Tesla Model 3

There was lots of Hoopla and Excitement this week about the reveal of the Tesla Model 3.  The Green Machine’s opinion is that this is one wonderfully engineered car.   No doubt that this car sets the standard for what can be done with a vehicle powered by lithium ion batteries. 

Tesla revealed that over 190,000 people had made their $1,000 reservation for the car at an average price of $42,000 each.  Sadly for many of these folks they won’t be getting the $7,500 tax credit unless the Feds change the law.  The law as presently written is that only the first 200,000 electric vehicles of any one manufacturer qualify for the $7,500 credit.  I am sure that Elon must have his lobbyists working on changing the law.

The car has an EPA range of approximately 200 miles.  The frame and body of the Model 3 are made of steel not aluminum like the Model S.  This was done to lower cost but adds to the mass of the car.  My guess is the car will weigh around 4,500 pounds and will have 55 to 60 kilowatt hours of batteries.  These specifications have not been revealed.

In 2013 Dr. Chu who was Secretary of Energy wrote a paper that the cost of lithium ion battery packs including all controls and thermal management was approximately $650 per kwh.  Folks are claiming the Model S battery pack will cost Tesla only $100 per kwh when the car starts selling in late 2017.  My educated guess is that the cost of the battery pack at the end of 2017 will still be $350 to $400 per kwh and that each pack will cost around $20,000 to $24,000.  This leaves approximately $18,000 to $22,000 for the rest of the vehicle.

You all may ask why I do not believe the $100 per kwh is possible?  This is because the cost of raw materials for the batteries will experience price increases.  Cobalt, lithium, graphite, copper, etc. will see inflation.  What will be very likely is that he Model 3 will be the last car that folks ever buy.  The batteries might well last 5,000 cycles for a lifetime of a million miles.  I actually think this is the real selling point of the car.  A car that lasts a lifetime!

The styling of the car is superb and Tesla has established their brand as the highest quality most sought out vehicle.  No other brand of vehicles comes close to Tesla for customer appeal and satisfaction.  I still think that the Toyota Prius should outsell the Model 3.  Time will tell how successful the Model 3 becomes and how much profit Tesla makes.   I have to hand it to the team at Tesla they sure know how to create excitement.