Deep Dive Into Tesla’s Low Cost, Short-Range Model 3 Pack Design

[TMC Staff]

What’s the story here and how much might this new battery pack really save Tesla? We’ve had lots of news in the last week. Tesla told us during their earnings conference call that they maintained 20% gross margins during the 3rd quarter. On the other hand, it also delayed production on the short range version...
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[Pepetideo]

Nice analysis.. but this is assuming that from the point at which tesla started selling M3s at scale to the point at which they will sell the shortrange version there is no cost improvements to the battery cells themselves.

I am willing to bet that when they start selling the short ranger version in around 6 months time their profits per car will not be lower that 15%.

Buy you a beer if I am wrong

 

[omgwtfbyobbq]

I agree with @Pepetideo . Besides the changes to the pack and fewer cells, Tesla's also using one less (16A?) charger board in the MR/SR and is switching to a IGBT based inverter from the current CiS MOSFET controllers in the LR, which should save a few more bucks.

 

[Words of HABIT]

The battery is just one aspect of the car. Currently LR M3 only comes in PUP, and RWD is no longer available. The least expensive version: SR M3 non-PUP, RWD, no-options. I realize this is probably +-10% of all future orders, but that is what most critical observers are Tesla are asking, what will be Tesla's margin on their least expensive version and when will it become available. Anything above 10% and delivered within six months would be amazing, 15% with sooner delivery would be interstellar.

 

[gliderboy2]

I would think the tires on the short range might be of harder rubber and perhaps have smaller contact patch. Anyone know if this is the case?
IMO, Tesla's financial health is most important factor. IMO, Tesla should push back the release of a $35,0000 base vehicle until they are completely filling demand for the premium version or until they can achieve the same profit with it. Otherwise pushing this forward 6 months or whatever is counter productive.

 

[Dana1]

I would think the tires on the short range might be of harder rubber and perhaps have smaller contact patch. Anyone know if this is the case?
IMO, Tesla's financial health is most important factor. IMO, Tesla should push back the release of a $35,0000 base vehicle until they are completely filling demand for the premium version or until they can achieve the same profit with it. Otherwise pushing this forward 6 months or whatever is counter productive.

I’d think it’s unlikely each model version will have the same margin. The trick is to sell a blend of cars that in aggregate produce an acceptable margin. I do think folks that have waited two years deserve their car.

 

[GigaGrunt]

Close...but maybe it’s not always that complicated...January will be good.

 

[Riggald]

Nice analysis.. but this is assuming that from the point at which tesla started selling M3s at scale to the point at which they will sell the shortrange version there is no cost improvements to the battery cells themselves.

I am willing to bet that when they start selling the short ranger version in around 6 months time their profits per car will not be lower that 15%.

Buy you a beer if I am wrong

Panasonic are already selling the cells to Tesla at below cost.

 

[kbM3]

The article result is based on a false premise. I.e. that the gross margin of the RWD LR is fixed. Gross margins across all versions will improve as fixed costs are distributed across more vehicles and manufacturing processes on all parts of the vehicle improve.