|
| Tesla CEO Elon Musk attends an opening ceremony for Tesla's China-made Model Y program in Shanghai, Jan. 7. Reuters-Yonhap |
By Kim Yoo-chul
Tesla recently announced its plan to drastically reduce the cost of its battery cells and packs ― which suggests the company's new goal is a $25,000 electric vehicle (EVs). The remarks raised the possibility of Tesla's increased battery purchases from LG Chem and Panasonic, as well as CATL of China.
But according to analysis by Sandy Munro, both an occasional critic as well as a supporter of Tesla's manufacturing prowess, Tesla would not hugely increase the production of $25,000 in-house EVs mostly because of the possible dissatisfaction of its shareholders both in terms of profits and market positioning.
Tesla CEO Elon Musk predicted many times that Tesla would dramatically reduce the cost of its EVs. He first promised a $25,000 EV back in 2018, which he said would be possible within three years from that time.
"So far, Tesla buyers are looking for all of the bells and whistles. They want everything. They don't want one thing or two things, they want everything. And when you want everything and somebody comes out and gives you a small thing ― think about when General Motors started to try going into the small car business. They were very successful at selling big, giant cars. So when they went into the small car business, who bought their vehicles? Nobody," Munro told investors in a recent webinar organized and managed by Bernstein Research, a top-tier global investment research firm. A copy of a fully edited transcript of the conference call was obtained by The Korea Times.
Munro's assessment is that the Model Y is notably less expensive to build than a Model 3 given that the Model Y sells for $3,000 more than a similar Model 3. This reinforces the notion that Model Y could be meaningfully accretive to company General Motors over time.
He suggested that getting to such a price point would be difficult, and worried that the low price point might not be consistent with Tesla's premium positioning and customer expectations.
"Coming up with a smaller vehicle that's less costly, they probably can do it… I don't know if their customers would be that happy, and I'm sure their shareholders would be saying, why? You can sell everything you've got as fast as you can make it; why would I want to go into the small car market with small profits and lots of other issues? What we need to do is focus on what they've got because I've heard lots of promises from different companies, and been disappointed when they brought out whatever it is that they brought out," Munro, who is very well-known for his extensive teardowns of Tesla and other automotive vehicles and EVs, told them.
Regarding how Tesla gets to a $25,000 vehicle, Munro said, "We were at $158 per kilowatt hour (kWh) when we did the Model 3. And the reason for that was because we went down to the cell level and looked at everything. Now for the Model Y, we think that it's around $108 ― $108 is a big drop in two years. Maybe $70 or something. That's a big move too, but at the end of the day, a $20,000 vehicle or $25,000 vehicle, I don't see that," according to the highly experienced technician. "I don't think it could get under $32,000. I don't see how you could do that and it'd still make any money."
KWh is the unit of energy most commonly used to measure the capacity of battery packs in modern EVs. Those prices have been reducing dramatically over the last decade from $1,100 per kWh in 2010 to $156 per kWh last year.
It's uncertain whether or not Munro's rather "cautious stance" toward the $25,000 Tesla EV will have any visible impact on LG Chem and its chief Chinese rival CATL, as the lowered possibility means less pressure that LG Chem may feel in terms of squeezed profits.
Musk said he intends to increase the purchases of LG Chem batteries for Tesla EV during a recent Battery Day event. A few days after the announcement, LG Chem decided to spin off its battery business.










































