How will Tesla make their next-gen sedan even cheaper?

[ggnykk]

Elon has hinted a few times recently that there is a next-gen more affordable vehicle in the works. Assuming this vehicle is sold with a base around $25k to $30k, how do you think Tesla will be able to manufacture it to keep costs down far enough to extract a decent margin?

Some guesses, I really have no idea about manufacturing costs so I could be way off:

Smaller car with smallish battery (with future drop in pack costs) to get ~ 200 miles. Battery pack cost < $5,000.
Cheaper power train / electronics.
Less color options.
Cheaper manufacturing methods derived from Model 3 / Y experiences (i.e. reduced wiring)
Perhaps based margins will be low with expectation that EAP/FSD will have a high take rate.

Thoughts?

If you have heard enough of Tesla earning calls and Elon's interview, he has heavy emphasis on four themes that will drive down costs in the future. The four biggest needle mover in terms of costs are:

1. Economy of scale.
In the beginning of all manufacturing process, the fixed costs are a lot higher than marginal costs (look up in wiki if you don't know what this mean). But as volume of production get higher and higher, the marginal costs will start to drop significantly. Resulting in a lower unit cost per vehicle.

2. Lower cost of battery pack per kwh
This ties in to economy of scale as well. As production of battery pack increase and the battery technology get even more mature, the cost per kwh would drop exponentially. Along with smaller overall battery size, that would results in significantly lower battery pack cost.

3. Better vertical integration
Better integration such as building battery manufacturing and car manufacturing/assembly all under one roof. Such as the new plant in Shanghai and the future plants in US and Europe. As for the existing plants in California and gigafactory in Nevada, they would try to have better link up/transportation between the two facilities. Think of fleet of autonomous semi trucks travelling between the two facilities.

4. Efficiency gain through intensive robotic automation and increased efficiency.
He goes as far as saying that he see Tesla as more of an automation company rather than a car company. He is and will continue to improve efficiency through intensive robotic automation in all aspect of manufacturing. Much more than any other car companies, he claimed. As well as car manufacturing speed that will be many times higher than industry average.

 

[RDoc]

From my understanding of automated assembly, although that's not my field, there can also be significant improvements by relatively small design changes to make the assembly process easier for the automation.

 

[islandchick]

I reiterate, lower cost of manufacture does not correlate with a lower cost to owner. From my point of view neither he nor the company has shown any interest in expanding into middle-class America.

 

[Brando]

Low cost electric - best I've seen so far. A Swedish company - very interesting - worth exploring.
There are of course others - suggest internet searches to find more.

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Walking, biking, public transport - all about getting your transportation costs down and environmental cost down too.

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[bhtooefr]

So I had some ideas of my own to cut costs for a compact model, and what it'd look like.

Target size: C segment hatchback at the largest, the Golf and Focus being the defining cars of that segment effectively.

For some examples of size (widths without mirrors):

Model 3: 1.85 m wide, 4.69 m long

C segment:
Mk7 Golf: 1.8 m wide, 4.26 m long
Mk4 Focus: 1.83 m wide, 4.38 m long

B segment:
Mk6/7 depending on how you're counting Polo: 1.78 m wide, 4.05 m long
Mk7/8 depending on how you're counting Fiesta: 1.73 m wide, 4.04 m long

As the Focus manages to be 4.4 m long for the hatch, sure, let's go for that, I think you could get a decent fastback (read: streamlined) roofline in that, with the short front overhang of Tesla's design. Think something like the 10th-gen Civic Hatch's rough shape (NOT its styling), but with a much shorter nose, and a bit longer rear (the 10th-gen Civic as-is is, as I understand, a bit too big for the European market, having been optimized for the US sedan).

Maybe consider going under 1.8 m wide without mirrors, to make parking easier, so it's almost a long B segment car.

It needs to be a liftback IMO.

RWD base model of course, and stick with the PMSRM rear motor, although maybe make it smaller if that's cost-effective.

Incorporate the cost reduction measures used in the Model Y.

Move from double wishbone to MacPherson strut front suspension. (Worth noting that even some of the Model 3's competition uses that - the BMW 3-series specifically. Everything in the B/C segment, even from premium brands, uses it AFAIK, so going down to it is an accepted cost reduction for that segment.)

Redesign the rear suspension. Maybe there's a simpler multi-link design that could be used (maybe the old Ford Control Blade setup originally used on the Mk1 Focus, that basically everyone's copying in FWD-based applications nowadays, and AFAIK is compatible with rear drive applications), without going all the way to a de Dion tube or something similar (which will hurt ride quality badly). Also make sure the geometry is compatible with smaller wheels (the European-market C segment premium competition is on 16" and 17" wheels it looks like).

Reduce tire diameter from the current ~26.5" used in the Model 3, to the ~25" commonly used in the B segment. Lower cost tires, frees up about 3" of passenger space for a given vehicle overall length (because the wheel wells locate the front footwells and the rear seat back, and because you can push the wheels that much further out to the corners), and reduces unsprung weight.

Beyond that, I doubt that there's much room for pulling cost out of the car without compromising greatly on some things that Tesla really wants to keep around (the EAP/FSD package), or compromising on efficiency. You might be able to create an EAP-only package (similar to the AP2.5 hardware in capability) that's lower cost than FSD, and can be easily upgraded to FSD, but that makes it harder to get the revenue of a FSD upgrade than having the hardware already there. And, I'm not sure how much you'd gain from not having a Dual Motor option (and AWD is a feature available in the segment on ICE models, so it's a feature you'd want to have available). Everything else would be optimizations that would also apply to the higher-end models, I'd think.

 

[islandchick]

So I'm no good at photoshop. You get the idea. The cheaper Tesla! Coming Soon!!!

 

[Brando]

Another option would be to use the Model 3 front motor, saving development costs.

IF VW fails on the eGolf/Polo, then it would be great if Tesla offered front wheel drive hatch back to compete with VW.
But if VW stays in business, we'd expect them to do the eGolf very well indeed. I think the eGolf is already in high demand - i.e. VW can't make them fast enough.

 

[Anjumhameed]

tesla has announced that by 2020, they will introduce a new lineup of entry-level sedans, that will be more cheaper than existing tesla models, but no exact news is reported by the company..

 

[ratsbew]

tesla has announced that by 2020, they will introduce a new lineup of entry-level sedans, that will be more cheaper than existing tesla models, but no exact news is reported by the company..

Source?

 

[islandchick]

Hey, I heard Elon had some really nice oceanfront 5000 square foot houses with all the amenities for sale next year. Just send your $400k deposit now and we will get back to you on pricing and availability.

 

[FreqFlyer]

tesla has announced that by 2020, they will introduce a new lineup of entry-level sedans, that will be more cheaper than existing tesla models, but no exact news is reported by the company..

The only way this makes sense is that its built in China...............GF3 is a big factory though.........

 

[J X 3]

First of all, not from cell prices being lower, all of that needs to go into larger packs to improve charging rates as much as possible. For as long as charging rates limit the addressable market, packs must increase in size. If they get stuck at 200+ miles of range, they lose to the competition.They need to push range and charging forward as fast as possible to expand the market and stay ahead of competitors.

They can work on better and cheaper packs, Increase efficiency, decrease weight, savings on the electronics side.
Ofc the car would be smaller (in Europe and China the B and C are volume leaders) but only some costs scale with size and those that do scale, don't scale perfectly. Aerodynamics are harder with a shorter car too as height is hard to scale down.
Manufacturing is another area to work on.
Everything can be made cheaper. For example the glass, the way to make it cheaper is to develop stronger glass and make it thinner, so higher number of sheets per given raw materials quantity.
FSD will help margins too ,they just need to make it affordable and maximize attach rates. For a sub 25k$ sedan or sub 30k$ SUV base price, if they charge 3k for FSD, likely everybody buys it, add a few other options and just that gets them the margins they need ,even if base before options is at cost.

 

[Watts_Up]

I wonder if there is a future for the In-Wheel technology for small cars?

Here are so projects:

Protean Electric

Elaphe in-wheel propulsion

Michelin Active Wheel

 

[Brando]

My brilliant strategy ? <sure you can't wait to hear it>
As others have pointed out, not much to save making 3 smaller and with cheaper parts
(Elon would never allow cheaper/low quality parts - Elon takes pride in his creations - safety first.

Tesla S/X <camino option too>; 3/Y; pickup or two; SEMI; Roadster (even a 3/Y based camino??)
This is enough for an international auto company.
Suspect all can continue profitability.

continuous improvements
- drastic cuts in wiring (only a highly vertical integrated company can do it) design for robot assembly too.
- parts designed and made for automated/robotic assembly.
- Alien Dreadnought cometh

- FSD and Tesla Network change the economics
- Tesla makes you money OR you don't bother to own a car and use robotaxi.

- let the legacy auto makers who need the volumes to fill their factories dominate the small sized auto.
- Oh and actually try to compete directly with Tesla?? 7 years and still nothing serious

And not to forget Loops and HyperLoops and the StarShip.
{ don't need no "stinkin" small car }

 

[Laban]

The market wants a small Model Y type of vehicle rather than a smaller version of the Model 3. Perhaps Kia e-Niro/Audi Q3 sized, ~4.4m/175 inches long. ~1.6m, 63 inches high. That would sell well in all markets, Europe, US, Asia.

That should be doable at a $25-$30k starting price. Tesla has been talking about 50% less capex for the Gigafactory in China -> lessons learned from the Model 3 production line. Add to that:

- More cars produced = lower costs
- Reuse everything that can be reused from the Model 3/Y = lower costs

-> motor(s)
-> interior/dashboard/AC solution
-> battery packs

- Design it to look good with smaller wheels, perhaps 17" standard, 18-19" options. Maybe even 16" (e-Niro)
- Optional AWD. It's a Tesla after all. And you can get a VW Golf with AWD
- Performance version, It's a Tesla..
- Definitely keep the AP hardware, if only for the safety related features in the standard version

Any non-AWD, manual seats, .... type of car is better suited for a sub-compact. And i'm not sure that Tesla should aim for that market. At least not in the next 5-10 years.

 

[Brando]

The market wants a small Model Y type of vehicle rather than a smaller version of the Model 3. Perhaps Kia e-Niro/Audi Q3 sized, ~4.4m/175 inches long. ~1.6m, 63 inches high. That would sell well in all markets, Europe, US, Asia.

That should be doable at a $25-$30k starting price. Tesla has been talking about 50% less capex for the Gigafactory in China -> lessons learned from the Model 3 production line. Add to that:

- More cars produced = lower costs
- Reuse everything that can be reused from the Model 3/Y = lower costs

-> motor(s)
-> interior/dashboard/AC solution
-> battery packs

- Design it to look good with smaller wheels, perhaps 17" standard, 18-19" options. Maybe even 16" (e-Niro)
- Optional AWD. It's a Tesla after all. And you can get a VW Golf with AWD
- Performance version, It's a Tesla..
- Definitely keep the AP hardware, if only for the safety related features in the standard version

Any non-AWD, manual seats, .... type of car is better suited for a sub-compact. And i'm not sure that Tesla should aim for that market. At least not in the next 5-10 years.

S/X/3/Y SEMI truck/camino Seems like plenty for one vehicle company (storage & solar & roofs)
USED Teslas supply the lower prices - million mile vehicles can supply a lot of "lower cost vehicles"
(annually used car sales 3 or 4 times new car sales - expand from 150,000 to 300,000 going to 1,000,000 mile life spans. game changer)

All the Other Expert Auto companies can make the lower cost options and try to compete with Tesla on the rest.

 

[Buckminster]

For me, there is 2 obvious solutions:

1) Golf Plus competitor reusing M3/MY parts. 5 Seats. Battery 40 kWh (SR+ is 50 kWh) Sale price of $30k (SR+ is $40k). Still a drivers car with a huge market - lots of synergies - M3 / MY costs come down. Sales start 2023 (MY sales start end 2020).
2) Robotaxi. 4 seats facing each other (Elon seems to think that this is doable in the necessary timescales). 30 kWh, smaller newer battery, no dashboard, no screen. Sale price $25k. Sales start 2024. Less redesign long term - Tesla become leader.

Both solutions for me should be RWD only - bigger std frunk.

 

[Laban]

..
All the Other Expert Auto companies can make the lower cost options and try to compete with Tesla on the rest.

I agree with you in the short term (<= 3-4 years) but Elon has talked about a cheaper model in some interviews. Something that might be released after the Semi, Roadster, Pickup, Y is on the market. So why not speculate about what that car would be

 

[Brando]

I agree with you in the short term (<= 3-4 years) but Elon has talked about a cheaper model in some interviews. Something that might be released after the Semi, Roadster, Pickup, Y is on the market. So why not speculate about what that car would be

I agree. I hope Tesla might get that big. But it would be OK, if the "acceleration" part of Elon's Plan might mean big auto companies wake up and try and compete as they already know how to build in large numbers and they have the people and factories to get it done.

PS - I like the Uniti - An electric car to redefine urban mobility and Elon can make it better and cheaper than anyone, I suspect.

 

[Watts_Up]

PS - I like the Uniti - An electric car to redefine urban mobility and Elon can make it better and cheaper than anyone, I suspect.

It look like a Smart EV, but unless they make it very affordable, I doubt that this car will survive in US:

The Smart Car Is Officially Dead in the U.S.
The electric Fortwo, which was the only Smart model still for sale in America,
is going away at the end of the 2019 model year.​