Tesla completes Elon Musk’s master-plan by finally announcing launch of 35000$ model 3
Back in 2006 Elon Musk who had recently become CEO of Tesla explained his plan to make Tesla a successful company and to make EVs accessible for all. As you can read in a blog he wrote on the Tesla website in July 2016:
“The first master plan that I wrote 10 years ago is now in the final stages of completion. It wasn't all that complicated and basically consisted of:
Create a low volume car, which would necessarily be expensive
Use that money to develop a medium volume car at a lower price
Use that money to create an affordable, high volume car And...
Provide solar power. No kidding, this has literally been on our website for 10 years.” (read more)
This week he officially showed the world that he was able to fulfill his plan through to the last steps by launching at last the standard model 3 for 35000$ - the long promised affordable (mass market price) high volume electric car. Since late 2017, when the first models 3 came out, Tesla has been gradually lowering the price of the model 3 going from the most expensive version of the model 3 - the performance dual motor, to the long range dual motor, to the long range range rear wheel, to the mid range rear wheel, to finally the cheapest version- the standard range rear wheel motor. A spectrum of versions that went from the original 69000$ performance model 3 to the recently announced 35000$ standard model 3. The standard model 3 has long been delayed but now the standard battery pack and interior is launched. Those two things were the main factors from the car’s side that lowered the cost - indeed, the range for this version was lowered to 220 miles with less acceleration power and less premium interior. (read more)
However, Elon Musk says the price was also lowered thanks to marketing strategies explained in the next news brief below
Tesla - leader & automaker killer? Massive price drops on all models, online sales-only strategy, gigafactory 3 plans, unveiling model Y in 10 days.
Should Tesla be seen as the leader and as a model to follow because of its success in launching the standard model 3? Maybe, but the production of the standard model 3 was not the only announcement they made this week and the others could bring radical shifts for the automaker world.
Elon Musk announced that in order to lower the price of the model 3 this year, they plan on closing down all their stores and make sales online only. The main reason Tesla used their stores was to show off their cars and display their techs in order to make people more accustomed to their new company, gain customers’ trust and create some hype. They even have test drives of Teslas throughout the world. This worked rather well, but now that Tesla is well-known and customers are more familiar with their products, it made sense for Elon Musk and the Tesla team to do everything online. This lowers costs for Tesla and prices for the cars customers will buy. According to them, it should also make the experience of buying a car easier. (read more) This has scared some investors nevertheless and TSLA stock has gone down.
As announced on Thursday, Tesla started closing their first stores as early as Sunday. (read more)
Tesla also released a new battery pack for the Model S ended the software-locked battery pack for the model X, making the long range and Performance the only 2 options while the model S has standard, long and performance range. This harmonized the option for their 3 vehicles and combined with their sales strategy enabled considerable price drops for all 3 models (model 3, S and X) (read more)
Addionics shows the impact of the new standard model 3 on the EV industry:
Tesla (model 3) =35000$ 2019 220 miles
Hyundai (Kona electric) = 36450 2019 186 miles
Nissan (Leaf Plus) =36550$ 2019 220 miles
Renault (Zoe) ≈34000$ 2019 250 miles
Honda (Urban EV) ≈35000$ 2020 155 miles
VW’s Seat (el-Born) ≈35000$ 2020 260 miles
Skoda (VISION iV) ≈35000$ 2020-2021 300 miles
This week, Tesla is really disrupting the market of electric vehicles priced around 35000 dollars. Now a buyer will be faced with the choice of buying a Tesla Model 3 for 35000 dollars or another electric car with worse specs, less aesthetic, less prestige and no charging network. Nonetheless a few cars will still be able to compete and the Renault Zoe and Peugeot e208 may hold up to the rise of the model 3 in Europe and offer customers more choice. This week the 2019 Peugeot e208 was revealed with a range of 211 miles and an estimated price of 27000-30000$ - surely something that customers will look into purchasing. A few models seem likely to have low sales on the market such as the Nissan Leaf Plus (see price tag and range above), the Kia Soul (approximately 40000$ for 150 miles available at the end of this year), the Kia Niro (approximately 36600$ for 239 miles available at the end of this year) and Honda’s Urban EV (see price tag and range above) unless they drop the price tag. Skoda’s VISION iV seems like it could offer serious competition to the model 3 but it is only a prototype and will probably manage to deliver the produced cars in 2021. This is why we cannot say there is much competition for Tesla: car manufacturers seem to follow Tesla’s trail and be one step behind; it is easy to announce a car that will be in customers hands in 2 years, but what Tesla has proved able to do in 2 years shows that they have actually kept more promises than most car manufacturers for EVs. Indeed they cut price tags down by up to 10000$ for the model S ‘long range’ and and by 13000$ for the Performance version; also after two years of improving the model 3 production, it is important to insist that the price has dropped from 50000$ to 35000$ in one year and half. So the battery packs that Skoda (or any other automaker) offers in 2 years should be largely on top of the current market, otherwise with improving EVs, it will be a joke when the car finally comes out in comparison to other available EVs.
These important news put aside, news of Tesla 3rd Gigafactory are surfacing. It has reportedly borrowed 2 billion dollars from Chinese banks for its strategically placed factory in Shanghai. This is part of the first stage of investments used to accelerate the beginning of the construction(read more). Furthermore, it was revealed that the factory is planned to complete its first usable manufacturing workshops as early as September. These will include the stamping, bodywork, painting and assembly workshops. The factory as a whole (all workshops included) is planned to be ready for March next year and will be able to annually produce 150000 model 3s. (read more & read more).
Finally, as the cherry on top this week for Tesla, Musk tweeted this Sunday: “Model Y unveil event on March 14 at LA Design Studio”. In 10 days Tesla will reveal the sister of the model 3, which Musk announced would be about 10% bigger and 10% more expensive than the Model 3 (so at a base price of around 39000$) and will be the first of a series of crossovers from Tesla. (read more)
Tesla’s battery advancements possibly blocked again by investors
On the downside for Tesla, it has had more issues with the acquisition of Maxwell. A few weeks ago, we talked about Tesla’s acquisition of Maxwell for 200 million, but the fact that at the time of the acquisition the company was worth 140 million on paper made some investors in Tesla file a suit against this acquisition. This is slowing down the process even more, knowing that Tesla was trying to purchase Maxwell for several months and spend much time negotiating between Maxwell’s board and their own board. It might be that we wait quite some time before we see Maxwell’s technologies used by Tesla, and it is a possibility we might never see that happen. The acquisition of Maxwell would allow Tesla to increase its batteries’ energy density by 300-500 Wh/kg, increase longevity and reduce cost. (read more)
Volvo’s Polestar 2 reveal - Tesla’s model 3 main competitor?
This week, Volvo fully unveiled their new all electric vehicle after having leaked some earlier images of the car. Volvo’s creation and subsidiary Polestar was supposed to be their performance brand and it has now announced it will also be a fully electric car brand from now on. This branch of Volvo could very well compete with Tesla especially when looking at the car’s luxury and google’s integration. The car has a 300 mile range for a starting price of 68000 that will go down to 45000$ over the following years. This is not a great deal for many (simply because the new price of the Tesla rear wheel long range model 3 is already at 43000$ for a range of 325 miles), but this car boasts a luxury that Tesla owners did not feel they had. Indeed, a Tesla is definitely on top of the market but if you own a luxury car, you can’t help but notice the bland inside of a Tesla. Even though, this is what Tesla wanted, to have a nice exterior design, comfortable and open inside with just an Ipad, some people find that it is lacking certain luxury finish (when talking about luxury, we are obviously comparing with the Model S and X not 3). So Polestar set out to have similar specs and similar price as a model S and X with an ameliorated interior.
The battery pack is 78kWh and is composed of 324 individual rectangular shaped pouch cells each probably made up of 3x108 cell groups which render a total voltage of 400V. (read more & read more & read more)
The partnership with Google integrates Google Maps, Google Assistant, and the Google Play Store which altogether allows a powerful infotainment system - capable of smartly collecting and using information - in effect rivaling Tesla’s “iPad on wheels” (read more)
Uber’s electric Jump bikes have more users than Uber’s cars
In Sacramento California, recent stats show that 53% of Uber riders were using the Jump bikes and 47% were using the original car service. Uber bought jump last year - a large network of shared electric bikes. Uber expects that the boom of the electric shared bicycle/scooter market won’t stop there: even though a little surprised, they expect the trend to continue even more towards coming years and are working towards ameliorating the Jump’s bikes and services. (read more)
Huge Chinese battery manufacter CATL keeps getting bigger - Joint venture with Faw, deepens battery tie with BAIC BJEV and Pride Power
CATL and FAW the Chinese state-owned automotive manufacturing company have founded a joint venture together. The joint venture - called CATL-FAW Power Battery Company (CATL-FAW) - consists in a capital of 2 billion RMB or 300 million dollars. CATL has the upper hand in the joint venture though because it owns 51% (RMB1.02 billion) while FAW holds the 49% (RMB980 million) remaining stake. The venture aims at developing Lithium ion batteries and other form of batteries for storage and the automotive industry. (read more)
CATL also signed a 5 year agreement this week to reinforce partnership with BAIC BJEV (auto manufacturer and Pride Power (battery manufacturer) so that the three work together in making larger volumes of batteries. The three Chinese companies signed a series of contracts to strengthen the battery production of the two battery manufacturers while supplying the auto manufacturer for predefined shares of the latter. (read more)
Chinese giant BYD starts building its 20GWh battery factory
The huge factory equivalent to 20000 EVs with 100kWh battery packs will be used for production and assembly of battery packs for their large range of EVs. It is estimated to be finished in a year from now. WIth the booming demand for EVs in China and Tesla’s proof of the use of a gigafactory, this factory will certainly show itself useful, putting BYD a step ahead in the Chinese and worldwide auto industry. (read more & read more)
24M produced semisolid cells with impressive density over 280Wh/kg
The battery startup from Massachusetts delivered this week their first commercial high energy density to their unrevealed partner. Their batteries have a 12% increase in the world’s highest energy density commercial batteries - 250Wh/kg. The supplied company, probably an automaker looking to ameliorate the performance of its EVs will definitely reap the benefits of these supplied batteries. (read more)
Unveils, reveals and teasers on electric and hybrid vehicles this week: Tesla Standard Model 3 price reveal, Polestar 2, Geely GE11, Seat crossover, Kia e-Soul for Europe, Kia refreshed Niro PHEV, Honda E Prototype, Byton M-Byte SUV, Piëch Automotive’s Mark Zero, 4 new Audi hybrids Q5 A6 A7 & A8, Seat el-Born, Nissan IMQ Crossover concept, next gen Porsche Macan, Nissan’s Leaf e-Plus price reveal.
The three interesting reveals of this week aside from the much mentioned Tesla standard model 3 and Polestar 2 were the Piëch Automotive’s Mark Zero, the next gen Porsche Macan and the Nissan’s Leaf e-Plus price reveal.
The Leaf e-plus price reveal was important because it showed the disruption of the model 3 on mass market cars meant to come out this year. if the standard model 3 had not come out the Leaf Plus would probably have been a few thousand more expensive. We can expect the possibility of a few auto makers to sell some cars at a loss. (read more)
The Pieche Mark Zero was the most intriguing reveal because it has 300 miles of range and 5-minute charging enabled by some mysterious new battery cells. (read more)
The next gen Porsche Macan is the most exciting reveal because we were waiting for Porsche to hit a more moves towards electrification. Therefore, it was a good move to see their highly prized Macan will be all electric with production starting in 2020. The specs of the car don’t seem as exciting though. (read more & read more)
Hyundai invests 40 Billion in upgrading its electrification and announces development of battery-only car Chassis
This whopping investment could very well be what allows them to compete with Tesla in the years to come after their major announcement this week. (read more)