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Tesla Model 3

Tesla’s Model 3 is already a game changer: Tech, Value and Economics prevail

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Yesterday I spoke to BBC Newsday about the Tesla Model 3 and one of the questions they asked was “is the Tesla Model 3 a game changer”.  Even before incentives the Model 3 competes with other entry level luxury vehicles like the BMW 3 series and Audi A4.  With incentives it moves even further down-market, competing with big sellers like the Toyota Camry (the USA’s top selling car in 2016).  That definitely moves Tesla into the mass market with a lot of opportunity to grow.  There are some additional factors though that I think makes it a true game changer.

Industry Affect

It’s already a game changer.  Just over a year ago most automakers still dismissed Tesla as a niche manufacturer and articles still wrote about how electric vehicles were decades out or may never come to fruition.  Then Telsa had almost 400,000 preorders for a vehicle no one had actually driven, most had only seen through their computer screens, and wouldn’t be available for over a year.  I was one of those people.

Fast forward to today, with manufacturers practically falling over each other to announce their own electric vehicle programs and new targets.  The discussion has flipped. Articles are no longer written about if electric vehicles are coming but how quickly.  I think we have the Tesla Model 3 to thank for that.

Value Proposition

Preorders are one thing, but can the Model 3 compete in a world of mostly combustion vehicles?  That will depend on the value customers assign to it.  My opinion is that Model 3 is the first lower cost electric vehicle to cross the ‘value threshold’.  What I mean by that is that a buyer considering two vehicles in the same class and quality, one electric and one combustion, would chose the Model 3 over the combustion option.  The Model 3 is just the better all-around car.

(Tesla)

Consider the Chevy Bolt, a good car, but a more difficult sell on value proposition.  Does it actually provide $37,500 worth of value to the buyer or could I purchase an internal combustion vehicle that provides me more value (as per classic capitalism this is largely ignoring the societal and environmental benefits to others, which can be difficult for most buyers to quantify – it’s not right, just reality).

“The Model 3 is just the better all-around car”

The factors at play are complex, the initial purchase price, comfort, reliability, range, acceleration and speed, safety, handling, aesthetics, operating costs, convenience, and environmental impact.  These all go into a buyer’s value calculation, mostly subconsciously.  For me I can’t think of another vehicle that hits those categories as well as the Model 3.

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Economics and Cost Reductions

Customer value is great but Tesla more than any other automaker needs to produce electric vehicles with a decent profit margin.  It doesn’t have a lot of gas guzzling expensive SUVs to offset losses on EVs.  Other automakers have claimed they are perfectly willing to make EVs at a loss, which seems largely driven by meeting emissions targets in key US states (California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont).  That may also be why GM is pulling back on Bolt production, if they’re approaching their quotas in those states .  In Ontario Canada, which has no such requirements, the Chevy Bolt is sold out until January 2018 and the only one available to test drive is at the non-profit organization Plug’n Drive in Toronto.  A lot has been made in the past of Tesla’s business losses, but those include capital investments and R&D.  They do in fact make a profit on their vehicles, but invest more money on improvements and expansions than that profit totals.  Making an affordable electric vehicle at a profit is a challenge Tesla seems confident they’ve achieved.  That’s a big deal.  A game changer.

Technology Innovation

To be a game changer though the Model 3 can’t just be another lower priced electric vehicle.  It has to be innovative and it is absolutely that.  It will be using a new battery format, autonomous driving hardware, and it’ll likely be using Tesla’s newly optimized powertrain with 1 million miles capability + faster acceleration.

Tesla Model 3 prototype from the March 31, 2016 unveiling event in Hawthorne, CA

With those improved batteries and powertrain it should be one of the most efficient electric vehicles on the road.  There’s also the Supercharger network which really opens up the options for long distance driving, more than any other manufacturer. These capabilities will set a new benchmark for affordable electric vehicles.

Tonight it will be very interesting to see what the final specs. Will anyone be able to match it?  Let the (affordable) EV space race begin!

What do you think?  Is the Model 3 a game changer and why?

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As an engineer working to improve sustainability and energy use, I have a passion for renewables, research, and data analytics. I'm based out of Toronto Ontario and you can contact me on LinkedIn or Twitter.

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Tesla axed one of the Model Y’s best features in ‘Standard’ trims: here’s why

Lars Moravy explains why Tesla chose to go with a glass roof in the new Standard trims, despite it not being visible.

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Credit: Tesla

Tesla chose to implement a glass roof on the new Model Y ‘Standard’, despite the fact that you won’t be able to see it from the inside.

In the new Model Y ‘Standard’ configuration, one of the biggest changes is the lack of a glass roof, which is one of the more unique features Tesla offers.

How Tesla’s Standard models will help deliveries despite price disappointment

The entire roof of the Model Y’s ‘Premium’ and Performance trims is glass, giving everyone in the car an astounding view of the sky.

However, Tesla chose to cover this up in the new ‘Standard’ trim level. Here’s a look at it:

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Credit: ItsKimJava | X

Despite it not being visible from the inside, the roof is still made of glass. It is only visible from the outside. Even if you removed the headliner in the Model Y ‘Standard,’ you would not be able to see the outside, because the glass is opaque:

Tesla’s Vice President of Powertrain, Lars Moravy, commented on the use of glass in the Premium models and how it differs from the glass in the Standard trims:

“All glass is NOT created equal. Remember, the Model Y Premium glass is laminated with silver IR reflective coatings to make it super comfy and reject solar load… the standard is not… plus LOTS of people wanted a closed headliner, always trying to listen (and improve road noise at the same time).”

The decision to cover up the glass while still using it was an efficiency choice. Moravy said Tesla chose to keep the glass for the new Standard models due to “cost, supply chain, and manufacturing efficiency.”

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Tesla launched the Standard models on Tuesday. The cars were effectively a counter to the loss of the $7,500 EV tax credit.

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How Tesla’s Standard models will help deliveries despite price disappointment

“What a giant miss,” one person said.

“With all due respect, no way is this what y’all have been hyping for 6 quarters…” another one claimed.

“So…where are the affordable models?” another reply read.

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Credit: Tesla

When Tesla unveiled its Standard versions of the Model 3 and Model Y this week, reactions were mixed. Many liked the addition of two new models, but they were also concerned about the price.

“What a giant miss,” one person said.

“With all due respect, no way is this what y’all have been hyping for 6 quarters…” another one claimed.

“So…where are the affordable models?” another reply read.

Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings

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There’s no arguing it: $36,990 and $39,990 for the Model 3 Standard and Model Y Standard were not what consumers had in mind.

But, despite Tesla getting its new offerings to a price that is not necessarily as low as many expected, the two cars still have a chance to assist with quarterly deliveries.

Here’s how:

First-time Tesla buyers will lean toward Standard models

Tesla owners have become accustomed to expecting all the bells and whistles in their cars. Heated seats, ventilated seats, acoustic glass, vegan leather, industry-leading performance, world-class range, and a glass roof are all expected by current or past owners.

But what about new owners?

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New owners do not have these high expectations, so to many of those who have not sat in a Tesla or driven one before, they are going to be blown away by the minimalistic looks, capabilities, and features of the Standard models.

The Premium models will feel like the high-end offerings that other automakers also have for sale, except they’ll only be a few thousand dollars more than Tesla’s base models. With other companies, the price for these higher-end trims is $10,000 or more.

The more affordable Standard models will be there, but if buyers want the extra features, they’ll likely be able to justify the extra few thousand dollars.

Tesla’s Standard Models fall under the U.S. Average Transaction Price

Kelley Blue Book releases a new report each month showing the average transaction price (ATP) of all vehicles sold in the U.S. for that month.

The latest report, released on September 10 for the month of August, revealed an ATP of $49,077. This was up 0.5% from July ($48,841) and higher year over year by 2.6%.

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Technically, Tesla’s new Standard models fall well under that ATP, meaning they technically do qualify as “affordable.” However, realistically speaking, affordable does not mean “under the national average.”

It means accessible for low-income families, single-parent households, and other groups. This would likely be under $30,000.

Déjà Vu with the Cybertruck Rear-Wheel-Drive

When Tesla offered the Cybertruck RWD, it stripped out many of the best features of the Cybertruck, such as the adjustable air suspension, powered tonneau cover, and interior materials, just to name a few.

It was $10,000 less than the Cybertruck AWD, but many people essentially viewed it as a way to push consumers toward the more expensive variants, since the discount was a better value than missing out on features.

Tesla released the Cybertruck RWD to make the AWD look like a deal

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Something similar could happen with the Standard models. With it only being a few thousand dollars less than the Premium Model 3 and Model Y, some consumers will see it as a better option to go with the more expensive trim levels.

Even if they don’t, many car buyers will see it as a deal to grab the Standard versions.

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Tesla will let you bring back this removed Model 3 part for a price

It will cost $595 and is available on Tesla’s website. You will have to have a Model 3 on your Tesla account to purchase the stalk retrofit kit.

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Credit: Tesla Asia/X

Tesla is now letting Model 3 owners in the United States bring back one part that the company decided to remove after it refreshed the all-electric sedan last year. Of course, you can do it for a price.

With the Model 3 “Highland” refresh that Tesla launched last year, one of the most monumental changes the company made was to ditch the turn signal stalk altogether. Instead, Tesla opted for turn signal buttons, which have been met with mixed reviews.

I drove the new Tesla Model 3, here’s what got better

The change was widely regarded as Tesla preparing for more autonomous driving in its vehicles, especially as its interiors have gotten even more minimalistic.

The lack of a stalk in the new Model 3 was just another move the company made to adjust drivers and passengers to seeing less at the steering wheel column.

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However, many drivers did not prefer the use of buttons and wanted the stalk reinstalled. Tesla allowed it in several regions, launching a retrofit kit. It has now made its way to the United States:

It will cost $595 and is available on Tesla’s website. You will have to have a Model 3 on your Tesla account to purchase the stalk retrofit kit.

It is interesting to note that despite Tesla’s strategy to remove the stalk with the new Model 3, which was released in early 2024, the company did not choose to make the same move with the new Model Y.

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The new Model Y launched in the United States in early 2025, and Tesla chose to install a stalk in this vehicle.

It seemed as if the turn signal buttons were too much of a polarizing feature, and although the company technically could have given orderers an option, it would not have been the most efficient thing for manufacturing.

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