Tesla’s domestic Model 3 falls below 300,000 or stirs the market landscape

Tesla is giving the electric market a surprise when 2020 begins. At the end of 2019, Tesla announced the delivery of 15 domestic models at its Shanghai Super plant, and on January 3rd, Tesla’s domestic Model 3 announced a price cut. Tesla officially adjusted the price of the domestic Model 3 to 323.8 million yuan, including the basic ride-assisted feature, from 35.58 million yuan previously.

Tesla's domestic Model 3 falls below 300,000 or stirs the market landscape

In addition to official concessions, the purchase of the car is exempt from the purchase tax and the State subsidy policy, the amount of the subsidy is 24.75 million yuan. As a result, the car is currently sold for $299.05 million after subsidy.

In addition to lowering the price, Tesla officials have cut the price of the car’s options. For example, the original optional price of pure black car paint was 9500 yuan, which is now adjusted to be free; pearl white, cold silver, deep-sea blue, and the previous price of 18,900 yuan of Chinese red car paint were adjusted to 8000 yuan;

Even if the price reduction is strong, there is room to explore.

According to industry analysts, the Tesla Model 3 still has 4-5 million price cuts, if further price cuts, then the entire automotive industry will have a huge impact on the competitive landscape.

Tesla's domestic Model 3 falls below 300,000 or stirs the market landscape

Is there room for price reduction in the domestic Model 3?

The domestic Model 3 is pressing for price cuts, and parts are an important part of the price cut, and Tesla needs Chinese suppliers to cut costs.

A big difference between the domestic version and the imported Model 3 is that part of the domestic version of the Model 3 is made in China (see table). Xinzhi driving from Tesla learned that imported parts still need to pay customs duties, while domestic parts do not use. At the same time, production in China can also save transportation, manpower and other costs.

According to Anxin Securities analyst Deng Yongkang analysis, Tesla parts localization is imperative, there is still room for price reduction in the future. Tesla plans to reduce costs by purchasing more domestic components to avoid tariff costs, and is expected to increase its domestic production rate to more than 80% in the third quarter, and even the gross margin of the bike is expected to exceed 30%, with Model Y in the third quarter of global synchronous production, the future will bring new growth points. Global sales are expected to exceed 500,000 units by 2020.

Tesla’s batteries are supplied by Panasonic, which will make its own purchases at the material end, potentially making a local replacement, as Panasonic integrates its core manufacturing into the superfactory. In terms of the motor and electronic supply chain, Tesla is currently switching from AC asynchronous motors and traditional IGBT inverters to permanent magnetic synchronous motors and SiC inverters, and the materials of permanent magnet motors will most likely be purchased in China. If Tesla were to bring in more Chinese suppliers, it would be much less expensive and there would be room for price cuts in the future.

According to the analysis of public data, China’s suppliers mainly concentrated in the powertrain system, central control system and charging system three areas, did not enter the domestic Model3 core supply chain system.

Tesla's domestic Model 3 falls below 300,000 or stirs the market landscape

(Watchmaking: New Smart Driving)

Although China has a large gap in new energy vehicles, but there is no market-oriented strong demand, in the case of policy stimulus contraction, the market will be slightly weak. At the same time, China has not yet formed a mature new energy vehicle industry chain, whether Chinese suppliers can support Tesla’s ambitions is not yet known.

Three core technologies lead new energy

The domestic Model3 is based on power battery system, autonomous driving technology and vehicle FOTA technology as the key to support its competitive advantage.

Tesla’s powerful electric core, developed jointly with Panasonic, as well as its own battery management system and battery cooling system, has built a moat in the core of its electric vehicles.

As the power source of electric vehicles, power battery is the most core part of the entire industrial chain, domestic Model3 power battery system accounts for 32.4% of vehicle cost.

From 18650 batteries to 21,700 batteries, Tesla has joined panasonic in developing its own battery monomer and achieving a breakthrough in energy density of 260-280Wh/kg. Ahead of The Ningde Era and BYD. (Ningde era and BYD are currently at 200-240Wh/kg)

Tesla’s battery costs are ahead of the industry, falling to $111/kWh by the end of 2018 and further down to $100/KWh. Marking the combined cost of electric cars in the industry will be close to or even lower than the cost of fuel cars, which is a milestone for the future popularity of Tesla products and even electric vehicles.

In terms of autonomous driving, the home-made Model 3 is equipped with an Autopilot system, a camera-led hardware, a Hardware 3.0 chip, and eight cameras, 12 ultrasonic radars and a millimeter wave radar.

In addition, Tesla, on the one hand through the powerful hardware system to seize the autopilot, on the other hand, through the FOTA air upgrade way of software updates, to ensure that the optimization potential of the hardware system can be realized. Compared with other auto companies’ OTAs, FOTA technology is able to iterate on the underlying system, pushing software patches directly to the relevant ECUs to complete functional upgrades. And the vast majority of car companies can only achieve OTA upgrades to on-board systems

Stirring up the domestic electric vehicle market pattern

Referring to Model3’s performance in the global market, according to data frommedia EV, the world sold 1.7636 million new energy vehicles in the first 10 months of 2019, and the global cumulative sales of new energy vehicles 1.7636 million units, with an average market share of 2.2%, of which Tesla Model 3 was 22. The total sales of 1274 vehicles were the highest, 2.7 times the number of 21,926 units sold in the second-ranked BAIC EU series. Tesla already has a 30% market share in the global new energy vehicle market.

Let’s look at the competitive landscape of China’s new energy vehicle market. Domestic currently more representative of the new energy vehicles are NIO and Xiaopeng, at the same time, the two have also announced in public many times to label Tesla.

At nio Day 2019, NIO’s new EC6 has not yet announced the price, Li said: “Tesla has not yet announced the price, hoping to give the EC6 some freedom.” “

Look at Xiaopeng P7, in the price P7 is expected to be between 270,000-370,000, and then look at the performance, Xiaopeng P7 four-wheel-drive high-performance version of the maximum power of 316 kW, peak torque 655 meters, NEDC comprehensive operating range of 550 km; Peak torque 390 Nm, 000 acceleration time 6.7 seconds.

The Tesla’s domestic Model 3 long-range version features dual-motor all-wheel drive with a 0-100km/h acceleration of 4.6s and an NEDC range of 590km, while the Performance high-performance version also features dual-motor all-wheel drive with a 0-100km/h acceleration time of 3.4s and an NEDC range of 595km.

Some analysts said that if Tesla domestic Model3 prices again, the domestic new energy vehicle market will likely usher in a strong recovery under the leadership of Tesla, with the introduction of model3 and other joint venture new models, the supply side will be further enriched, and B-side taxis, C-side independent brands are expected to bring incremental price-performance, Full-year production is expected to return to high growth, with an estimated 1.6-1.8 million units.

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