Tesla has again lowered prices across all models, marking the third time this year. The higher-volume Model 3 and Model Y have been discounted by at least $1,000, while the luxury Model S and X vehicles have received a $5,000 price cut. Tesla’s continuous updating strategy and production technology improvements have enabled these price reductions, benefiting consumers with lower costs. However, not without disadvantages, including the loss of radar functionality in their cars. The removal of radar sensors has led to increased phantom braking incidents and struggles in identifying emergency vehicles.
Production technology innovations
Tesla’s ability to reduce vehicle prices is attributed to their focus on continuous updates and production technology improvements. One significant innovation is the Giga Press, a casting machine capable of producing large single-piece rear body castings for the Model Y. This new technology simplifies the production process, as it replaces 70 parts with one giant rear underbody, eliminating the need for 300 robots and improving the quality and consistency of the vehicle body. Tesla has also developed a new alloy for large part production, further enhancing the manufacturing process.
Another critical development is Tesla’s 4680 battery cells. By acquiring Maxwell Technologies for their dry cathode expertise, Tesla was able to eliminate the complex and costly wet-coating process in battery manufacturing. This dry coating process is cheaper, faster, and less harmful to the environment, reducing capital spending by a third and factory footprint and energy consumption to 10%. However, scaling up the production of 4680 cells has been a challenge. However the efficiencies from the dry coating process and the 4680 cells are rumoured to reduce the Model Y battery pack cost to $5,000-$5,500. This is about half the cost of the original 2170 based battery pack.
