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Model E

I really appreciate the revolutionary task Elon Musk has embarked upon to give the world truly a remarkable electric car...However I have one question for Elon Musk..Why would a rich man who can afford petrol or Gaz as the yanks say buy an electric car..He would buy a Jaguar 8 cylinder or even 12 cylinder Hummer...Cause this guy's father owns a Petrol station. For this guy who has put this car/petrol on company account can write it as expense.

What is needed is a car with 350 k.m on single charge for the middle class daily commuters who cannot afford gaz/petrol and the only way for the mass is the Model E with 30,000$ and this is the frist priority..After S should have been the Model E for the mass and not x for the rich....Mr Elon you got it wrong...So re-focus and make the E with 350 k.m for 30,000$ fast and quickly by mid 2014 for sale nov 2014 as 2015 model.

This will be great news and now you are talking history..You will be known and remembered as the one who revoltionised the auto industry and you wuill be the next ford in history for 200 years until someone comes with flying cars or the ones that run on thorium

Model X is an easier next step because it's the same battery "skateboard" or in more common auto parlance "platform" as the S. That and Tesla still needs battery pricing to come down a bit to really make the Gen III (aka Model E) truly feasible.

They also want to capitalize on the fact that especially in the US, the luxury SUV is the most profitable segment of vehicles.

Patience.

Cheers!

Yup, Elon Musk will read your post and immediately realize his mistake of not producing Model E right now, just when you need it most! Nevermind, battery tech & cost, economies of scale, having a solid supercharging network in place, etc etc etc.
Next time you come across someone driving a Model S or Model X, be sure to say Thank You. It is their generosity that is paying for the R&D of Model E, which you seem to feel is somehow owed to you right now.
Also, if you honestly expect it to cost $30,000, you will be rather disappointed when specs & pricing are released. Model S was said to cost $50,000 with a range of 300 miles. Truth is, the $50,000 Model S was never meant to have that much range. It only makes sense to apply the same logic to Model E specs vs. pricing. The $35,000 car (actually people have started refering to it as a $40,000 car as of leately for some reason) will be bare bones and will not come with the biggest battery, let alone any features.

Model E will be for "the rich" too. Actually every new car is sold to the rich by your defenition. The majority of people in the US and other countries can only at best afford a used car if a car at all.

It is not realistic to second guess the visionary Elon Musk as to how to revolutionize the automobile industry. He has already created a ripple effect in the existing build them to become antiquated auto industry. All the players are seeing their baby steps( hybrids etc) pale in comparison to the growing support for Tesla mentality. The stated plans for the future of this Tesla business plan was to make a world class, I got to have it vehicle. The limited edition sports car was the first slap in the face/ wake up call, then the immensely safe and desirable Model S. Watch the other car makers try to catch up. In spurring the auto industry to do so has he not given us what we all want, not the same old crap from the oil companies and the auto industry. I for one am a proud owner of a Model S and a stock holder and would not find any fault with my experiences with Tesla as compared to the dozens of foul experiences I received at the hands of the automobile dealers I bought from in the past. I am 66 semi retired living off Social Security and some investment returns. I am by no means a RICH man.

The Model X is essentially the same car. It's another instantiation of the same skateboard and hence there's no deviation from what you suggest in going towards the Model E next.

Hi Everyone,
What I find genuinely funny is that many people refer to Tesla owners as the rich. What!? I'm definitely not rich but work about 100 hours per week along with my spouse. We have drive our ICE vehicles for exactly 10 years (which we will keep) and have saved, keep zero balance on our credit card, and live a modest life.

I sincerely believe that most Tesla owners are hardworking individuals and families and I, personally, want to say "Thank You"! Honestly, they are paving the way for new technologies for the masses eventually.

Tomorrow, I get to take my first test drive in a Model S. I've now got my financing in order, insurance, and waiting for my spouse to say "Thumbs Up!" And, for those who think we are rich, think again! We really want to be part of something GREAT! And, kinda, sorta, feel like we are doing our small part -- because we will be paying monthly payments and we will be helping the Tesla engineers and scientists hopefully learn from what we experience.

So, to conclude, I want to say "Thank You", ALL of you early Tesla buyers. If it was not for you ALL, Mr. Elon Musk would be fighting this fight alone....And, being former military, I believe in fighting alongside him and each of you.

Hope this doesn't sound to corny, but, I am NOT a rich person....

Thanks for my rant....

Oh yes, why do people like to subtly seem like they are always taking jabs at the "rich"??? I want to also say to those of you that are "rich", good for you!!!

More power to our wealthy citizens! This is what America is all about....Work hard, and prosper!!!

Thank you!

You drive gas guzzling cars "because you can," and you can write off the cost of gas as an "expense." There is no such thing as "practical" for you. I mean, if gas is basically "free" for you, why stop now?

What I find funny is these people saying that TMC is doing something wrong with top to bottom approach. TMC is first new car company in US that is successful since about hundred years. How wrong can that be? Every car company that has tried the opposite have gone belly up.

raphaelmartin24...

raphael, All previous electric auto startup companies have failed due to a lack of funds coming in to feed and sustain the business plan.
Elon and his team have a business plan in plan that has been executed
to near perfection. Well thought out with honesty and forthright information that has commanded the respect of anyone who studies them. If you are serious about learning what they have accomplished and what they indeed to do and most importantly why they have the time frame they do, I urge you to gather as much information about their strategy as you can. Youtube is an easy way to start, simply enter into the search function keywords such as Elon Musk, JB Straubel, Model S, Tesla and you will have hours of interviews to view and start to digest. Only then will you find the answers to the question and proposals you made in your post. After you have absorbed all there is, I feel that you too will recognize the amazing accomplishments they have made, and the future they have for us.
They truly are an amazing company, lead by a very gifted individual who truly leads by his example how American Companies should be run. And there are many companies taking notes, and a few who are probably shaking in their boots.
Sit down, hold on tight for the ride of your life. You will see a change happening that most thought could and would never ever happen.

@David N

+1

Just a note that Model E is not the end of the line. Musk intends another halving of model cost a few years later. But that's just a "twinkle in the eye" at the moment.

I think the $40k price is actually still unrealistically low and we will never see a first generation E for $30k. Not too easy to just shrink down a big car to a smaller one and cut the price by two-thirds!

There may be some ways around this. Perhaps Tesla will own the battery and drivers will pay to have it recharged. Maybe there will be so many "Kwik Charge" stations around that a cheaper 100 mile battery will be sufficient as the standard offering.

Tesla set the bar high with the S and subsequent cars are going to have to be pretty nice.

Smaller and lighter car doesn't require as big battery to get large range. Model S is actually very heavy car even without battery pack, it isn't the electric drivetrain that makes it so heavy.

With smaller battery you reduce the price of the car.

If we get to the point where cost of battery is $200/kWh a 60kWh battery costs about $12k. If you assume $40k as base car price it leaves $28k to the rest of the car. I'd say it is doable, and 60kWh could give car 300 mile range if it is small and light enough.

$30k is possible only with quite a lot smaller pack. Maaaybe with 40kWh pack, but I doubt it.

@carlgo - it actually easier then you think. Key is to increase the cell energy by 40% then you can use half the numbers of cells in the entry level meaning lower battery weight, lighter frame, smaller tires etc - it sums up pretty fast. Entry level will not have same level of features included, but you can buy as options. Here is my prediction for the 2017 sedan lineup

Model E 50 kW 200+ EPA - $35k starting
Model E 75 kW 250+ EPA - $45k starting up to $75k fully loaded
Model S 85 kW 265 EPA - $80k starting but with more options included
Model S 120 kW 350+ EPA - $100k starting...
( sure they will be performabnce options )

KWh... before Brian catches me.

Has anyone tried making a list of what standrad features could be taken away from Model S, following Elon's statement that the base Model E will have fewer features than Model S. Are we talking steel body panels, halogen headlights, manual adjust seats, crank windows (lol)? The list is rather short.

Steel body panels, check.

Things like seats that remember driver settings are definitely non-standard in entry-level cars. Check.

After that there are quite a lot of small things that can be taken away, like using your phone as remote and gizmos like those door handles.

I mean manual adjust seats as in reach under the seat and pull a lever to adjust, not the optional memory seat feature.
There have to be certain features that don't add any cost to production, mainly software based ones. And if those are taken away from the base Model S, there is hardly anything left at all to begin with. This is why it's so difficult to come up with things to cut to get a better understanding of what a base Model E might feature.

Memory seats would be one, but otherwise I think Model S will get more base features and on Model E you have to buy the option.

I think the reason the Model E is not until 2017 is because of the lack of battery supplies available.

I recall an article where it mentioned that 200,000 cars per year would require that Tesla purchase fully half of the global supply of those sized cells. Obviously those cells are already spoken for by the current buyers with supply contracts. Tesla has a real constraint to production due to lack of cells being produced.

So that seems to be why Tesla is preparing to build their own battery factory in a joint venture, likely with Panasonic. They need to secure a source of supply for themselves. With a specialty focus on automotive cells and finished battery packs, along with battery management systems, etc.

They will also likely have a division to handle repurchase of end of life car battery packs to transition them to Solar City for home energy storage of solar power.

With all the talk of low running costs and minimal motor maintenance costs, I'd like to see the Model E built with really inexpensive upkeep in mind. Modular replacement parts , use of common existing parts when they're significantly more cost effective, ability to get repair work done by existing auto repairers and body work people.

That sort of thing brings the price down too, and I can genuinely expect less upkeep costs and fuel to offset the extra price. (My father's Lexus is far more expensive to replace a tyre on than my car.).

Much of the MS weight is supposedly safety reinforcement (steel). Not much to shave there and keep the 5-star rating.

@PapaSmurf - 500k Gen3 will require the entire current Li-ion world wide production regardless of form factor (iPhone, tablets, etc)... simply not available today. Building a new massive battery factory is given - be it at the mercy of another company ( like Panasonic ) or do it yourself... do it yourself is the only choice and pretty obvious ( but you still want partner(s) with expertise ).
2017 you'll see at best 50-100k Gen3, 500-700k is more like 2019/20 time frame. Yes, battery production has to be by then on an unheard scale - get used to it.

Kleist, my comments were more towards the OP as to why a high volume Model E is not even possible at this time during 2014. Not enough cells.

I suspect Tesla needs Panasonic or another partner in part to get access to the patent rights to produce these cells. Tesla has a certain amount of IP to also contribute due to all of their design work on the battery management system, liquid cooling, software, etc. They likely just need to work out the cash contribution for Tesla and Panasonic for the joint venture, the percentage of ownership, the operating agreement, how disputes are resolved, buyout options down the road, etc.

I can't see the Model E shedding very many features, if any. Existing manufacturers like Hyundai and Kia are bringing features that were in only the most expensive cars last year to mass market. In truth the Model S (as good as it is)

is missing some features found on today's mid-range cars. (Nevermind in 2016/2017 when the Model E may be introduced.)

Tesla can't easily drop the quality of the body materials either since light weight == range. Regrettably light weight generally also == $$$. That's why I think the next car might need to be innovative but use more traditional

materials. (For example I remember bicycle manufacturers using interesting tricks like butting and case hardening that enabled them to get a boring material like chromemoly steel to act as a relatively inexpensive and light stand-in for

aluminum or titanium. I recall a sub 4 lb quadruple butted 4130 steel Bontrager adult mountain bike frame, for example. Several other posts on this forum have put forth some other interesting improvements to steel as well, not to

mention the use of high-strength boron steel in lieu of traditional carbon steel. Of course my example is also not the most applicable when it comes to the automotive world, either, but hopefully you see my point that there's still room

for improvement within the realm of traditional materials.)

From what I've seen, Tesla will have to continue their tradition of engineering excellence in bringing a new smaller, lighter vehicle to market:

1) Potentially some components will be shared with the existing Model S and X to allow for economies of scale and the dual use of some existing production lines.
2) Innovative new materials and/or processes will be used in lieu of the current weight saving methods. Aluminum (due to the energy used in isolating it) probably won't be a contender unless Tesla uses their relationship with Alcoa (I

believe?) and leverages their newfound buying power. It's possible that new alloys or composite alloys of steel might be a good option. Alternatively the CFRP BMW is pioneering could be a good option - it is lightweight, strong and from

what I've read could actually prove inexpensive. (Particularly in the event you need replacement components or body work done.)
3) Battery technology (specifically the lithium-ion family) appears to be improving at a pace of 7-8% pre annum. This is perhaps a conservative estimate - some folks are suggesting the jump is as much as 10% a year. Tesla uses apx

7,000 cells this year (let's say the year is technically 2012 since that is when the 'S launched) to bottle up 85kW in a pack. If everything scales linearly in 2017 the same pack would allow for a capacity of ~115kW. (This assumes

a total capacity increase of 35% using a conservative cadence of 7% improvement a year.) Since the Model E will be smaller the battery unit will also need to be smaller by necessity. To achieve the same 85kW capacity only 5185 cells would need to be used. Assuming the pack's outline is entirely used to house cells, we can therefore reduce its footprint from about (?) 8' x 5' (40 sqft.) to potentially a less portly

26 sqft. Perhaps a good set of dimensions would be about ~5' wide by ~5' long? This would allow for a shorter and narrower wheelbase but keep with Tesla's design philosophy in using the battery as a stressed member. There are already

many vehicles with an average width of 6' including the Honda Accord (6.06ft) and the Toyota Camry (5.975ft). The BMW 3 series was also mentioned in the same sentence as the Model E during some interviews with Tesla spokespeople, and it it has a width of 71.5" or ~6 ft. This also means that on Model Es' outfitted with larger packs, the pack could run from behind the front wheels to the same location as we've seen with the 'S - just ahead of the rear wheel well. This may even have the room for an additional foot or so worth of cells as part of a larger premium pack. Tesla could use this advantage to claim a true 300 miles (EPA 5 cycle) range, staving off the naysayers who suggest there's little to improve upon with respect to EV range. On the other hand, its smaller size combined with the use of fewer exotic materials would allow middle income folks' to buy a ~200+ mile range Model E, meeting the mandate for this new design. This satisfies two groups: the Tesla geeks who want a smaller vehicle with enhanced handling and range (via a larger, more expensive pack), and buyers with more basic requirements and/or budget who would buy a cheaper, more sedate base Model-E. The same philosophy is seen with BMW; do you have the money for a 320i or would you prefer getting better results for more money in a 328i? Very similar parts list, very different results, and a big price differential for a minimal expenditure by the manufacturer.
4) Many people would suggest that Tesla strip the Model-E of many of the luxuries currently found in the Model S. I would argue that having a single configuration would allow Tesla to continue leveraging their supply

chain for cost reductions, reduce debugging and testing efforts as well as reduce retooling and training costs.

For example I've seen suggestions that the removal of the large screen would reduce costs; I would suggest that this is part of the Tesla DNA and would save less than imagined. For example the iPad 2 reportedly cost apple ~$330.00 to

manufacture as of March, 2011. The cost to develop a different centre console and hardware to control things like HVAC, the radio, etc would be significant. In my opinion I'd prefer Tesla commit to reusing the screens used

in the Model S. These units have been debugged, the OS and apps are developed and as time goes on the components can be subject to process improvements a la PS2 Slim/PS3 SuperSlim, XBox 360 "Xenon" to "Corona" evolution

(http://en.wikipedia.org/wiki/Xbox_360_technical_specifications#List_of_r...) and the Wii Mini. Each of these iterations improved the cost of manufacture or reliability, both of which lower the cost to the manufacturer either via

intial manufacturing expenditure or required service under warranty. Considering the much cheaper Volt has a screen and capacitive buttons in lieu of buttons and dials, it'd be going backwards to outfit the Model E with anything but

screens.

The seats in the Model S aren't a good place to look for savings either other than to offer the textile material as the base option. The electronically adjusted leather seats could be positioned as the upscale option instead of coming

as the standard though. Again, instantiation of existing components may actually save a significant amount. (I've seen seating and interior materials mentioned as a way to save money as well.) The leather interior could otherwise be changed to use textile or high quality (recyclable) plastics on base models, perhaps saving a small amount.

Perhaps Tesla can offer some cheaper rim and tire options with the Model E. A basic set of (safe) tires and a generic set of rims could save some cost and require little development while not disrupting the current supply chain.

Where can Tesla save the most money then?

*** Body materials and the cost of the battery cells. ***

Sorry for the long, rambling post. I hit 'Submit' as I was about to head into a meeting at work... didn't want to lose even the poor quality work I did.

In short I think Tesla can achieve their goals if (as Papasmurf mentioned) they can continue to lower the cost of the 18650A cells they're buying from Panasonic and use something cheaper than aluminum for the bodywork. :-)

Jewsh;
Well-thought out post. Thanks. As for saving and losing stuff, I'll repeat my recommendations: install Lazarus add-on and the ClipMate package. Posts are saved as you type by the former; everything copied is preserved by the latter.

The only addition to your cost control list I can think of is further advances in robotic process control and design, etc., extending and leveraging everything TM has learned and conceived during its MS-MX evolution. For a $35K sticker price with a 25% GM, materials and labour need to be $28K. Not off the bat, of course, but as a target. Possibly more given averaging of margin across base and 'loaded' models.

Getting even further ahead of ourselves, I'm going to be fascinated to see the Roadster II and GenIII-X spinoffs, not necessarily in that order.

@Brian H:

28K for materials is pretty low at today's rates, but in the future EVs should be cheaper to manufacture than their ICE counterparts. Tesla has the right vision but as you say will need to aggressively improve the supply chain, improve efficiency during manufacture and figure out how to extract some of the costs from the interior without losing what customers see as the Tesla DNA. (Such a bunch of management-speak, I know.)

Indeed the Roadster II and Gen 3 family will be super interesting - Tesla may very well make up one of the big four soon and ergo the stakes are much higher. Incidentally my wife has already green lighted a Gen 3 for her but I am thinking it's a better fit for me... I don't need five seats to drive one person to work. She'll be the one picking up our daughter and she's the one who likes to drive her colleagues to lunch. (I also want to get Tesla's M3 beater when it comes out. :-) )

The new battery factory might be about more than just securing a supply of cells. By bringing the battery cell manufacturing in-house, they also cut out the 3rd party profit for the most expensive item in the car.

Tesla (or their joint venture) will now capture that profit for the cells and battery packs. Panasonic will likely still capture some profits, but in order to become the primary long term Tesla partner in the new Giga factory, they will likely have to give up a piece of it to Tesla.

I have no idea what the gross margin is. I suspect there is at least a gross profit margin of between 20% to 40% for Panasonic. So if Tesla can bring that in-house, it either allows them to capture higher profits (Model S and Model X) or produce cars that are more affordable (Model E).


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