Author: Da Shi

Tesla Model Y “Price Reduction”! But not completely reduced.

After the repeated suspension and resumption of the Model Y single-motor rear-wheel drive version (standard range version) in the United States, the national production was finally completed last week. The guiding price of 291,840 yuan can enjoy a new energy subsidy of 15,840 yuan this year. The final price after comprehensive calculation is about 276,000 yuan.

Although there is a difference from my analysis in the article in January of this year [“Will Tesla Model Y be further reduced in price? My guess is: Less than 260,000!”(https://mp.weixin.qq.com/s/Pi24u3vpfMKlxpK_S23DUw)], the article is based on the performance of the American version’s lowest configuration with an EPA range of 394 km. Who could have imagined that Tesla would “not play by the rules” and directly increase the national product single-motor version’s range to 525 km?

Will Model Y’s sales exceed Model 3’s?

Before the launch of the standard range version of Model Y, the entry-level model of domestic Model Y was the long-range version. After experiencing a slight price increase, the selling price was 347,900 yuan. The long-range version is equipped with front and rear dual motors, a total power of 317 kW, a torque of 545 N·m, and an acceleration time of 0-100 km/h in 5 s. It uses ternary lithium batteries and has an NEDC range of 594 km.

The standard range version of Model Y uses the just-off-the-line domestic permanent magnet synchronous motor, adopts a rear-wheel drive layout, has a total power of 220 kW, a torque of 440 N·m, and an acceleration time of 0-100 km/h in 5.6 s. It also replaces lithium iron phosphate batteries, with an NEDC range of 525 km.

I believe that users of the official website’s long-range version of Model Y can easily find that although the parameter level has been adjusted, the actual performance has not declined much. The 0.6s difference in 0-100 km/h acceleration can basically be ignored, and the loss of 69 km of range can still be accepted. After all, it has exceeded 500 km, which can already meet the commuting needs of most people for one week.

The loss of these small amounts of data can be exchanged for more than 70,000 yuan. The cost-effectiveness of the new car is undoubtedly outstanding. This move can not only attract more users with a budget within 300,000 yuan but also may have many users who have reserved Model Y choose to change their reservation. No wonder that on the day of its debut, Model Y’s orders have exceeded 10,000 units.

For the current Model 3 Standard Range, after the subsidy, the price of 250,900 yuan and a range of 468km doesn’t seem as attractive as before compared to the Standard Range of Model Y.

Both cars perform similarly in terms of appearance, interior, and configuration, while the Model Y leads by a significant margin in terms of passenger and cargo space.

The front seat space of the two cars is almost the same. The seats themselves are completely identical. It’s just that the sliding rails under the seats of the Model Y are raised a bit. However, due to the higher body, there is not much difference in the front space.

The difference in headroom and legroom in the back seat looks small, but in reality, the sitting posture of the Model Y is much more comfortable. Although the seat cushion is still not long enough, it is relatively high, and there is a considerable space under the raised front seat cushion where basically the entire shoe can be stretched into it. Moreover, the backrest angle is very gentle, and there won’t be a feeling of sitting on a “small bench” like the Model 3.

The Model Y also has more features than the Model 3, such as a heated steering wheel, heated rear seats, a 12V power supply in the trunk, a 15-speaker sound system (instead of the standard 8 speakers), LED front fog lights, interior ambient lighting, automatic anti-glare rearview mirrors, rear privacy glass, and a cabin air filter.

Coupled with the longer range and more comfortable seating space, the value for money of the Model Y is indeed much higher than that of the Model 3. It is believed that most target users can accept the 25,000 yuan price difference.

Also, in terms of driving quality, the Model Y is more comfortable overall, with better filtering of road vibrations, and the steering and suspension are not tuned extremely. It is more suitable as a family car.

In contrast, the road feel of the Model 3 is too intense, and it is more suitable for those who do not require too much passenger capacity in the back seat. Although the shock absorption is still of a relatively high quality, the Model 3 is more like a performance car that emphasizes handling, and theoretically, not many people will be able to adapt to such a “taut” driving experience.

According to the new car sales data for June released by China Passenger Car Association last week, the sales of Tesla Model 3 and Model Y are very close, with a difference of only about 5,000 units. It is believed that when the Model Y Standard Range version officially starts delivery in August, it is very likely to surpass Model 3 in sales.

Can you still buy Model 3?

Of course you can, but personally, I suggest watching for a while because soon, the domestic Model 3 may once again see a price reduction.

The reasons are similar to what I wrote in my previous article. As the entry-level Tesla models for the current phase, both Model Y and Model 3 must maintain high cost-effectiveness and an appropriate price difference between each other. Only in this way can sufficient sales volume be maintained to fulfill the betting agreement with the Shanghai government: From the end of 2023, the Shanghai Gigafactory must pay annual taxes of 2.23 billion yuan, if this condition cannot be met, the corresponding land must be returned.

So far, the Tesla Model 3 has been without a price reduction for more than a year. During this period, many parts of Tesla have been localized production, especially the domestically produced electric motor that was just delivered not long ago.

Therefore, based on the previous analysis, a difference of only 25,000 yuan is not sufficient. I think a subsidized price of around RMB 230,000 is more reasonable (a difference of RMB 45,000), and let us wait together for the next update.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.