Forums

Will the Gigafactory help make cheaper Teslas overall?

Will the Gigafactory help make cheaper Teslas overall?

Will the proposed Gigafactory help reduce battery prices on all of Tesla's vehicle models or just the Model E? I can only imagine a model S performance at $60K if the battery pack cost was reduced significantly. Or will Tesla just use the gains in production and cost efficiency as more revenue? I can't imagine paying the same high price for a model S or X after battery costs are reduced. This idea also applies to all the tech that is included in the vehicle. The same 17" monitor shouldn't cost the same next year as technology and production increases. Unless the tech gets upgraded and new useful features are added of course.

Brian H | March 2, 2014

All part of making the products profitable. Don't hold your breath waiting for MS-MX price drops. That's what the ME is for.

Gradual updates and improvement in capabilities and options is far more likely, IMO.

Timo | March 2, 2014

Model S has different model years, so you might see "upgrades" like in any other cars. 2014 Prius is quite a bit different than 2010 model was. Still Prius.

Brian H | March 2, 2014

Model year designations are only a VIN legal requirement, not anything representing identifiable changes. Produced Dec 30/13 = 2013 model. Identical car produced Jan 2/14 = 2014 model.

Timo | March 2, 2014

You don't have to change anything, but it doesn't mean that your can't or won't change anything. Model S in year 2020 will not be the same car as it was 2012.

Brian H | March 2, 2014

True, but it's cumulative and unpredictable, not annual change.

Timo | March 3, 2014

Unless you make it so.

holidayday | March 3, 2014

"Or will Tesla just use the gains in production and cost efficiency as more revenue?"

This is my thought. They are increasing margins on the model S, which will result in:
-Better SuperCharger infrastructure
-Better support infrastructure (sales/service/rangers)
-Better R&D for future models
-Lower pricing on Model E
-Paying gigafactory debt faster in order to create a second/third gigafactory
-But no overall profits, since those margins will be used for growth