– This video is supported
by Brilliant.org. So if you add all this up,
what that means is that the Model Three will be
bringing in 266 million dollars of revenue with 53 million
dollars of profit, every week. (upbeat futuristic background music) Hey guys this is Ben
Sullins with Teslanomics, the show where we explore sustainable tech from the lens of data. We use the data to identify the story instead of our opinions or our emotions. We try to be objective as best we can. So if you’re into that kind of
thing, consider subscribing. So this story starts
back quite a while ago when the first Model
Three was ever unveiled. This was March 31st of
2016, and at the event we got to see the car and
learn a lot more about it. However, we didn’t really get to learn everything about the car. To start, we didn’t know the range, options, or price besides
the base $35,000 model. They did, however, announce
that a ludicrous version of the car would be made available. In typical Tesla fashion,
this was in a tweet from Elon in response to a question. Fast forward to July of 2017
and we finally get the specs on the Model Three at the
Handover event in Fremont. Except, not really. We didn’t really get all of
the specs that we wanted. While they did announce
some of the basic specs at the event, we still didn’t know about the all wheel drive,
or performance models. That was until just recently when Elon tweeted out these details. And days later, early reservation
holders received invites to configure them. And this is why I build the calculator, since many of you haven’t
received your invite to configure yet, but are interested in the what the price may be. And further, the calculator
goes beyond that. Beyond just the price of the
vehicle, looking at things like your loan options, and
insurance, and charging rates and all those kinds of things. So this is why I did this. Now, if you’re unfamiliar with that, let’s do a quick walk
through of the calculator just so you have some context here. So here on teslanomics.co, I have this Model Three cost calculator, which you can find from
the menu right there. And when you do through it, you can basically start
out choosing your options. So it’s defaulted to the
current first production run, which includes the long-range battery, and then the premium
upgrade, which are required. Then you can choose
autopilot, if you want, and here is the new edition, the All Wheel Drive and or Performance. And the way these are priced is that in order to get the performance version, you have to get the all
wheel drive version, which comes out to an additional $29,000. And here’s a link to the
tweet from Elon about that. Now also when you do that,
it will zero out the cost of the features here, so notice right now when I click on Midnight Silver Metallic, it adds a thousand. If I click on Performance,
it’s still gonna say that, but when we go to the next step here, it’s going to zero that out. So if I get rid of autopilot, you can go down and see
that it’s now $78,000. So, even though it shows the $1,000 there, it doesn’t really add it on. And then same with the wheels. They’re 20 inch sport wheels, which look similar to these, are included. I don’t have an official image yet, so I’m gonna wait on that. Then you punch in your finance, the dock fees is a thousand bucks, the tax rate is depending
on where you are. Also, it should default to the current, so you can change that out as well. Now, from there you enter
your loan information. I’ve defaulted to some of the
common values you may see. A five year term, a 3.25 interest rate, which is what Tesla’s currently offering. So, from there on you just enter the data. You go down to figure out your charging based on how much you drive, and the style of driving you
have, slow, moderate, or fast. Then the cost of electricity, and finally, you get to the last step where
you enter your insurance. I defaulted to $120 in the
U.S., which is kind of high. It varies of course, there’s
so many factors in insurance, so it’s impossible to
figure that out for you. And then incentive, so if
you have something like, you know we have in
California, plus the federal, you get $10,000 off essentially. So from there, you can click see results and on here it’ll break
it all down for you. So you can see that in this scenario, the Model Three Performance Edition would cost $1,600 a month. Now that includes the
$1,400 a month payment, plus the charging cost, plus insurance, giving you the total here of $1631.89. Then you kind of break it down with fees and incentives and all that. So it isn’t perfect, but this should give you a really good estimate about it. So this is what the calculator is, and when I built this, I also
put a tracking token in there. I’m sorry, it’s not the creepy Facebook-Mark-Zuckerberg kind of tracking. (heavy breathing) It basically just logs
whatever you’ve selected. And the reason it does that
is so I can analyze it, like we’re doing right now,
or like we’re about to, and see what people chose
because I think it’s really insightful when you ask
people what would they do, they are biased in their answers. Versus, when you just
give them a tool like this and just see the behavior,
it’s a very different scenario. And there’s a lot of social
science behind that reasoning. So, that was the idea. Now, when I started analyzing this data, I thought that it would be similar to what I had seen before,
where a small percentage of people were opting for these things, most people were sticking
with the basic configuration, but it didn’t turn out that
way when I first looked at it. Now, the question I started with was how many people are actually gonna buy the performance Model Three, and if you price it all out,
if you fully spec if out, you’re over $90,000 for the slimmed-down, watered-down version of
a Model S, in my opinion. I know some of you will
disagree with that, but anyways, before I dig in, I do need to add one caveat here, is that, a lot of the results that you’re gonna see were because I told people
about these new options and so I assume there is
some bias here that they were going there specifically
to look at those. So let’s dive in here, and see what the data is trying to tell us. The first question was, how many people actually
submitted the form? Here we have, I’m looking
at basically everybody that submitted the online form, and it was over 15,312 submissions. Now, that’s not unique people, that’s just how many
times people submitted it. Now, of those, we had
7,493 that didn’t chose any of the all wheel drive options. Then 6,866 that chose all wheel drive, and 953 that chose Performance. From there, if you kind of look at that from a percentage standpoint, that 48.94%, almost 50% of
people didn’t chose any of these. 44, almost 45% chose all wheel drive. And just over 6% chose Performance. So this is kind of the breakdown
of, you can extrapolate this and think, this is
what people may order. Now, there’s likely that a lot of people are waiting on all wheel drive, and that’s why you see
such a high number here. But, if you read a lot
of the stuff online, you just pay attention to the community, this actually kind of matches up. Not a lot of people are
looking for performance, but a lot of folks are looking
for the all wheel drive. Especially folks living
in colder climates. So, if we look at just performance, I wanted to see what is the average price, and in order to do that, I needed to understand
what options they chose. So if you look at those that
selected the Performance option 42, almost 43% of them said
that they would chose the EAP, which is the Enhanced Autopilot, which is commonly just
referred to as Autopilot. It’s what Tesla currently offers. Then 35.57%, almost 36% of
people said that they would buy the full self-driving option,
which is an additional $3,000. And then 21% said that they
wouldn’t get anything at all. And that also was surprising,
because I think most people buying a Tesla are gonna
get some form of Autopilot. If you look at driving style, I thought this was
another interesting one, 74% left it at sport,
which is the default. Then 21, almost 22% said they drive fast, or I’m calling it ludicrous here. And barely anybody at all,
just over 4% said that they drive in chill, or slow. So, very interesting
there, the distribution. Now I thought that more people
would be driving ludicrous. In terms of color, in
case you’re interested, black was the number one color. Now, remember, any of the
paint options do come for free with it so there’s no additional cost, unlike if you just chose all wheel drive, you have to pay additionally
for wheels and everything else. You can look at it there, the breakdown. I’m surprised, I’m
guessing a lot of people just left it as the default. This brings the average price
for a Performance Model Three, based on the data we have to $82,145. Now let’s do this for all wheel drive. All wheel drive, similarly
we’re starting out with the same numbers in terms of
how many people selected it. To recall, it was almost
45% of the respondents. Within there, this is the color breakdown. Again, black was the highest one. Again, I think it’s just a matter maybe you just love how
mine looks, who knows, but I think they’re just sort
of leaving it as the default. Now, in this case, you do have to pay more for additional colors. Now, we look at Autopilot you can see that it actually was quite different than the other option
with the Performance. 53.19% selecting the Enhanced Autopilot. 31 saying no, almost 32%,
that is shocking to me. I wonder if any of the stuff in the media has really kind of biased people towards not buying Autopilot. I do think that if you
don’t drive long distances on safe highways it’s probably
not entirely necessary. So if it’s an added cost,
people probably opting for all wheel drive instead of Autopilot, which wouldn’t be a surprise to me at all. And then, if you look
at the driving style; 83% said sport, so
definitely a different driver getting the Performance version
versus the All Wheel Drive. Now if you want to compare
these side-by-side, you can do it like this, to where, on the Performance side, pretty similar on the chill, 4.2 versus 4.3. Ludicrous is where you
see a completely big gap between 21.83% of the Performance people, versus 12.55 on the
All Wheel Drive people. So that’s a big jump. And then you know, that shakes out on the sport option there. So people that are choosing
the Performance option drive fast, not a big
surprise there at all. Now the Autopilot one is where I thought there was something interesting, because the Performance folks are opting for more full self-driving. Now, I would think if you’re
a performance-focused driver, you probably don’t want
any Autopilot, right? I imagine when I get my Roadster, I don’t want the thing
to have Autopilot at all. Like, I want to drive it,
that’s the point of it. So this was kind of interesting to me. The number of people not choosing any Autopilot option here,
between the All Wheel Drive and the Performance is really high. I’m pretty surprised by that. I just kind of assumed that most people would be getting that. So this brings the All Wheel Drive average price to just over
$55,000, almost $56,000, $55,930. So this got me thinking though, what does this mean for Tesla? What does it mean for their bottom line? And if we take the numbers I have there, and let’s use them ’cause
it is some data that we have that was collected somewhat objectively, and we apply the margins that we know that they’re going for. We can kind of back in to how much money they’re gonna be making as a
result of these new options. So let’s look at that now. What I have here is
essentially is a table of data, and I’m just gonna walk
through this line by line. That way we don’t lose
sight of what it is. So, the first one that we
have is the Performance model. The average price I put in at $82,145 which you just learned. The margin, if we’re assuming 20%, they said they’re aiming for
25, Tesla overestimates a lot. Let’s call it 20 to be conservative, and 6.2% of them selecting this option, means if they’re producing
5,000 cars a week, 311 of them will be
this Performance option, which brings in 25.5
million dollars of revenue, and 5 million dollars
of profit, or margin. For the All Wheel Drive version,
since the price is lower, $55,930, but the percent of
them being made is almost 45%, the revenue per week from
this is 125 million dollars, and the margin is just 25 million. So a full 5X over the Performance model. Then you have the long-range,
and this is the current option, the only one that
they’re currently making. I honestly don’t know if they’re gonna make the Standard until next year, so we’ll see about that. Maybe it’ll happen this year, but for right now, this
is where they’ll be. Coming around July, if that
Model Three delivery ramp hits that mark in July as Elon predicted and as I and many others are forecasting. Then this one, the standard
version of the Model Three will be bringing in 115.7 million dollars, and 23 million dollars of profit. So you can see the All
Wheel Drive option here is significantly more in terms
of what it’s bringing in. There’s a lot of people
that are selecting it, and it’s gonna mean a lot. So if you add all this up,
what that means is that the Model Three will be bringing in 266 million dollars of revenue, with 53 million dollars
of profit, every week. This is once they hit
the 5,000 cars per week, and this is assuming a 20% profit margin. Of course, those numbers
won’t be exactly right, but that is what we have to go off, and I think just for benchmarking, it’s a fair way to approach it. So I’m curious what you
guys think about this. I had fun building this calculator, and I hope you enjoyed using it. Every day, thousands more people use it, and I’m gonna revisit this down the road. And of course, I’ll be coming
up with new tools and things to help you understand
what’s going on with Tesla from a more analytical and
data driven standpoint, instead of what you might see out there in other media sources. Now, I created this calculator by hand, by using basic web technologies. And then I added this logging mechanism, I actually used a different
language called PHP, which allows me to do different things like create files and in
this case actually send data up to the Amazon Cloud to store it. I’ve got a lot of emails
asking how to do this, how you could get started
on something like this. I’m excited today to say that
I have an answer for you. Brilliant.org helps you master concepts in math, science, and
engineering by solving fun, challenging problems, which
helps you get up to speed on topics like these quickly
in an interactive format. For example, I think their course on Computer Science Fundamentals
is a great place to start. I went through it recently and although I’ve been doing this for years, I felt I learned a few new things and was reminded of a few others. Specifically, the idea of arrays and kind of how data is structured. That way when you’re actually working with the data you can
put it in the right place and make sense of it later on. It’s really important
to get it right up front before you have to try to
deal with that mess later. Anyone that’s worked in
tech will tell you that. We all learn using different methods, which is why I found Brilliant to be cool because not only they
have examples and syntax, but diagrams, quizzes,
and a community of folks learning similar topics to you. If you’d like to brush up on
your math and logic problems, or start for the first time; go to brilliant.org/Teslanomics
and sign up for free. Also, the first 200 people that use that link can get up to 20% off on their annual subscription. Perhaps you’ll even learn new and exciting ways to free the data. So thanks for watching,
and I’ll see you guys back here in the next one. (upbeat futuristic music)