A Tesla Model 3 around 35000 is possible with 200 miles range
Debate Rounds (3)
Thx Con! I'm looking forward to the debate!
Here are the reasons why I think they will be able to do the seemingly impossible
Reference: Model S with 70KWh battery and a starting price of $75,000.
Argument 1: Less profit
Tesla currently has between 25% and 30% profit on each Model S it produces. The Model S is a low production volume car while Model 3 will be a high production volume car and therefor they can afford to have a lot less profit per car.
For example 10% profit, this alone means lowering the price with $10,000.
Argument 2: Model 3 car will be smaller, use cheaper materials and will be less luxurious
The Model S is a big and heavy car and it has a relatively expensive aluminium body.
The new model will be smaller in size, thus needing less materials and probably be made in steel to lower the costs.
The new model will also be less luxurious, just like the BMW 3 is less luxurious then a BMW 7.
Argument 3: Economies of scale for the car production process
As stated before, the Model S is produced in low volumes (35,000 cars in 2014).
By 2020 Tesla aims to have scaled up it's factory to produce 500,000 cars.
Argument 4: Gigafactory and a 50 KWh battery in stead of 70KWh
The most expensive part of an electric car with decent range, is ofcourse the battery.
1) The Model S with 70KWh battery has an EPA range of 240 miles. This means the car was using 290Wh / mile.
2) Tesla is currently believed to get batteries from Panasonic with a cost of around $250 / KWh. 
Compare to other cars in the market
In stead of only comparing with the Model S, it is usefull to also compare with other manufacturers.
While the electric engine is really basic stuff (static magnets and electric magnets and some housing), generates a lot less heat, has only 1 gear and is almost directly connected to the wheels.
I am not sure that Tesla will want to lower it's brand reputation by producing vehicles that are less luxurious then they already are. If they made a vehicle in steel, they will loss a huge selling point. Also, it will take a much more powerful motor to propel a heavier car which is a great cost compared to simply lowering the weight. Also, electric cars are already stereotyped to be bad at handling, Tesla doesn't want to push that any farther.
If it uses steel instead of aluminium, it will need about the same amount of power as the model S as it will also be about the same weight so given your points, 15 percent less energy isn't possible.
Maybe the Tesla giga factories will be great but by 2017 it's benefits will still not be a lot larger than the amount of money needed to build the factories. The amount of money needed to build it has to be accounted for in the price of the vehicles.
Tesla is idd not yet a mass production company, that's why they are spending all their money on growth.
They have already spend lots of money on upgrading their assembly line and they will continue to do that.
They build the first Model S in 2012, 23000 cars in 2013 and 35000 cars in 2014.
They are aiming to build 50% more Model S every year + Model X will start production.
Production target for 2015 is 55,000 cars.
Production target for 2020 is 500,000 cars.
So by 2017 Tesla could produce 100,000 to 150,000 cars.
The company and electric cars are not popular?
I have no statistics about this and it is ofcourse very subjective.
What I can say is that Tesla has not spend money on advertising whatsoever and still can't follow demand.
Tesla owners, events and test-drives are enough to get people interested about their cars.
Tesla idd did have some problems with the first cars it produced (fast engine replacements), but lately it has been producing more cars while there were less problems in total.
Meanwhile lots of magazines are writing very positive reviews of Tesla, ranking it in the top of cars to buy (not top electric car, but top of all cars). Also Tesla service is ranked at the top and Tesla customers are most satisfied with their car. 
If Tesla and the electric car did have popularity problems, it is changing fast.
I'm not sure what you mean with "lack of connection" of the car.
You think that Tesla wants to keep the brand connected to luxurious cars. That's not the case, Tesla is founded to convert the whole car industry faster to electric cars by leading the way.
Using steel in stead of aluminium
Everything has it's advantages (steel is cheaper) and disadvantages (steel is heavier).
I have no idea what the weight difference would be between a Model 3 in steel or aluminium.
In Model S the cost price is less important then Model 3, making steel maybe better then aluminium, but I'm not sure.
In my argument #2 i just wanted to show a general example of how they could use cheaper materials.
I'm not sure what you are saying with "by 2017 it's benefits will still not be a lot larger than the amount of money needed to build the factories".
Ofcourse every battery factory costs money for any manufacturer. The gigafactory will have less costs / KWh because of it's scale and better integration then other factories. Also the gigafactory will put more effort in producing batteries that fit better for an EV (slightly bigger battery cells and small improvements in weight/KWh, durability, ...).
Perhaps they will build more cars however, while they are still busy upgrading their assembly line, they can't make their car very cheap. The problem is, the money for the factory has to come from somewhere and the most obvious way is through "profit" from selling the vehicles.
The popularity issue is that although some people do like the Teslas, buying them could be hard due to the amount of retailers closed (because of legal issues, for some reason it is illegal in quite a lot of US states to sell directly from corporation to customer). People are also less familiar with electric cars and most important of all, since Tesla just started making cars recently, and their first car, the Tesla Roadster being a variant of an already existing car, little people have experience with the vehicles. It's the same reason why a small amount of people buy BYD cars (most people probably don't even know what that is). Tesla still haves some problems with charging time and range decreasing in the cold.
The "lack of connection" theory basically means that a lot of people claims the car has no "feel" or that it feels like it is driving itself. Or that it has bad handling.
If Tesla does not stay either "sporty", "hi-tech" or luxurious, it will simply fall into the tons of tons of electric cars we have today. EV really isn't anything new and making such a cheap vehicle will make it directly fall into the i3 territory which isn't very preferable as it would always be more fun and less expensive to go with the Fiesta or GTi. That is why the i3 didn't sell a lot. Perhaps you are saying more of a 320i or C200 territory.
Even the i3 is made out of mainly carbon fibre and aluminium. Making it out of steel would be a fail as it would make it too heavy and the money saved won't be enough to justify the needed increase in motor power output as well as battery size.
What I said was that it costs money to build the gigafactory and in the short term, it would, in fact spark prices as the team has more of it's budget spend on the gigafactories and less on their cars.Thank you, pro, for your debate. Vote con!
Because I had the opportunity to start the arguments and Con doesn't have the opportunity to answer anymore, I will try to briefly answer only some things.
Being profitable can be done in 2 ways:
- sell few items with a big margin
- sell lots of items with a small margin
So Model 3 will have 1/3th of the margin of Model S, but with 10x production amount Tesla will get more money.
Ofcourse in 2020 Tesla will have even less costs on each Model 3 and produce even more cars. In 2017 profit on Model 3 will be very low, but that's the case with every startup of a new product.
Some American states indeed restrict Tesla from selling cars. But Tesla is currently already selling fine in Europe and starting in Azia, by 2017 Tesla will be a true global player. These few American states are only a small percent of the market and they will have to change their restrictions sooner or later.
Tesla Model 3 should in no way be compared to mini BEV's with low range and hybrids we currently see. I wasn't comparing Model 3 with a BMW i3, but with the conventional ICE engine BMW 3 series (of which a 320i is a good example) and also the C200 is a good comparison.
Thanks for the fine debate Con! I found it interesting and I hope other people do too.
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