Author: Winslow

As we all know, Tesla has mentioned several times at shareholder meetings that it aims to achieve a sales target of 20 million units per year by 2030. However, this goal is almost impossible to achieve with only the existing Model 3/Y, as electric cars have higher production costs than gasoline cars, resulting in an average selling price much higher than gasoline cars. The 3/Y is also one of the more expensive electric cars and is classified as a “luxury car” by Tesla in both domestic and international markets. Price and sales volume are strongly correlated, therefore a significant price reduction is necessary to achieve a substantial increase in sales volume. Today we will explore whether it is possible to launch a Tesla priced at 150,000 yuan.

Firstly, why a 150,000 yuan Tesla?

Let’s take a look at the current market share of automobile sales in China by price range. Cars priced below 100,000 yuan account for approximately 20% of the market share, 100,000-250,000 yuan accounts for about 60%, 250,000-350,000 yuan accounts for about 15%, and those above 350,000 yuan accounts for about 5%. Currently, Tesla’s 3/Y belongs to the 250,000-350,000 yuan range. If a car priced at around 150,000 yuan can be launched, it can enter the 100,000-250,000 yuan range, with a market capacity approximately four times that of the current market.

Next, can a 150,000 yuan Tesla achieve the sales target of 20 million units per year?

Based on annual sales volume, Tesla’s sales in China this year are almost 500,000 units, with a new energy penetration rate of approximately 25%. Assuming that the penetration rate reaches 75%+ by 2030, Tesla’s existing sales volume in the 250,000-350,000 yuan range will reach about 1.5 million units. Launching a Tesla priced at 150,000 yuan can increase sales volume in this category by four times, which can sell approximately an additional 6 million vehicles. Tesla can thus sell a total of 7.5 million vehicles in China, accounting for 37.5% of the global target of 20 million vehicles. Therefore, launching a 150,000 yuan Tesla can appear to support the sales target.

Finally, is it possible to launch a Tesla priced at 150,000 yuan?

Undoubtedly, this requires some favorable opportunity and location. Based on Q3 financial data, the current comprehensive selling price of the 3/Y is about 300,000 yuan, with a gross profit of 27%. Therefore, the production cost is approximately 220,000 yuan. Breaking this down, the battery cost is approximately 88,000 yuan, accounting for 40%, with the remaining 132,000 yuan for the cost of the car body and electronic components.Assuming that the upstream raw materials for batteries are continuously produced and expanded, the cost of batteries will decrease by about 20% from the current historical high point, to about 70,000 yuan; Commodities such as bulk commodities and chips also decreased by about 20%, so the cost of body electronics decreased to about 105,600 yuan.

The size of a 150,000 yuan Tesla should be smaller than that of 3/Y. Assuming that the battery capacity is reduced by 40%, the cost is 42,000 yuan; the cost of body electronics and other things is correspondingly reduced by 30%, and the cost is about 73,900 yuan. The total is 115,900 yuan, and the selling price at a 30% gross profit is about 150,600 yuan.

Finally, in order to ensure that this car still has practicality, it is estimated that the actual range reduction should be around 20-30% (due to weight reduction, energy efficiency will be better), which reduces from the current CLTC 556km of 3/Y to CLTC 390-450km, which seems to be no problem for urban commuting and surrounding travel, especially with sufficient supercharging stations.

Therefore, Tesla may introduce a new model priced at around 150,000 yuan in the future. However, a bit of luck is indeed needed.

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.