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Comment by dgritsko | Hacker News Reader

Model Y production ramp started in January, ahead of schedule. Deliveries expected to start before the end of Q1. Exciting stuff!

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I was happy to see they'd increased range to 315 miles.

That's 507 km, which is starting to become an acceptable range in countries where you tend to travel longer distances.

The model 3 and S already have that range or more. You'll only get ~350km out of that at highway speeds though. The supercharger network makes it perfectly reasonable but it's not yet ideal. Other EVs tend to be far behind still. Most can't charge fast enough and even the ones that do don't have enough charging infrastructure in most places. We're getting very close to mass adoption but will still need 5-10 years more depending on location to get enough battery improvement and charging deployment to make it a no-brainer to get the EV over the pretty good plugin-hybrid models that exist right now.

Depends on the definition of highway speeds a bit. At 60mph I hit the rated range pretty much dead on (500km/310mi). At 75mph it’s probably between 350 and 400km.

Generally agree about the charging infrastructure. Personally I have fun trying to find where I can connect to the grid but I don’t think everyone would call that fun...

Round numbers: I think when there are ~2-3x the number of supercharger locations (not chargers but locations), it will basically be at parity with the convenience of gas. I believe range (500km @ 60mph) is already acceptable and if the number of locations is increased it will be even less of an issue. Just my $.02

Sure, given the context being in kilometers instead of miles I was using the ~130km/h that is common in a lot of European highways. From experience that gets you less than 350, particularly in winter. Some places (and drivers) are quite a bit faster still. US highways have fairly low speed limits and so range is less of an issue.

True parity with gas will take a much longer time. My previous diesel car had almost 4 times the range and could be refueled in 5 minutes. But there are other advantages that cover for that. Which is why my estimate is that 5-10 years depending on location is what will be needed for both the offer of models and the charging infrastructure to all be in place.

As a counter point, my current gas powered car only gets about 240mi/385km in range. And my car before that was 300mi/480km. So compared to that a 300mi range is perfectly adequate.

OTOH, they killed the RWD version. That likely would have had an even longer range, and certainly had a lower cost.

I used to think the same as you but it's not exactly what you think. The front motor is a bit smaller than rear so at cruising speeds on the highway, the rear motor disengages and the front can handle the speed while using less KW even with the added weight of the extra motor.

That has been true in the past with the S & X, but the motors on the 3 (and presumably Y) are a bit different. The RWD 3 was slightly more efficient than the AWD.

The Y will mostly cannibalize 3 sales, but will be good for a few quarters’ pop.

That Model A is going to cannibalize Model T sales, but it will be good for a few quarters' pop. Ford is doomed.

iPad started cannibalizing Macbook sales ten years ago. Apple is doomed, we'll see them fail RealSoonNow™️.

Ford was making a profit when the Model T existed. Tesla isn't.

False. Tesla earned a net and operating profit this quarter and last and looks set to continue the trend toward consistent profitability as they roll out their more profitable position in China. They've reached a sales scale where their operating income is annualizing to well over a billion dollars per year. Operating income was $359 million this quarter, and $620 million combined for the two most recent quarters. Free cash flow for the quarter was a billion dollars. They're sitting on $6.2 billion in cash now.

You're quoting non-GAAP numbers. It isn't an achievement to make money just by paying people in stock. Cash flow is also inflated by the use of long-term leases.

Tesla lost $800 million this year. That should be the focus.

While you can easily make a good argument that Tesla will be profitable from now on based on extrapolation, given that they lost money ($862 million) in 2019 your declaration of "False." like it's an open and shut case is misplaced (and rude).

Parent cherry picked the facts for his argument, you cherry picked yours, neither of you have objective truth on your side. FWIW, I lean towards your argument more than theirs.

I thought the Y was most similar to the X? Am I missing something?

Its pretty in between as far as size goes. But it shares many parts with the 3 and most importantly is much closer to the 3 on price. The 3 Dual Motor Long Range is about $48k and the Y is $50k. The X Dual Motor Long Range is $80k.

So if it will probably take some sales from both the 3 and X. But X sales aren't very significant compared to 3 sales anyway.

In terms of margin the X sales are still significant. S/X sales are still the only thing that provides any consistent profit to Tesla.

> I thought the Y was most similar to the X?

IMO, all Tesla vehicles (so far) are pretty similar to each other.

On the one hand, Y is a less expensive X.

On the other hand, Y is a bigger 3 with a hatch back.

I'm not an expert in automotive consumer behavior, but I have to imagine that Y will cannibalize some amount of 3 sales. I also don't think that will matter that much - there is so much demand for Tesla vehicles that they are battery limited.

Also, Ys are more expensive, meaning an increased bottomline if they really displace 3s.

Increasing the top line, not necessarily bottom line. There is nothing to indicate that Ys have better margins than 3s.

There's some evidence: pretty much same platform as 3 should imply roughly the same cost structure for the Y. That+higher price implies higher margin. It would be akin to Performance Model 3 in that sense.

There is still more material in the Y than the 3. That doesn't seem to indicate better margins

But they might have reduced the number of stamped parts by an order of magnitude, improved wiring in a revolutionary way (there’s a patent by Tesla for that), MUCH less R&D and production setup than model 3 (they won’t make all the mistakes twice),... and let’s not forget economies of scale, they will produce more Y than 3.

All of this is theoretical and we don't have any real data on how it will affect gross margins. When the car is larger, many things are going to be more costly, like painting, which takes up a significant part of automotive margins.

It's similar to a 3 and the X. Basically, the question is whether there are a large number of customers not buying Tesla's because an affordable model without 7 seats doesn't exist. From there, you have to question how many people who are currently deciding on 3s would decide to buy Ys.

> I thought the Y was most similar to the X? Am I missing something?

The Y is a crossover SUV like the X, but based off the Model 3 platform/chassis; what I'm really surprised by is the notion that they will build these in Fremont!

I actually interviewed at the Fremont Factory in '17 in logistics, the factory was a at Max capacity even with the low 3 numbers being produced. In 18-19 they hit their stride and started to use auxiliary lots:

https://teslamotorsclub.com/tmc/threads/found-a-lot-of-model...

They stated that at full capacity and with a successful ramp up 3 would overwhelm their storage capacity, so turn around was critical with little to margin for error; if anyone remembers all the Tesla employee parking lots were full and created a parking nightmare. Well, the outbound deliveries were equally bad. The shutdowns and refitting of the assembly lines showed just how drastic things were for a while.

They overcame this and I'm glad they did as they are now offering the 35k base model 3 as was announced in the beginning which was the 'game changer,' but I'm also glad I turned down the offer in the end, especially because they don't seem to be utilizing their Sparks and Shanghai factory for this model which would probably be best as S/X/3 are still being made in Fremont. Then again that stock price leap to 600 is pretty nice, just not worth the stress induced heart attack or stroke at 40.

I wonder where Semi/Roadster II/Cybertruck are being made then. I honestly thought they'd consider doing the Roadster II at Fremont for that extra 'Made in California' cache to match its price tag, but not the Y.

If that was a bad thing, no auto manufacturer would have more than one model.

I think so too, and I think they know that. It sounds like they are "only" planning to ramp US production from the current rate of ~400k total units per year to just over 500k per year. Of course, with China coming online, that still leaves a net increase.

It sounds like they may have backed away from some of the more extreme high end projections for the Y. It looks like worldwide production may double within 1-2 years, though.

According to their own figures, they have capacity to produce 650K, but only project 500K deliveries next year. Why is that?

Error margin

That's quite an error margin for a $100 billion company.

I agree. They have been steadily decreasing the amount of guidance that they give out each quarter and this is another part of that.

I don't particularly like it.

They appear to be giving conservative figures this time around.

On which? Production or delivery?

Yes to both.

It will ~cannibalize~ eat Toyota Rav 4 and Ford Escape sales as well.

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