Cybertruck & 2 new models based on model3/Y platform that can be manufactured on current production factory lines.
These currently unnamed new vehicles are expected to be cheaper than Model 3/Y, which currently start at $43,000 before incentives – likely closer to $30.000-$35,000.
How is price reduction accomplished? Small batteries thus less range? Cheaper interior materials? Engineering that integrates multiple component into one unit that costs less and reduces production costs?
Those vehicles are expected to contribute more to Tesla’s growth, but since they will only launch in the first half of 2025, the contribution will be somewhat limited in 2025 as Tesla ramps up production.
Finally, Tesla is also planning to do a Model Y refresh early in 2025.
iirc, I saw. somewhere, an operating margin for Tesla on the order of 17%, about double was other automakers book. My theory was the other automakers rushed into EVs, thinking they could book the same sort of margins. Turns out, building EVs people want, isn’t that easy, especially when you aren’t connected to a personality cult. Meanwhile, Tesla has plenty of room to cut prices, putting the other automaker’s EVs deep in the red, because they don’t have the personality cult markup.
Tesla has new, highly efficient plants with lots of capacity built in the days of high PEs when funds were cheap. Those plants should be fully paid for minimal debt.
The competition is now building or remodelling plants to match that capacity. But with PE below 10, their finances are more stressed. Slowing down is no surprise. They may still win in hybrids.
What’s happening with Tesla Mexico? All set but on hold for now. Maybe waiting for EV markets to stabilize.
I think a key component will be a strategy we’ve already seen: Tesla used to have margins around 30%, now they are around 17%. That’s inline with higher end brands, but still above US manufacturers. There is room to cut those further in order to gain market share.
Let’s see if they copy the BYD system design and build. The teardown of a BYD EV discussed a major cost reduction NOT used by Tesla. So, BYD is well ahead of any other builder.
Try engineering cult!
Try no part is the best part cult
Try 48 volt cult
Try giga press cult
Try the machine that builds the machine cult
Try agile management cult
Try no LIDAR cult
Try fewer models cult
Try no dealers cult
Try supercharger cult
Try no EDI cult
Neither did Steve Jobs with Apple. They were just satisfied with making products that disrupted the status quo.
GM made electric cars before Tesla existed. But Tesla is the only western company capable of competing with Chinese BEVs in China. That may not be “new”, but it is “better”.
