Alright, more customers are getting 4680 Model Ys.
It's here, it really happened, Tesla produced and delivered 4680 vehicles.
Except they released them rather coy, without even any official specifications.
OWNERS However, there are plenty of enthused new
Tesla 4680 Model Y owners, who are doing their best to help spill the beans about this revolutionary
new automobile.
Thanks to them, we are able to place together some bits and pieces, and we have gone through
our discoveries in the past.
So much so, we are now once again at a cross-roads.
OPTIONS We have a pretty good idea of the usable battery
size for the new model, at around 68 kWh.
But that's all we really know.
We know that this car can be charged up to 68 kWh and then drive around 280 miles on
that charge.
There also do not appear to be warnings about charging the battery to 100%, and a lot of
people are potentially thinking this battery can go from 0 to 100% charge.
This would mean huge breakthroughs in battery degradation.
Due to the fact it really being so impressive, it may be unlikely, and perhaps that the other
20% or so of the battery is actually software locked instead.
In fact the Model Y owners from the YouTube channel Spoken Reviews was very much of the
thought that there would be a software upgrade available to unlock more range.
UPGRADES Software upgrades in a car.
Pay a bit extra after point of purchase, and improve your product after the fact.
Not really a thing with traditional auto.
Imagine buying a new BMW, then deciding it's not quite quick enough, oh I wish I spent
that little bit extra to get the faster version.
Well in the Tesla you can.
You don't to commit to the that larger price tag initially, buy the car you can afford
now, and perhaps one day later when you saved a bit more you can upgrade your car.
Except I mean upgrade your actual current car.
Increase the acceleration, or the range, or unlock other features.
Wow, that is really cool, perfect for everyone consumer.
It would likely meant that everyone who buys the standard version now, will most likely
one day upgrade it to the long range within time.
This is a new style of supply and demand curve.
Demand is based on what consumers can afford at the time, but if you launch products that
are simply missing a few features at lower cost, and over time you can add to them, then
that would create a demand jump.
Honestly this business is really start to break some of the traditional molds in so
many senses of the word.
Alright, everyone understands how a Tesla upgrade would work, and we can even back that
up with something they have done in the past as well.
You were able to upgrade your Model X 60D to a 70D.
WHY Yea, it's a really, really cool pricing model
to buy a new car.
And like I said, I am sure within soon enough time the majority of them are likely to upgrade
anyway.
But that's within time.
What about right now?
What are we facing right now?
Battery and cell shortage.
Tesla are battery constrained, not only that, it's not a temporary issue, it's going to
be all decade.
So why on Earth would Tesla waste perfectly good 4680 cells in every vehicle, that may
not ever be used?
Right, and this was one of the theories for offering a standard range version from Texas,
simply due to the fact they can probably produce about 30% more vehicles that way.
We want to get as many EVs out as possible, so this would be inline with the mission.
Except what if the mission was a bigger scale, and Tesla need a lot of money for it, and
therefore it is in Tesla's best interest to actually make vehicles that make as much profit
as possible, rather than replace as many ICE vehicles as possible.
Then said profits are used to make more impact in developing nations.
CELLS The community can't decide on whether this
car even has 690 or 828 4689 cells in it yet.
When we start looking at the usable battery size, and the estimated energy from the 4680
cells, then they match a 690 cell battery pack.
Yet, we haven't seen such a thing.
In fact everywhere we look Tesla seems to be showing a full 828 cell count.
12 columns of 69 cells.
I think when it comes to situations like this, it can be best to let go of all preconceived
ideas and expectations, and instead just look around at what we actually have, as that may
just be it.
What do we have?
An 828 cell battery with a 68 kWh usable battery and 280 miles of range.
ENERGY DENSITY Alright, but if Tesla have 828 4680 cells,
and still only produce 68 kWh, well that's not great.
It means each cell is producing just 89 Wh.
Whereas a 2170 produced about 18 Wh.
Implying that the 4680 cells are 10% less energy dense than the current 2170 cells.
These are the cells themselves, and as the 4680 cells have a lower weight to kWh due
to a large cell design, that would imply that the 4680 cell chemistry is even less than
10% energy dense, perhaps 12% or so.
This is at the cell level, if we incorporate the pack then it all changes, as the 4680
is using a structural pack.
Alright, this is the first even mass produced EV battery cell using a nickel cathode without
cobalt, so it had to start somewhere.
But this was quite a bit lower than we expected.
Hence the theory using 17% fewer cells at just 690 cells.
I think that this is potentially a low enough energy density, to perhaps assume that Tesla
may be locking some of the potential here with software.
But why, after everything we just said about battery constraints?
Well I'll tell you.
WHY Why lock a percentage of your products when
they could be out in another vehicle being sold to customers, making massive profits.
Well I have some ideas.
With a larger battery pack there are actual physics at play still.
A larger battery pack is more efficient at regenerative braking.
The same for charging, a larger battery can charge faster.
A larger battery pack needs to be charged fewer times, meaning less degradation.
But I think there may be one other major reason.
It's in it's description, we call it a structural battery pack, but what was it called on Battery
Day?
Cell-to-vehicle integration.
The operative word there being "cell".
The cell is the structure of the vehicle.
Now what happens when you start removing cells from the structure?
It will compromise the integrity of the structure.
There needs to be 828 cells there, which is actually a fewer number than the initial Battery
Day cells, so perhaps Tesla have made improvements since, as we would hope and expect.
Still though, if that is the case, then it's just stupid for Tesla to make all those cells
with jelly roll inside.
They should just make some empty cells.
Well although we say Tesla are battery constrained, it's actually cell constrained.
If they were to make empty cells as well, then for one, that would add major complexity
to an already, well most likely most advanced manufacturing line in the world, or at least
up with TSMC.
If you suddenly start making empty cells as well, then that will add massively to complexity.
Not only in the actual production of them, but then also you need to then keep each dummy
cell separate from a jelly roll cell.
From there you would somehow need to make sure all the dummy cells were on the outside
of the battery pack, for better weight distribution and safety.
This is not happening, it's already difficult enough.
But like I said Tesla are cell constrained, if you start making empty cells, then that
is a waste of a cell case and manufacturing process.
You have serious opportunity costs here.
Every empty cell is the opportunity cost of a jelly roll cell.
When factor that in, a dummy cell process would slow down manufacturing too much, it
would not be worth any potential cost savings.
Tesla need to pump these cells out fast, they don't have time to mess around with a ton
of empty ones as well.
PROFITS Savings?
Well what if actually wasn't even a saving?
What if software locking the battery actually meant more profit.
Ok, we are somewhat assuming here that Tesla are wasting all these extra cells, and lost
profits on more auto sales.
Well we are talking about a software upgrade here.
It's a paid for upgrade.
We are back to thinking potentially an 80 kWh battery here now, possibly more for all
we know, or if not, it will be one day.
Yes, remember this will all be future proofed too.
Even if the software upgrade is not possible now, eventually Tesla will have energy dense
cells enough for this to be a possibility, and like I said, reducing the number of cells
may not be an option for structure.
So let's say the standard Model Y is $60,000, soon enough that will be 40% profit margin,
or $24,000 gross profit.
Now at a 68 kWh battery that comes in at $350 gross profit per kWh.
Now if there is an additional 12 kWh or so there to unlock, then you might assume we
are up to around 330 miles of range, similar to the current Long Range version.
Well what if 50% of customers eventually upgraded?
Well let's say it's only $5,000 to upgrade.
That would mean you get $2,500 extra gross profit only average per vehicle, 50% of customer
paying an additional $5,000.
That means you profit $2,500 from those additional 12 kWh, or $208 per kWh.
Hmm, well we know we can get $350 per kWh for a whole vehicle, therefore we are better
off actually making more cars.
Well as far as gross profit is concerned perhaps, but hey, even BYD can make gross profits on
EVs.
How about what actually matters.
Well if we take a 20% operating margin, then we actually only produce about $175 operating
income per kWh.
Now any software upgrades, they don't add to cost of goods sold, so they go straight
to operating income, i.e. we said $208 over $175, so it is actually more profitable to
sell cars with unused cells.
Of course this was based on a take rate of 50% and just $5,000 for the upgrade.
But who knows, Tesla might even say $5,000 for a 300 mile range upgrade, or $10,000 for
330 miles.
I think that there is more than an average of $2,500 per vehicle to be made with software
upgrades here.
OSBORNE I would say a long range upgrade would cost
more than the 2170 version as to not create the Osborne effect, and same deal for having
this lower cost model.
MISSION Why are Tesla trying to profit from us so
much?
I thought they were the good guys.
And isn't the mission to replace as many EVs as possible.
Well these profits will be used to invest in developing nations so they can also have
clean transport, and it will do that much more for the mission than what it could in
the US.
WEIGHT Now one thing that is very good news if this
is 828 cells over 690 cells, well you know what it means right?
It means the battery pack is that much heavier than we thought.
138 cells heavier to be exact, and at 355g per cell, that's an extra 50 kg of weight
saving the structural pack is creating.
I also have some theories on how to work out a figure on how much weight the pack is potentially
saving.
ELECTRIFIED
Then just as I was finishing this video, Dillon Loomis from Electrified says he has information
from an insider.
Supposedly they are saying that there are 828 cells in the pack too, which is potentially
more confirmation.
That claims charging software limited, just like we assumed, which is good news, and we
are all curious to find out just how fast this battery will charge.
Dillon says that Tesla are cell constrained and not software locking range, however, when
he said this, I think it was his opinion, not insider information.
His opinion being that Tesla are cell constrained and wouldn't want to waste unused cells, that
could be used to produce more vehicles.
However, we have just explained as to why this may indeed be the case.
SUMMARY Ok there sure was a lot of food for thought
here.
I am pretty sure that these cars are going to have 828 cells.
Which does mean the energy density could be understandably disappointing, but this is
just the start, its very early days, we don't know what we have here yet, but it looks like
Tesla are going to pull it off.
Of course we have our software locking theories too, which could be very exciting.
I guess we will have to keep waiting to see.