#RBPi (#RESIST-by-Plugging-in) diaries expand awareness that:
- Plug-in vehicles (a.k.a. electric cars or EVs) are a viable and attractive option in many segments of the US new and used auto market.
- When the government is dominated by oil interests and global-warming deniers, switching to an EV is a direct, effective act of #Resistance.
If you are serious about resisting, have a car, and haven’t plugged in yet, I hope to convince you to move from “when will the EV that fits my endless wishlist be available?”, to —
“How soon can we get an EV and hit Big Oil where it hurts?”
I waited 6 months between #RBPi vol. 1 (ok, it was really 1a/b) and 2. But 2017 is playing out as a transformational year for EVs in the US, so I’m upping the frequency to monthly, as long as I can keep up.
Of course, this month one EV news item rules them all. Unless you've been under a rock, you probably know that Tesla just launched deliveries of its potentially earth-shattering Model 3, in its usual Silicon Valley pomp and fanfare.
My hat is off to Tesla, the main driving force that pushes EVs into mainstream American consciousness. The action plans Tesla has set in motion are way more revolutionary, and the tipping point is far closer, than most people realize despite the extensive media coverage. This tipping point is intimately related to the Model 3, of course, so the media at least got this part of the story right.
However.
The marketing, delivery and pricing policies revealed over the last few days, demonstrate why one must never worship any tech company — or any corporation — nor put blind faith in them.
Below the fold, first explanation of Model 3’s revolutionary potential, followed by Tesla’s fine-print trickery — and then, updates from elsewhere in EV world.
Model 3: The Revolution is in the Ramp
Most Model 3 talk is about its 200-mile and midmarket-price combination. But Tesla has been scooped at this milestone, by GM’s Chevy Bolt that has been in the market since December, with pre-incentive prices of $37.5-43k. And in a few months Nissan will bring its longer-range Gen 2 Leaf to market, with base prices probably even lower.
So besides Tesla’s cool factor and Elon Musk’s stardust, what’s the big deal with Model 3?
The big deal is the volume, and the mind-boggling planned production ramp-up. One needs to directly see Tesla’s material, or read in-depth articles, to learn this.
Tesla plans to go from zero to 5k Model 3 units/week in 4-5 months. While ramp-up of existing Tesla models has been impressive — ~50% combined annual growth each year — current total weekly Tesla output is barely half of 5k/week. And by end of 2018, they plan to churn out 10k Model 3 units/week.
Since overseas deliveries start only in late 2018, this means that next year Model 3 might be one of the best-selling cars in the US across all segments, in its first full sales year, with 300k-400k sales.
That might be unprecedented. For sure for a modest-volume automaker. And completely unheard-of for the EV segment, which might reach 200k sales/year in 2017, across all models and automakers, with no single model amounting to more than 20% of that. The current one-year US EV sales record is still 30k, set by Nissan Leaf in 2014.
Imagine what that 300k Model 3 sales (or even “only” 200k) next year might do to Big Oil, and to those traditional automakers who have been sitting on their hands w.r.t. EVs. One of them, Ford, already fired its CEO, at least in part due to his slow response to Tesla’s dual threat (EVs and auto-pilot).
Moreover, Tesla has ingeniously pre-solved the chicken-and-egg problem of how fast to ramp, by enlisting ~400k paid Model 3 advance reservations. The only challenge, it seems, is to deliver reliably.
Alas, another challenge has emerged for Tesla: tripping up on its own hubris, and turning off many of these reservations as a result.
So… How Much Does the Model 3 Really Cost?
Tesla made clear that to facilitate the ramp-up, only limited options will be available during Model 3’s early months. Fair enough. But what wasn’t expected — and is still not reported widely enough — is that early Model 3’s will be limited to the $50k-$60k price range. As Jose Pontes astutely pointed out, that’s closer to the luxurious Model S (starting just under $70k) than to any sane definition of ‘mid-market’.
How did they do it? Like all Tesla products, Model 3 initially comes in two battery sizes. Unlike the others which were launched simultaneously, only the larger, 300-plus-mile battery size will be available till November or even later. So add $9k to the $35k figure chirpily bandied about in the press.
Then, the $5k premium package also seems mandatory right now. So if you want a Model 3 anytime soon, we’re already at $49k, and not done yet.
Color: add $1k for any color except black.
Wheels… here’s a Model 3 with the ‘standard’ wheels. Don’t like them? Add another $1.5k to get the ones shown in most Model 3 pics.
And then there’s autopilot, the most over-hyped tech trend since sliced bread. If you want some for your Model 3, it’ll be another $8k, for a total of $59,500. It is likely that most of the 30 cars ceremoniously delivered on July 28 bore this price tag.
Sure, all automakers play with trims and options to up the margin. All retailers play with “loss leaders” to increase sales of more profitable product. But I’ve never heard of a “loss trailer” that’s not even available yet for months, and is near-infeasible even when eventually available. And trims that double the car’s price? Not in regular folks’ market segments. To make matters worse, unless Trump+Congress act fast (fat chance), the $7.5k Fed rebate on Tesla cars might expire before most lower-end customers get theirs.
I won’t belabor the point. Maybe I’m misreading the public, and the vast majority of reservation holders were secretly ready to shell out a net ~$45-50k (after incentives) rather than the promised ~$27-30k. And maybe the less-rich reservation holders will just patiently await their turn, as people with more $$ to spare gleefully skip over them. But I won’t be surprised to see a backlash.
Aug 9 AM UPDATE: A customer (likely a Tesla employee) just posted snapshots of the official odel 3 configurator. Indeed, the base price right now is $49k, and that’s only for black with the ridiculous wheels and no assist/autopilot capabilities. As the last screen shows, the fully-loaded right now is $59.5k.
Meanwhile… Bolt Might Have a Big Baby Sibling Coming?
GM could have cashed in big time on this, but its amazing 238-mile Bolt appears better designed for Old World customers. Americans like bigger stuff. GM might be listening, though, because rumor has it that a Bolt-based Buick SUV might come out soon. I hope it’s really soon.
Meanwhile, the Bolt has quietly and gradually been increasing sales, getting near 2,000 units last month. Not spectacular, but enough to grab the monthly US #1 EV spot. August will be the first month of 50-state Bolt availability, and this website (though a bit out-of date) suggests that almost anywhere you are not far from GM dealers who offer $3-5k off MSRP, before bargaining.
Of course, the closeout Nissan Leaf can be bought, or preferably leased, at far lower prices. And used Leafs and Volts continue to be a great bargain.
Enough for now. My hand hurts. See you in September, after the launch of Leaf Gen 2.