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Tesla’s cost per kWh for cells from suppliers revealed, and it’s much lower than competitors

(Credit: Tesla)

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Tesla sources many of its battery cells from third-party suppliers, like Panasonic, LG Chem, and CATL. Because of the massive rate at which Tesla buys these cells, it is paying significantly less per kilowatt-hour compared to its competitors, according to a new report from Cairn Energy Research Advisors.

With battery packs making up most of an electric vehicle’s cost, cells are the most important factor in controlling the price. The more a company buys, the less it costs, just like a wholesale retail store like Sam’s Club or Costco: the more you buy, the less per unit. In this case, electric vehicle companies compare their prices by kWh, and Tesla has a controlling lead in the sector, Cairn said, and it will last through the decade.

“Tesla is definitely putting the hammer down on the accelerator pedal. They see this as the crucial period, and they’re building out their capacities,” Managing Director of Cairn, Sam Jaffe, said. Mentioning the company’s Berlin, Shanghai, and Austin production plants, it is evident Tesla is piling on the output to decrease costs and make the most affordable (and highest-performing) electric cars on the market.

According to Cairn’s research, Tesla pays an average of $142 per kWh for cells purchased from its three previously mentioned suppliers. Meanwhile, companies like GM are paying $169 per kWh, while the industry average runs around $186, according to the firm’s report. Furthermore, Tesla’s packs cost $187 per kWh on average, with GM’s costing $207 per kWh and the industry average being $246 per kWh.

How has Tesla managed to pay so much less per kWh than competitors? Cairn says it is because Elon Musk and his team of highly-trained engineers and developers have done everything in their power to cut costs of its cars, a strategy outlined in the Tesla Master Plan.

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“Everything is focused on cost. The lower the cost, the more affordable the cars become,” Jaffe said, according to CNBC.

Tesla’s work is far from finished too. Chasing the elusive $100 per kWh point, which is the widely-agreed upon price point that would match EV’s price to gas-powered cars, was outlined at Tesla’s Battery Day event in September, where Elon Musk outlined the company’s plan to decrease battery costs by up to 54%. This was outlined through a plan of mass-scale production, more affordable materials, and new manufacturing strategies. Additionally, Tesla plans to manufacture some of the cells in-house at its Kato Road facility.

Because of Tesla’s developments, Cairn believes it will remain the leader in battery cells throughout the decade. With some analysts predicting that Volkswagen would be the company to challenge Tesla, Cairn believes GM is the true number two.

Jaffe said:

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“GM is fully committed and is taking this complete integrative approach which is going to allow it to be very close to Tesla, although the scale still isn’t in the same ballpark as what Tesla is planning.”

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Elon Musk commends Tesla team on successful Robotaxi launch

Tesla CEO Elon Musk commended the company on the successful launch of Robotaxi.

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NORAD and USNORTHCOM Public Affairs, Public domain, via Wikimedia Commons

Tesla CEO Elon Musk commented on the company’s launch of the Robotaxi platform, which officially went live to a small group on Sunday in Austin, Texas.

It is the first time Tesla has offered driverless rides through the ride-hailing platform it has worked to activate for several years, and it was overwhelmingly successful based on early reviews.

The launch was coupled with the release of the first-ever looks at the Tesla Robotaxi app, which does more than allow riders to summon vehicles for transportation. It also allows the rider to adjust climate settings in the car before it arrives for a comfortable ride, and it will sync entertainment and streaming settings to keep occupants entertained.

Tesla Robotaxi riders tout ‘smooth’ experience in first reviews of driverless service launch

The first rides are being performed with a safety monitor in the passenger’s seat. These monitors have no control over the vehicle, and are there just to ensure smooth operation.

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The first reviews called rides “smooth” and “comfortable,” and commended Tesla for its hard work over the past few years to make this happen. Many were impressed with the cars’ ability to keep pedestrians safe, avoid congested parking lots, and the efficiency of the rides, as the time from the ride request to the Robotaxi accepting the ride was extremely fast.

Musk has been at the forefront of this operation for a decade, as Tesla has been working to release a version of the Robotaxi through the development of Full Self-Driving. This has been an effort that included seeking top-tier engineering talent and taking incredible leaps of faith, including switching to a Vision-only approach for Full Self-Driving.

Musk commended the Tesla team for its hard work:

It’s truly an incredible accomplishment, as many considered Robotaxi a “failure” despite it not even being rolled out. In May, we reported on media outlets calling the Robotaxi rollout a total failure, despite Tesla always maintaining the launch would happen in June:

Tesla Robotaxi deemed a total failure by media — even though it hasn’t been released

Hundreds of rides have already been taken, and there have not been many complaints. It’s an incredible jump forward for Tesla.

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Tesla Robotaxi riders tout ‘smooth’ experience in first reviews of driverless service launch

The first reviews of Tesla Robotaxi are in, and those riders are impressed and astounded with the smooth and comfortable nature of the service.

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Credit: Joe Tegtmeyer | X

Tesla Robotaxi riders are touting their awesome experiences in their first rides using the automaker’s new driverless ride-hailing service, which launched to a limited number of people yesterday for the first time.

On Sunday, Tesla officially launched Robotaxi, its driverless ride-hailing service, in downtown Austin. A select group of people were chosen to receive early access to the program, as well as the new Robotaxi app, which is used to request a ride and will sync everything from climate preferences to streaming settings with each pickup.

Tesla officially launches Robotaxi service with no driver

Teslarati gained access to the Early Access riders program and the Robotaxi app, giving us a first-hand look at the experience. We will be in Austin soon to test out the Robotaxi fleet for ourselves.

However, those who were there for the initial rides on Sunday had nothing but great things to say. Hundreds of rides were taken during the first hours of the Robotaxi program, and neither the company nor the riders reported any issues.

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Here’s what people said about their experiences:

  • “Extremely smooth stops,” and great awareness of road conditions, including pedestrians, speed bumps, and busy parking lots, were all handled with ease:

  • Safe navigation around pedestrians who walked just off the sidewalk into the road:

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  • “Just as good as it is during the daytime” at night. There were no changes to report by riders who took rides during the day and evening:

  • Avoided expensive and stressful parking at local tourist hotspots like Terry Black’s Barbeque:

  • “Comfortable and similar to existing Tesla cars with FSD,” intuitive and “surreal” experience:

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  • The app is quicker than other ride-sharing services. When a destination is chosen, Robotaxi is already on the way to your location:

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Tesla Robotaxi rollout proves that Elon Musk still delivers, even if it’s late

Tesla is also still the company that makes the impossible feel late.

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Credit: Tesla

It took a long time, but Tesla has finally successfully rolled out its dedicated Robotaxi service in Austin this weekend. The initial rollout only involved a small fleet of cars operating in a small geofenced area in Texas, but it is still significant. 

It does, if any, prove that Elon Musk is still capable of delivering on his promises, even if they are late. Tesla is also still the company that makes the impossible feel late.

Finally, a Rollout

Elon Musk has been predicting a Robotaxi rollout for years, so much so that even avid Tesla supporters have grown quite wary of his constant predictions. After a while, Elon Musk himself admitted that he has become the boy who cried FSD, though he still maintained that self-driving was really just around the corner.

This past weekend, Musk’s predictions finally came true. Actual paying customers used Tesla’s dedicated Robotaxi service for a small flat fee of $4.20 per ride. Elon Musk seemed quite happy with the Robotaxi’s initial launch, as evidenced by his congratulatory message to the Tesla AI team on X.

https://twitter.com/elonmusk/status/1936876178356490546
https://twitter.com/aelluswamy/status/1936865682810946035

No More Tesla Vision Debates

One thing that is evident in Tesla’s initial Robotaxi rollout in Austin was the fact that the debate surrounding Tesla’s vision-only approach is completely gone now. With actual Robotaxis operating around Austin, there are no more questions about whether cars can navigate city streets on their own using only AI and cameras. They can, and safely too, at least based on Tesla’s initial fleet of Robotaxis.

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https://twitter.com/ItsKimJava/status/1936927640268484909
https://twitter.com/SawyerMerritt/status/1936997202880081950

The Beauty of Normalcy

The Robotaxi rides from Tesla owners who were fortunate enough to experience the first driverless rides from the EV maker’s fleet were quite uneventful. Comments on social media platforms such as X observed that the Robotaxis operated safely and cautiously, and their driving was actually smoother than some human drivers. 

That may not sound very exciting at all, but that’s the beauty of it. Tesla’s Robotaxi service is designed to look and feel natural to people. And so far, it appears that Tesla is accomplishing this with its Robotaxi rollout.

https://twitter.com/DrKnowItAll16/status/1936992009685700663
https://twitter.com/DirtyTesLa/status/1936999390100496443
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