Some excerpts from Musk’s internal memo:
“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,”
“Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way.”
Musk also noted that, while fourth quarter deliveries were “almost as many cars as we did in all of 2017”, the group still needed to reduce prices in order to make products that were “cost-competitive with fossil fuels.”
“Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k,”
“The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.”
His cars are still to expensive. The cost sharing with Americans that didn’t want the car it the first place is just going away.
Hyundai will have the EV Kona on the street in a couple months. 258 mile range for 37k before tax credits and discounting when Hyundai gets the volume up. The Car mags that have reviewed it, love it. Good looking small SUV unlike that butt ugly front end of the Model 3 Tesla Sedan. Competition will hurt Tesla, better looking equal priced high end stuff from Europe, low end more affordable cars from Nissan, Hyundai and others. Once the Status symbol wears off Tesla and the vanity driven millennials are onto the next new shiney thing Tesla will be in trouble. They are placing their bets with the China market and the new Factory they are building there. No doubt Elon will want to export from China and wind down California production to get profitable.