By on May 17, 2016

Tesla Model 3 Unveil, Image: Tesla Motors

As the owner of a 2013 Tesla Model S P85 and occasional TTAC writer, I have my opinions on the Model 3. Many commenters thought Tesla’s business model of starting at the high-end and working its way down market was crazy, but Elon Musk had the right idea: use the cash flow from high-end car manufacturing to ramp up your engineering chops and supplier relationships so you can push prices down to eventually make a mainstream product.

That’s exactly what Tesla is doing and the plan seems to be working brilliantly — but there’s a catch: managing the engineering “complexity budget.”

When engineering very big systems, whether it’s the latest CPU from Intel or the latest car from General Motors, and you absolutely, positively, must ship your product on a schedule, then you have to manage change complexity from the previous product to the next product. That’s why you see car manufacturers building “platforms” where they can swap in different parts while keeping essential systems the same. These platforms let you decouple your release schedules. Ship the new car today and ship the new engine next year, if you must, but move those cars out the door!

With this in mind, you can see how audacious Tesla’s engineering has been.

2011 Tesla Roadster 2.5 S, Image: © 2012 Peter W J Miller

The original Roadster, while borrowing a huge amount from the Lotus Elise, had a brand new battery and drivetrain, plus all sorts of carbon-fiber bits. The temperature management system on the battery alone was a huge engineering feat.

Tesla Model S, Image: Tesla Motors

After that, Tesla developed the Model S with new everything: factory, battery, motor, software, etc. At least the automaker rolled out features as they became ready. The all-wheel-drive system wasn’t in the initial car, and the AutoPilot sensors shipped long before the software was ready to use them. That’s complexity under control. The counterexample is the pop-out door handles. It took Tesla several redesigns to get them right, and meanwhile you had customers puzzled at their stuck handles. Should Tesla had used boring, ordinary mechanical door handles? For the initial car, yes, absolutely.

Tesla Model X, Image: Tesla Motors

Now, let’s consider the Model X. On its surface, the Model X is a very logical stretch of the Model S, with the same drivetrain and driver controls, but Tesla just couldn’t resist the temptation of those fancy rear falcon doors. The company was indeed caught in a bind when a supplier couldn’t deliver, which pushed the shipping schedule. If Tesla had engineered normal rear doors, the car might have shipped on time.

Now let’s look at the Model 3. In the abstract, the engineering challenge of the Model 3 is to make a cost-reduced Model S. That would need several mandatory bits of engineering complexity: reducing the materials cost of the batteries (thus the Gigafactory) along with everything else in the car. From this perspective, the austerity of a single, central touchscreen starts to make lots of sense. It’s a low-cost part, widely available, and easily reconfigured by software. Similarly, you can appreciate the lower cost of a traditional trunk and not the Model S’s motorized liftback. Top that off with the huge logistical challenge of scaling up your manufacturing operation, and you’re already pushing your engineering team to the brink.

Well, just like Tesla couldn’t resist the pop-out door handles for the Model S, or the falcon doors for the Model X, it’s also including a new “spacecraft control system” for the Model 3. Musk indicated that the plain steering wheel is just a placeholder for something new, yet to be revealed. This is exactly the sort of complexity overreach that I’m talking about. It would be one thing if Tesla shipped a “normal” car right away and then rolled out the fancy gizmos later on, perhaps first on higher-cost Models S and X and later on the Model 3. Certainly, there are plenty of other things that should “obviously” be in the pipeline for the Model 3. The market would happily purchase CUVs, convertibles, minivans, and other body styles riding on the same drivetrain, each of which would have its own complexity to deal with, particularly on the manufacturing floor.

2017 Chevrolet Bolt EV, Image: General Motors

How does Tesla’s Model 3 complexity compare with the traditional marques? GM is probably the most aggressive with its Chevy Bolt, which you can already internalize how absolutely ordinary it will be to drive. Fire all of your guns at once and Chevy still won’t explode you into space, as Tesla seems to desire.

Das Germans seem to be focused on plug-in hybrids at a higher base price than the Model 3 or the Bolt, and on “compliance cars” like the Audi A3 e-Tron, with again a higher base price and nowhere near the range of the Bolt or Model 3. But Das Germans do have a handle on product complexity. That A3 e-Tron is really just another variant of the Golf, with presumably a significant carryover from the larger platform.

Consequently, we’re left with something of a rabbit vs. tortoise race. Tesla’s rabbit is bounding forward, and I’m sure its engineers are at the limits of what they can manage. For now, GM is perhaps the only marque in the game who’s trying to run with Tesla, and the rest of the industry is firmly in the slow evolution/complexity management game. The billion-dollar question is whether Tesla will trip and fall while everyone else catches up, or whether it’ll truly pull it off and deliver on those 400,000 reservations. If they ship with an ordinary steering wheel, you’ll know it decided to prioritize its complexity management to hit a target. If it’s really gonna make it happen and take the world in a tech embrace, expect costly delays.

[Images: Tesla, General Motors, Peter W J Miller]

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72 Comments on “Tesla Model 3 and the Complexity Budget...”


  • avatar

    Tesla Model 3 is the future.

    As many of you know, I made a video of the Model X this weekend – which finally got to NYC.

    I intend on leasing two – but the configuration I want (for my business use) is not currently available till year’s end.

    Ever complain I had about the Model S (P90d) was addresses.

    – Model X is spacious
    -Model X is FAST (even in the non “p” trims)
    – Model X has a lot of bugs, but in future versions will b e worked out.

    And I’m not saying this because I’m a share owner.

    I’m saying it because it’s a FACT.

    Tesla has set themselves apart – by doing everything they could do NOT TO BE taken as a typical car dealer.

    The Germans will eventually retool and produce EV and PHEV as the norm – almost totally cutting out diesel and gasoline.

    Cars will be aluminum and lighter.

    Trucks will follow.

    The Model 3 will probably be faster and more desirable than anything else in the segment it occupies with the exception of the BMW 3 and C-class.

    I expect initial prices to be high. But they will come down eventually.

    My JEEP SRT costs $1030 a month with $250 insurance – and around $60 a week in fuel.

    The Model X would still cost around $1200 a month plus Godknowswhat in insurance – but the lack of fuel costs would make a big difference.

    I think I want to make my Uber service 100% EV.

    We have the JFK supercharger – which my drivers can simply leave the cars at and go eat- take a poop – or go do something with themselves.

    Thus far it’s been profitable using these cheap Japaneconoboxes (just got a Rogue, and I’m bought to swap out the Azera soon) .

    If the lease prices on the cars were a little less on the base Model X, I could replace all of them with that – drive fuel FREE – and PROFIT PROFIT PROFIT.

    I’m sold.

    But still – there need to be 3 times as many chargers/superchargers as there are now. That would help eliminate range anxiety and…

    ….listen carefully…

    CHARGING ANXIETY (a Phrase I just coined)

    That will occur when the stalls are all filled because suddenly your $140,200 P90D has to wait in line behind a bunch of Starbucks drinking hippies with Model 3 that cost a 5th the price of your car.

    • 0 avatar
      jjster6

      @BTSR,

      “– Model X has a lot of bugs, but in future versions will b e worked out.”

      “I’m saying it because it’s a FACT.”

      How can a prediction about the future be a fact? Just curious.

    • 0 avatar
      yamahog

      Point by point –

      I didn’t know you made a video of the model x but if I wanted to hear a self-aggrandizing self-promoter talk about making money, I’d sooner get a Donald Trump book on tape because the value he adds is tangible and he’s done far more than just manage to upload some youtube videos.

      It’ll be a long time yet before we see electric trucks. Go figure out energy density and what the implications are (hint – it’s the reason your model x can only tow a boat 50-ish miles). Also, if truck buyers don’t even really prefer turbos or hybridization, why do you think they’ll want to go full electric?

      Also, as a rational businessman, how do you expect to recover the additional costs of a Model X over a used Lexus RX hybrid? You can get an uber worthy Lexus RX or Es300h for high 20ks, and they’ll dramatically reduce your idle fuel consumption. I’d be amazed if the 80k of additional capital tied up in a model X will be worth it. But what’s your capital structure look like? Or do you just manage it on ca$h flow and mean to tell us how we should conduct our own business? Lastly, I don’t know about anyone else, but I try to avoid Tesla Uber Black cars. They’re some of the most disappointing black cars available. Every single full size luxury sedan from a company that takes them seriously is much better to be a passenger in. The S class, A8, and LS are my favorite I always give them a 5 star.

      Lastly, there are 650 instances on the web of the exact phrase “CHARGING ANXIETY” (though perhaps not in all caps) and it looks like the phrase has been around since 2012.

      https://teslamotorsclub.com/tmc/threads/charging-anxiety-log.9784/

      Do you have no sense of shame?

      • 0 avatar

        Point by point:

        #1 Shame – is a feeling poor people, prostitutes, the drug addicted and victims of violence feel when they hit rock bottom. As long as a dollar value is attached to my positive reinforcements, I feel nothing. I can’t be bargained with. I can’t be reasoned with. I don’t feel pity or remorse. And I absolutely will not stop until payday.

        #2 The model X pays for itself the more you drive it.

        Lexus? I HATE LEXUS. I wouldn’t want one if it were given to me. I’d sell it for a down payment on a new Hellcat Challenger to go next to my Charger.

        #3 My video on the Model X is late. California got it first. If I coulda gotten it earlier, I would have.

        • 0 avatar
          yamahog

          I see you regard discrete, sequential points like you regard Lexus. You don’t want them given to you, and you don’t want to make them.

          Good luck chasing your payday. Hit me up if you’re ever in the midwest and want to race that HELLCAT for pinkslips.

          • 0 avatar

            I didn’t buy my Hellcat to race it.

            I bought it just to have it until I can trade it towards a Jeep TRACKHAWK or 300 HELLCAT.

            People who race cars for money are taking a risk of losing.

            I make money by making videos of the cars for Youtube.

            0% risk of “losing”.

  • avatar
    PeriSoft

    My own disappointing test drive of a Model S suggests that while Tesla knows drivetrains and software, they’re far away from figuring out the most prosaic car-bits of a car – like windows that don’t rattle when you shut the door, door handles that don’t feel wobbly and cheap, and interiors that don’t thrum and drum with wind noise at 50mph. I wish them luck, but they have a long way to go.

    • 0 avatar

      My late-2013 Model S has some of these issues (a rattle in the liftgate, etc.) but newer ones I’ve been in seem to have improved on this. My 2000 BMW Z3 also had a rattle in its liftgate, so it’s not like Tesla’s alone in the rattles and odd noises department. To Tesla’s credit, they seem to be very good about fixing these things. My previous visit to the dealer, they fixed a clicky-noise in my windshield wipers, no charge, and I expect that my next visit will be similarly drama-free when I get them to fix the liftgate rattle.

      • 0 avatar
        PeriSoft

        The thing is, this one was brand new, a 2016. It had about 1000 miles on it, and it’s one they chose to be a demo car. The handler who rode with me didn’t even notice the wind pounding, which suggests it’s normal.

        I get that some cars will occasionally be like that, but this is deep into production and it happened in a new vehicle they used as an ambassador for the brand. It pushed me away instead of attracting me, and that can’t be what they were going for.

    • 0 avatar
      CoreyDL

      This is the way of the small, shed-like manufacturer. Tesla is just the US version of Rover today. ;)

      They’re building some models which many find interesting and like, but lack quality. And while they do it, they’re not -actually- making any money.

      Modern Margaret will be along shortly.

  • avatar
    yamahog

    Say what you will about the tortoise and the hare race, but Honda (and by the grace of the God of Speed, hopefully Toyota) has talked candidly about their electrification plans which is akin to a leapfrog event.

    Honda, Toyota, and Hyundai are uniquely committed to hydrogen because hydrogen works really well for small, dense nations surrounded by water / natural gas (which can be transformed into hydrogen). But for the rest of the world, hydrogen isn’t that great.

    However, a hydrogen fuel cell car is an electric car with a hydrogen fuel cell in lieu of a battery. Honda has indicated that they’ll sell the Clarity (named in tribute to the track by the band Sleep? perhaps) with a hydrogen fuel cell in some markets, and a battery pack in others.

    And Toyota has to be aware that their hydrogen car could swap out its hydrogen gear for a battery and go down the road just as well.

    Don’t count the frogs out of this race just yet.

    • 0 avatar

      As you point out, a hydrogen fuel cell car is really an electric car without a battery. This suggests that, if the whole fuel cell thing doesn’t pan out, they could swap in a battery pack instead. We’ll see.

    • 0 avatar
      redav

      Hydrogen doesn’t make sense, even for island countries with natural gas.

      The only reason hydrogen cars exist is govt, and by extension interest groups who influence govt. It has too few technical advantages to make it on its own. The lone exception would be flight. Hydrogen’s excellent energy density makes it worthwhile for drones and maybe other aircraft.

  • avatar
    Pch101

    “The billion-dollar question is whether Tesla will trip and fall while everyone else catches up”

    Tesla has figured out how to lose money on EV sales.

    Everyone else already knows how to lose money on electric vehicles, which is why they have largely limited their efforts to compliance cars. That isn’t exactly a skill that everyone wants to have.

    • 0 avatar
      VoGo

      If a tree falls onto a vinyl music recording in a deserted forest, does the broken record make a sound?

      • 0 avatar
        Pch101

        I agree. This notion that the auto industry has to “catch up” with a loss generator is a bit hackneyed. Why keep repeating an obvious falsehood?

        • 0 avatar
          Luke42

          @pch101:
          People keep saying that the other automakers need to catch up because Tesla has technology and the experience that a lot of us want.

          Remember that customers only care about the product and the ownership experience. Customers buy a car to satisfy their needs and wants, and don’t care if the company they’re buying from is profitable. Most don’t read the quarterly reports (as you point out), or particularly care what it says.

          Tesla does both the product and the customer experience well, and they do it in ways that are both innovative and simply not available elsewhere.

          If you are a customer who really wants to buy what Tesla is selling (and don’t think like an investor), then it really does looks like the rest of the industry is 5-10 years behind.

          • 0 avatar
            Pch101

            “People keep saying that the other automakers need to catch up because Tesla has technology and the experience that a lot of us want.”

            Did Tesla invent the car? No.

            Did Tesla invent the electric car? No.

            Did Tesla invent the battery? No.

            Did Tesla invent the li-on battery? No.

            Did Tesla invent the steering wheel? No.

            I could go on, but the point should be obvious.

          • 0 avatar
            stuki

            But,

            Tesla did make the Electric car hip. And for now, and until unlimited free money for all things self congratulatory hip becomes a self limiting indulgence, that is what really counts :)

            Since you seem to have a good grasp of more down to earth accounting, couldn’t you at least, if you wanted to be generous, credit them with doing a good job of building Goodwill? Perhaps offsetting some of their losses?

    • 0 avatar
      wumpus

      Yes, I understand why you are so terribly concerned that they might just end up like poor old Microsoft. A company that went public in 1983 and didn’t generate a profit until 2003.

      No really. All the money was plowed back into the company. Just like Tesla.

      • 0 avatar
        Will in MKE

        Wow. Just… wow. Do you really believe what you wrote? Microsoft didn’t generate a profit until 2003? Yes, 2003 was the first year MSFT declared a dividend. You do know that dividends do not equal profit, and that unprofitable companies can issue dividends?

        Silly me, I guess Berkshire Hathaway isn’t profitable since there’s no dividend to speak of. Now we know why TSLA trades where it does.

      • 0 avatar
        Pch101

        It’s hilarious that some folks regard Tesla as a tech company.

        In any case, Microsoft was profitable from the start. Next time, work on your facts:

        http://www.lannigan.org/pdf/Microsoft_prospectus.pdf

  • avatar
    Frank Galvin

    Dan – my thanks on a well written article. I have little to no understanding of product planning and executing the same. The structure and language you used really broke it down into an easily understood piece.

  • avatar
    TrailerTrash

    “probably the most aggressive with its Chevy Bolt, which you can already internalize how absolutely ordinary it will be to drive.”

    why this remark? It says “I am am a Tesla enabler and proudly so”

    Come on. Excuse away all you want. The material in the Tesla is Scandinavian poor. It is hard and uncomfortable and no where near that of a car costing over One Hundred Thousand Dollars. Not even for a 50K car. A one trick pony.
    Goonie hoon-ish take off thrill…just can’t get you to your destination.

    Please.

    And until the government stops using my money to promote the sales of each and every Tesla…Tesla is just another beggar standing along side the road asking for money for food. Pretending to want to better one’s life but still refusing to work for food.

    • 0 avatar

      I was referring to the completely ordinary steering wheel and driver controls. You’ll be able to jump into a Bolt and drive it away without any training, without reading any manuals. It’s a normal car. The Model 3, assuming they replace the steering wheel with a “spacecraft control system” will be anything but ordinary.

      • 0 avatar
        mcs

        My interpretation of what the “spacecraft control system” would be is just a display (maybe column mounted) and steering-wheel-mounted controls. I could be wrong. Something like that would not be difficult to do.

      • 0 avatar
        Ar-Pharazon

        Yeah, because the existing century-old, globally accepted, entirely up-to-the-task controls — the ones that are second nature to probably over a billion people on the planet — need to be replaced. Because they’re ordinary. Because they’re normal. Obviously not fitting for a chariot of the new gods.

        So you’d *want* a car that requires extra training to drive? You really want to RTFM before you pull out of the drive?

        Funny in an article purportedly about complexity. Does EM plan to replace that icky, ordinary system that every driver has used, ever, with this “spacecraft control system”? Or is he just introducing a gimmick to make his cars (and of course their owners) *special*? And introducing unnecessary complexity into the system.

        Will Driver’s Ed programs in Seattle and Mountain View start teaching “the Musk system” for the kids of all the Tesla owners? Most kids these days balk at the sight of a stick shift . . . will the select few do the same for steering wheels?

        Call me a Luddite or an Elder overly-concerned-with-his-lawn, but this whole idea is stupid. We do not need a magical new control system for our vehicles, not even one by Elon Musk.

        Overall I found this article to be a pile of fellatial fanboydom.

      • 0 avatar
        TrailerTrash

        Dan…just to be clear then, you were praising the Bolt?
        If so, then it is understood.And I agree.

        And I did love the write up and thoughts about manufacturing.

        However, if you are calling it mountain dumb and middle west plain n simple stupid or kinda implying it is unsophisticated, then that is really elitist and boring.
        I think most folks like myself are fed up and angry with the looks and sneers given to us by the Save The Earth greenies and Hollywood leftist.

        The Tesla is a statement for the rich…jewelry for the road. Sorta like boasting about the lack of the carbon footprint as you leave to catch your flight to the Canes Film Festival parties on your yacht.

        • 0 avatar

          The Bolt is a product that will be likely to ship on time and on budget. It won’t rock your world, but it will get you to work. If I have any concern with the Bolt, it’s the same concern I’d have with any GM car, that they’ll cut some important corners and damage long-term reliability.

          The Model 3 is a different game. Perhaps they’re going more for a desired feature set than for a desired target price, even at the risk of slipping deadlines. Or maybe not. I’m trying to extrapolate from what we can see to what we can’t.

  • avatar
    laserwizard

    This article is pure hogwash.

    If you were really working to do the right thing, you’d never waste precious development dollars on gull wing doors. This is pure bravado and foolishness.

    The real reason that Musk started his ponzi scheme by building high priced units first was because he needed the high prices to cover his costs; he didn’t do it to build capital as was suggested since this whole thing has been funded by taxpayer loans.

    I’m sure it is all pretty and fancy to state that temperature controls are hard to develop. I’m not an engineer, but I do know that in my limited research since 1980 when my college bud and I were working to develop a hybrid before there was even the name for such things, that you would never build the Chevrolet VaporVolt as it was envisioned.

    Complexity is foolish. Complexity to make a name for yourself is a business killer.

    There is no reason that these cars look so sleek while compromising interior room. And there is no reason you’d build that gull-wing thing if you were trying to build a psuedo SUV. And it is utterly foolish to build vehicles that don’t share components where they can. Once again Musk is dealing in complexity that is unnecessary.

    And this $35K mirage vehicle proves the folly of not working to develop component sharing. By spreading out the development costs over increasing units, you’d necessarily increase profitability which would sustain this company while decreasing complexity in manufacturering. There is nothing wrong with standardized switch gear and items where you can. It does reduce the snob appeal that seems to drive this company, but this company is really not a serious builder of anything other than deposits on a fictional car and appealing to stupid people with money so that they can be different from everyone else.

    once that ability to be a snob disappears, this company goes under. Going mass market will kill this company and reduce it to the Cadihack business implosion by having too many products that are watered down and you see them everywhere.

    • 0 avatar
      seth1065

      laserwizard,
      I am not a telsa guy I drive far to much for one to make sense for me, but come on once that ability to be a snob disappears, this company goes under” is a bit much most of the German cars we get in North America live and die and the snob factor. I doubt Telsa will go under , Elon may have to sell it to someone else but there have been and always will be snobs about what they drive so in that regard they are fine.

    • 0 avatar
      bikegoesbaa

      I’m not a real Volt fan and am generally neutral on GM, but you look like a hyperbolic fool when you refer to a current product as “Vapor”.

      Volts definitely exist, and have been available for half a decade. Like them or not, they are not Vaporware.

    • 0 avatar
      stuki

      Gullwing doors are a great practical feature on mommy mobiles, as it allows mom to fiddle with junior’s child seat, without getting rained on.

      On the X, the extremely low center of gravity enabled by those heavy batteries down low, allowed Tesla to splurge on the weight of the gullwing mechanism up high, something other Minivans/CUVs can’t do nearly as penalty free.

    • 0 avatar
      bunkie

      “Complexity is foolish. Complexity to make a name for yourself is a business killer.”

      it could be argued that the big three German luxury brands have embraced this strategy whole-heartedly. It remains to be seen if the result turns out the way you predict.

  • avatar
    tylanner

    The main advantage for Tesla in this race is that there is no real competition. There is a large and un-bridgeable divide between the dinosaurs of the industrial revolution and the fruits of the technological revolution. I feel a more appropriate analogy would be the Apollo Missions build-up to the first moon landing. The Model 3 is undoubtedly the moonshot.

    All the production goals are internally applied and controlled. The pre-order promise is no more than a motivational tool to drive his company to a concrete number.

    The big unanswered question is about timing. Are the fundamental EV technologies being developed by Tesla mature and reliable enough for mass consumption? The Model 3 is Tesla trying to answer that question in the affirmative.

    • 0 avatar
      C. Alan

      “Are the fundamental EV technologies being developed by Tesla mature and reliable enough for mass consumption?”

      I think GM may be ahead of Tesla in this department as far as maturing their EV technologies. The Chevy Volt gave GM a very important test platform for developing battery technologies. The fact that every Volt is designed to ‘Phone Home’ to the mother ship through OnStar gave GM very good data on the health of the Volt batteries out in the field. While the Tesla may do the same thing, there are a heck of a lot more Volts on the road than Teslas, and in more diverse locations where weather is more of a factor. GM took advantage of all this data to make incremental bumps in the Volt range between model years 2011 to 2015. I think the Bolt has benefitted from all this R&D and will be the real game changer in the EV market.

    • 0 avatar
      Ar-Pharazon

      Wow. You totally overestimate the technical difficulty of what’s been accomplished by this guy, and totally underestimate the technical difficulty of everything else required to deliver a reliable, durable, compliant, safe, and AFFORDABLE vehicle. And you can’t take a pass on any of those . . . affordable is part of the equation.

      It is appropriate that you cite the Apollo program. An engineering feat for sure, but I’m sure it cost a Bil or several. You can do a lot if cost is no object. Laserwizard pointed it out well above . . . Tesla does not appear to be doing some of the basics to lower cost and improve quality. Always going for something ‘cool’ instead of boring cost and quality.

      Maybe he’s a genius who will have it all. Maybe he’ll personally hand draw all the required part designs (they’ll be perfect) and 3D print everything (perfect, too . . . and on demand!) and he’ll have no component sharing and no iterative designs and nothing but cool stuff but still be cheap and last forever.

      To hear most Tesla fanboys, it shall come to pass. I’ll believe it when I see it.

  • avatar
    mike1dog

    I hadn’t heard about the “spacecraft control system” before. I don’t understand why you would do this. I’ve seen show cars with oddball control schemes before and thought they seemed silly in a show car. It’s literally trying to reinvent the (steering) wheel. Change for the sake of change.

  • avatar
    VoGo

    Interesting perspective, Dan.
    Thanks for sharing.

  • avatar
    philadlj

    These points are absolutely spot on:

    The S should have launched with regular door handles.

    Why allow a part the owner uses EVERY TIME they enter the car be so fickle and fussy?

    The X should have launched on time with conventional rear doors.

    Yes, they’re cool, but they weren’t 100% necessary. People were going to want the X in large numbers, falcon doors or no. Instead of getting the X on time, they got delays which continue to this day.

    They also could have possibly also caught the rear seat problem if they hadn’t been so preoccupied with the doors.

    The 3 should launch with a conventional steering wheel.

    Again…you’ve got HUNDREDS of THOUSANDS of pre-orders for the car with an work-in-progress interior. Why mar yet another launch – by far their most important – with a bellwhistle that might derail the whole thing?

    Just ask Audi about how introducing European-style pedals to the unsuspecting American public worked out.

    I get it. They want to GO FARTHER (even though that’s Ford’s slogan) and WOW people.

    Frankly, I’d be wow’d enough if they got a car out on schedule in the numbers they need to, with no fussy problem parts or features.

    Fancy gizmos can come later.

  • avatar
    HiFlite999

    Tesla’s great “success” has, to date, been funded by Quantitative Easing. With QE, traditional interest-bearing accounts and bonds have such low returns that money goes into the stock market. Without trading at 20+ times what Tesla stock would be otherwise worth, Musk would not be able to finance his operations to date, much less those required to realize the Model 3.

    • 0 avatar
      VoGo

      This is the most fascinatingly bizarre and false conjecture I have read today. How exactly is it related to design complexity?

      • 0 avatar
        heavy handle

        It’s not.

        He’s probably been saving this insight ever since he heard it on talk radio. He saw a Tesla post and had to contribute, no matter what the text actually said.

      • 0 avatar
        redmondjp

        It is directly related; the availability of unlimited zero-interest Yellenbucks makes unicorn-chasing possible.

        Meanwhile back in the real world, successful manufacturing companies carefully control their development costs so as not to run out of cash and go out of business. A lesson that Tesla will likely learn soon.

        • 0 avatar
          heavy handle

          You can find companies who’s stock performed similarly to Tesla in any era. Many of those companies are still around.

          Stocks vary, as they say. You will find analysts to tell you which stocks are buys, which are holds, and which are sells. And you will find analysts to tell you the exact opposite. They all meet-up after markets close, have drinks, and laugh about it.

          If you think any of this started in 2008, you are wrong.

          • 0 avatar
            VoGo

            Apparently the tech stock bubble of 1999 was caused by QE that occurred a decade later.

            Thanks, internet!

  • avatar
    Hogie roll

    While I’m very critical of Tesla’s government cronyism. I do like the differentiating features.

    • 0 avatar
      VoGo

      What cronyism? Tesla paid back a loan (early), just like Ford. They were never bailed out like Chrysler and GM, to the tune of $12B in taxpayer money.

      Buyers can get a $7.500 tax rebate for buying an electric car from ANY carmaker.

      So how is there cronyism?

      • 0 avatar

        Furthermore, there’s a lifetime per-manufacturer cap on how many subsidies are paid out. For most Model 3 customers, the subsidies won’t be available. http://www.latimes.com/business/autos/la-fi-tesla-subsidies-20160406-story.html

      • 0 avatar
        slance66

        It’s cronyism that electric cars are provided that rebate. It’s nonsense and never should have occurred. It’s picking favorites rather than letting them win on their merits.

        • 0 avatar
          mcs

          Oil drilling is subsidized too. Ford got a 5.9 billion dollar loan to update factories. Cash for clunkers…

          • 0 avatar
            TrailerTrash

            Cash For Clunkers was your government t work…not the wishes of the auto industry.

            And once again, folks, PLEASE stop trying t compare the oil subsidies with the Tesla money.
            The oil we find is used in so many parts of our daily lives you would and could never live without it.
            Your entire friggin sissy lives would be changed forever. That plastic keypad you are irritating and everything around you comes from oil.
            Please stop.
            The real truth about green tech subsidies and oil is a whole world you know nothing about.

          • 0 avatar
            bunkie

            “The oil we find is used in so many parts of our daily lives you would and could never live without it.
            Your entire friggin sissy lives would be changed forever. That plastic keypad you are irritating and everything around you comes from oil.”

            That’s kind of a good argument for green subsidies so that we have plenty of oil to turn into plastics that would otherwise be burned.

          • 0 avatar
            VoGo

            Right. The fact that many plastics are petroleum based has nothing to do with an article on design complexity at Tesla,…

            …but consider the source.

        • 0 avatar
          VoGo

          Even if you dislike the tax refund for buying an electric car, why call out Tesla, when GM, Nissan, Ford, Honda, Toyota, etc. all take advantage of the same program?

          • 0 avatar
            TrailerTrash

            Because we are talking here about Tesla.
            Nobody who is against the Tesla money would defend the other refunds.
            It is all bullcrap.

            That is like saying if you take a tax break for you home mortgage then never talk about the big tax breaks the worst corporations or rich take. You are an idiot if you are the only one not taking tax deductions.
            So, really…

          • 0 avatar
            VoGo

            Actually, TrailerTrash, we’re talking about design complexity at Tesla.

            But this guy came on and called out Tesla for cronyism. We tried to educate him on the facts, primarily that Tesla has not benefited from any gov’t programs that weren’t used by the other large American carmakers. That’s just plain fact.

            But you had to join the fray and share your political views.

  • avatar
    orenwolf

    Nice Article. Thanks Dan.

  • avatar
    indi500fan

    The model 3 is a nice looking car in my view.
    If they have a depreciation curve similar to the Nissan Leaf, they will be a very nice buy on the 3 yr old used market.

    Of course to benefit I’ll need to be alive in 2023. The SocSec actuarial tables say I’ve got a good shot.
    I could look cool on my 5 mile trips to church, doctors and retiree club.

    • 0 avatar
      C. Alan

      The Model 3s may hold their value better, mainly because by the time they come out, they will no longer be eligible for the $7,500 federal tax credit. This is what hammered the value of most EVs in the used market.

    • 0 avatar
      Kenmore

      Tesla, Hoverounds or their clones, by 2023 many of us boomers will have electric wheels.

  • avatar
    jimf42

    that would at least be Die Germans since it is plural… or Die Deutscher would be better…

  • avatar
    Flipper35

    So the tweet says interior and controls like a spacecraft. I take it that it will be small and cramped and the computer will do most everything for you. I hope he isn’t going for a side stick controller. I would think that would get tiresome after a while. Yes, aircraft and spacecraft have them but unless they are going full auto on the car that comparison doesn’t work. Planes and spacecraft aren’t hand flown the whole time.

    Not being able to hoon the car now and then would be a deal breaker for me, but I guess all the new kids will be fine since they are used to the PS/X-Box controllers.

  • avatar
    DaveBeNimble

    This is a really interesting post, and it becomes more interesting when you add in another point about Tesla (and Musk’s businesses in general). Tesla has a habit at hiring engineers well below markets rates for their zealotry, and burning them out. The consequence is that they have really high turnover. Now you pair their never-ending drive for complexity with this high turnover rate, meaning that they are losing their institutional knowledge as fast as they gain i, it spells really turbulent times ahead.

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