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Cost To Build a Tesla Model 3 Is $28,000, German Engineers Say (www.wiwo.de)
Rei writes: An interesting report came out the other day from Germany, where an engineering firm purchased four Tesla Model 3s on the grey market to study on behalf of an anonymous major German auto manufacturer. Among their key findings: due in part to a huge reduction in cobalt in the batteries (2.8% in the cathodes versus a typical 8%) and a number of simplifications, the parts cost of a Model 3 (in units of 10,000 vehicles per week) is estimated at $18,000, along with $10,000 in production costs. Note that the teardown was for the long-range version with the premium upgrades package.
On Reddit, users with access to the full report added further details. The 75kWh battery is 40% of the components cost ($7,200); the interior is completely symmetric (facilitating RHD); there are only 4 kinds of screws used in the underbody (a typical German luxury manufacturer uses 40); many parts of the car are designed specifically so as to be easier for robots to grab; and the battery pack is harder to remove than on the S/X (e.g. not battery swap capable). After studying the individual components, they concluded that German EV manufacturers would not be capable of producing a similar vehicle at this point in time. Asked on Twitter whether Musk agreed with their price conclusions at a rate of 10,000 vehicles per week, Musk replied: "Definitely." That said, Tesla is still in the process of moving from 3,500 to 5,000-6,000 per week by the end of this quarter, and is not expected to reach 10,000 vehicles per week until next year.
On Reddit, users with access to the full report added further details. The 75kWh battery is 40% of the components cost ($7,200); the interior is completely symmetric (facilitating RHD); there are only 4 kinds of screws used in the underbody (a typical German luxury manufacturer uses 40); many parts of the car are designed specifically so as to be easier for robots to grab; and the battery pack is harder to remove than on the S/X (e.g. not battery swap capable). After studying the individual components, they concluded that German EV manufacturers would not be capable of producing a similar vehicle at this point in time. Asked on Twitter whether Musk agreed with their price conclusions at a rate of 10,000 vehicles per week, Musk replied: "Definitely." That said, Tesla is still in the process of moving from 3,500 to 5,000-6,000 per week by the end of this quarter, and is not expected to reach 10,000 vehicles per week until next year.
Learned this in my first econ class ever.
"double your price of whatever you make it for. You will make money. We have all these formulas and tricks to tell us what it should do but we have no idea. 2x just works".
The class then ran dozens of simulations. The guy was right.
That's huge. Last weekend I helped a friend replace the motor in his 1993 Toyota, and IIRC there were 10, 12, 13, 14, 15, 17, 19, and 21 mm bolts plus several different other Phillips screw sizes. Better than GM which my friend had to buy several sizes of Torx drivers or my other friend that has a Harley we replaced a clutch on that needed a couple of exotic Torx drivers that we couldn't find locally. T25 was too loose and T27 wouldn't fit in one of the bolts. He also replaced one of the heads on it, and the special Torx driver from Snapon was more expensive than he paid for the used head!
If the components are $18,000, labor is $10,000, and factory depreciation is $10,000 [1], then Tesla should have been making a profit on those $70,000 premium Model 3 sales, but somehow that's not reflected in their Q1 report.
So either the Germans are able to get much cheaper materials and labor than Tesla, or this is just a FUD piece. Since it's written by an actor, sources anonymous German engineers, and has a paywall for the full article, I'm leaning towards the latter.
[1] A $5 billion Gigafactory on a very aggressive depreciation schedule (double declining balance with a useful life of 10 years) would be $1 billion for the first year, which would add about $10,000 to the cost of each vehicle if they make 2k vehicles / week.
Sounds reasonable. Keep in mind that the $28K is just parts and labor. It does not include a share of fixed costs -- overhead, debt servicing, operating costs, taxes ... etc. My experience with that sort of accounting is tangential (IANAA) and not really applicable to mass manufacturing. But the costs of running a business tend to be pretty impressive.
You can't see ANYTHING from a car, You've got to get out of the goddamned contraption and walk...Edward Abbey
how does 2x work if no one will buy the car?
Obviously if you can make 2x for the car you will make money, it does not take simulations to prove that, but the problem comes in with demand versus price point.
When you cant win, ad hominem.
there are only 4 kinds of screws used in the underbody (a typical German luxury manufacturer uses 40); many parts of the car are designed specifically so as to be easier for robots to grab; and the battery pack is harder to remove than on the S/X (e.g. not battery swap capable).
The screw thing is awesome. As someone who has done a transmission swap on an Audi A8, I can tell you that it is a truly massive improvement for the technician.
When robots install parts, they are always designed to be installed by robots. That's how it's done.
The battery pack on the Model S was installed partially with adhesives, so....
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I worked in customer service for a large company, and I could see every cost, and price associated with every product we made, from service parts, to complete units, and you are correct.
We doubled our cost when we sold it to the dealer, and they doubled their cost when selling it at suggested retail.
There were a few things that we completely raped people for (a $3 shaft for $120) but the majority was the double double.
While I was there, I learned another valuable lesson for the double double, and that has to do with scheduling projects. My boss would always tell me to double the amount of time I thought it would take when planning a project, and he would then double that amount of time when scheduling resources. Something he learned in aerospace:) but you didn't want to be the reason something was held up! We had a similar problem with model year, don't bite off more than you can chew:)
Cheers!
Ha ha ha. Good one. Exactly one good flu epidemic will set humankind back potentially thousands of years. That epidemic may not be that bad, but a bad one will happen and there will be some serious societal adjustments that more than likely will preclude your rabbit hole.
Caution: Contents under pressure
This could be the reason why "Tesla is still in the process of moving from 3,500 to 5,000-6,000 per week by the end of this quarter".
Basically they might be stockpiling cars until after the next quarter starts (July) so that the maximum number of buyers can take advantage of the full tax credit.
Nissan has Bolts on their books for $31K, but if you walk into a dealer anywhere but California, you'll be given reasons why you shouldn't consider a Bolt, followed by reasons why you cannot. In California, you'll be able to get one only if Nissan hasn't yet reached some legislated environmental quotas.
If those state laws are done away with, expect the Bolt to disappear entirely.
VW might produce enough EVs to fulfill their obligations under repatriations for dieselgate, but expect them to try to convince legislators that the reason they haven't sold enough is that their customers don't want them.
Here's a hint - if you ever hear a car company or salesman talking about how this car will probably be OK for your daily commute, they aren't trying to sell you that car. Talking about your daily commute is to make you bored with the vehicle, so they can then make you excited about the car they want to sell.
Prediction for end of Universe #42: Fencepost error in Quantum_bogosort.cpp
The german manufacturers don't have the structure to keep up with Tesla at this point.
Tesla uses vertical integration to cut the costs of the middleman(the auto suppliers and the dealer network in this case). They produce a lot of key subassemblies themselves, where other's subcontract to various levels.
Traditionnal car OEMs can't do the vertical integration today.
aaaaaaa
There's nothing at all "misleading" about starting a production-limited vehicle with the more premium versions and working down from there as production ramps up. Lots of manufacturers do this. Jaguar won't be offering their base i-Pace for a year after the heavily-optioned-out version is on sale.
It's only where you're demand limited that you have to get the cheapest versions out immediately.
As for the demand for the base battery, according to polls on the Tesla forums, only about a third of reservation holders want it. And there's no confusion about the tax credit; the fact that Tesla would be running up against the start of the phaseout (which is a long process) has been widely known and discussed from the beginning.
Jesus: "Son of a
If by "rest of the costs" you mean R&D and SG&A, yes, but "no duh" to that. ;) (Also worth noting: they were tearing down a Model 3 LR with PUP, not a base model)
Ford's average vehicle margin is 10%. Now, Tesla's structure means they need a higher margin (as they own all of their own stores and service centres), but "greater than 20%" is more than a healthy margin. And that's with no options (which are overwhelmingly profit).
Jesus: "Son of a
The $10k is not "labour", it's "production costs", which includes tooling depreciation.
And FYI, but a normal automotive margin is around 10%.
Jesus: "Son of a
However most EVs sold in Germany are french
To say "french" is a bit too generous. German can manufacturers have not put serious efforts into the EV business yet. Neither really has anyone else in Europe with the single notable exception of Renault.
That is changing. 2017 saw the Renault Zoe head and shoulders above all other EV manufacturers. German manufactures had position 3, 7, 8 and 10. With the remainder being a few Asian cars and some Teslas.
In January this year the e-Golf outsold the Zoe for the first time. Year to date paints the Germans in a very different picture:
1: Smart For2 ED 1947
2: VW e-Golf 1905
3: Renault Zoe 1719
4: Kia Soul EV 1668
5: BWM i3 1620
6: VW Golf GTE 1113
7: VW Passat GTE 1066
8: Smart For4 ED 1058
9: BMW 225xe 943
10: Mercedes E350e 813
Number 11, 12, 16 and 18 are also German manufacturers.
Expect to see many more German EVs on German roads.
2x is what you need to avoid losing money on each sale. It has to include unknowns like warranty costs, manufacturing issues and so on.
It's pretty standard to use 2x when costing anything in industry. You want to add a â5 widget to the car, you assume it will add â10 to the price.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Sounds reasonable. Keep in mind that the $28K is just parts and labor. It does not include a share of fixed costs -- overhead, debt servicing, operating costs, taxes ... etc. My experience with that sort of accounting is tangential (IANAA) and not really applicable to mass manufacturing. But the costs of running a business tend to be pretty impressive.
R&D...
When the plant was run by Toyota, more components were purchased from outside manufacturers. Tesla builds more of the car components on site, and has engineers on site.
In his robot utopia the price of energy would for all intents and purposes be zero. All you need is robots pumping out solar panels and windmills, and other robots installing them.
Obviously you can't power mining machinery with solar directly, but once you have "free" energy it's also cheap to make hydrogen or methane or whatever else you want to use for that purpose.
Try going back 500 years and describing our technological wonders to those living in the Middle Ages. Such as how one family can farm the land that 10,000 much larger families used to (leading to empty farm towns across America). How we have machines that allow a dozen men to build what would to them be a huge building. How almost anyone can fly above the clouds to go visit family half a world away. Or how we can instantly communicate with the other side of the world, not just with "letters", but audio and video too. Or the sheer number of people who live in our cities.
Then you can explain to them why, with all of these wonders, we still have a need for money.