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Will Giga Texas Model Y's Cannibalize Fremont Model Y's?
There is news that Tesla Model Y reservation holders are getting VIN registration and that those VINs are not for Giga Texas, 4680 battery Model Y's, but for Fremont still. This is causing some reservation holders to delay delivery in hopes of getting a Giga Texas made Model Y. But, will being an early adopter cause problems?
4680 Battery Model Y Vehicles From Giga Texas
One of the hardest things to do is to reach volume production with a product and to have that product be of a high quality. Tesla has gone through the most difficulty with their Model S and Model 3 releases, even having to put all-hands on deck in order to get the Model 3 to ramp to volume production. They were able to succeed, but it took tremendous effort.
The problem that may arise with Tesla and the 4680 batteries from Giga Texas is that this is a new technology that is being released. Tesla can do all the testing they want, but there is nothing like an actual customer using your product and doing things and discovering things that you weren't able to with your internal quality assurance processes.
The 4680 Model Y vehicles may cannibalize Model Y sales from Fremont and that may be Tesla's first problem they have to solve. Tesla may have to only build Model Y vehicles from Giga Texas and have Fremont focus entirely on the Model 3. I think this is a necessary eventual step because people are going to want the latest and greatest technology in their Model Y.
This is from a Tweet from Dan Burkland who share that his wife had finally gotten a VIN associated with her Tesla Model Y Performance, but was not happy that it is not a car made at Giga Austin with the 4680 cells and structural battery pack. Burkland is wondering if they should wait now.
Good news: 7 months later and we finally have a VIN assigned for my wife’s @Tesla Model Y Performance.Bad news: It’s a Fremont VIN so no 4680s + structural pack. My wife is now deciding if we want to hold out a little longer for the 4680s… pic.twitter.com/yQQ4CXIOV9— Dan Burkland (@DBurkland) March 8, 2022
How Tesla Should Handle This
I don't think Burkland's concerns are unique to him and his wife. I think most customers would like to have the latest and greatest technologies that Tesla can offer. However, that technology is just getting started and as an early adopter, you may have to go through any issues that need to get worked out as numerous customers use the car and spot things.
For instance, panel gaps and other issues were first spotted with the Model 3. Those issues are largely fixed now. There is also double pane glass in the driver side and passenger side windows. All of this is because of feedback from customers. After a year of production, the car is of a much higher quality than it was upon first release.
The cars may not come with the AMD Ryzen chip and 4680 battery and that could cause some people to refuse delivery of their Tesla vehicle. People want the 4680 battery Model Y. Elon Musk announced that Giga Texas would manufacture the Model Y for just some parts of the U.S., mostly the middle and eastern parts of the U.S.
I think Tesla will have to navigate this by only building the Model 3 at Fremont and only the Model Y at Giga Texas. Tesla will need to have full coverage across the U.S. eventually from Giga Texas for the Model Y. This way, there is no worries about cross working with different technologies from multiple factories. It makes things simpler and faster and I believe Tesla will eventually do it.
Will we see first adopter issues with the 4680 Model Y vehicles from Giga Texas? Or has Tesla worked out most or all of the issues that will come up? Will Tesla eventually only build the Model S/X/3 at Fremont and Model Y/Cybertruck at Giga Texas?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.
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