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Comment by Animats | Hacker News Reader

I think the Model 3 will end up costing way more that $35k, to turn a profit.

That's Tesla's biggest risk - they can't deliver profitably at the price point they pre-sold at. The Model 3 is an ambitious car to sell for $35K. Tesla is not a "lean manufacturing" operation; their head counts at the auto plant per car sold are currently quite high. They'll probably get that figured out eventually, but meanwhile, they need the high margins of luxury cars.

The timeline will slip and it won't come out until 2018.

Probably. They're claiming "late 2017" now, and new orders won't be processed until 2018.

The whole Solar City deal was premature.

The Solar City operation has political problems. It assumes Government subsidies for solar, which may be going away for political reasons.

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> It assumes Government subsidies for solar, which may be going away for political reasons.

Residential solar costs average out at 15c per kWh, post 30% tax credit. If the credit goes away, the 20c per kWh generation cost is still competitive compared to utility's retail rate. The bet is on solar technologies to continue incremental gains in efficiency, pushing the final price per kWh down.

In the commercial and industrial world the cost can be driven down significantly since the installations are larger (4c per kWh is the lowest I've seen), and the one-time installation costs are recouped faster, so that sector is likely to grow with or without tax credits. It's subject to the same efficiency metrics as consumer-grade tech.

Most residential solar is third-party financed, either leased from the manufacturer or operated under a power purchase agreement, where the solar supplier owns the gear, acts like a utility, and sells power to the consumer. There are various incentive programs which make this viable.[1] Solar City pulled out of Nevada when one of those incentive programs went away.[2]

[1] https://financere.nrel.gov/finance/content/don%E2%80%99t-be-... [2] http://www.slate.com/articles/business/the_juice/2016/01/sol...

The obvious problem with this argument is that if grid-scale solar installations push down utility pricing, this will kill residential solar and SolarCity's business model revolves around residential.

There's the transportation and distribution cost on grid-scale that's currently low, but as the generation costs go down, the fixed cost of owning the land, building and maintaining power lines will occupy larger piece of the pie chart.

Residential has zero transportation cost, post-installation, and I think those solar roof tiles SolarCity pre-announced is an attempt to blend the solar installation costs into the roofing costs. "You are paying the roofing guy for labor and materials to build/replace the roof anyway, so why not pay our roofing guy to build/replace the roof, and get solar as an incredible bonus" is I think their marketing strategy with that.

Didnt they just agree to a large scale project in Australia? I would think they see this coming and are engaging more on the utilities side

> It assumes Government subsidies for solar, which may be going away for political reasons.

Isn't their car operation also vulnerable? Tax credits may be less easy to get rid of, from a political perspective, but I think Trump would be far more interested in promoting cars that run on coal than cars that run on electricity.

If the solar plan falls apart, electric cars would prop up the coal industry better than gasoline cars. The electric cars you charge from your wall outlet will be powered by coal, no?

My understanding is that the economics of power generation are deprecating coal: http://www.triplepundit.com/2016/12/despite-trumps-promise-e...

So it would be better to have electric vehicles than ICE in its current form, but more power grid usage will likely accelerate other technologies rather than make coal profitable again.

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