Let me tell you a horror story:
The Tesla Model 3 is already a model released 5 years ago, which means—
Before you know it, you are 5 years older.
Just kidding, let's talk about the business: this car that came out 5 years ago is finally going to be changed.
Reuters reported on Nov. 28 that Tesla is moving ahead with a project code-named "Highland," a facelift of the Model 3, according to four people familiar with the matter.
People familiar with the matter said that the focus of the "Highland" improvement is to reduce the number of internal components and reduce the complexity of the body.
At the same time, Tesla may also bring an upgrade that consumers are more interested in: introducing the Yoke steering wheel and 17-inch central control screen from the Model S to the Model 3, and making some changes to the appearance and powertrain.
People familiar with the matter also said that the new Model 3 will be produced in the Shanghai plant and the Fremont plant in California in the third quarter of 2023.
Although Reuters' "exclusive" reports from unnamed sources are not very credible, these improvements seem reasonable and should be done by Tesla.
The Model 3 is really due for a facelift.
Change, must change to the right place
In fact, in the past five years, Tesla has brought several large and small updates to the Model 3, improving its battery performance, interior layout, and information and entertainment systems. But all the time, its appearance has not changed much.
Tesla’s design department seems to have learned the tricks of a Stuttgart car company: No matter how you change it, a frog face + full buttocks is a 911.
But it is precisely the change in appearance that is most likely to be perceived by consumers.
Ed Kim, president of AutoPacific, a well-known American auto industry analysis and research company, also pointed out the problem Tesla faces.
"Tesla knows that visually tangible changes are necessary," he said. "It's important for potential customers to see the changes coming."
Tesla urgently needs a new design to draw consumers' attention away from competing products.
The latest data from the Passenger Federation shows that the Model 3 is facing tremendous sales pressure in the Chinese market:
In the first 10 months of this year, sales of BYD Qin and BYD Han far exceeded that of Model 3, with the former at 287,417 units and the latter at 211,011 units, while the Model 3 had only 101,848 units—less than half of their respective sales.
This is very different from last year's situation.
The cumulative sales of Tesla Model 3 from January to October 2021 ranked second on the list, but only one year later, sales of BYD Qin and BYD Han surged by 116.2% and 132.4% respectively, while Model 3 declined up 9.2%.
Tesla, of course, has also moved.
After reducing the price of some models by 14,000 yuan to 37,000 yuan at the end of October, Tesla launched an insurance subsidy plan on November 8, which will reduce or exempt part of the final payment for consumers who come to pick up the car.
However, the increase in sales brought about by price cuts is really limited, and at the same time, some consumers continue to wait and see. After all, who knows if it will drop again?
Cost reduction is the biggest driving force for model change
Stimulating sales is one aspect. What Musk really wants is to bring integrated die-casting to Model 3.
He mentioned in an interview earlier this month:
More than once we found parts that weren't needed, that were put there just in case, or that weren't there at all. We've removed a lot of unnecessary parts from the car.
From the beginning of 2021, the Model Y delivered by Tesla's Shanghai Gigafactory has adopted an integrated die-casting rear floor, and the number of parts of the rear floor has been reduced from the original 70 to 1-2. Behind the reduction in the number of body parts is a significant reduction in production costs.
The previous analysis report of Guosen Securities shows that on a rear floor production line with a production capacity of 500,000 yuan, the integrated die-casting solution can reduce the welding cost from the original 375 million yuan to 25 million yuan, and the labor cost from the original 3 million yuan. Yuan dropped to 450,000 yuan.
To achieve an annual production capacity of 500,000, it is estimated that 4 sets of die-casting islands will be required, plus equipment such as fixtures, welding machines, and robots, and the total cost will be about 450 million yuan. Counting the previous welding cost and labor cost, the total cost is about 480 million yuan—a saving of 150 million yuan compared with the traditional stamping & welding solution.
That's just the money saved on a rear floor. Soon, Tesla applied this technology to the front side members.
According to the 2022 first-quarter financial report of Tesla’s Austin plant in Texas, the total number of parts on the front and rear floors of the Model Y produced by the plant has been reduced from 171 to 2, and the number of solder joints has been reduced by more than 1,600.
These are the credits of the integrated die-cast front longitudinal beam + rear floor.
Not only that, Musk also extended this technology to the entire chassis——
At the opening day of the Berlin factory in Germany last year, Tesla brought an integrated die-casting chassis. They planned to replace the original 370 single parts with 2-3 large die-casting parts.
The integrated die-casting technology brought Tesla, a young car company, an extraordinary gross profit margin of 27.9%, which made Tesla's single-quarter net profit surpass Toyota in the third quarter of this year.
Sam Fiorani (Sam Fiorani), an analyst at AutoForecast Solutions, an auto industry data forecasting company, believes that the changes brought about by the new Model 3 will also show Tesla's attainments in integration.
They've been looking for ways to make electric vehicles profitable, and more profitable.
Musk revealed on Tesla's third-quarter earnings call this year that Tesla is developing a lower-cost next-generation platform that can reduce the cost of a single vehicle to half that of Model 3 and Model Y.
People in the industry generally believe that the new car Musk refers to will be an entry-level new car smaller than the Model 3, and he himself has confirmed the existence of this model.
But thinking about it now, Musk’s words seem to have a different taste——
Do you think the new Model 3 can enjoy the bonus of the new platform?
We will see the outcome in Q3 next year.
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