With cheaper battery manufacturing and the economies of scale, Tesla is about to lower the price for the Model 3 and Y. In this video, I discuss why I believe this and show you the evidence that backs this up.
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All music used in this video is from Lakey Inspired's Patreon exclusive music
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Tesla is known for its constant innovation that leads to higher growth rather than taking profits. Elon Musk is focused on strategically investing for Tesla's future growth. Jeff Don Tesla's battery research partner has been filing plenty of patent applications for Tesla's new battery technology, making it clear that Tesla is capable of producing a vehicle with an extremely high range. However, most Tesla owners don't use this range to its maximum extent, which is one of the reasons why I believe Tesla will soon lower the price for the Model 3.
And why, in this video, I'm going to show you all the evidence that points to huge price changes coming for the Model 3 and why, before I begin, please take a moment and hit the like button and subscribe. It really helps out with the channel with that. Being said, let's get right into it. Tesla's ultimate goal has always been to accelerate the transition to sustainable energies, which is done by releasing more affordable vehicles over time.
Tesla recently lowered the price for the Model 3 in China from forty five thousand eight hundred dollars to forty one thousand three hundred dollars. This was done not only to receive China's government incentives, but also because the economies of scale allowed the company to do such a move. A recent report by Reuters stated that Tesla's new battery packs, with both last a million miles and cost eighty dollars per kilowatt hour. The reason why that $ 80 per kilowatt hour number is so revolutionary is because, at $ 100 per kilowatt hour, auto industry executives estimate that electric vehicles are on par with internal combustion engines by bringing that number below $ 100.
This implies that Tesla's vehicles are cheaper to produce than internal combustion engine vehicles according to Forbes Tesla's current battery packs cost one hundred twenty seven dollars per kilowatt hour. The cheapest model three has a range of 250 miles with a 50 kilowatt hour battery pack by multiplying the $ 127 per kilowatt hour number with 50 kilowatt hours. We obtain a total of sixty three hundred and fifty dollars to produce a 50 kilowatt hour battery pack. At the eighty dollar per kilowatt hour level, this would equate to four thousand dollars per 50 kilowatt hour battery pack.
Twenty three hundred fifty dollars less than the current price, along with cheaper battery manufacturing, the economies of scale, has led Tesla's vehicles in the US to have a lot higher profit margin than before. This was evident when we saw how Tesla's GAAP margin, excluding credits, has continued to increase over the past few quarters. The last piece of evidence pointing towards a price decrease is the evolution of Tesla's vehicles with no change in price by 2021. The Tesla Model Y will soon retail for forty thousand dollars with the release of the cheaper version.
On the other hand, the Tesla Model 3 currently goes for forty thousand dollars when ordering online from a business perspective. This makes no sense. The model y is clearly the more advanced vehicle out of the two, yet it will cost the same price. Sandi Monroe's analysis of the Tesla Model Y has revealed how much better of a build a vehicle is compared to the model. Three. The fact that the model Y will go for the same price when ordering online would totally obliterate the sales of the Model 3. The $ 40,000 model y currently isn't available, and once it is released, it only makes sense to decrease the price of the Model. 3.
The year after the $ 40,000 model Y is released, the $ 40,000 Tesla cyber truck will be available again. Since the cyber truck is technologically a more advanced vehicle, it would only make sense to lower the price of the model Y. However, since the $ 40,000, cyber truck won't be released for a while. We can put that aside for now and focus on Tesla's upcoming price change for the Model 3 now with cheaper manufacturing Tesla can take two routes: lower the price of Tesla's current vehicles or take extra profits.
Tesla currently has about eight billion dollars in cash. From the perspective of musk, it wouldn't be a smart decision to take profits when that money could be used to fuel more demand for the Model 3 in the US. Tesla's current goal is to take as much market share as they can from traditional car manufacturers and by lowering the price for the Model 3. This would allow Tesla to compete with the cheaper electric vehicles.
Legacy automakers are releasing to top it off. It's not a special occasion for Tesla to update their current vehicle. Specs and price in March of 2019. Tesla dropped the price of both the Model S and X by 12 to $ 18,000 by fixing up the wiring, with the style Tesla had in the model y and changing the battery system, Tesla will be able to lower the price while offering a better vehicle.
This has happened in the past with the Model S and X, and it should be able to fuel up some more demand for the Model 3. If you enjoyed this video, please hit the like button and subscribe.
Elon's costs going down. Retail price only goes up. Lower the price of current existing cars? My ass
what happened it has been 7 months and the prices have only risen
I think the small model 2 will be hitting this price 1st. Battery day sept 22 nd 2020 will tell us more about the battery progress.
The one thing I have my fingers crossed for Battery Day is that Elon announces instant price decreases across the board, due to new battery tech.
Why is your voice feel sarcastic 😂. I feel like I'm waiting for him to tell a joke 😅
Musk just cancelled the SR Model Y because it doesn’t go far enough. Musk said that they are failing in their mission to produce an affordable EV. He said that they need to be profitable. Not just break-even, but PROFITABLE.
So, it’s not happening until they are super-profitable by margin.
Stopped watching when you mixed up free cashflow with cash.
Seems like you don't know how to read a balance sheet
they should only make a lower priced and more inferior Tesla Model C for compact car. and leave the rest at their prices but maybe slightly lower. N
Great important video! Listened at 1.5 playback speed w/ no problem Cadence and articulation are fine.
So am I just screwed if I pick my new model 3 up in mid September?
Has anyone ever traded a NON Tesla vehicle into Tesla when buying their new s,3,x,y?
I wouldn't say lowering the price by a large amount all of a sudden is likely, It's likely to happen gradually though, as previous buyers wouldn't be satisfied with it. : /
Note that it costs less for Tesla to build a model Y than a model 3. So it's even possible they will drop the price of the model Y and discontinue the model 3.
They didn't dip the price of the Model s when they realesed the Model 3??? Or did they
Of course I see this video AFTER I ordered my Model 3
Why people push us for hitting Like when they have not played any of it? I will never hit like even if I really like it in the end.
The CyberTruck and the Model Y are competing for completely different customers. Your analysis comparing on some imagined technological superiority makes no sense. The prices can be set quite separately with one having no affect on the other.
25k model 3 Would really push it into a mainstream car.
Yeah…how much of the car will be left?
It's not like materiel prices are doing anything but going UP, so the 'parity with ICE' battery prices aren't coming.
Some Nostradamus action you got goin here. This video aged well. Model Y $3,000 cut. Good work.
I want an electric midsize pickup that doesn’t look like a cyber truck. 😐
It no longer makes sense to borrow money for a gasoline powered car anymore if you are to borrow money for a car, it better be electric. Otherwise use what you have or buy used and cheap for some vehicle to get around in before you choose to make the plunge. Even then it is best to avoid the loans and go for saving up to buy it in cash.
I want a Tesla so bad I can’t stand it. But at the current price, I can’t afford it. But if it goes to 25k I could absolutely do it. I really hope this happens so I can get my dream car.
Please dont ask thumbs up before the video. Ask after
I am in love with Tesla…´Never a copy cat’ is safe to say?
Tesla don't need to drop prices yet cause they don't need more demand. They only the demand they can produce. So far they can easily sell every produced M3 and Y. As long as production capacity does not ramp up a lot they will take the profit to pay for even more expansion. The kWh price for the Batterie doesn't Change that much… 2.000 more moren less… There are other reasons for big prices. I've Just ordered a M3 SR+ Midnight Silver Metallic and can't wait for it's delivery in September.
Maybe now the model 3 can be cheaper than the 76k$ they are asking for in Australia
Just got the model Y if this trend is true can't wait to get the cybertruck, because of its radical design I'm definitely not going for version 1, and v2 would/should be more cost effective…
I would buy one of these if they came out with a 30k model 3. Otherwise, Prius Prime is the car for me. It covers most of my daily driving in the EV mode and it gets around 51mpg on highways.
As someone else had previous mentioned I agree that this is a great video that provides information without rambling on for an hour covering the same points! I’ve been watching a lot of Tesla specific content lately as I’ve reserved a Cybertruck and many creators ramble on. I get the hype and yes it’s exciting stuff but the information should be precise as well as straightforward. Keep up the great work!
I'd love a tesla but I live in an apartment complex and I drive a lot. It wouldn't make sense.
when you buy a Tesla the day before it gets a huge price cut:😭🤬😡😤🤨😖
Hope you right and I’m finally be able to afford Tesla model 3 in near future 🤔
Thier goal has never changed.
It is to make huge profits and get every form of government grant loan and welfare they can get and to sale energy credits for even more profit.
Saving the planet and renewable energy was is and never will be Tesla's goal, it was is and will always be to make as much profit as possible, get as much welfare as possible and sell credits for as much profit as possible.
I lost my voice recently, so I had someone else do the voice over this time. Let me know what you think about his voice!