Can the Tesla Model 3 Break Even at $35,000? This Guy Says 'Nope'
Tesla is in the game to make money with its $35,000 Model 3, due out in late 2017, but that claim was recently disputed by an industry insider.
Jon Bereisa, an electric vehicle engineering consultant (and former General Motors systems architect responsible for the Chevrolet Volt), said recently that the Model 3 needs to be much more expensive for Tesla to break even, according to StreetInsider (via Electrek).
Bereisa, who serves as president and CEO of Auto Lectrification LLC, was speaking on a broadcast hosted by UBS analyst Colin Langan. He said that the likely makeup of the Model 3 battery, as well as its capacity, would cause the factory variable cost (FVC) of the vehicle to be more than $1,500 above the EV’s stated price tag.
Assuming a 60 kilowatt-hour battery (at a cost of around $190 per kWh), plus building costs, Bereisa said this would mean the Model 3 would have to sell for $45-48,000 to become profitable.
Jeff Evanson, Tesla’s vice-president of investor relations, called in to dispute those assumptions. He said the cost of batteries at Tesla are already under $190/kWh, and added that the Model 3 will have a battery pack of less than 60 kWh.
Nor will the model feature all-aluminum architecture, said Evanson, poking holes in Bereisa’s assumption about the Model 3’s building materials and their associated cost.
It was a lot of he-said, he-said, with Bereisa saying he doubted the price of batteries could go much lower than $190/kWh (given the current state of lithium-ion battery technology), and added that a 55 kWh pack would be needed just for 200 miles of range. Tesla claims the Model 3 will travel a minimum of 215 miles on a charge.
Who’s right and who’s wrong here? Who knows.
The model 3 is still well over a year from production, so it’s all hearsay at this point.
[Image: Tesla Motors]
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The 3 won't be shipping in large quantities until 3 years from now. By that time the cost of batteries will have dropped.
Way too late to the party but I just want to point out we are fast approaching the 8th birthday of the TTAC Tesla Deathwatch (5/19/08 - 12/11/08, R.I.Google). In celebration here is a poignant quote from the final Tesla Deathwatch written by the man himself "TTAC won’t be hovering over Elon Musk’s minions vulture-like, waiting for the latest insult or injury." Guess that was a few EICs ago so it probably doesn't apply anymore. Anyway, this post did provide some insight such as chassis material (not Al) and current battery costs so thanks for that. Carry on!