Mercedes Shareholders Concerned Over Tesla Model 3 Threat - Who Else Should Be?

We have to pay to read the article? Can you find another way to get us this 009?

Without reading the article doesn't every manufacturer have to find a way to meet California's zero omission quotas or give up on part of that market? The Model S plays in Mercedes segment and the Model 3 is in the E, C range. Mercedes needs a strategy anyway.

Would Tesla consider OEMing to Mercedes, BMW or Audi? That could be interesting and could be a win-win.

Mercedes shareholders should not be concerned.

If Tesla loses at least $10,000 on every $100,000 vehicle they sell, then logic would have it that they will also lose a ton a money per vehicle on every $30-$40,000 Model 3 they sell.

It is flat out impossible that Tesla can sell a Model 3 for the $30,000 to $40,000 they promote as the retail price before rebates. If Nissan charges $30,000 for a crummy Nissan Leaf and if a Volt is about $40,000 (both of which are cars that have clearly been "value-engineered") it is patently not in the realm of possibility that a Model 3 sells at that price.

Prediction - the Model 3 will go out the door for 340i, C300, A4 money - out the door well-optioned at $60,000. They will end up offering a stripper for $35,000 but it will not be a vehicle that meets the expectations of the customers.

This is Model X all over again - come place your pre-order deposit for a a Model X SUV for $70,000. (...4 years goes by...) Please give us $110,000 for a Model X because we are selling the "fully optioned" ones first.

Its a shell game. I am not a Tesla hater. I love the Model S - it is fantastic, however there is a very obvious pattern of "bait and switch" going on here.

Sigh,... It seems that Zombie Lie that "Tesla loses money on every car they sell" just won't die. That gross misunderstanding of business basics like economies of scale and fixed costs just makes whoever says these sort of things sound plain dumb. FYI, Tesla is rapidly building infrastructure and massive factories... Musk already confirmed they make a profit on every car they sell. Starting up a business as massive as Tesla is involves huge amounts of cash up front while waiting for realizing positive income later down the line. The notion that the more cars they sell, the more they lose is simply not true for 1000th time.

Literally no manufacturer should fear Tesla.

Well - Maybe the ones they OWE money to should

However - there is no reason to fear something that currently does not exist. WE do not yet know WHEN it might exist - and what its competition will be at that time. In two years - it is possible that Mercedes might have a real competitor

All should be worried, but premium brands the most. The German brands all are behind in technology advances in efficiency, automation and safety systems. The Model 3 planned volume enables the aggressive price point, along with the tax deduction, it will mean Tesla will be capacity limited, saving others from a complete smack-down.

I want what you're smoking.

Of course they are all sweating bullets as the next wave from Silicon Valley is reinventing transportation.

Autoweek asked (i.e. suggested) that Tesla is a house of cards....

Really? Call me skeptical.

Let’s start with the styling: I get the way any car looks is purely subjective, but the Model 3 looks unfinished to me. One editor said, “It looks like they photoshopped the front end off the car,” and that’s exactly right. That snout kind of ruins the whole car to my eye. I can’t get past it.

The speculation, hype and excitement in the days leading up to the March 31 unveiling of the Tesla Model 3 felt more like the launch of an Apple product than any new-car event. Enthusiastic Tesla fans ...

Then there’s the price. As Stewart points out, after the $7,500 federal EV tax credit, a base Model 3 should cost right around $27,500 -- should being the key word. Tesla said it plans on launching the Model 3 in the last quarter of 2017. I gotta say though, one thing Tesla has been good at over the years is missing deadlines -- the year-late Model X comes to mind. (I loved this line, taken from, of all places, the forums on Tesla’s own website: “A month to Elon is like 6 months here on Earth.”)

So while Musk says he feels “fairly confident” Model 3 is coming next year, I’m betting it’s 2018 before customers start getting them.
Begging the question, will the $7,500 credit still be around then?

Recall the credit was designed in the first place to help goose the EV market; it applies to the first 200,000 EVs an automaker sells. After that, credits start dwindling. Tesla is projected to hit its 200,000 mark right about the time the Model 3 is launched … then what?

And finally, Tesla quality, or lack thereof. We had our own experience, and the stories on other sites are legendary -- center screens melting down, drivetrain glitches, leaky sunroofs … Those are on the low-volume Model S.

Tesla says it wants to sell 100,000 Model 3s a year, claiming 115,000 people have already put down deposits. If it can’t build 20,000 Model Ss a year properly, what’s the plan to do that many Model 3s right? I’d love to hear the answer.

Read more: http://autoweek.com/article/car-news/tesla-model-3-house-cards#ixzz45CQptgZy

Actually, 325,000 deposits so far. Not too shabby for a week's work.

By the way, quality issues with the Model S were mostly confined to early build models. Today, Model S quality is no worse than the S-Class or 7 series and is probably better.

It's obvious that Tesla can't build so many cars today - that's why it won't be out for almost two years.

Finally, Tesla makes money on every car it sells.

The losses stem from the massive capital investment involved in building a $5 billion battery plant in addition to developing three new models from scratch.

The problem is - those federal tax subsidies only apply to the first 200,000 vehicles of a manufacturer - and the S and X models have reduced that number already.

Sorry - but YOUR accounting is simply wrong - regardless of where the loss comes from - Tesla has yet to make a profit - period. The cost of capital investment is a COST - and until they have production that reaches the level where they can apportion the cost over a huge number of vehicles (and I don't believe they ever will) - that cost must come off current sales - ergo - loss.

Taking a look at Tesla's income statements one can see where some of "they make money on every one they sell" comes from. Tesla calls what is usally called Gross Margin (sales price minus manufacturing cost) "Gross Profit". It isn't real profit as they still have selling costs, admin costs, and R&D costs to get to their Operating Profit, or the real profit an ongoing business generates. The operating profits for 2013, 2014, 2015 are $61M, $187M, $887M or a cumulative operating loss $1.135B in the last 3 years. Even if they did no R&D (which they need to finish the Model 3)their selling costs put those sold units into the red. This is FYI only. Make your own decision to buy or sell the stock.

Makes the early reservations worth $7500, and once 200k target is met the next 12 month sales (unlimited) qualify for a tax credit, though at a phased out schedule. Tesla is targeting 500,000 per year and will be well motivated to deliver the total reservation list from the US in those 12 months.

Pipe dream..

in 2 years the mainstream manufacturers will just release the lastest and greatest to wipe the floor with tesla. Elon Musk has too much of an ego and will be brought down to earth with a great thump!

Borrowing MDarringer's earlier quote:

"I want what you're smoking."