Model 3 is rolling out of the factory and onto the roads, and so far owners are making happy noises. But can Tesla make a profit on its much-anticipated mass-market EV? The results of two recent teardowns suggest the answer is a resounding yes.
Earlier this year, a group commissioned by German automakers dismantled several Model 3s, and estimated that Tesla’s costs per vehicle should be about $28,000, leaving room for a healthy profit margin (Elon Musk seemed to concur, calling the report “the best analysis to date”).
Around the same time, teardown specialist Munro & Associates took apart a pair of Model 3s. While Sandy Munro offered some serious criticism of the new EV’s build quality, he raved about its electronics and battery technology. Now that Munro has had time to complete his analysis of Model 3, he estimates that Tesla should be able to earn at least a 30% margin on the Long Range RWD version.
“I didn’t think it was gonna happen this way, but the Model 3 is profitable,” Munro said, admitting that some crow was being eaten at his shop. “Over 30%. No electric car is getting 30% net, nobody.”
Munro credits Tesla’s in-house development of components, and the functionality provided by Model 3’s all-encompassing touchscreen, for the EV’s surprisingly low cost of production. “That’s the magic of using components that are already on the car. You make them work double or triple duty,” he said.