Tesla's per-car production cost down to $36,000, cheaper model and robotaxi still on the...

Tudor Cibean

Posts: 162   +10
Staff
In a nutshell: Tesla's per-vehicle manufacturing costs dropped to less than half in the past five years, thanks in part to more efficient factories and improved vehicle design. The company also reiterated plans for an entry-level EV and robotaxis launching in the distant future.

At a Goldman Sachs tech conference, Tesla executive Martin Viecha outlined the company's plan for the next five years while also talking about general trends in the EV industry.

According to Viecha, battery supply has improved a lot. For the first time in years, Tesla can secure as many cells as it needs for its automotive and energy storage products. He mentioned that the company now has multiple battery suppliers, including Panasonic, CATL, and LG Chem, and they're expanding capacity quickly.

He believes this sector is the most important, as the EV industry would only grow as fast as battery supplies can grow. Designing and building the cells and battery packs is only part of the process, with refining and mining lithium, nickel, and other raw materials being just as crucial. Because of that, Tesla is looking to open its own lithium refinery stateside, possibly in Texas or Louisiana.

Viecha also discussed the carmaker's per-vehicle manufacturing costs, which dropped from $84,000 in 2017 to just $36,000 today. He attributed these savings to more efficient factory design and improved vehicle designs, making manufacturing easier and more cost-effective. Tesla's new factories in Shanghai and Berlin can build cars cheaper than its first one in Fremont, California.

Tesla is also planning to release an entry-level EV eventually, which will likely be a hatchback with a starting MSRP around of $25,000. However, it is not a priority for the company because demand for the Model 3 and Model Y are stronger than anticipated.

In fact, Tesla says Model Y is on track to become the top-selling car by revenue this year worldwide, and to become the best-selling car by volume as soon as 2023. It's already the best-selling EV, according to reports.

The executive also touched on Tesla's self-driving software receiving iterative improvements. The plan is for it to ultimately become fully autonomous, at which point the firm will likely release a robotaxi platform.

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Uncle Al

Posts: 9,356   +8,556
LOL ..... yeah a new and growing EV market place is going to force Tesla to be a lot more competitive BUT their quality remains a big issue with most buyers, not to mention that undependable auto-drive and the games he plays charging BIG feature upgrades that only unlocks extended mileage .... at this rate he won't be the richest man in the world much longer ...... good riddance!
 

Revolution 11

Posts: 235   +329
Its not this one, its another one yet to be produced - sometime. ;)
I am just saying if they have only gotten the cost down to $36K and battery prices are rising and not dropping this year, how do they expect a $25K car to come out anytime this decade?

Especially because they keep stating that it is a goal......how about demonstrating you can make a $25K car that can even break even on margin?
 

wiyosaya

Posts: 8,284   +7,658
I am just saying if they have only gotten the cost down to $36K and battery prices are rising and not dropping this year, how do they expect a $25K car to come out anytime this decade?

Especially because they keep stating that it is a goal......how about demonstrating you can make a $25K car that can even break even on margin?
I agree. My point was that Musk tends to say quite a bit of stuff and be overly optimistic on when he thinks it will be done. For instance, In 2018, Musk announced he wanted to be on Mars this year. We all know that is not happening. - https://www.businessinsider.com/elon-musk-spacex-mars-plan-timeline-2018-10 It's no reflection on you or your post.
 

Theinsanegamer

Posts: 3,781   +6,624
"Viecha also discussed the carmaker's per-vehicle manufacturing costs, which dropped from $84,000 in 2017 to just $36,000 today. He attributed these savings to more efficient factory design and improved vehicle designs, making manufacturing easier and more cost-effective. "

Interesting claim. Batteries are very expensive, a replacement battery pack for, say,a model S was valued at over $20k last year, and the cost has undoubtedly gone up since then with the rising price of lithium. So are they saying the rest of the car only costs $5k? That doesnt seem right....
 

Mr Majestyk

Posts: 1,460   +1,366
Production costs halved prices increased 50%+ in Australia in that same time. All it means is bigger profit margins for these scumbags.
 

Mr Majestyk

Posts: 1,460   +1,366
I agree. My point was that Musk tends to say quite a bit of stuff and be overly optimistic on when he thinks it will be done. For instance, In 2018, Musk announced he wanted to be on Mars this year. We all know that is not happening. - https://www.businessinsider.com/elon-musk-spacex-mars-plan-timeline-2018-10 It's no reflection on you or your post.

You don't actually listen to Musk do you. He's literally insane and talks total crap these days. Tesla needs to punt him ASAP.
 

wiyosaya

Posts: 8,284   +7,658
You don't actually listen to Musk do you. He's literally insane and talks total crap these days. Tesla needs to punt him ASAP.
Hmmm...You guessed correctly that I don't listen to Musk. In fact, I have not listened to him for years. 🤣 You won't get any argument from me about his sanity.

Unfortunately, I think the only way that Tesla will punt Musk is for them to undergo a hostile takeover; honestly, I don't know why anyone would even want to do that. As I see it, there is just too much competition from real car manufacturers coming to the marketplace. Musk/Tesla with his grade-school antics don't stand a chance, IMO.
 

Lounds

Posts: 1,224   +1,131
China owned MG have just released the MG4 EV for £26,000 in the UK and EU. So it can be made cheaper it's just the US costs more for staffing per car manufactured. What we really need is a breakthrough in battery or hydrogen tech.
 

alexnode

Posts: 92   +32
Teslas have loads of problems in comparison with other cars. A friend of mine has a car rental business in a Greek island and Teslas are his worst cars by far regarding reliability.
 

gamerk2

Posts: 758   +733
Half is very impressive. Too sad that for most companies that is not enough to create jobs here, in the US.

To be fair, consumers have shown time and again if the choice is between "American produced goods" and "cheaper goods", they'll take the cheaper option every time.

Which makes sense; our economic policy since the 80's has been built around keeping labor costs down through decreased wages, so it's no surprise consumers by and large don't have the extra cash necessary to support the US's higher production costs relative to countries like China. Simply put: You give consumers less money, don't be shocked when they gravitate towards the cheaper product.

As long as US economic policy is built around keeping labor costs down, US manufacturing will remain uncompetitive; consumers just can't afford the price premium.
 

Revolution 11

Posts: 235   +329
"Viecha also discussed the carmaker's per-vehicle manufacturing costs, which dropped from $84,000 in 2017 to just $36,000 today. He attributed these savings to more efficient factory design and improved vehicle designs, making manufacturing easier and more cost-effective. "

Interesting claim. Batteries are very expensive, a replacement battery pack for, say,a model S was valued at over $20k last year, and the cost has undoubtedly gone up since then with the rising price of lithium. So are they saying the rest of the car only costs $5k? That doesnt seem right....
Well, that $36K might be for the entire fleet, not the Model S itself. A smaller battery in the Model 3 or Y will be cheaper than the Model S's battery. Also the replacement cost is probably higher than the high-volume price that Tesla pays Panasonic for batteries.

Considering that Kia in its older days as a low-cost automaker could sell cars for no lower than $16K, the cost of a EV car without the battery must be closer to $15K than $5K. If you add say $20K for the battery (using the lower cost for mass volume orders), that comes out to $35K which is close to what these low-end EV cars are selling for.

What I am saying is that even if the battery was completely free to produce, you could not make money on a EV that sold for less than $15K, I suspect.
 

netman

Posts: 838   +380
"Viecha also discussed the carmaker's per-vehicle manufacturing costs, which dropped from $84,000 in 2017 to just $36,000 today."

That is the First Big Lie...!

"Tesla is also planning to release an entry-level EV eventually, which will likely be a hatchback with a starting MSRP around of $25,000. However, it is not a priority for the company because demand for the Model 3 and Model Y are stronger than anticipated."

That is the Second Big Lie...!