Alright, here we go again, back to the Austin Model Y as more information comes to light. The
facts we have are that Tesla are delivering these new Austin made Model Ys to their employees. These
are Standard Range AWD Model Ys, yet there is no ability to purchase such a vehicle online. We are
pretty much certain now that these Austin Model Ys have structural packs with 4680 cells. By the way
be sure to watch this video til the end, because I am really proud of some of this research.
There is a leaked email from Tesla to employees going around too, that claims
"We're excited to introduce Model Y AWD - the first vehicle manufactured at Giga Texas.
Model Y AWD uses our first structural battery pack with 4680 cells." It is being called AWD, not
standard range. Which might be more inline with Tesla's new way of naming trims,
having recently renamed the Model 3 Standard Range to the Model 3 RWD.
Earlier in March, we also had the hacker discover there was a new model Y Standard
Range Plus, that was supposedly made in Texas. However, saying that, we also saw the demo cars
in Austin and they were called the Standard Dual Motor. Not called the standard range plus. But we
might assume these are the same vehicle. Judging by the percentage this vehicle was charged and
the amount of range the vehicle claimed remained, it aligns in perfectly with a range of 279 miles.
We also saw some code for the Tesla web site leaked, showing some more of the
specifications and available options. This was for a Model Y All-Wheel Drive, so this model
has now had 3 different names from potentially Tesla as a source. But the range seems to be
the same in each scenario, i.e. 279 miles. FYI, I know that code is not actual web code,
it's JSON, which is just a way of displaying an array in text.
Ok, so just recap, we know there is a
very good chance that there is a Model Y AWD being made in Texas with 4680 structural battery pack,
and 279 miles of range. But what we have also
recently discovered in Reddit that this car was available for employees to buy for $60,000.
There are people saying that they can confirm this is the case and have seen the documentation.
Likely no one on Twitter wants to disclose this, as they would be fired.
Ok, so just to re-iterate there is supposedly there is a Model Y AWD with 279 miles of range,
with 4680 structural battery packs, that is made in Austin,
and it is, or was, for sale to employees for $60,000. Alright there is a lot to digest here.
Lets start by firstly
actually acknowledging this price point and what it means. I guess we would assume
that if this car was for sale to the public, then it probably would be the same price, and that the
employees are not getting insider discounts. Now let's compare this with the current Model Y
Long Range with 2170 batteries, which is currently for sale for $63,000. So for an additional $3,000
you go get a further 50 miles. That seems like quite good value for the extra range.
So is it that Tesla have so much demand they think they can actually sell a standard Model Y
for as much as $60,000. Just to remind you it was only just over a year ago,
when Tesla offered a standard range Model Y, and it cost only $42,000 but only had
a range of 244 miles and was rear wheel drive. This is almost 50% more expensive.
Now you and I understand there is a lot more
difference between these two vehicles, the Long Range and the new AWD. But the average consumer,
do you think they would understand? In fact as the prices are so close, if anything I think it would
add to the confusion. Perhaps it will be marketed as the New Model Y, and the advantages will be
clearly shown on the site. But I don't know how much a typical consumer could really understand
what a structural battery pack means. Or perhaps the other advantage of ordering it,
is that the waiting list is much shorter and you can take possession of it a lot sooner than a Long
Range version. Either way, these price points are very close. Which could confuse consumers.
I mean is this 4680
standard vehicle that much better that it warrants about the same price tag as a Long Range version?
Are most drivers going to notice the improved handling? No, I don't think they do, I think
most of us are in a Tesla echo chamber for a start, and I doubt any regular person you ask,
if they care about structural packs, 4680s or LFP or whatever, they would just look
at you with a quizzical expression on your face, and ask what are you talking about?
The Battery Day tech is likely lost on the vast majority of consumers, or at least definitely
when it hits the masses. So it will be tough for most to justify losing 50 miles to save $3,000.
From another perspective though,
if this is a $60,000 standard Model Y, then wow! Presumably Tesla know their supply and
demand curves pretty well. And if they think they could get away with $60,000 for this vehicle,
then you can only begin to imagine what the gross margins must be.
At a quick guess, in excess of 40%, possibly even 45%. Even more if they add FSD.
I know commodity prices have gone through the roof, but you have to remember,
these are likely somewhat transitory, and Tesla would have locked in prices a long time ago,
and the ones they didn't, they no doubt hedged anyway. It's an obvious thing to do,
and Zachary Kirkhorn is one switched on CFO. So if I can think of it, he can, oh and likely Elon too.
I mean it's obvious. So I would say those margins are standing strong. Which is bonkers. Especially
when the car is $60,000. We are talking about $25,000 gross profit per vehicle. If they sold 1
million a year, that alone is $25 billion gross profit. You know, on top of everything else.
I mean maybe
this is just the sweet spot for Tesla, offering this much range, but not using too many cells,
so they can make perhaps 30% more vehicles, all receiving these crazy profits.
It really is enough range for the vast majority of driving. Range anxiety isn't really a thing.
The Model 3 RWD is the best selling Model 3, and it has even less range, and people cope.
There is much we
don't know about the battery tech yet either, we don't know if it charges faster than 2170 or not.
According to battery day a cell 46 mm diameter actually charges slightly slower
than a 21 mm diameter, from the 2170 cell. I mean only slightly, however,
the graph is a little sneaky. As there is something in brackets on the graph
after the label charge time. It says tabless. So this is comparing different charging speeds for
different diameters of tabless cells. Implying not necessarily the actual 2170 cell. In other words,
this vehicle might charge a lot faster than the Long Range, which means consumers may see value
in that. And makes us wonder, just how fast are these new battery packs capable of charging.
Of course we have to remember that faster charging does result in faster battery degradation.
But what if the 4680 cells can handle the faster charging that much better,
we have heard that there is a good chance they are capable of a million miles before too much
degradation. So that might also mean further that the fact these batteries are more rugged,
then they could be charged more like LFP batteries. In other words, they can charge all
the way to 100% and discharge all the way down to 0%. Compared to the Long Range 2170 version
which is meant to be charged between 10 and 90%, thus instantly losing 20% of your range, and ok
sure you can charge it full to 100 and drive it to 0, but it's degrades the battery faster.
Well 20% of 330 is 66. In other words the actual range of the Model Y is really 264 miles, which
is 15 fewer miles than the standard. However, in reality, all this really means is that you
just need to charge your LR more regularly than a 4680 standard. But it still matters,
and it still adds value to the vehicle over a 2170 version.
If this Model is real,
then Tesla have also circumnavigated the potential Osborne effect. This is exactly the
way I had hoped they would do this. If you recall I said if they are launching a Long Range 4680,
then they should charge an additional $5,000, which would take it to $68,000. Well this
is kind of the same except the addition to the price tag is being added on to a standard range.
But the one thing
that simply doesn't add up the most, is the fact there are 828 4680 cells in those battery packs.
Now we could instantly think perhaps those were for display only, even though we saw them with
that many cells in the actual production line too. And that this standard version was just a test
version with only 600 or so cells. But how likely is that? I think these vehicles have 828 cells.
Which would come in at roughly 82 Wh per cell, a little lower than most estimates,
but still a possibility. But 70 kWh, this figure is too high for a 279 mile range
model Y, especially when you factor in all the battery day tech. Which is why I can understand
where the LFP theory derives, as it would be easy to jump to an LFP theory here. But there are a
lot of reasons it's not LFP. I think we have to rule it out, and work with what is most likely.
So what is most likely?
What if employees get the first few Model Ys, that were "test" production.
Limited by software for now, until Tesla releases the new LR when Tesla is ready,
and the employees get theirs upgraded with software, but ended up buying them at a discount.
I hope we can all agree I have not been trying to stick to any narrative, and reinforce any
confirmation biases, I have been fickle to the latest news and reports we receive. Which I
think is the way it should be. This is what makes the most logical sense to me, the standard AWD,
is actually a Long Range in disguise, limited by software. The EPA figures appear to be bogus.
But this is not the first time Tesla have requested the EPA to downgrade their vehicles.
The EPA gave the model 3 a range of 334 miles and Tesla requested them to reduce it to 310 miles.
So I don't think the EPA information is reliable. The rumors were that Tesla
requested the EPA to downgrade the vehicle range because it was too good. No reason we
aren't seeing that happen again, in fact lots of reasons Tesla are doing that.
It doesn't stop there either. With the Model X 60D, Tesla allowed an
upgrade of the battery to go from 60 kWh to 75 kwh, or from a 60D to a 75D model.
This is not the first time Tesla have limited the usable battery with software.
Whether Tesla sell this as a standard with optional upgrade is uncertain,
but I would say the employees versions they have purchased will eventually have a software upgrade
whether free or paid, that will take their car to the Long Range version
4680 from Austin. Wow, this sure is exciting.