Un-officially called as the Tesla Model 2,
the anticipation for a below $20k price tag hatchback is increasing, as the developments
in Tesla’s EV tech become more promising! Hello and welcome to our channel Smart Sense
With an increasing buzz about Tesla’s new Cheaper Model 2, we decided to look into the topic,
and connect the dots ourselves, and here’s what we found:
With a mission to accelerate the transition of the world to Sustainable
energy, Elon Musk has brought a huge paradigm change to the industrialism, single handedly!
If we take a fleeting look at modernization and subsequent development,
we can see that how humanity as whole has been stuck with its technologically
primitive procedures and infrastructure. It is amazing to see how industry, economy and
their inner less obvious SOPs, which are designed to sustain dominance and in most cases, monopoly
over the market, have hindered technological progress at such an appalling magnitude!
As We/I have said this before: Elon Musk is truly a visionary!
With ventures like Space X, Tesla, Open AI, Solar City and Neuralink;
Elon Musk is single handedly pushing world towards futurism and sustainability,
against all the odds and opposition. Which is, by the way not an easy task at all,
in the presence of deep rooted and influential fossil fuel based economies of scale. His sheer
will and persistence to pursue such disruptions, not in one niche, but the entire paradigm of
industrialism, is in and of itself worthy of praise! But that is a topic for another video.
- With the aim of progressing the
global energy consumption away from non-renewable energy resources to renewable-sustainable energy,
Tesla is Musk’s gateway to connect with people and convince them of the practicality of his ideas.
And he has been quite successful frankly, given all the opposition and a practically
crippling competition Tesla has been facing in the Automobile market. In a
recent interview with YouTuber Marques Brownlee, Elon iterated the negative
impact of ‘’insanely competitive industry’’ environment on low cost vehicle production.
- It is crucial that the utility of
sustainable energy practices is made accessible to the lower middle classes of the society globally.
Which pertains that prices of such commodities, in this case, the Automobiles produced by Tesla,
be cheaper and the vehicles be more reliable. If we look at the price range for an average
fuel based hatchback car, which meets the everyday travelling needs:
the costs floor at around 18k to 20k on average. If Tesla wants to generate an economy of scale
out of EVs market, they need to make a good performance car, which resides under the
25,000 USD price ceiling. Production of such a hatchback compact car is un-official for now.
Chances of such a development are becoming more and more stronger as Tesla swiftly moves
towards greater technological sophistication – which we will turn to later in the video,
and further reducing the production costs by setting up their Giga factory in China.
At the launch event of Shanghai Giga factory, Elon hinted towards a pipeline project:
of working on something radical, like Cyber truck, something that ‘’World has not seen before’’.
Tesla was eventually meant to reach this stage, as it was the part of Elon’s strategy all along…
- Elon Musk’s strategy for Tesla has been to
first produce Expensive, high performance Electric super car, the Tesla Roadster in small volumes,
and placing it in competition with fuel based Super cars like Porsche
or Ferrari; to prove the practicality of Electric vehicles and generate revenue.
Then using that revenue to manufacture mid-range, mid-volume, vehicle. And finally use its revenue
to produce cheap vehicles at high volume, and grow it into an economy of scale.
Tesla aims to produce not only cars but all kinds of light and heavy duty vehicles,
from Sedans, SUVs, and Supercars, to electric Vans, pickup trucks, and Semis.
This diversity shows that Tesla aims to address the needs of every segment of the society!
Despite the goal of making electric vehicles as affordable as possible,
Tesla has no plans to compromise on the quality. Also, looking at the maintenance and running
costs of a Tesla vehicle, which are virtually non-existent, compared to traditional cars,
the high purchasing cost, in hindsight, becomes a hoax anyway.
To achieve affordability nonetheless, the goal is to increase the demand to such a level, that they
are able to establish an economy of scale around it. For this purpose, Elon has turned to China,
and established its Giga-factory in Shanghai. It is not only the best Choice for stationing their
manufacturing and production due to lower overall costs- including labor, but also for the fact that
China is the holder of the biggest Market in the World, and interestingly, very receptive
towards the shift towards Electric cars. Prior in 2018, the Chinese government also
approved special subsidies for Alternative Energy vehicles, which allowed Tesla to
further cut the price of Tesla Model 3 manufactured in Shanghai. The Shanghai
Giga factory went into production in October 2019. Tesla has delivered over 800,000 units of Model 3
as of December 2020, becoming the bestselling Electric car so far.
However, having a starting price of over 37,000 USD, Model 3, despite its incredible specs and
performance is out of the reach for the majority. In mid-2020, Tesla released an open call for
independent designs for compact hatchback, to be manufactured in China. Referring
to the hints that Elon has been dropping prior, about a radical and different idea,
and combining them with the banger that Cyber Truck design was, Elon may not settle for a
conventional car design for this one as well. Nonetheless, we are going to leave the design
discussion here, and move on to the technological aspects of the project.
As we mentioned in the introductory part of the video, in order to bring the prices down,
Tesla has to work on further sophistication of its EV technology, to cut down the production
costs. The pre-existing battery pack technology is way expensive for a $20k
hatchback. And no matter how much costs they are able to cut down by utilizing subsidies in China,
the gap created by the expense of core technology would make its production infeasible.
Tesla has been working on upgrading the battery technology from some time now, and on the Tesla
Battery day, held on September 22, 2020, Elon announced to reduce the costs of EV battery packs.
Which means that Tesla is moving towards the production of a less than $25k vehicle.
Over the last decade, the prices of EV battery packs have dropped by
a margin of 87%, and are now expected to be further cut down to half of the existing rate.
Elon Musk elaborated that the company is working on the production of ‘’Tab-less batteries’’.
The term tab-less here pertains that the ‘tab’ or partition between cells and what they are powering
has been removed. This development is expected to play a role in increasing the
range of vehicle by 16% and increase the total energy capacity of the batteries by 5 times.
Furthermore, the internal composition of the batteries is also going to be changed.
Together, all these modifications and up gradations are expected to bring the
Battery pack costs to almost half. The pricing claim seems to be quite
promising given that battery prices have come down from $1100 per KWH in 2010,
to $156 per KWH in 2019 – and accordingly we have seen the drop in Tesla EVs as well.
Talking with Marquess Brownlee, the famous tech YouTuber, Elon said that “I think in order for us
to get up to...a 25,000 car, that’s something we can do… But if we work really hard I think maybe
we can do that in about three years.” MAYBE…
That’s the keyword here… Nonetheless, we can expect a below $20k
hatchback as late as 2024 at the farthest, which is not much of a time period anyway.
Or MAYBE that Tesla does meet the prediction and we get the Model 2 in next 2 years.
Either way, we are happy as long as we get it! At the Battery day event, Elon made one more
announcement cum prediction, of ramping up the production rate of cars to 20 million a year,
which is twice the rate at which gas-car giants like Toyota, Volkswagen, or GM currently produce.
And with this we conclude our today’s video. Also let us know about your
thoughts about the video, we would love to hear your feedback as well.
And if you liked this video then make sure to click the like button
and subscribe to Smart Sense so that we can keep coming up with your favorite content.
And hey, don’t forget to hit the bell icon, and stay tuned for the next video.