Tesla started a price war last month, and as the company works to keep its costs as optimized as possible, some of its suppliers are preparing to experience some pressure. The concerns were related by industry officials who work with Tesla and its suppliers.
Comments from executives during the fourth quarter and full-year 2022 earnings call suggest that Tesla is currently focused on its costs. Tesla Chief Financial Officer Zach Kirkhorn, for one, noted that the company was “attacking every area of cost,” and CEO Elon Musk noted that a recession, if one does happen, could lead to “meaningful decreases in almost all of our input costs.”
Dan Sharkey, a co-founder of Brooks Wilkins Sharkey & Turco and a lawyer who represents automotive suppliers, noted that aggressive price cuts are never really good news for suppliers. “It is never good for suppliers when (automakers) cut vehicle prices because that pressure rolls downhill. I never like it, because I know eventually they’re going to try to get it out of one of us,” Sharkey said.
“My message is, there’s not going to be any room there. Many suppliers are financially struggling,” he added.
While major Tesla suppliers such as Panasonic, LG Energy Solution, CATL, and IDRA, are typically cautious about statements concerning their relationship with the electric vehicle maker, a Tesla supplier who opted to remain anonymous informed the publication that the company focused more on delivery over pricing during the pandemic.
-->This meant that Tesla was willing to pay a premium to acquire parts at a faster pace. Following the Q4 and FY 2022 earnings call, the Tesla supplier is reportedly worried that this trend will change. Tesla, for its part, has not issued a statement about the matter as of writing.
Carmakers such as Tesla saw notable margins during the pandemic. But while this was the case, some suppliers reportedly were not able to fully pass along their higher costs, resulting in lower margins. Bain, a consultancy firm, estimated that in Q3 2022, the profit margins of automakers were almost 3% higher than suppliers. With this in mind, suppliers would likely experience even more pressure as carmakers like Tesla lower their prices.
Some Tesla suppliers are already experiencing a lot of headwinds. Gissing North America, a Michigan-based company that produces acoustic systems and headliners for car ceilings, counted Tesla as its largest customer. Yet last year, the company filed for bankruptcy due to high commodity prices and labor costs. Steven Wybo, chief restructuring officer, noted that he does not really see things getting easier anytime soon.
“There’s certain things that I think will ease, but there’s this labor component that’s built in to the price of everything, and I don’t see that easing any time soon and potentially never,” Wybo said.
Industry officials, for their part, have noted that Tesla might aim to reassure its suppliers by highlighting that the potential losses from lower prices will be more than made up for in higher volumes of orders. This would definitely be beneficial for Tesla and its suppliers, especially considering the electric vehicle maker’s efforts to ramp to 20 million vehicles per year by the end of the decade.
-->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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Elon Musk makes a key Tesla Optimus detail official
“Since we are naming the singular, we will also name the plural, so Optimi it is,” Musk wrote on X.
Tesla CEO Elon Musk just made a key detail about Optimus official. In a post on X, the CEO clarified some key wording about Optimus, which should help the media and the public become more familiar with the humanoid robot.
Elon Musk makes Optimus’ plural term official
Elon Musk posted a number of Optimus-related posts on X this weekend. On Saturday, he stated that Optimus would be the Von Neumann probe, a machine that could eventually be capable of replicating itself. This capability, it seems, would be the key to Tesla achieving Elon Musk’s ambitious Optimus production targets.
Amidst the conversations about Optimus on X, a user of the social media platform asked the CEO what the plural term for the humanoid robot will be. As per Musk, Tesla will be setting the plural term for Optimus since the company also decided on the robot’s singular term. “Since we are naming the singular, we will also name the plural, so Optimi it is,” Musk wrote in his reply on X.
This makes it official. For media outlets such as Teslarati, numerous Optimus bots are now called Optimi. It rolls off the tongue pretty well, too.
Optimi will be a common sight worldwide
While Musk’s comment may seem pretty mundane to some, it is actually very important. Optimus is intended to be Tesla’s highest volume product, with the CEO estimating that the humanoid robot could eventually see annual production rates in the hundreds of millions, perhaps even more. Since Optimi will be a very common sight worldwide, it is good that people can now get used to terms describing the humanoid robot.
-->During the Tesla 2025 Annual Shareholder Meeting, Musk stated that the humanoid robot will see “the fastest production ramp of any product of any large complex manufactured product ever,” starting with a one-million-Optimi-per-year production line at the Fremont Factory. Giga Texas would get an even bigger Optimus production line, which should be capable of producing tens of millions of Optimi per year.
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Tesla is improving Giga Berlin’s free “Giga Train” service for employees
With this initiative, Tesla aims to boost the number of Gigafactory Berlin employees commuting by rail while keeping the shuttle free for all riders.
Tesla will expand its factory shuttle service in Germany beginning January 4, adding direct rail trips from Berlin Ostbahnhof to Giga Berlin-Brandenburg in Grünheide.
With this initiative, Tesla aims to boost the number of Gigafactory Berlin employees commuting by rail while keeping the shuttle free for all riders.
New shuttle route
As noted in a report from rbb24, the updated service, which will start January 4, will run between the Berlin Ostbahnhof East Station and the Erkner Station at the Gigafactory Berlin complex. Tesla stated that the timetable mirrors shift changes for the facility’s employees, and similar to before, the service will be completely free. The train will offer six direct trips per day as well.
“The service includes six daily trips, which also cover our shift times. The trains will run between Berlin Ostbahnhof (with a stop at Ostkreuz) and Erkner station to the Gigafactory,” Tesla Germany stated.
Even with construction continuing at Fangschleuse and Köpenick stations, the company said the route has been optimized to maintain a predictable 35-minute travel time. The update follows earlier phases of Tesla’s “Giga Train” program, which initially connected Erkner to the factory grounds before expanding to Berlin-Lichtenberg.
-->Tesla pushes for majority rail commuting
Tesla began production at Grünheide in March 2022, and the factory’s workforce has since grown to around 11,500 employees, with an estimated 60% commuting from Berlin. The facility produces the Model Y, Tesla’s best-selling vehicle, for both Germany and other territories.
The company has repeatedly emphasized its goal of having more than half its staff use public transportation rather than cars, positioning the shuttle as a key part of that initiative. In keeping with the factory’s sustainability focus, Tesla continues to allow even non-employees to ride the shuttle free of charge, making it a broader mobility option for the area.
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Tesla Model 3 and Model Y dominate China’s real-world efficiency tests
The Tesla Model 3 posted 20.8 kWh/100 km while the Model Y followed closely at 21.8 kWh/100 km.
Tesla’s Model 3 and Model Y once again led the field in a new real-world energy-consumption test conducted by China’s Autohome, outperforming numerous rival electric vehicles in controlled conditions.
The results, which placed both Teslas in the top two spots, prompted Xiaomi CEO Lei Jun to acknowledge Tesla’s efficiency advantage while noting that his company’s vehicles will continue refining its own models to close the gap.
Tesla secures top efficiency results
Autohome’s evaluation placed all vehicles under identical conditions, such as a full 375-kg load, cabin temperature fixed at 24°C on automatic climate control, and a steady cruising speed of 120 km/h. In this environment, the Tesla Model 3 posted 20.8 kWh/100 km while the Model Y followed closely at 21.8 kWh/100 km, as noted in a Sina News report.
These figures positioned Tesla’s vehicles firmly at the top of the ranking and highlighted their continued leadership in long-range efficiency. The test also highlighted how drivetrain optimization, software management, and aerodynamic profiles remain key differentiators in high-speed, cold-weather scenarios where many electric cars struggle to maintain low consumption.
Xiaomi’s Lei Jun pledges to continue learning from Tesla
Following the results, Xiaomi CEO Lei Jun noted that the Xiaomi SU7 actually performed well overall but naturally consumed more energy due to its larger C-segment footprint and higher specification. He reiterated that factors such as size and weight contributed to the difference in real-world consumption compared to Tesla. Still, the executive noted that Xiaomi will continue to learn from the veteran EV maker.
“The Xiaomi SU7’s energy consumption performance is also very good; you can take a closer look. The fact that its test results are weaker than Tesla’s is partly due to objective reasons: the Xiaomi SU7 is a C-segment car, larger and with higher specifications, making it heavier and naturally increasing energy consumption. Of course, we will continue to learn from Tesla and further optimize its energy consumption performance!” Lei Jun wrote in a post on Weibo.
-->Lei Jun has repeatedly described Tesla as the global benchmark for EV efficiency, previously stating that Xiaomi may require three to five years to match its leadership. He has also been very supportive of FSD, even testing the system in the United States.
Elon Musk makes a key Tesla Optimus detail official
Tesla is improving Giga Berlin’s free “Giga Train” service for employees
