170,000 yuan to buy a Tesla, the first pure electric car for young people is here

The cheapest Tesla car in history is coming!

On the evening of September 22, Tesla Battery Day, founder Elon Musk announced with great enthusiasm that in the next three years, he is confident to create an attractive battery cell phone with a price of only US$25,000 (approximately RMB 17 million) of pure electric vehicles.

Currently, Tesla’s lowest-end Model 3 model starts at $37,990 (approximately RMB 260,000) in the United States. This means that within three years, the price of Tesla’s cheapest model will drop by 34%.

In order to build a new car costing 170,000 yuan, how does Tesla CEO Musk plan to reduce costs?

Reduce battery costs

Battery costs account for one-quarter to one-third of the total cost of electric vehicles. In order to bring down the price of the entire vehicle, Musk's first big move is to reduce battery costs.

"What's bothering us now is that Tesla's prices are not close enough to the people, and we need to continue to cut prices." During the earnings conference call in July this year, Musk said that Tesla only needs meager profits to maximize sales growth. Make vehicles more affordable.

At a press conference on the evening of September 22, Musk once again emphasized that Tesla cars are not yet affordable and will achieve this in the future, so battery costs must be reduced.

Continuing the working principle of "first principles", Tesla first disassembled battery production into five parts:Battery design, battery production, anode materials, cathode materials and vehicle body integration.

Tesla will break through these five directions one by one to achieve the goal of "cost reduction."

First of all, in terms of battery design, Tesla officially released the poleless battery, claiming that by changing the size of the battery cell, the manufacturing cost per kilowatt hour can be directly reduced by 14%. The next step is to improve the battery manufacturing process, and Tesla is trying new methods.

Regarding anode materials, Tesla complained that current silicon processing is too "technical" and drives up the cost of use. Musk said that in the future, new raw silicon materials will be used to mass-produce batteries, which can save the cost of approximately 5%.

Regarding battery cathode materials, Tesla said it will launch cobalt-free batteries, using nickel instead of expensive cobalt as the battery raw material.

In the final step of body integration, the rear of the car will adopt an integrated casting process to reduce unnecessary parts for each car.

Tesla is optimistic thatAfter overcoming all the above technical difficulties, the battery cost can be reduced 56%,A new car worth 170,000 yuan will be released at that time. According to media reports, when Tesla battery supplier Panasonic was asked whether it would cooperate with it to produce new batteries, it responded that it would consider multiple options and has not made any decision yet.

In addition to using technology to reduce battery costs, Musk is also very strict in cost control in company management. In the first half of 2020, Tesla's sales increased by nearly 15% compared with the first half of 2019. As the workload increased, the financial report showed that Tesla's "sales, general and administrative expenses" decreased by US$290 million year-on-year, and R&D expenses were basically the same.

Regarding cost control, Musk once said, "It is difficult to save the cost of building a car. There are about 10,000 small processes in building a car, and each small process costs 3 US dollars and 50 cents. We You need to rack your brains and think about how to extract 50 cents from each process.”

Disrupting the mid-market

As China is the world's largest new energy vehicle market, Tesla will certainly not miss it. What impact will Tesla, priced at 170,000 yuan, have on domestically produced cars?

Take the August pure electric vehicle sales list released by the Passenger Car Association as an example. Among the top 10 models on the list, in addition to the Model 3, which ranks first and sells for 300,000 yuan, the Aion S, which ranks third, has a starting price of 300,000 yuan. 140,000 yuan, the eighth-placed new Qin EV starts at 130,000 yuan, the ninth-placed BYD Han EV starts at about 230,000 yuan with subsidies, and the 10th-placed WM EX5 starts at about 190,000 yuan.The above 200,000 yuan models will all be within the "range" of Tesla's new models.

That is to say,In the next three years, mid- to high-end new energy models will face Tesla’s fire.

Tesla is preparing for this new car, which sells for only 170,000 yuan, including comprehensively laying out sales channels and increasing the production capacity of its Shanghai factory.

In the Chinese market, Tesla has gradually entered the "sinking market." According to the official website, Tesla has directly operated stores in cities such as Qingdao, Suzhou, Ningbo, Wenzhou, Dalian, Foshan, and Dongguan in cities that are not first-tier and non-provincial capitals. According to the latest plan, Tesla will even expand to third-tier cities such as Weifang, Jiangmen, Zhenjiang, and Yancheng. Tesla experience centers will also be launched in 34 provinces and cities across the country.

Tesla’s trump card is undoubtedly the Shanghai Gigafactory.Musk expects the plant's annual production capacity to reach 1 million vehicles.

According to Tesla's financial report, the annual output of Model 3 at the Shanghai Gigafactory is 200,000 units. The construction of the Model Y production line is progressing as planned, and the first batch of cars is expected to be delivered in 2021. As the equipment of the Shanghai factory is gradually improved, the production process becomes smoother, and with each new car costing 170,000 yuan, the annual production capacity of 1 million vehicles is expected in the future.

The new Tesla, which sells for 170,000 yuan, may become a hit product. A large part of Musk's ambitious goal of "producing 20 million cars per year" will depend on domestic consumers. If domestic car manufacturers do not develop and expand in time, they may "watch Tesla crush everyone."