The Model 3 costs also did not include the effect of a very substantial shift to LFP cells (much cheaper), plus shifting more than half the production to a lower cost region (China). Plus scaling, which does give Tesla better costs on parts. A large amount of the "reduction" was due to the shift to China and the use of LFP cells, plus the cost advantage of the entire Chinese pipeline.
Tesla is in no way a leader at reducing EV costs. That has to be apparent from other co's pricing in the same regions. That part was particularly misleading.
The commercial van is just as underconceived as all his other models. It's more clear when you compare it to the versatility of Canoo - https://www.canoo.com/
Considering that their average "Gigafactory" has an output of 500k/annually they probably have to celebrate the opening of around 4-5 new ones each and every year to be able to produce 20 million units by 2030.
But maybe we're all wrong and the Gigafactory Mexico will be able to scale up to some 15 million units ;)
Some are saying that Giga Mexico alone will be 1-3 million units of capacity. Never seen a factory that large before and can't understand why they'd do that given how far inland it is. I believe the closest sea port is 475 Km away. In any event, why build so much more capacity without any new products & an existing line-up that needs heavy discounts?
I think IR Day's crux of 50% lower costs with the next-generation platform (in 2, maybe 3..definitely 4 years from now) is to have something to point to when bad earnings come out from here on from the price cuts and muted volume growth. They can claim "it'll all be better once the next-gen platform with 50% lower costs is out". Let's see how that works for them.
The Model 3 costs also did not include the effect of a very substantial shift to LFP cells (much cheaper), plus shifting more than half the production to a lower cost region (China). Plus scaling, which does give Tesla better costs on parts. A large amount of the "reduction" was due to the shift to China and the use of LFP cells, plus the cost advantage of the entire Chinese pipeline.
Tesla is in no way a leader at reducing EV costs. That has to be apparent from other co's pricing in the same regions. That part was particularly misleading.
Good article. Thanks.
The commercial van is just as underconceived as all his other models. It's more clear when you compare it to the versatility of Canoo - https://www.canoo.com/
Considering that their average "Gigafactory" has an output of 500k/annually they probably have to celebrate the opening of around 4-5 new ones each and every year to be able to produce 20 million units by 2030.
But maybe we're all wrong and the Gigafactory Mexico will be able to scale up to some 15 million units ;)
Some are saying that Giga Mexico alone will be 1-3 million units of capacity. Never seen a factory that large before and can't understand why they'd do that given how far inland it is. I believe the closest sea port is 475 Km away. In any event, why build so much more capacity without any new products & an existing line-up that needs heavy discounts?
I think IR Day's crux of 50% lower costs with the next-generation platform (in 2, maybe 3..definitely 4 years from now) is to have something to point to when bad earnings come out from here on from the price cuts and muted volume growth. They can claim "it'll all be better once the next-gen platform with 50% lower costs is out". Let's see how that works for them.
Great write-up. (This comment is from 2024.)