Next-Gen Tesla To Be Cheaper Than Model 3, Without Dilution? Yes.

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Originally published on TeslaMondo.

Skip to 12:12 here, and you’ll hear Musk imply, without expressly stating, that Tesla is plotting a Gen 4 Tesla that everyone can afford. Model III, he acknowledges, leaves about half the population unable to swing the price.

“There will be future cars that will be even more affordable down the road . . . With fourth generation and smaller cars and what not, we’ll ultimately be in a position where everyone can afford the car.”

He might have been talking about the EV scene in general, not specifically a Tesla strategy. But for the sake of a measly blog post, let’s assume Tesla eagerly participates in this fourth generation.

It’s hard to imagine Tesla tackling a higher-volume project than Model III, given the Mount Everest of Model III orders that needs to be whittled to a pitcher’s mound in the next few years. But Tesla is all about “increasingly affordable” cars. Its website used to say so — remember? The big question is whether Tesla could pull off something that other marques have tried but failed to do, which is cheapen the brand without cheapening the brand. That’s the “dilution” in the headline.

This drive downmarket does have some cautionary tales. BMW and Mercedes both have intermittently flirted with cheap hatchbacks, with little success in the US, better elsewhere. The Caddy Cimarron, Porsche 924, Porsche 914, Ford Mustang II — all of them problematic for brand image. But the gold medalist in dilution pollution is the Jaguar X-Type. Remember that? During the brief time Ford owned Jaguar before selling to Tata, Ford managed to nearly destroy the brand by offering this generic, cheapo Jag Frankenstein of slapped-together Volvo and Mondeo parts.

It sold in greater volume than Jaguar’s other models, but that’s not saying much for a low-volume specialty brand. Tata rescued Jag and has since cranked out stuff worthy of the name. Imagine? A polished British brand polluted by Ford, but saved by . . . the same company that builds the Nano penalty box.

The cheapening of Tesla likely won’t result in the cheapening of Tesla, for a few reasons.

  1. There’s no impostor like Ford behind the curtain. Teslas are pure Tesla.
  2. A cheap Tesla at any price level would still set itself apart from the field, if only for being purely electric. How many affordable pure EVs will exist, even 10 years from now? How many with their own ecosystem of proprietary charging stations?
  3. Tesla’s brand identity is better defined than, say, Jaguar’s. What makes a Tesla a Tesla? That’s not very hard to answer, at least for now. When autonomous driving flattens the automotive landscape, putting a Honda Accord on equal footing with a BMW 5-Series,  then every automaker will have to reinvent itself, including Tesla. Until then, Tesla is all about electric, fast, sexy, and a sprinkling of James Bond.

So far, Model III certainly has not diluted the Tesla brand. If anything, it has strengthened it by introducing Tesla to the general vocabulary. TeslaMondo has witnessed more traffic since Model III hit the scene, if that’s any valid measure.

Reprinted with permission.

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89 thoughts on “Next-Gen Tesla To Be Cheaper Than Model 3, Without Dilution? Yes.

  • Tesla is very much a forward thinker, but they won’t ship anything like that till they finish their 2015 x10 growth spurt.

    Thing is, if autonomous driving happens, then the cost of riding in a model 3 may go way down making it accessibe to most people. Think Uber + computer arranged car pool. Might even help with congestion, not to mention parking.

    • That is what he hinted at in his conversation in Norway the other day.
      Autonomous inner city transport vehicle to replace cars and buses for the final delivery of people to the destination.
      I will find link to conversation and post next.
      I have said it before once the Model 3 is bedded down post 2020 some time the next hurdle is the $20 vehicle for the single person starting out on his/her career

        • I love the way he talks. Or is it the way he thinks before he talks. Not too much emotion, and real gentle. He is the antiTrump! 😉

        • If he has new ideas, taxpayers are in trouble.

          • Actually the exact opposite tax payers will be not paying for the health effect the building of further infrastructure it is a win win for everyone.

          • Yes, since the incentives are drying out soon you have to come up with a new scheme

          • No not really.
            Just for a second imagine instead of using a very costly ICE vehicle to transport you from A to B you use a zero energy vehicle to deliver you safely to your destination at a cost admittedly, however far lower than the cost of the present mode of transport.
            Bonus no need to pay to park and when you wish to leave simple book a trip and back again saving you both money time and more importantly cost of providing your ability to take up space within the inner city area.

          • Take your FUD home and make yourself a sandwich.

          • Bob old mate hmm i think education is needed for a whole lot of people that is the problem, i just contributed to a discussion on how to help in an emergency situation in a third world country and it is really difficult coming from a rich western perspective.
            Perhaps in the educated western democracy’s we also are in need of education just how to do this is a problem.

          • “Guest” was a troll who has been hitting us several times a day lately.

          • Hence my remark RE:- ” education “

          • yeah, but the issue with people like this is, they are not interested in learning. and, in some cases, they are even paid to do this. this person has had several warnings and keeps creating new email addresses and using different IP addresses to spam us.

          • I can’t see the deleted statements, but I assume he’s feeling threatened by EV-based car-sharing services. So saving actual taxpayer money is less important than forcefully preserving the sacred private automobile that conflates property and freedom (as only for those who earned them). Remember, Jefferson’s first draft was “life, liberty and property.” Revising “property” to “the pursuit of happiness” opened Pandora’s box to the possibility that technology will replace some forms of property with services that leave us all happier.

          • who knows. the intent & process were clear, though:
            1) dirty the image of EVs, esp Tesla
            2) spout nonsensical BS in practically every comment

        • “20 minute mark he mentions mass transport inner city areas”

          Hmm, I wonder what he is referring to. I speculated a year ago @ Cleantechnica googles-self-driving-electric-car-fleet-is-expanding/ that we could have autonomous micro-cars that hook up like railway carriages in large cities.
          This would be 20 years away but one could envision computer controlled autonomous vehicles that communicate with other autonomous micro-cars and cede overall control to a city traffic control computer system. The micro-car would pick you up in the morning for work. You tell the car your destination. This is relayed to the city traffic computer system. The city traffic computer system calculates the best route and even selects other vehicles in the your area travelling in the general direction you are travelling to form a chain of vehicles. The vehicles have advanced linkage systems that enable them to hook up and function as one train vehicle for long “straightish” sections of travel. They can for example all accelerate and brake in unison. The train breaks up and the cars go their separate ways when the traffic computer deems this most efficient for the completing the journeys of the individual cars. Train cars have no space between them so they utilise road space effectively but can still remain at speeds around 70 mph. The cars themselves are also very small and light. There could be dedicated roads and raised platform roads specifically designed for these light vehicles. Raised platform roads could be quite modular and could be put in place quite quickly.
          Car platooning has been discussed widely. This is where computers control convoys of cars such that they travel closely together and can brake and accelerate in unison. This would take up more road space than my idea due to significant gaps between the vehicles for a safety margin. In my model a standardized micro-car format allows for relatively lightweight raised modular platform roads due to the light weight and size of the vehicles.

      • You won’t need a car.
        This would be an UBER bus type AI service, that picks up 2-4 people and delivers to your door. and works all thru rush hour, from 6AM to 9:30AM. You wouldn’t need a car.

        It should cut traffic by combining riders with shared routes.

        • Plus it reduces congestion enough to allow for dedicated lanes of self driving Bus Rapid Transit. Or the AI will determine that certain vehicles have priority and get out of the lane or create space in front of them to allow another AI car to get out of the way of an approaching sufficiently larger passenger vehicle,

        • It appears you are correct as you hear in the talk below in the video.
          It would appear Elon is in front of the curve with thoughts to implement within inner city environs a mode of transport that will move people using solar for charge and zero emission with out congestion to their destination it is rather like using present mobile phone tech open it and send a message it works because of interconnecting services.
          So a few thousand people to move per hour hardly a problem considering the millions of messages that the present technology can handle.

  • How come you haven’t mentioned ‘Leeco’s’ concept car. I’d have thought that would be right up your street.

    As for the main point in this piece. Cheaper cars will sell better in the future than they have in the past – simply because the petrol-heads will no longer be able to spread their snobbery and derision as they have in the past.

    The first mass produced truly electric car(Model S) effectively made all ICE’s obsolete, maybe not overnight but certainly in good order.

    Musk has changed expectations. Cars will become like phones now. Battery life and charging will be the only discernable measure people will be concerned about. The cheaper the better!

    • LeEco: It is in line, but the writer had a big backlog of stories.

      • Looking forward to hearing LeEco’s solution to the scaling up problem. It took Tesla three interations and 12 years, yet LeEco plan to be instantly huge and competitive? That’s a lot of faith in reverse engineering.

    • Raises a new discussion topic – what happens when cars become so cheap, they undermine public transport systems.

      • That’s easy. You tax them and make public transport free to use…like it should be anyways.

        • I’d suggest ‘near free’. People don’t value, and vandalise, stuff that is free.

          • I think people value Google, Facebook and Hotmail (etc), but that is a popular saying!

          • No shortage of grafiti there

        • It should be free during the off-peak.

      • The cost of two people riding in a car will still be about half the cost of one person riding in the car. And put 18 people on four wheels….

        • The cost of owning and operating a car is $8698.

          A very generic cost, your personal situation will vary but let’s use that. Suppose it’s a 20 mile commute to work, 40 mile RT. And you have a car that is basically used for nothing but that commute. 220 days a year? 8,800 miles per year. $0.99 per mile.

          If someone could get door to door service, a comfortable ride, and pay $0.50 per mile don’t you think many would use public transportation? Three people in a self-driving four seater should cover the car cost plus create a nice profit for the car owner. Create six passenger, six door cars and the price of a commute could drop to around $0.20 per mile. A “Bob box” ten seater could drive the price lower.

          (Bob box – curbside middle door. All seats face middle of vehicle. Three across seating in front/rear ends. Single seats on each side of aisle. No one has to move to let anyone else in/out.)

  • The brand of Tesla isn’t based on the Model S’s technical capabilities. It is based on the vision of leading the transition to sustainable and automated transport. Without that transition the Model S would only be of interest to car enthusiasts.

    • Definitely. And because of that, the more Tesla transitions the masses, the better.

    • You make a great point about the Tesla brand. Additionally I find it very intriguing your thought that without the transition to sustainable transportation the Model S would have only been for car enthusiasts. Who would have thought an electric car would be for car enthusiasts when traditionally they were sneered at by almost everyone for limited performance. Personally though the only few people I know that own Model S’s all could not have cared less about performance or cars in general before they bought the Model S. The Model S in fact turned them into car enthusiasts… That is the kind of Brand power Tesla already has…intriguing indeed.

      • I think your observation is a good one. The Model S is good enough to convince and convert. Youtube has a drag race video between a Model X and Ferrari that the Model X wins repeatedly with ease.

        • Especially if you play the video over and over.

          It’s late. I need to go to bed…. ;o)

          • It was a best of 3, so no need to replay 🙂

          • 😀 Bob commenting at the end of the night is even better than Bob commenting first thing in the morning. 😀

          • I hit my peak when I’m snoring….

      • Yes, great points.
        1) Turned normal car enthusiasts into EV fans.
        2) Turned greenies into car enthusiasts.
        3) Turned tech enthusiasts into car enthusiasts.
        4) Even turning some normal people (none of the above) into car enthusiasts. (Of course, car = Tesla.)

  • Ah, without BRAND dilution. I see.

    I am expecting some pretty serious STOCK dilution to finance this kind of expansion!

    • Not executing the vision will deflate the stock as it reached its existing levels on expectations.

  • Could we please go straight to the 15th gen car, that will be twenty times cheaper and will go one million miles on one charge and can be recharged in 3 seconds. Why limit our imagination, we can fly wherever we want on the wings that Elon gave us.

  • Could we please go straight to the 15th gen car, that will be twenty times cheaper and will go one million miles on one charge and can be recharged in 3 seconds. Why limit our imagination, we can fly wherever we want on the wings that Elon gave us.

  • Could we please go straight to the 15th gen car, that will be twenty times cheaper and will go one million miles on one charge and can be recharged in 3 seconds. Why limit our imagination, we can fly wherever we want on the wings that Elon gave us.

  • Have to love a troll who continues posting here after having email address (obviously fake) an IP banned repeatedly… 😛

    (Just a side comment, not related to the article.)

    • Could we please go straight to the 15th gen car, that will be twenty times cheaper and will go one million miles on one charge and can be recharged in 3 seconds. Why limit our imagination, we can fly wherever we want on the wings that Elon gave us.

      • I would expect looking at the limits of expectation within the present laboratory exploration that a 200 kw storage device at under $100 a kw is possible with short time fast charging.
        This would deliver range well outside the safe driving ability of a person.
        In fact only a 150 kw should be more than is needed delivering some near 400 mile range which is rather large.

        • this guy is a troll who keeps trying to bash Tesla/Elon. here he is just exaggerating and trying to make fun of us. 😀

          • I do not mind in the least
            In life there are those who understand and those who are deep rooted in misunderstanding one must take care to steer a careful course so as not to dismay and cause reinforcement of misunderstanding of a subject.
            Some times pointing out the subject matter only leads to a reinforcement of misunderstanding, however i hope that politely being civil and giving the evidence is the best course.

  • The Model 3 hasn’t had much affect on the brand yet because we still haven’t really seen everything included or not and the final price. I think we all know what “starting from” means these days and Tesla has openly admitted average price is more like 42k not 35k. I think they can deliver quality and I already hold a reservation but I am being cautiously optimistic. There is a lot that can go wrong between now and Late 2017 early 2018 that will affect timing, quality, and/or price of the Model 3.

    If anyone can pull off another great EV it’s Tesla but it remains to be seen. Heck they are practically the only ones trying at this point so I sure hope they deliver!

    • Perhaps it has not effected the brand. But it has caused a great deal of momentum as an impetus for transition in the industry.

      • I’m not sure I agree. If you mean momentum and/or awareness among consumers then I would agree but otherwise I don’t see a whole lot of movement among the industry itself. I worry the major manufacturer’s will show an impressive ability to resist change. Currently we have several vapourware type announcements or comittments with no real product and the Chevy Bolt… a limited attempt at best. Hopefully th Bolt will be wildly successful but with limited production the general news could easily paint it as a failure with low sales, even though the more informed (us) would know better. We shall see…

        • Germany will soon try to push EVs. This is the point where the manufacturers enter the market.

          • Yes this is the moment where Kodak makes a big move in digital, DEC takes over the microcomputer market, and US Steel reigns supreme with their ascendance with mini-mills. Or not.

          • But you do remember who started WWII, was key to PV and Energiewende and is phasing out nuclear first…
            I guess German politics get things done sometimes.

          • All wars come to and end and domestic production follows domestic needs and tastes. Existing car companies believe that means gas cars. It’s difficult to give your best effort for something you do not believe in. The entrepreneurs have long since departed large car companies and their skills, visions, and drive to transform industries or products will be difficult to recover.

          • You have to start somewhere. Till now EVs heavily dependent on policy. Chinese only buy EVs in the 8 megacities. It is because your chance to get an ICE license in the lottery is around 8%.
            More countries will set similar actions. How’s that a domestic need? That’s a looming global market for German automanufacturers.
            They are well positioned and the while supply side is already moving in the right direction.
            I know for a fact that internally at AVL everyone knows in which direction combustion engines for cars are moving.
            Do you really believe they now sit back and anticipate to close shop in 10-20 years?

          • I haven’t thought through the global implications for German manufacturers yet.

          • But there’s a big difference between saying the German government should incentivize EVs, and saying that this will guarantee the established German carmakers will do something. The culture of government and the culture of automakers can be quite different.

          • They are not going to just incentivize EVs. They will reach agreements with the industry on who will pay which part of the transition and how the charging infrastructure is going to get established.
            Nothing is happening over the heads of the industry.
            And surely it is a move to position the industry globally for coming change.

        • ” I worry the major manufacturer’s will show an impressive ability to resist change”
          I would not be surprised. The world will move on, leaving them behind.

    • “and Tesla has openly admitted average price is more like 42k not 35k”

      You make it sound as if they were trying to deceive someone…

      The car will be available from 35k, but most people will want some options and are glad to pay extra. Nobody is forcing them. What is wrong with that? It is normal business and I don’t see anything nefarious going on in this matter, not with Tesla, nor with other brands that also offer bare-bones cheap entry-level models.

      • “openly admitted” gives you a nefarious feeling? I can’t help you with your own perceptions being negative…

  • If Tesla created a less expensive Model 4; they should start a second brand name for all cars in that price range & below.

    • That’s 2oth century car thinking. Like dealerships…. ;o)

      • I am a child of the 20th century. And Tesla will be just fine working to avoid having dealerships.

  • After hearing about the i3 tear-down report. Musk better start looking at that Carbon-Fiber material. The Chinese are. Looks like they plan to skip the aluminum car age.

    • Perhaps Tesla and others could use Carbon Fiber to differentiate their “premium” models for awhile if we do eventually get to the point some time in the future where little differentiates each EV as they are all quite good and affordable.

      I agree with several people here that it seems car ownership in general is going to really change in the future. I will always be a car enthusiast but a growing number of people are not interested in vehicle ownership and by extension know very little to nothing about cars. I work in Toronto and the concentration of young professionals living in dense areas with good access to transit that don’t own or want to own a vehicle is growing quite rapidly.

    • Aluminum is the most recyclable material I’m aware of but I’m no expert. How is carbon fiber?

      I guess this gets into a whole lot of tradeoffs (like energy used to create aluminum in first place) so feel free to ignore. But I know Musk is concerned with this kind of thing. We must consider such for creating sustainable future.

  • Yhis guy starts to lose already bullets. Too much promises, too much adventures.

    • He produced 100k cars in the last 12 years. If you don’t believe Elon, you are a troll.

      • There is no belief this is tech where the product meets expectations.
        No sales talk needed when you talk tech rather different than the ICE branch of vehicles franchise in place for 100 years.

    • Seems to me he is doing pretty well. Are there promises that Tesla didn’t deliver?

  • If the present manufacturers wished to beat Tesla they could because Tesla have given them the IP to use, so which one will take up the challenge to try Tesla are willing to help because it is not about the company it is about changing the whole transport scene.
    And i was of the opinion that a more affordable car was on the drawing boards as well as the inner city transport vehicle that will remove ICE vehicles completely from the inner city area.

  • Not exactly a revolutionary statement is it? You’d expect that things get both better and cheaper over time. Tesla’s vision is to convert the world to electric driving, that requires cheaper cars.

  • Ford drove Volvo to the ground and sold it to the Chinese owners that simply allowed the engineers to take over resulting in far better cars and big smiles among the owners.

    GM drove Saab to the ground and it is a bit unclear if they can manage the comeback they deserve but they are now Chinese owned too.

    I think everybody will understand that Tesla desires to be a carmaker even for people with modest income. So contrary to diluting the brand I think a fourth generation cheap electric vehicle will build brand value.

    BMW actually have produced very small cheap cars in the past that everybody loves so even larger manufacturers of primarily expensive cars can get away with affordable cars.

  • It is nice how MaaS (Mobility as a Service) idea is spreading. why own a vehicle that is parked not moving over 90+% of time cities can get more space just by up to 80% ewer vehicles (mostly parked) cleaner air due to less/no ICE. etc. what will all the displaced folks who deal with them do? repair shops, insurance agents. lots of folks employed directly and indirectly. lots of wealth at stake, lots of push back

  • I think Tesla will simultaneously get their hands on designing Model Y in the form of small CUV, based on M 3, as well as 4th gen even more affordable M1 or whatever the name. These small CUVs are quite appealing, last year Renault Captur and Peugeot 2008 sold some 150k pieces each, think we’re gonna see more newcomers into the segment, PHEVs included. As for 4th gen Tesla should keep it in 15-25k price bracket and that’s the point where another major automaker will join the fray, most likely around 2019.

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