Former GM engineer Jon Bereisa, who served as Systems Architect during the development of the Chevy Volt plug-in hybrid, doesn't think Tesla could possibly make the Model 3 in any profitable form. Bereisa, who left GM in 2009 to start his own hybrid and EV consultancy, told investment firm UBS (via StreetInsider) that he thinks Tesla would have to charge nearly $50,000 to break even on the Model 3, all due to the battery.
Tesla Investor Relations head Jeff Evanson promptly dialed into the analyst call to correct Bereisa.
While Bereisa is correct that the Model 3 does come with costs like aluminum construction and Autopilot sensors that the competing Chevy Bolt will not be burdened with (though the start price for the Bolt is $2,500 higher than the $35,000 Model 3), Evanson pointed out that Tesla's battery pack costs today, with the Gigafactory still under construction, are already under $190/kWh, far from both Bereisa's estimate for Tesla at $260/kWh and GM at $215/kWh.
Bereisa has been out of formal involvement in EV development for several years, but given his experience at GM in the development debacle that was the Chevy Volt (don't get us wrong, it's an okay car, but the process of bringing it to fruition was a travesty of management), we can totally understand how he's coming in so far off on Tesla's estimated costs.
There's one other nugget that Tesla's Evanson revealed during his call-in: the Model 3 will have a battery capacity below 60kWh. While he didn't reveal exactly how large the Model 3's battery pack will start or what optional capacities will be offered, it's not terribly surprising to hear that at least the base model will have a sub-60kWh pack. The Model S was initially offered with a 60kWh battery pack that was good for 208 miles range — that was in 2012. By the time the Model 3 enters production in 2017, we'll be looking at more efficient motors, improved aerodynamics, and the overall weight savings of the smaller Model 3 over the rather large Model S.
Though there's no telling if the old-school engineers of Detroit will be with the program by then.