Tesla Model 2, a $25,000 Tesla

[PandaBear]

I saw a report that the average sale price for a car in the US was $45k in October 2021 (up 12% year over year). If it comes in around $25K and has decent quality and range, then they will sell like hotcakes. (Do hotcakes really sell that well, lol?)

I think it is average vehicle, and the price is mostly propped up by SUVs and trucks.

Cars I think they are more like 30k, and that's likely mid range to high end Camry or so. You have to compare apple to apple and if you are selling a $25k Yaris and tell people it is better than a $50k truck they will laugh at you. If you call a $25k Yaris EV a good deal they may also laugh at you if a Yaris is only $16k. I am not sure but I have a feeling Model 2 is going to be a Yaris / Corolla size car, competing with Yaris / Corolla if they are targeting $25k.

 

[JeffKeryk]

1) To be viewed as fast growing you need to keep losing money and keep growing.
2) The funding for growth is not from selling cars at a profit but from selling stocks.
3) Risk vs reward. People buying Tesla stocks and cars know what they are buying, and people buying normal cars aren't expecting a company that suddenly innovate its way into the next generation but comes with a risk that it might go under, or other 'excitement'.

I think these are the main reasons why traditional car companies don't try to do this.

I'll keep buying boring cars from boring companies knowing that I will have no concern of reliability for another 25 years. I cannot say the same about Tesla yet (maybe in 20 years I can). Tesla isn't the only one, I'm not buying a Mitsubishi or Chinese branded car in the US for the exact same reason as well.

Not sure I agree with your point of view PandaBear.
And, as a Silicon Valley person, status quo is not how we operate, right? Otherwise nothing new would evolve. And no Silicon Valley.

 

[JeffKeryk]

I think it is average vehicle, and the price is mostly propped up by SUVs and trucks.

Cars I think they are more like 30k, and that's likely mid range to high end Camry or so. You have to compare apple to apple and if you are selling a $25k Yaris and tell people it is better than a $50k truck they will laugh at you. If you call a $25k Yaris EV a good deal they may also laugh at you if a Yaris is only $16k. I am not sure but I have a feeling Model 2 is going to be a Yaris / Corolla size car, competing with Yaris / Corolla if they are targeting $25k.

I fully expect the Model 2 to be ground breaking, excellent, disruptive. That's what Tesla does.

 

[PandaBear]

Not sure I agree with your point of view PandaBear.
And, as a Silicon Valley person, status quo is not how we operate, right? Otherwise nothing new would evolve. And no Silicon Valley.

No, we don't do status quo, but as you know there's always risk and reward. The risk takers are always going to be in the minority and when / if they win they win big. I expect the rest of the industry to catch up but not as fast as Tesla innovate, and they would likely learn from early Tesla mistakes as well. All products and technologies eventually get commoditized and mature.

Funding is a huge part of any development as you know, and you know Tesla gets funding like a tech startup and nobody would expect the legacy auto industry to match that. People buying Tesla knows why they are buying, and people buying boring cars aren't always expecting that. It is a fundamental customer / product match problem.

 

[JeffKeryk]

No, we don't do status quo, but as you know there's always risk and reward. The risk takers are always going to be in the minority and when / if they win they win big. I expect the rest of the industry to catch up but not as fast as Tesla innovate, and they would likely learn from early Tesla mistakes as well. All products and technologies eventually get commoditized and mature.

Funding is a huge part of any development as you know, and you know Tesla gets funding like a tech startup and nobody would expect the legacy auto industry to match that. People buying Tesla knows why they are buying, and people buying boring cars aren't always expecting that. It is a fundamental customer / product match problem.

Fair enough. And not the path I follow. All good @PandaBear
I appreciate your thoughts.

 

[Silver]

When are the cheap simple basic electric commuter vehicles coming... geez sick of all this overpriced BS. This tech is so cheap and easy.

 

[nthach]

When are the cheap simple basic electric commuter vehicles coming... geez sick of all this overpriced BS. This tech is so cheap and easy.

With Toyota announcing an battery plant investment in the US, Tesla might finally see some competition that isn’t a luxury car, pickup or an SUV(and certainly not a compact car like the Leaf that borrows from the Versa/Sentra). Maybe an electric Corolla/Camry or in-house RAV4 EV is on the way and the Mirai/Prius can finally be put out to pasture?

 

[JeffKeryk]

When are the cheap simple basic electric commuter vehicles coming... geez sick of all this overpriced BS. This tech is so cheap and easy.

FYI, Musk's "Secret Master Plan", from the beginning of his term at Tesla, was to build such a car.
From the Secret Master Plan, penned in 2006:

So, in short, the master plan is:

1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options

Don't tell anyone.

 

[Silver]

FYI, Musk's "Secret Master Plan", from the beginning of his term at Tesla, was to build such a car.
From the Secret Master Plan, penned in 2006:

So, in short, the master plan is:

1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options

Don't tell anyone.

Hmm. So we're stuck at #1 and he's taking rocket ships to outer space with "that money".

 

[JeffKeryk]

Hmm. So we're stuck at #1 and he's taking rocket ships to outer space with "that money".

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