Elon Musk was interviewed by Engadget The cheapest Model S was scrapped because it was only 4% of sales.
“Customers recognized that it (40KWh version of the Telsa Sedan) was really a hobbled car, the equivalent of a hobbled horse,” Musk tells us. He believes that people want the Model S to be their primary car, and a car with such limited range wouldn’t fill that role.
The cheapest Tesla Model S one can buy is the $70,000, 60 kWh option.
Elon Musk doesn’t want to build mediocre cars, which means the third-gen car, the one that will sell for half as much as a Model S will be a challenge.
“That’s about three to four years out,” says Musk. “Hopefully 2016, but I would say no later than 2017.” To get there, the company has a significant engineering task ahead of it, having to reduce the cost of the battery pack and the electric drivetrain by 50 percent just to have a chance. “Economies of scale will help with that, and it’ll be a slightly smaller car, so that’ll help too … Going from the Roadster to the Model S the cost dropped by about half, and I think we can do that again.”
The Tesla X SUV was delayed a year but Elon says the Tesla Model X is definitely going to be a better car. It will be more smoothly executed as a result of our experience with the S. But, right now, we’re highly focused on quality, production efficiency and service.
A plan to achieve the best service program
Musk admits it’s not a glamorous task or one he’s fond of, but it’s an important one. He has a game plan, he says, to create “the best service program of any car” — something he slyly indicates we’ll be learning more about in roughly a week’s time.
More Supercharger stations and the promise that they will always be free
Musk also promises a major announcement regarding the company’s Supercharger network is due in just two weeks. “It’s a very exciting and dramatic — really dramatic — increase in the number of Superchargers and in what Superchargers can do. I think people will be really psyched.” Musk assures us that the company will meet its goal of 100 Supercharger stations, initially pegged for 2015, well earlier and that usage of those stations will “always be free.” Always? “They will be free forever.”
Recently announced financing with ownership-leasing mix
The recent Tesla financing plan does remove worries over depreciation from the purchase. It also enables a buyer to get the government credits while still financing the car at a low interest rate. NBF expects that the financing program should increase sales by 20% in the near term and perhaps 30-40% in the long term.