RWD LFP Tesla Mannequin Y May Slash Value By $4,850, Driving US Gross sales To The Subsequent Degree

Cleanerwatt was the primary to note that Tesla simply obtained approval for a brand new rear-wheel-drive (RWD) Mannequin Y utilizing lithium-iron-phosphate (LFP) batteries that can doubtless be very inexpensive. Who’s a inexpensive RWD LFP Tesla Mannequin Y concentrating on, and what does it imply to your complete US automotive marketplace for the remainder of 2023 and past?

As I predicted in December, Tesla has to radically enhance the affordability of the Mannequin Y to satisfy its aggressive gross sales goal. It has already minimize the efficient value of the Mannequin Y Lengthy Vary by $15,500 (from $65,990 to $50,490), offered the US Treasury with documentation to qualify for the $7,500 tax credit score, and launched a Mannequin Y Customary Vary AWD that’s $2,750 inexpensive. These 3 modifications decrease the beginning value by a whopping $25,750, or 39%!

That has helped double gross sales since final yr and made the Tesla Mannequin Y the very best promoting automobile on the earth and the very best promoting passenger automobile within the US (however behind the Ford F-150).

For a lot of firms, that will be sufficient success that they’d relaxation on their laurels for a couple of months and luxuriate in their victory, however that isn’t how Tesla works.

EPA Data

Taking a look at this EPA submitting, you possibly can inform that is all about worth. It has a single 198 kW everlasting magnet motor that, taking a look at this older submission, appears to be like like it’s often used because the rear motor of the Mannequin Y Lengthy Vary. Utilizing a everlasting magnet motor might barely enhance the fee over a less expensive induction motor, however then its unrounded effectivity is 175 as a substitute of the beforehand accessible AWD Mannequin Y Customary Vary at 167, a 6% enchancment. Though they did check with totally different dimension batteries, it seems the battery might be 56 to 63 kWh in dimension vs. the Customary Vary AWD dimension of 71.6. This could be a 9% to 12% smaller pack, however with 6% higher effectivity, vary would solely be 3% to six% much less or 8 to 16 miles lower than the Customary Vary AWD’s 279 vary, in order that’s a prediction of 263 to 271 miles, or a bit past Elon’s acknowledged minimal of 250 miles vary.

Who Is It For?

This mannequin might be finest for folks both driving in a neighborhood space or who don’t thoughts stopping slightly extra usually to cost. It received’t be nearly as good within the north, each as a result of it doesn’t have the all-wheel-drive that improves traction within the snow and in addition as a result of it is going to cost extra slowly when the battery is chilly. Fortunately, Tesla’s battery administration system means this isn’t too huge of a penalty, however you need to watch Bjorn’s video above in case you are pondering of shopping for an LFP Tesla and reside in an space that will get very chilly.

An0ther level to think about is that they suggest you cost LFP batteries to 100% on daily basis, vs. the 80% or 90% advisable for nickel-based batteries. This implies 100% of a 270-range battery might be greater than 80% of 330 miles, which is 264 miles. It is usually anticipated that LFP batteries will final twice as many cycles. So, for somebody who has an extended commute and places plenty of miles on their automotive yearly, and who desires a automotive that can final a very long time, this is perhaps a superb alternative.

If Tesla permits homeowners to make use of their batteries to both energy their properties and even promote energy again to the utility, the LFP’s means to resist extra cycles earlier than degrading considerably might be much more worthwhile.

This might be an ideal second automotive for individuals who need plenty of room however have one other automotive with longer vary for lengthy journeys. There are lots of people who purchased their first Tesla within the final yr or two and are prepared to purchase one other for a partner or little one, however who don’t wish to spend one other $60,000 for one more automotive — and in addition don’t wish to purchase one other gasoline automotive now that they’ve tasted the fruits of driving electrical.

Predicted Pricing

The 2021 RWD Mannequin Y that offered for as little as $39,990 in February 2021 earlier than being discontinued solely had a spread of 244 miles. I appeared on the value distinction in Canada between the Mannequin Y Lengthy Vary and the Mannequin Y Customary Vary RWD, and it’s $10,000 Canadian or about $7,600 in US {dollars}. That may put the beginning value at about $42,890, or $4,850 lower than at the moment’s entry-level Customary Vary AWD. With financial savings of a few thousand {dollars} from a smaller battery pack, one other thousand as a result of it’s utilizing cheaper lithium-iron-phosphate (LFP) batteries, a pair thousand much less because it doesn’t have the entrance motor, and a thousand from revenue margin, we get to a $5,000 decrease promoting value. This could be solely $2,650 greater than the bottom Mannequin 3 that has an analogous 272-mile vary.

Conclusion

As we get nearer to the brand new yr, the $7,500 tax credit score turns into extra highly effective, since patrons solely have to attend a shorter and shorter period of time to obtain it, as a substitute of 9 or 12 months earlier within the yr. I feel this may enhance demand for all electrical vehicles eligible for the credit score a bit. As well as, a number of states have enhanced their incentives, particularly Colorado, which has among the finest incentives within the nation!

This implies the Mannequin Y RWD can have a a lot decrease value of possession than gasoline vehicles just like the Toyota RAV4 and Honda CRV (which begin at $28,275 and $29,500, respectively), despite the fact that the Mannequin Y’s internet value after incentives might be between $31,000 and $36,000, relying in your state. To see how a Tesla with the next price ticket will be aggressive with a gasoline automotive at lower than half the value, see my latest article titled “Tesla Mannequin 3 Lifecycle Price Almost Matches The Least expensive Automobile In America!” Tesla can have no drawback gaining large share from Honda and Toyota if it releases this new mannequin and ramps up manufacturing considerably.

If you wish to benefit from my Tesla referral hyperlink to get Reward Credit, right here’s the code: https://ts.la/paul92237 — however as I’ve stated earlier than, if one other proprietor helped you extra, please use their hyperlink as a substitute of mine. If you wish to study extra about Tesla’s new referral program, Chris Boylan has written an wonderful article on it.

Disclosure: I’m a shareholder in Tesla [TSLA], BYD [BYDDY], Nio [NIO], XPeng [XPEV], Hertz [HTZ], and a number of other ARK ETFs. However I provide no funding recommendation of any type right here.