Tesla Says All-Electric 3-Series Competitor Due By 2015

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Tesla Says All-Electric 3-Series Competitor Due By 2015

Nikki Gordon-Bloomfield

5,280 views Jul 12, 2012

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Tesla presentation slide from June, 2012 outlining 'Gen 3' platform variants

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Ever since it was founded, Tesla Motors [NSDQ:TSLA] has followed a ‘trickle-down’ business model, developing its technology in premium luxury cars before using that technology to develop ever more affordable models.

With its first car, the expensive yet sexy Roadster sports car no-longer made, its 2012 Model S full-size sedan now in production and plans to launch its Model X Crossover SUV next year, Tesla is already looking towards its first true, affordable electric car.

It, according to Tesla’s chief designer, Franz von Holzhausen (via autocar), will be a BMW 3-series competitor that the Californian automaker hopes to launch as early as 2015.

First promised earlier this year, the new car will be Tesla’s third mass-produced electric car, built on an all-new, smaller, third-generation platform that it will share with a compact crossover SUV.

But according to von Holzhausen, Tesla may build more than just a compact sedan and crossover SUV on the new platform.

“There are lots of ways in which we can exploit the platform,” von Holzhausen said. “There will be a time and place for us to develop something around a pickup. That’s a market for which the torque of an electric motor would be ideally suited.”

Hinting that the target price of Tesla’s compact sedan would be around $30,000, von Holzhausen promised that “the third model will continue to drive down the price point as fast as possible.”

2012 Tesla Model S painting process

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We’re glad to see Tesla planning for its future, but it’s worth remembering a few things.

First, while Tesla's Model S development was at breakneck speed, it remains to be determined whether there will be any quality issues of the kind most automakers experience with brand-new cars and platforms.

Second, the 2012 Model S is Tesla's first mass-produced car. To launch a 2015 affordable BMW 3-series beater, it has to continue producing the Model S, as well as the successful development and launch of the 2013 Model X.

In short, a lot can change in three years.

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Comments (17)

John Briggs Posted: 7/12/2012 5:23am PDT

I think that it is awesome that Tesla is planning out well in to the future.

But am I the only one that gets a little nervous about Tesla and Fisker talking about long term plans when the financial viability of their existing products still seems questionable.

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CDspeed . Posted: 7/12/2012 7:00am PDT

I've been a car enthusiast since I was a teenager, and just looking at what Tesla has done I'd say they are a lot less questionable then Fisker. Fisker's second model is MIA at the moment and the Karma's only asset is it's styling it hardly justifies it's six figure price tag. And who's loan is under investigation...Fisker because Fisker's business practices are questionable at the moment.

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John Briggs Posted: 7/12/2012 7:38am PDT

I guess it is a question of numbers to me. If Tesla makes $10,000 of profit on each Model S and sells 10,000 units per year that is $100,000,000 a year in profit. However, new car development projects seem to cost many hundreds of millions of dollars (at least in established companies). I'm just curious how far the profits from the Model S will support multiple different car development projects.

Does anyone have a guess what the development costs were for the Model S including hard tooling?

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Jeff Hre Posted: 7/12/2012 8:52am PDT

"I'm just curious how far the profits from the Model S will support multiple different car development projects."

Investment is what makes new models spring to life. Boatloads full of investments. That shows up clearly when OEM's guess wrong and the economy simultaneously turns down. Companies face the abyss of constrained funding, aging products and intense competition to unload both over production & capacity in shrinking markets.

Building cars is incredibly capital intensive, competitive, complex and barely, if at all, self sustaining heading into a bad economy. For some reason many investors don't abandon ship at the end of the business cycle and get angry at the results. I suppose each generation has to relearn the same lesson.

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David Laur Posted: 7/12/2012 9:57am PDT

John; i see the success of the S allowing Tesla the leverage to finance further research into developing the a new platform. Despite the rampant negativity surrounding EVs, Tesla seems to enjoy an "underdog" approach that has many very rich people hoping they are successful.

as far as S development costs? i think they borrowed a lot from other known designs since many of the Tesla team came from other car manufacturers, so that cost i say is minimal. the ongoing cost of improving battery performance is the real question. the Roadster went as cheap as cheap could be. i remember when they introduced their 7,000 unit battery pack. i almost fell out of my chair laughing. well, look whose laughing now

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Chris O Posted: 7/12/2012 11:43am PDT

@John Briggs: according to this source Model S was developed for less than $400 million.

http://www.autocar.co.uk/car-news/industry/tesla-losses-continue

I wonder why you think Tesla needs fantastic profits from the Model S to develop new Models. Isn't that what finance is for? If the Model S turns out to be a profitable venture than finding finance for the next project should not be a problem.

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John Briggs Posted: 7/12/2012 1:15pm PDT

Thanks for the source on the development costs.

OK, sure, you can finance the next vehicle with another borrowed $400MM. But eventually won't each vehicle have to have $400MM in profit just to pay for the development costs?

I guess if each vehicle will sell 40,000 or more units over its lifetime, it will all be good.

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Chris O Posted: 7/12/2012 1:37pm PDT

I think you need to distinguish between fixed and variable costs. Fixed costs involve development costs, variable cost are just the extra cost involved in building every additional unit. To calculate profits all costs, fixed and variable need to be taken into account. So the only real profits are the money that remains at the end of the production run when all the bills are paid, including those for development.

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CDspeed . Posted: 7/12/2012 6:36am PDT

Being that most 30 to 40,000 dollar EVs are economy car like a Tesla at that price should help bring the price of electric cars down. I really like Tesla's ambition, they aren't content to sit around and wait for new technology like the big older companies. Tesla is starting to look like leader rather then a follower.

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Chris O Posted: 7/12/2012 11:53am PDT

No kidding, if they could really pull off a 3 series contender at $30K they would basically own the EV Market.

Maybe that's the number after incentives though, in which case Nissan that will no doubt have lowered prices significantly by than might be able to keep up.

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RIck Scinta Posted: 7/12/2012 6:56am PDT

Keep them coming Tesla! It will push other companies to get out of their comfort zone and to start innovating.

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tex nex Posted: 7/12/2012 12:14pm PDT

Yes, there are many hurdles ahead for Tesla and the rest of the EV industry but why are we (Americans) so tunnel visioned on what can go wrong? What happen to the "Can do" spirit that made this country the envy of the world? We made things and accomplished feats that would not have come about if we had the the fear in our souls that we have now.

Yes it will be a challenge for Tesla but it will be successful..."Can do" is their guide!

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Norbert N Posted: 7/12/2012 8:28pm PDT

With Tesla, you can rest assured a lot *will* change in three years. ;)

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Mark Stang Posted: 7/12/2012 9:43pm PDT

A midsize all electric sport sedan that is competitive with the BMW 3 series would be awesome. I am looking forward to Tesla's new design. I like the concept of the skateboard platform since it should allow Tesla to design a new sedan and cross over SUV quickly since they will most likely share much of their drive train and suspension hardware with the Model S. Tesla made a smart move by designing a desirable high performance EV rather than trying to come up with a small underpowered inexpensive EV that looks like an econobox. Hopefully Tesla will be able to produce enough Model S sport sedans so they can make enough money to launch the Blue star EV’s on time.

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Chris H. Posted: 7/13/2012 9:32am PDT

Nikki, not to rain on your parade, but there isn't much in this piece that wasn't said by Eberhard or Musk in 2006. Von Holhausen is simply repeating the same lines that various Tesla spokespeople have been saying for the past 6 years. The 3rd generation Tesla vehicle (originally codenamed "Bluestar") has been described as a sub-$30k mass market car at least since the unveiling of the Roadster at Barker Hangar:
http://www.youtube.com/watch?v=Vt1AdfgcNiQ
http://www.youtube.com/watch?v=pLo0Ji9pOMQ

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