Software limited batteries baffle me - it defers expansion and M3 at $35K?

[Deeppurple]

1. Isn't it true that Tesla has a major shortage of cells to begin with, given the delays of PW's and M3 ramp up?
2. Tesla just started selling MS and MX only with 100kW software limited batteries, hoping that current or future owner will upgrade, but what if they don't? Or what if it takes someone years before they do, while Tesla already "over-invested" in their battery, while drivers continue to "carry" that extra expensive yet dead weight? Wouldn't this option be more appropriate when they have ample supply of the cells, and not the shortage?
3. It also baffles me why they cannot drop the price of M3 to $35K with a 60kwh battery, while they seam to be OK and profitable selling a 75kwh battery M3 car for around $44K, so why do their margins all of a sudden disappear if they drop the price by $9k while reducing the battery size by 15kwh and removing a few other options? Is $9K too much of a discount for the 15kwh difference?

 

[GregRF]

1. Powerwalls and M3 use Gigafactory sourced 2170 cells. Model S/X use Japanese sourced 18650
2. This move improves margins on the S/X and helps to differentiate from the Model 3
3. If they are near their $100/kWh goal of cell cost, stripping out 15 kWh only reduced the cost by $1500, so a stretch to get the other $7500 out of the car. (Not to mention the MR is probably already low margin to begin with)

 

[ewoodrick]

1) No
2) I'd much rather have a 75 with limited 100 battery, It takes a REALLY long time for a 100 to degrade to a 75.
3) You are assuming that there's a lot of margin at $44k, the real number is probably somewhere in-between. But the real issue with the $35k is that it's not time for it yet. It's overseas time to get the higher margin vehicles. The $35k 3 will probably require a production line by itself, lots of differences (especially the roof) will make it harder to produce bot cars on the same line.

 

[jboy210]

Regarding #2 the costs of making a battery is dropping fast. Elon says the cost will hit $100/kW this year. If this is true. the difference between a 75Kw battery and a 100Kw battery drops to $2,500.

However, as it is was they had 2 lines going, one for 75 and one for the 100. Getting rid of the 75 let's them kill this line and shift staff. Then they can shift the equipment over to building the batteries for the Model 3, and follow on models, using the locally produced 2170 cells.

And they need this additional capacity to produced the Model Y small SUV, likely to be produced in GigaFactory 1 in Reno and Gigafactory 2 in China

 

[Deeppurple]

Regarding #2 the costs of making a battery is dropping fast. Elon says the cost will hit $100/kW this year. If this is true. the difference between a 75Kw battery and a 100Kw battery drops to $2,500.

However, as it is was they had 2 lines going, one for 75 and one for the 100. Getting rid of the 75 let's them kill this line and shift staff. Then they can shift the equipment over to building the batteries for the Model 3, and follow on models, using the locally produced 2170 cells.

If the cost will be this low then why are they stressed out about hitting the $35K target? It is still unbelievable for me to think that my entire 100kwh pack will cost a mere $10,000 in 2019, when I recently spent $15,0000 for just the 25kwh difference when I chose to buy 100kwh vs 75kwh battery.

As to 2 lines, wasn't it also true that the time to swap a battery was something like 30 sec. when Tesla was fiddling with a swap station idea, which would mean it's probably around 15sec to just insert a battery? There is probably more to this story.

 

[jboy210]

If the cost will be this low then why are they stressed out about hitting the $35K target? It is still unbelievable for me to think that my entire 100kwh pack will cost a mere $10,000 in 2019, when I recently spent $15,0000 for just the 25kwh difference when I chose to buy 100kwh vs 75kwh battery.

As to 2 lines, wasn't it also true that the time to swap a battery was something like 30 sec. when Tesla was fiddling with a swap station idea, which would mean it's probably around 15sec to just insert a battery? There is probably more to this story.

The $100/kW are targets for 2019 for Tesla's cost. Like every part in a car there is an expected profit, and for EVs batteries are a big part of that. You don't think an upgraded sound system that you pay $1,500 extra for really costs BMW, Mercedes, Cadillac, etc an extra $1,500. Their profit margins in a lot these cars is largely a function of the upgrade packages you order. Same with battery size in EVs.

And a battery production line means a lot more than swapping batteries. It is means different shells to hold the cells, wiring, electronic control circuitry, liquid cooling systems, etc. Then there is retrofitting the robotics to perform different assembly tasks, maintenance of the assembly systems, etc. In addition, there are life cycle costs of creating and storing multiple spare SKUs for repair and warranty work, associated paperwork for government compliance, etc. This sort of stuff can really add up.

No doubt there are other reason, but streamline production is a big deal with the costs get multiplied by 50,000 units.