What Is Going On With Tesla's Model 3 Battery? And What Does That Mean For Tesla Profitability?

The Model 3 may not be as profitable for Tesla Motors Inc TSLA, according to Jon Bereisa, CEO of Auto Lectrification. Bereisa is said to have estimated Model 3's factory variable cost (FVC) to be $1,510 above its base price of $35,000, read a report on Electrek.

Bereisa, the former chief engineer of General Motors Company GM's Chevy Volt program, reportedly sees the Chevy Bolt's FVC at $4,980 below its $37,500 starting price.

Related Link: Is Tesla Killing U.S. Gas Demand? Not Quite

The report quoted UBS analyst Colin Langan as saying, "Bereisa's Model 3 estimate cost breakdown adds up to the vehicle being unprofitable for Tesla."

According to the report, "Bereisa based his analysis on the base Model 3 being offered with a 60 kWh battery, like the Bolt, and on Tesla achieving a cost of ~$190/kWh. He estimates that Tesla's current battery pack cost (cells, casing, cooling and entire pack) is at $260/kWh, while GM's is at $215/kWh."

The report added that Tesla's vice president of investor relations, Jeff Evanson, stated that Tesla's battery pack cost is already below $190/kWh and the base Model 3 will be offered with a battery pack option smaller than 60 kWh.

Shares of Tesla were down 1.01 percent to $251.17.