heavy on internal decisions in order to maximize the tax credit opportunity for customers. If they have a choice between giving lots of options or doing the right thing for the customer I feel Tesla will do the latter.


     
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  2. Rick59

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    Well done, Yoda. Me likes "Better" with Cold Weather Package.
     
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  3. MichelT3

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    Seems sensible to streamline technical specifics.
    For me - as a lover of Citroën's former hydraulic suspension system - I would love to get the air suspension with hight correction. You didn't mention that option. Or is it part of the 'premium package'?
    I also miss a price estimate for the upgrade 75 -> 90 kWh? Which I would love.
     
  4. Gilberto Pe-Curto

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    Hi @TrevP , fantastic article!
    If those options ever come to be real, I would make an effort and go for the Best package.
    20K to get all that ?!
    'It's gonna be great" !
    Upsss sorry about this mention...
    But unfortunately , I tend to be not so optimistic and expect a Best a bit more expensive than that.
    I'm with @MichelT3 on the Air Suspension.
    Since I experienced an old Citroen DS my boss had, I was impressed with feeling. Is like being on a plane.

    PS: I think I'm going to put some of my surfboards for sale on EBay...
     
  5. MichelT3

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    Ha! Thanks! Citroën hydropneumatic suspension really IS like flying! I still love driving my 2 DS'ses and my CX!
    (Sorry, off topic...)
     
  6. Todd Harrison

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    Traditional ICE manufacturers create packages because most people who buy from them want to go to a dealership and buy off the lot, they take what they know will sell and do large runs. While I think they will certainly have packages that give a slight discount by bundling options I also think there will be allot of customization where the more expensive options are involved . I haven't watched the video yet if this was covered I'll find out once the kids go to bed.
     
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  7. Michael Russo

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    Same here... yet would not be able to afford it I am afraid with a 1:1 $/€ forex plus VAT unless the €7k incentive in France would still apply... I would hope a certain amount of à la carte would still be possible in addition to the three 'all-in menus' proposed...
    Feeling tense... :)
     
  8. John

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    Glad you did this. Top of mind for everyone.

    Thoughts I had re: what DOESN'T need to be in packages:

    1. "Performance" (in the old Model S/X sense) should not be an option. Just make the wiring and invertor beefy always. Relatively small incremental cost, simplifies assembly. Noticed you didn't address this, so in a way I'm just agreeing with you.
    2. Remember that there is good margin in options, as long as manufacturing complexity is managed. For instance, design the stereo and HVAC systems in a modular fashion, and options like Ultra HiFi and Biohazard have almost no added complexity or cost, and in fact can also be done post-purchase (or changed later). Just snap in better speakers and amp to an existing harness. Because they have so little manufacturing complexity, they don't need to be in packages, and people who want them are happy to give you the margin on them. That having been said, I'd be tempted to just make the audio kick-ass and include Biohazard for everyone rather than hassle with either, but as a snap in option they are an easy margin opportunity.
    3. Any "soft" option like Full Auto has no need to be in a package, because there is zero manufacturing cost
     
  9. Michael Russo

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    Exactly my point and my wish!! :)
     
  10. BigBri

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    I can totally see them doing something like this, makes sense. They could perhaps bundle options together in smaller packages. Like upgraded seats is part of air suspension and call it the 'comfort package'. I'm wondering if at some point Tesla will do a detailed survey of its reservation holders to get a sense of which options will be more popular then others.
     
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  11. MelindaV

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    I doubt they will, or at least not outside of their own staff.
    Even though a different animal, they do have 4+ years of Model S and X orders to get an idea of what options and combination of options customers choose. Not to mention, I am sure they do pay at least a little attention to the conversations on the various tesla related forums so are aware of what the masses are looking to expect.
     
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  12. BigBri

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    I'll be interested to see if they share their process. My thinking in the case of the S/X is the volume is a lot lower so they don't need quite so much material storage but I suppose with the factory doubling and they do have a giant warehouse nearby they're leasing.
     
  13. AutoMcD

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    I'm not expecting roof options, they all get glass. I'm also skeptical if such battery will fit? And those performance numbers? We can dream, but this isn't the S..
     
  14. garsh

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    During this test drive, a Tesla engineer (Doug Field?) states that the Model 3 will have three different roof options, including solid metal.

    As for the battery, note that the wheelbase of the 3 appears to be only ~3% shorter than the wheelbase of the S:
    [​IMG]
    Model S: 77" wide, 116.5" wheelbase
    Model 3: 74.2" wide, 113" wheelbase
    Model S battery area: 8970.5
    Model 3 battery area: 8384.6
    Given that the model 3 has 93% of the area for batteries as the Model S, and that the Model 3's battery cells are reported to be 30% more energy dense as the Model S's cells, and I don't see why they couldn't fit a 100kWh pack in there.

    As for the performance numbers.... That's like saying that the BMW M3 couldn't approach the performance of the 7-series. Tesla is competing against the 3-series with this car - they aren't competing against the Model S. They have no reason to hold back on performance if they can offer it.
     
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  15. Gilberto Pe-Curto

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    This is the first time in the last 20 years of my life that I want time to pass very quickly without being affraid to get older.
    (It's actually the 2nd but one should not count due to serious health problems)
     
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  16. BigBri

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    I've been feeling the same way haha. I don't want to waste the time from now until delivery but at the same time a lot of things in my life are based around getting the M3. It's a pretty major life event for me.
     
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  17. TrevP

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    This is what I've been saying in my video comments replies to those who think I'm full of shit. They keep saying Tesla has to protect Model S at all costs by restricting Model 3 performance and options while conveniently ignoring the target market and what BMW does. Tesla could care less if the Model 3 takes away a Model S sale. It's still a sale for them. Apple says the same thing about iPhone sales canibalizing the iPod market ;)
     
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  18. MelindaV

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    I think those that pay attention to Tesla understand that they (EM) are not about limiting one for the sake of another.
     
  19. Michael Russo

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    And I am with T≡SLA on this! As well as on their attempts to stimulate reservation holders who can afford it to switch to a Model S sooner... gets them to fund the path to Model ≡ ... and allows them to satisfy us remaining bunch who will get our spaceship in wheels faster... Win-win :p
     
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  20. ph8886

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    I highly doubt Model 3 will offer 60, 75 and 100kwh battery pack with performance at 0-60mph at 3.0sec. i would think the battery size would more like 30, 45 and 60kwh with best 0-60 performance at 5-6 seconds range. currently the cost of battery is running at about $250-$300/kwh so a 30kwh battery would cost about $7500 to $9000. This is a good amount going into the cost of the vehicle for the base price of $35,000. your estimation of the best package at 100kwh at $55,000 would make the battery cost of $25,000 to $30,000 at half the price of the vehicle. it is highly unlikely this will be a profitable car for Tesla. Also, customers who would buy Model 3 are less likely as performance driven as customers of Model S. Model 3 is smaller and lighter. It would require smaller motors in order to give the car the needed over 200 mile range. Based on my estimation, a Model 3 with Best package with 60kwh battery, dual motors, may be able to do 0-60 at low 5.0 seconds which is still respectable for a car pricing in $50-60K range. Other than this, the rest of your estimates are pretty realistic.
     
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