I feel like we live on different planets. I'm a software engineer making six figures and I can't imagine spending roughly $30-35k on a car when I can buy a decent used car for $7k, and spend less than $1k per year on maintenance.
Sure I can afford a $35k car, but if I choose to put that in my 401(k) instead it could mean retiring 3-5 YEARS earlier.
That's a pretty broad group ranging from janitor to assembly worker to engineer. I'd hazard a guess that the median Tesla employee could not afford a $35k vehicle.
$35k is basically a Lexus or lower-end Cadillac. You're easily into luxury range for a daily-driver.
My car was $20k brand new with several options tacked on. Most people I know have used cars... getting a new car of any kind is a big deal IMO for most Americans.
The average new vehicle purchased in the United States is $33,560[0]. The Tesla Model 3 is $35,000, PLUS $7,500 in government tax credit[1]. This puts the effective cost at $27,500. The Honda Civic, widely considered a cheap car, is $20,415 MSRP[2]. Once you factor in gas and maintenance savings, around $1,200 per year[3], the Tesla is cheaper after just over 6 years. Since most cars are kept for 20 years, that is a good deal.
Given that, I would say that calling it a "cheap" car is pretty accurate for most Americans. Obviously it is not in the range of used cars or the ultracheaps ($10-15K), but it's really amazingly cheap for an electric if they can make it happen.
But over 3/4 of car sales are for used cars, which have an average price 1/3 of the new car average#. The Model 3 might prove to be good value for a new car, but a new one will still be unaffordable for many American drivers.
If you plan to keep an electric car for 20 years, I think it's not unreasonable to expect that you'll need to replace the expensive battery during that time period.
The current Tesla packs seem to hold up pretty good. Users who are tracking the degradation are thinking a million miles is possible. Tesla has a test pack that has simulated half a million miles with <20% capacity loss. Warranty is 8 years unlimited miles.
If you are driving a half million to million miles in 20 years, an electric will probably really make sense. You MIGHT need to replace the battery. With a ICE car, you will need $5K of oil changes, $3K of timing belts, and around $20K more in gasoline than electricity, probably a new engine and transmission or two... There's probably another $5K worth of service in there (plugs, fuel injectors, transmission, belts).
So with a gas car you KNOW you're going to be in to it for basically as much as the purchase price of a Model 3 just in maintenance (again, if you are talking half a million miles).
The average age of a car on the road in the us is somewhere just over 10 years old. The averae person may be switching, but a bunch are switching into a new to them used car
I will be very curious how many of those III will be the default base model. We have not seen the feature set at that price so I expect most people to be surprised as how spartan it is.
While they will avoid much of the touch/feel issues with regards to buttons the real test is where the good plastics start and end.
With regards to production targets, not only do they have to get their plant to that level their suppliers have to be able to hit those numbers as well.
I might just put my next car purchase off now. I would like to see how Tesla is doing with this car on September 20th
When you preorder, you put down $1000 and that's it. There is no way to select any options for your reservation and there is also no pricing available for options right now.
> Since most cars are kept for 20 years, that is a good deal.
One thing to factor in though is the rate of deterioration of the battery pack over a 20 year period and other issues unique to electrics vs the maintenance requirements unique to an ICE vehicle.
It would be really interesting to see the breakdowns on those numbers.
Yes, Tesla stated that the 35k is before the discount. So effectively it is 27.5k after the discounts, and they might offer further rebates for Tesla employees.
What's the median? And even with that being the average "new vehicle" price, that doesn't mean the average American buys a new car. Lots of people can only afford used cars, and for many, $33K is their entire annual salary.
cheaper after 6 years, except you're not factoring in that honda's hold value very well and we have no idea how badly an 'early adopter' electric car is going to fare in the used market. Something tells me that the used market for a tesla isn't going to be as strong as for a honda civic
Something tells me that the used market for a tesla isn't going to be as strong as for a honda civic
Not sure why you'd assume that.
Current Tesla models have excellent residual values: 62% at 3 years according to black book, which is excellent for the luxury segment - and even better when you consider that EV values tend to be skewed by tax credits!
The Model 3 will share features like over-the-air updates that should help it retain value well.
It's surprisingly difficult to find the median car price. I just spent 15 minutes googling and could find neither the statistic itself nor a source of the data from which I could compute it.
51% of Americans earn $30,000 or less a year [1] (yes, you read that right - and you wonder why populist candidates are so popular and why the anti-rich people sentiment is so strong...).
I wish Musk hasn't said that he's not going to make a car that's cheaper than $35,000. I know he wants to add Level 5 Autopilot and whatnot by default on these cars, but he really needs to get to the $20,000 range at least. That's where the real mainstream is, and not just in the U.S. either. EVs will go mainstream when they cost $10,000-$20,000.
It may take another decade to get there, but if Musk doesn't build such a car others will. It's just that I would've preferred a Tesla car to put pressure on the quality of the competitors as well.
90% of the people living in the EU earn less than $30,000 per year. The EU's median household income is comparable to the US poverty line for median household income. The EU's GDP per capita is 60% lower than the US; they have 750 million people, with a total GDP 10% lower than the US.
Or take Sweden for comparison, it's below all but 12 US states when it comes to median individual income. The median US income is about 45% higher than the UK median. The number of countries on earth with a higher median income than the US, you can list on one hand.
These numbers are even more dramatically out of line, if you're talking about white households (which supposedly form the core of the populist anger). The median white household earns $75,000 and has a median net worth of $145,000 - an income number drastically higher than Sweden, Finland, UK, Germany, France, etc.
So remind me again how income numbers in the US are driving the populist anger.
It looks like there'll be further models after the Three:
"I'm super excited about being able to produce a car that most people can afford," Musk said. "And there will be future cars that are even more affordable down the road."
"With something like the Model 3, it's designed such that roughly half the people can afford the car," he continued. "With fourth generation and smaller cars and what not, we'll ultimately be in the position where almost everyone will be able to afford the car."
> I wish Musk hasn't said that he's not going to make a car that's cheaper than $35,000.
When did he state that? I'd only read the general plan of 'make an expensive high-end car, use profits to make a less expensive mid-range car, use profits from that to make an affordable car'.
Or did he mean that they don't need to make a cheaper car for widespread adoption since owners can rent the car out as a self-driving taxi to recoup ownership costs?
I guess I'm jaded from my week spent there. It was a whole different world to me. One lady talked to me about how this is her second job today and that she can barely make it on time to today's safety training because of the bus schedules. The parking lot was an ocean of beat up cars. The perception I got was that nobody on the production floor would ever own these cars.
That just seems really sad. I've read that Tesla doesn't pay exceptionally well, expects people to work really long hours, and doesn't offer an employee discount because Elon doesn't believe in it.
Despite all this I've always imagined it to be a great place to work because of the world-changing potential of the work.
But the idea of all these people toiling away on an amazing product they can't even hope to own just seems incredibly depressing. I guess it's no different to all the people making iPhones in China, it just hits closer to home.
Musk created a company that gives around 15,000 workers a job. The company he created is not just a capitalist endeavor, but an attempt to start an environmental movement aimed at making electric cars viable in the world market. At multiple points during the company's early days, Musk put everything he had on the line; assuming huge levels of risk.
Meanwhile, Tesla is not making a profit and one wrong move could destroy it - ending the jobs of thousands and an environmental movement in one fell swoop. Giving luxurious benefits to Tesla employees just isn't possible at this point.
Your criticism that Musk is just a capitalist who doesn't care about his workers and treat them well seems completely unfair.
Boo hoo, not treating your workers like shit isn't some impossible, gargantuan task. Working your engineers & labor 60+ hours a week makes for great sound bites, but significantly below average productivity. Combined with an employer that won't even take basic suggestions on improving workflow from their floor staff, Tesla obviously has a certain level of arrogance about how to build a car. Fuck the employees who actually do it day in and day out, they don't know shit according to Tesla.
I imagine there is a huge difference in the employee pool between their Fremont factory location and their Palo Alto office location. Of course, Tesla is not exactly known to pay even their engineers very well: http://www.autoblog.com/2016/03/08/working-tesla-meaning-str...
But it's not a refundable credit. Which means you get whichever is the lowest of your tax liability or $7,500. Please note saying it's not refundable is term of art that does not mean what you might take it to mean. So let's walk through some examples.
Let's say your total tax liability for a year is $10,000. You paid in $11,000 via Payroll and other taxes. Without the credit you'd be due a refund of $1,000. If you are eligible for a $7,500 credit because you bought a Tesla you'd be due a $8,500 refund.
Let's say your tax liability for the year is $5,000. You've paid nothing in taxes for the year (probably because you knew you were buying the car and didn't need to). You bought a Tesla which makes you eligible for a $7,500 tax credit. You do not get anything refund from the IRS, but the $7,500 tax credit offsets your entire tax liability.
So just because it's a credit doesn't mean the credit is effective for low income people. You have to have enough income to have a high enough tax liability to even get the full $7,500.
This post is in response to someone saying "this is literally the cheapest car on the market", which is exactly what someone with that small of a liability would be looking for.
