If I was the CEO of a traditional car manufacturer, and didn’t already have a solid investment in an EV strategy, I’d be calling for an emergency management meeting about now.
Tesla’s annual battery day was upon us this week, delayed from the spring due to the COVID-19 restrictions. And interestingly, I’m seeing as many people expressing disappointment as I am seeing people who are super-excited about it. If you ask me, they’re both right.
So what did Tesla announce? Let’s go through the highlights.
- Two new models
Well, one and a half, really. And one of them isn’t coming any time soon. In fact, we didn’t even get to see it, only a stand-in icon of a car covered in a sheet. It is of course the fabled $25,000 Tesla, which Elon Musk said is the goal within the next three years. Usually, I’d warn about “Elon time”, but Tesla already has the technology to put out a cheaper car, all they’d need to do is to make a smaller car with less fixins and they’d be there. So that seems like more of a brand strategic decision (it would move them somewhat away from being a premium manufacturer), so I think it’s more a matter of them finding the way that they want to do it, rather than whether they are able to. So within three years seems reasonable. Musk also said that this car would have full autonomous capabilities, which ties in with the announced upgrade to the Autopilot (more on that next).
The second model announcement was the Plaid version of the Model S, which has been rumored for some time. It seems the threat of the Lucid Air has made them step up the launch of the Plaid powertrain, and it is already available for pre-order, with delivery some time in late 2021. It will feature a 520 km range (tops the Lucid Air’s 517) and a 0-60 mph of “under 2 seconds”. - Update to self-driving features in Autopilot
Musk also announced that Tesla is releasing a new and revamped Autopilot, with a fundamentally reworked version of the entire software stack. A private beta is said to be launching in a month or so. - No more cobalt
One of the pain points of the green aspect of the EVs is the use of cobalt in the batteries. Cobalt has a significant environmental impact in the mining process, and a number of mines around the world have substandard working conditions for the miners, to put it mildly. So now Tesla is looking to phase out cobalt for good. - In-house battery production
Phasing out cobalt is part of Tesla’s plan to move away from sourcing it’s batteries from Panasonic and start producing their own. This is a smart move, as it not only matures Tesla as a manufacturer, but also reduces bottlenecks that have plagued them in the past. - Tabless batteries
A new generation of cobalt-less, in-house batteries would also feature a new design, avoiding tabs all together and creating a battery that is more powerful and cheaper to make. This will, according to Tesla’s calculations, give the batteries 16 % more range and reduce consumer price of a Tesla to the point where it may become cheaper than comparable ICE cars.
All three battery announcements were also scheduled within the next three years, though here I do think we may see Elon Time come into play. I wouldn’t be surprised if some of them come earlier, while others are delayed. So let’s make that 3-5 years.
I get why for some, this was a less-than-impressive event. No new cars in the immediate future, and a lot of talk of development and progress and three year time frames. If you’re a car nut, or a tech nut, looking to be wowed, the event was… boring.
But I was blown away. And as I said in the beginning, if I was an ICE manufacturer, I’d be really, really worried. Tesla has produced some amazing technological breakthroughs, and some damn fine cars, and they’ve gained a lot of popularity. But they’ve also been marred by less-than-super efficient production, supply-chain issues, and cost of their products. They’ve been run as a startup, with all the benefits and drawbacks that that brings.
But with these new initiatives, Musk is showing that when it comes to Tesla, he’s serious, by addressing some of the key issues (battery availability, cobalt, range, price) while moving forward with some of the key technology (self-driving capability). This isn’t just an experiment in EV technology, he’s going for optimizing the value and supply chain, and make Tesla a true contender. And he has the means, the technology, and the brand position to do so.
So, Ladies and gentlemen of the traditional automotive industry, take note. Up until now, Tesla has grabbed all the headlines. Now, they’re coming for your bottom lines.
Thomas Grønfeldt Senger 