Tesla Provides Update on 'Model 2', Its $25k Car, During Earnings Call

By Kevin Armstrong
Tesla's gives an update on its upcoming more affordable vehicle
Tesla's gives an update on its upcoming more affordable vehicle

The third-quarter earnings call for Tesla offered intriguing insights into the direction and focus of the company's upcoming next-gen vehicle, dubbed the Model 2 or the $25,000 car.

While drawing on a comparison to Cybertruck's production challenges, Elon Musk declared this vehicle will be more conventional for production with the overarching goal of achieving an unmatched level of manufacturing efficiency.

Functional Beauty: The Aesthetic Vision

The next-gen car is predicted to be the most produced car in Tesla's lineup, with the potential scale and reach of the Model 2, with implications suggesting it could match the combined volume of other Tesla models. The "high-volume, low-cost" will be simpler in design and technological features to achieve a production speed unprecedented in the auto industry. The mention of achieving "units per minute level that is unheard of" paints a picture of Tesla's commitment to scale and affordability.

Breaking away from the enchantment often associated with Tesla vehicles, Musk set the stage for a different kind of vehicle in the Model 2. Described as "utilitarian," this new vehicle won't be about enchanting consumers but serving a functional purpose. Despite this, Musk reassured that the car will still bear Tesla's signature beauty.

The Quest for Affordability

A dominant theme throughout the call was the relentless push towards reducing costs and improving operational efficiencies. Vaibhav Taneja, Tesla's Chief Accounting Officer, pointed out the myriad challenges and variables in managing product margins, especially given the ongoing factory upgrades.

Nevertheless, company representatives remain unwavering in their dedication to cost reductions for 2024, showcasing Tesla's commitment to affordability. As Taneja describes, this "cost attack" strategy involves meticulous examination and improvement of every line item, highlighting Tesla's dedication to affordability at every turn.

Musk equated their cost-reduction strategy to a "Game of Thrones" where even saving pennies mattered. Musk highlighted the importance of such savings, highlighting how even small elements, like unnecessary internal stickers or QR codes, are being scrutinized for their contribution to the vehicle's cost.

Driving down the costs for the Model 2 isn't just about large-scale production adjustments; it's about scrutinizing every tiny detail. Musk illustrated the cost anatomy of a vehicle, emphasizing the challenge of saving even $0.40 on each of the approximately 10,000 parts in a car.

What This Means for Model 2

All these cost-saving strategies are directly tied to Tesla's aspiration to introduce the Model 2 at an unprecedented price point. By focusing on "pennies" and being "ruthless" in their cost-cutting measures, Tesla is gearing up to deliver a vehicle that doesn't just promise efficiency and sustainability but also unparalleled affordability.

The road to the Model 2 is evidently layered with challenges. Still, if there's one takeaway from the earnings call, it's that Tesla is more committed than ever to making the dream of an affordable electric vehicle a reality for the masses.

Tesla Begins Testing FSD in China

By Karan Singh
Not a Tesla App

Tesla was recently granted permission to test FSD on Chinese streets – specifically in Shanghai. Just recently, Elon Musk visited China and discussed the potential for FSD to come to China.

Gearing Up for FSD China

This is just the first step for Tesla to begin its customer deployments of FSD – Tesla conducts similar ADAS testing in North America, where special testing vehicles and testing employees run the latest FSD (Supervised) versions against a gamut of real-world, real-life tests.

Tesla has recently been working on translating FSD release notes into multiple languages, alongside building a data center in Shanghai and establishing an FSD Operations and Labelling team at the same center. These are the first, key steps to bringing FSD to a new market that has unique and different traffic rules when compared North America.

China doesn’t have the regulatory hurdles or challenges that Tesla faces in Europe to bring FSD and has been working with Chinese corporations as well as the government, which has now provided its official approval for FSD testing in-country.

We might even see FSD deployed to early testing customers in China by the end of 2025.

ADAS Competitors

There are quite a few competitors in the Chinese market already- with challengers like Xpeng and Xiaomi working on building their own homegrown systems, mostly driven by a mixture of cameras, radars, ultrasonic sensors, and LIDAR. However, many of these systems face similar challenges to other non-Chinese competitors and don’t have the mileage under their belts to tackle Tesla’s dominating lead in data and data processing.

European Union

Tesla is poising itself for an FSD rollout internationally, with increased testing also taking place in the UK, France, and Spain – some of the key locations with unique infrastructure in the European Union. However, some EU-specific regulations restrict how FSD can perform – each and every action must be manually approved by the driver. Until that regulation is changed to adapt to systems like FSD, it won’t be making its way there just yet.

Tesla Cybertruck to Receive Charging Improvements in Upcoming Update

By Karan Singh
Not a Tesla App

Former Tesla VP of Powertrain and Energy Drew Baglino previously mentioned that Cybertruck would be receiving charging improvements soon.

Wes Morrill, Tesla’s Cybertruck lead engineer, recently reposted Baglino’s comments on the charge speed update on June 16th and mentioned that it would be coming soon via OTA.

Charging Improvements

The 4680 cell has seen some difficulties in its charge curve, similar to Tesla’s other vehicles that have been deployed with the 4680. Tesla has alluded to difficulties in the manufacturing curve previously, and also with engineering improvements to the new cell standard, and eventually stopped manufacturing the Model Y with the 4680 cells.

However, this is the first time that Tesla has begun to deploy major improvements to the 4680 cell. It appears the improvements will allow up to 154 miles to be recovered in 15 minutes, which is approximately a 30% improvement to current charge rates.

We’re hoping that these improvements to the 4680 will also translate to older Model Y vehicles that have 4680 cells, which will be key to the owners of these vehicles. 4680 production is currently mainly focused on Powerwall, Megapack, and Cybertruck – with Semi not using 4680 yet.

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