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Munro & Associates finish Tesla Model 3 teardown, come away impressed

Sandy Munro admits that he has to "eat some crow" and believes that the Model 3 is indeed a profitable vehicle.

Steven Ewing/Roadshow

Shortly after the Tesla Model 3 began to trickle into the market, Munro & Associates was able to acquire an early production model of the car in order to tear it apart and analyze its construction. Initially, Sandy Munro, the company's founder, was unimpressed with the car's level of fit and finish, but now, months after the process began, his opinion of the vehicle has changed.

While Munro was impressed with the way the Model 3 drove, he wasn't sure how the car could be profitable in the notoriously tricky electric vehicle segment, where materials costs are very high. Now, having completely torn apart the car, he came away more than a little impressed with the way Tesla was able to integrate and combine electrical hardware into a relatively dense area inside the vehicle, rather than placing it throughout the car as other manufacturers have done.

He was also impressed with the battery cells in the Model 3. Despite being only 20 percent larger than the industry standard 18650 cells, the Tesla 2170 cells produce 50 percent more power, thanks to their newer chemistry.

The big shocker here is that Munro goes on record to say that the Model 3 is a profitable car. He estimates that Tesla has more than a 30 percent profit margin on it, while other EV's are struggling to see anywhere near the 30 percent mark. Considering the widespread speculation over Tesla's profitability, perhaps the Model 3, manufactured and sold in significant numbers, is a way out of the red and into profitability for the company.