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Tesla 4680 battery cell program hits major milestones in Q2 2024

Image used with permission for Teslarati. (Credit: Tom Cross)

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Tesla’s 4680 battery cell program saw some notable milestones in the second quarter of 2024.

Tesla noted in its Q2 2024 Update Letter that it was able to produce 50% more 4680 cells in the second quarter compared to Q1 2024. The company also noted that in Q2, it was also able to successfully build the first validation Cybertruck equipped with in-house dry cathode 4680 cells. 

“In Q2, we produced over 50% more 4680 cells than in Q1 and continued to see cost improvements. In July, we entered validation of vehicle testing for our first prototype Cybertruck produced with in-house dry cathode 4680 cells – a major cost reduction milestone once ramped. Cost reduction across our product lineup remains a top priority,” Tesla wrote in its Q2 2024 Update Letter

Recent reports have suggested that Tesla is planning to mass produce and install 4680 cells with dry electrodes to consumer vehicles before the end of the year. Citing people reportedly familiar with the matter, Chinese publication LatePost noted that the 4680 cell’s complete iteration features negative and positive electrodes that are produced using Tesla’s in-house dry electrode process.

As per the publication, Tesla’s current 4680 cells reportedly feature a negative electrode that’s produced using the company’s dry electrode process, as well as a positive electrode that’s acquired from a supplier. Since the positive electrodes are sourced from a supplier, they are produced using conventional wet cathode processes.

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If Tesla is able to successfully ramp the production of the 4680 cells’ complete iteration, the electric vehicle maker could see substantial cost savings for its vehicles. Tesla Vice President of Vehicle Engineering Lars Moravy summarized the milestones of the 4680 program in the second quarter during the Q2 2024 earnings call

“4680 production ramped strongly in Q2, delivering 51% more sales than Q1, while reducing COGS significantly. We currently produce more than 1,400 Cybertrucks of 4680 cells a week. We’ll continue to ramp upward as we drive cost down further toward the cost parity target we set for the end of the year. 

“We’ve built our first validation Cybertruck with dry cathode process made on mass production equipment, which is a huge technical milestone, and we’re super proud of that. We’re on track for production launch with the dry cathode in Q4. And this will enable cell costs to be significantly below available alternatives which was the original goal of the 4680 program,” Moravy said. 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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How Tesla’s Standard models will help deliveries despite price disappointment

“What a giant miss,” one person said.

“With all due respect, no way is this what y’all have been hyping for 6 quarters…” another one claimed.

“So…where are the affordable models?” another reply read.

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Credit: Tesla

When Tesla unveiled its Standard versions of the Model 3 and Model Y this week, reactions were mixed. Many liked the addition of two new models, but they were also concerned about the price.

“What a giant miss,” one person said.

“With all due respect, no way is this what y’all have been hyping for 6 quarters…” another one claimed.

“So…where are the affordable models?” another reply read.

Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings

There’s no arguing it: $36,990 and $39,990 for the Model 3 Standard and Model Y Standard were not what consumers had in mind.

But, despite Tesla getting its new offerings to a price that is not necessarily as low as many expected, the two cars still have a chance to assist with quarterly deliveries.

Here’s how:

First-time Tesla buyers will lean toward Standard models

Tesla owners have become accustomed to expecting all the bells and whistles in their cars. Heated seats, ventilated seats, acoustic glass, vegan leather, industry-leading performance, world-class range, and a glass roof are all expected by current or past owners.

But what about new owners?

New owners do not have these high expectations, so to many of those who have not sat in a Tesla or driven one before, they are going to be blown away by the minimalistic looks, capabilities, and features of the Standard models.

The Premium models will feel like the high-end offerings that other automakers also have for sale, except they’ll only be a few thousand dollars more than Tesla’s base models. With other companies, the price for these higher-end trims is $10,000 or more.

The more affordable Standard models will be there, but if buyers want the extra features, they’ll likely be able to justify the extra few thousand dollars.

Tesla’s Standard Models fall under the U.S. Average Transaction Price

Kelley Blue Book releases a new report each month showing the average transaction price (ATP) of all vehicles sold in the U.S. for that month.

The latest report, released on September 10 for the month of August, revealed an ATP of $49,077. This was up 0.5% from July ($48,841) and higher year over year by 2.6%.

Technically, Tesla’s new Standard models fall well under that ATP, meaning they technically do qualify as “affordable.” However, realistically speaking, affordable does not mean “under the national average.”

It means accessible for low-income families, single-parent households, and other groups. This would likely be under $30,000.

Déjà Vu with the Cybertruck Rear-Wheel-Drive

When Tesla offered the Cybertruck RWD, it stripped out many of the best features of the Cybertruck, such as the adjustable air suspension, powered tonneau cover, and interior materials, just to name a few.

It was $10,000 less than the Cybertruck AWD, but many people essentially viewed it as a way to push consumers toward the more expensive variants, since the discount was a better value than missing out on features.

Tesla released the Cybertruck RWD to make the AWD look like a deal

Something similar could happen with the Standard models. With it only being a few thousand dollars less than the Premium Model 3 and Model Y, some consumers will see it as a better option to go with the more expensive trim levels.

Even if they don’t, many car buyers will see it as a deal to grab the Standard versions.

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Tesla bull sees a new path to 600,000 deliveries per quarter

“We believe the launch of a lower cost model represents the first step to getting back to a ~500k quarterly delivery run-rate, which will be important to stimulate demand for its fleet with the EV tax credit expiring at the end of September.”

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Credit: Tesla

Tesla (NASDAQ: TSLA) bull Dan Ives of Wedbush Securities published a new note to investors on Thursday evening, which seemed to open up the possibility of the automaker returning to a growth rate in terms of deliveries.

After nearly two years of leveling off with deliveries, which was expected, Tesla is now slated to potentially return to growth, Ives says, as it has introduced new, more affordable models. It launched its Standard offerings for the Model 3 and Model Y this week, a strategy to bring cheaper cars to customers amid the loss of the $7,500 tax credit.

In his note to investors, Ives said:

“We believe the launch of a lower cost model represents the first step to getting back to a ~500k quarterly delivery run-rate, which will be important to stimulate demand for its fleet with the EV tax credit expiring at the end of September.”

Although these cars come in only slightly under $40,000, there is some belief that they will do two things: attract car buyers looking for an under-$40k EV with Tesla’s technology and infrastructure, or push those on the fence to the now-Premium models, which are simply the Long Range Rear-Wheel-Drive and Long Range All-Wheel-Drive.

Ives said in the note that Tesla’s plans for a $25,000 car are “on hold,” but it seems as if that vehicle will be the Cybercab, which the company unveiled a year ago today.

That project seems to be moving forward as well, based on what we saw at both Fremont and Gigafactory Texas yesterday. At Fremont, the Cybercab was spotted on the Test Track, while crash-tested units were spotted at the factory in Austin.

After the Standard models were rolled out and the Cybercab or another $25,000 unit arrives, Ives believes Tesla could actually get closer to 600,000 deliveries per quarter, he said on CNBC this morning:

Moving forward, Tesla has much more going for it than its potential growth in quarterly deliveries. Ives recognizes that a majority of what Tesla’s value will come from in the future: AI and autonomy.

Ives said:

“The AI valuation will start to get unlocked in the Tesla story and we believe the march to an AI driven valuation for TSLA over the next 6-9 months has now begun in our view with FSD and autonomous penetration of Tesla’s installed base and the acceleration of Cybercab in the US representing the golden goose for Musk & Co. We believe Tesla could reach a $2 trillion market cap early 2026 in a bull case scenario and $3 trillion by the end of 2026 as full scale volume production begins of the autonomous and robotics roadmap.”

Ives and Wedbush maintained their $600 price target and ‘Outperform’ rating on Tesla stock.

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The Tesla Model Y Standard is actually a great deal in Europe

A €10,000 delta could very well prove to be a meaningful difference for numerous consumers.

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Credit: Tesla

It’s no secret that the Model Y Standard proved polarizing to numerous Tesla watchers in the United States. At just a few thousand dollars less than the Model Y Premium, the entry-level variant seemed like a subpar deal considering all the features that are missing from the vehicle.

In Europe, however, the story might be different, and the Model Y Standard might actually end up being a pretty good deal for numerous car shoppers. 

Model Y Standard

Perhaps the biggest complaint against the Model Y Standard in the United States was its price. Listed at $39,990, it was only $5,000 less than the Model Y Premium Rear Wheel Drive (RWD), which starts at $44,990 before options. Considering the list of features and functions that are absent in the Model Y Standard, a good number of Tesla community members noted that the vehicle should have been priced lower, perhaps around $34,990, for it to truly be a good deal. 

Otherwise, the entry-level Model Y could end up following in the footsteps of the Cybertruck Rear Wheel Drive, which was priced just below $70,000, but was missing a long list of features that were included on the Cybertruck AWD. The Cybertruck RWD has since been discontinued, likely because of low orders. 

Different story in Europe

While the Model Y Standard may not make much sense in the United States, its pricing actually makes it a very good deal in Europe. A look at the order page for the Model Y in The Netherlands, for example, shows that the Model Y Standard is priced at €39,990 before options, €10,000 less than the Model Y Premium Rear Wheel Drive, which is priced at €50,990 before options. 

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As noted by Tesla watcher @KamermanMenno on social media platform X, a €10,000 delta is a meaningful difference for numerous consumers. Given the significant price difference, the Model Y Standard could become the ideal entry-level vehicle for drivers looking to join the Tesla ecosystem at the lowest possible cost. The fact that the Model Y Standard is a crossover SUV bodes well for the vehicle, given the segment’s popularity as well.

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