Let's talk Tesla

[hoping2retire35]

ok, so they have 325k preorders of the model 3 as of this writing. If you don't know it is basically an awesome car at a "reasonable" price(even without the subsidy IMO(yeah, I know, new is not mustachian, just keep things in persepctive for the conversation). Which brings me to my point, how will the this effect the market, especially other auto makers and their offerings? As I look at my local BMW dealership their 3 series range from $36-52k after being marked down.

Is the model 3 a category killer? how will other luxury model sedans keep up? who would still buy a 3 series or lexus/mercedes/cadalliac equivalent?

[aFrugalFather]

Still too early to tell.  There is probably 2 solid years before these will start hitting the road.  Tesla has yet to prove it can deliver this many cars given the Model X debacle.  Also not certain how many people will actually commit to buying given that its refundable. Furthermore, the tax credits won't cover all orders so not sure how many people will back out if they don't get the government subsidy.  Check back in in a year at least :)

[Chris22]

I'd put my odds at buying one about 50/50 assuming I can get a suitably high performance model for under $50k.  I have not put any deposit down.  I do not anticipate I will be able to get the federal tax credit, this does not concern me.

[neo von retorch]

An affordable Model 3 is not a luxury performance sedan. That's what the Model S is. It looks like a lot of luxury has been stripped out. So it really won't compete with those luxury cars, and it certainly won't kill that category.

In the long-term, of course, we'll likely see the shift from combustion to electric automobiles, but a single model will not do this.

The Model 3 is still an "early adopter" vehicle. Much less so than the Model S.



It will certainly help electric bridge "the chasm" - but what we'll see is a whole lot more options, and competition on features and price. The Model 3 is much more a catalyst than the final product, though, and to buy one is to jump on a bandwagon before seeing all the other options that are going to become available.

[hoping2retire35]

An affordable Model 3 is not a luxury performance sedan. That's what the Model S is. It looks like a lot of luxury has been stripped out. So it really won't compete with those luxury cars, and it certainly won't kill that category.

In the long-term, of course, we'll likely see the shift from combustion to electric automobiles, but a single model will not do this.

The Model 3 is still an "early adopter" vehicle. Much less so than the Model S.



It will certainly help electric bridge "the chasm" - but what we'll see is a whole lot more options, and competition on features and price. The Model 3 is much more a catalyst than the final product, though, and to buy one is to jump on a bandwagon before seeing all the other options that are going to become available.

neither is a $36k 3 series inline 4 bimmer. or even the $45k one.

[Chris22]

The "luxury" features I'm interested in are the techy ones incorporated in the dash iPad, I doubt they'll decontent too much of that.

[neo von retorch]

Wouldn't argue your personal preferences :)

I would argue that there's not a lot of cross-market shopping between Tesla Model 3s and most of the luxury brands. I might eat my words - if the Model 3 is fully decked out with traditional luxury (in additional to all the tech), and the interior style is fully competitive, it could happen. I don't think that's the case. The Model 3 is intended, in my opinion, to "get by" and compete with other mainstream cars (appliances, really) like the Accord and Camry. But there will be future cars, maybe from Tesla, maybe not, that eat into the luxury brands to a much greater degree.

[jamesvt]

Wouldn't argue your personal preferences :)

I would argue that there's not a lot of cross-market shopping between Tesla Model 3s and most of the luxury brands. I might eat my words - if the Model 3 is fully decked out with traditional luxury (in additional to all the tech), and the interior style is fully competitive, it could happen. I don't think that's the case. The Model 3 is intended, in my opinion, to "get by" and compete with other mainstream cars (appliances, really) like the Accord and Camry. But there will be future cars, maybe from Tesla, maybe not, that eat into the luxury brands to a much greater degree.

Well there is the Tesla Model S, but I don't know if it has really affected Mercedes S class, BMW 7 series etc sales.

[hoping2retire35]

Just checked MMM site; guess I have the prescience for a 1 week prediction or MMPete and myself converging on the same wave length.

[NoStacheOhio]

Well there is the Tesla Model S, but I don't know if it has really affected Mercedes S class, BMW 7 series etc sales.

http://www.mrmoneymustache.com/2016/04/15/tesla-road-trip/

Scroll down near the end and there's a table with that exact info!

[alsoknownasDean]

I'd say wait until more of the traditional car companies are offering Tesla-style vehicles. I'm not counting the Leaf and the iMiEV and that, because they're not really competitors with the Model S or Model 3.

Chevy Bolt is a start, but will we see a Cadillac version down the track? Will we see BMW introducing a similar EV to Tesla (excluding the i3, like I said, not really a competitor).

Quite honestly Tesla is still an 'early adopter' car company.

Besides, watch the $7500 tax credit disappear if the things get too popular (or if there's a Republican in the White House after November). That might scuttle the Model 3's competitiveness somewhat (there's no such tax credit/incentives here in Australia, and thus EVs barely sell, even with more expensive gasoline).

[libertarian4321]

Wouldn't argue your personal preferences :)

I would argue that there's not a lot of cross-market shopping between Tesla Model 3s and most of the luxury brands. I might eat my words - if the Model 3 is fully decked out with traditional luxury (in additional to all the tech), and the interior style is fully competitive, it could happen. I don't think that's the case. The Model 3 is intended, in my opinion, to "get by" and compete with other mainstream cars (appliances, really) like the Accord and Camry. But there will be future cars, maybe from Tesla, maybe not, that eat into the luxury brands to a much greater degree.

My wife drives a BMW 3-series.

She can't wait to dump it and buy a new Tesla Model 3.  We test drove the Model S last year, and LOVED IT, except that it was too BIG.  It's light years ahead of traditional gas guzzlers.

She just wanted a Tesla that is similar in size to her BMW 3-series.   The Model 3 looks like the perfect answer.  She would have put down $1,000 to reserve one if I hadn't told her to wait (her Beemer is still running great, so no reason to get crazy and "get in line" now).  I wonder how many reservations Tesla would have if it weren't for "cautious" folks like myself?

It's not about how much faux-wood paneling the car has, she wants the more modern, high tech, environmentally friendly car.  The acceleration of the Tesla makes her competent, but unspectacular BMW 3-series look like a Yugo by comparison.

BMW just can't compete with Tesla there.  At least now now.  Maybe they will catch up at some point.

Hell, I don't even like Sedans, I drive a big old ugly gas guzzling truck, and even I'm considering buying a Tesla.  It's just that much fun to drive.

Did I mention that HOLY SHIT, the TESLA IS FUN TO DRIVE?  Freakin' thing takes off like a rocket (and this was NOT the high end P90D rocket car that we test drove, just the "regular" version of the Tesla Model S).

[libertarian4321]

The Model 3 is intended, in my opinion, to "get by" and compete with other mainstream cars (appliances, really) like the Accord and Camry. But there will be future cars, maybe from Tesla, maybe not, that eat into the luxury brands to a much greater degree.

Forgot to address this.

I haven't been in a Tesla Model 3 yet, but I suspect comparing the Tesla Model 3 to a Honda Accord is about like comparing a thoroughbred horse to a rented mule.

At the very least, the Model 3 will accelerate at a rate that no similarly priced Honda or Accord can even hope to compete with.

I know the Model 3 won't be as nice as the Model S, but I can't imagine that it would be so stripped down that the Accord or Camry can compete.  We know the performance of the Model 3 will be vastly superior to a mundane sedan like the Accord or Camry.

[neo von retorch]

I agree and disagree.

Tesla is making cars like none before it, so they are doing things differently. An Accord or Camry is intentionally boring because they want to make a car that they can sell in very large quantities to the masses. They make some varieties - the V6 6MT Accord was a fun car to drive - but for the most part these models are bread and butter. Tesla doesn't have any competition in a sense, so they don't really have to make the car boring to get a lot of appeal.

But the point of the car is to sell in very large quantities. Tesla can't help that electric drivetrains are going to wildly outperform your run-of-the-mill Accord/Camry (I mean, they can, but there's no motivation to do so.) And since they're making a whole new class of car, they can make it a really nice, mildly futuristic design, and get away with it in a way that classic manufacturers likely would not. If the Accord suddenly looked like a space craft, the usual clientele would likely raise an eyebrow.

So while I agree that the Model 3 is "head and shoulders above the Accord/Camry", I also think it "competes" with them in that the idea is for people that "buy a safe, dependable choice like the Accord/Camry" now start to think "electric cars are becoming normal now, and I can consider buying one."

But... I also agree that this is still leaning to the left side of the early-adopter curve to some degree. It might be "Model 4" or even "Model 5" that is 100% mainstream and 100% competing against bread and butter combustion automobiles.

[Curbside Prophet]

Musk is notorious for missing deadlines.  We won't see the Model 3 in the next two years.  By the time it gets to market, it will have at least a few competitors.

[alsoknownasDean]

There's also good old hedonic adaptation to consider. :)

[gooki]

The best news is the amount of preorders will allow tesla to scale up their manufacturing facilities significantly.

I think you are right in the idea that once they're rolling of the line they will become a serious competitor in the mid sized sedan market. I think you'd get 50% of those buyers considering the model 3, and 50% of those choosing it, so overall they'll take 25% of that market, provided 1. They can keep up with demand. 2. The competition doesn't slash prices to retain market share. 3. The competition doesn't release a comparable competing product. 4. Tesla continue to provide the high level of customer service they are known for.

At the end of the day the race isn't to electric cars anymore. It's to fully autonomous electric cars.