Tesla's Model 2 Might Be Exponentially Better Than We Thought
But will this be enough to keep Tesla on top?
I haven’t been too kind to Tesla’s upcoming $25,000 mass-market EV, commonly referred to as the Model 2. I’ve compared its leaked specs with EVs already on the market or about to hit the market and have not been impressed, as the Model 2 came up short every time. Simply put, nothing made the Model 2 stand out, and there was nothing to suggest that it could sell in the quantities Musk claimed it would. But, recent revelations from Tesla’s battery partner CATL suggest that I, and many others, could have been entirely wrong, and the Model 2 will be by far the most capable affordable EV by a country mile. Let me explain.
Initial spec leaks pointed to the Model 2 having a 53 kWh hour battery from BYD, specifically their brilliant Blade Battery. This would be good enough for 250 miles of range and a 10% to 80% charge time of around 25 minutes. But EVs like the BYD Dolphin, VW ID2, MG MG4, Peugeot e-308, Citroën E-C3, Kia EV2, and Renault 5, along with a few others, have roughly the same specs for approximately the same price (especially considering the $25,000 price tag of the Model 2 seems to include government tax credit reductions).
However, it turns out that Tesla might not be using the BYD Blade Battery. The CEO of CATL recently leaked that they are working with Tesla for the Model 2. As such, the Model 2 is now tipped to use CATL’s upcoming Shenxing battery.
These batteries are the world’s fastest-charging LFP cells. They can charge at 4C (or four times their discharge current), meaning they can charge from 10% to 80% in just 10 minutes, or a full charge from flat in just 15 minutes! Being an LFP cell rather than lithium-ion, the Shenxing also has a longer lifespan of well over 1,000 charge cycles, meaning this battery should be good for at least 200,000 miles. This is really important for affordable EVs, as the fear of replacing the battery can put off buyers. Unlike many ultra-fast charging cells, the Shenxing isn’t a pipe dream for vapourware. Production of this battery has already started, with deliveries to EV makers set to begin sometime this year. That said, we don’t yet know the cost of these cells. Being an LFP cell, the Shenxing should be significantly cheaper than lithium-ion cells, but their fast charge ability doesn’t come cheap. As such, it’s predicted to cost around $100 per kWh.
If Tesla is working with CATL to build the battery for its Model 2, either purchasing it directly from CATL or licensing the IP to build the battery in-house, it makes sense for them to use the Shenxing. The 53 kWh battery would only cost $5,300, or about half that of the pack in a Model Y! What’s more, the car would only need a 250 kW charger to achieve its 10-minute 10% to 80% charge times. In other words, thanks to Tesla’s V3 Superchargers, you can actually get these charge times reliably and consistently in the real world!
Why does this matter? Well, several reasons. Unlike BYD, CATL has a history of allowing Western companies to license its IP and build its batteries in-house. In-house battery production is a crucial part of qualifying for US EV tax credits, so this fact alone could make the Model 2 significantly cheaper or more profitable. Moreover, it puts the Model 2 head and shoulders above the other affordable EVs. These EVs can only really do 140 miles on a highway before needing to charge, thanks to their smaller batteries. However, the other EVs take at least 30 minutes to charge, while the Model 2 takes only 10 minutes. So, if you have to do a roughly 280-mile journey, the Model 2 will arrive at least 20 minutes sooner than the other EVs in its price range!
In other words, this silly quick yet realistic charge time will make the Model 2 exponentially more usable than any other sub $30,000 EV. With this significant advantage, Tesla could actually meet its Model 2 sales targets of a million units a year.
But, this battery is a double-edged sword for Tesla. CATL also works with BMW, Volvo, Hyundai/Kia, Toyota, Mercedes, VW, Audi, Škoda, Ford, Honda, Nissan, Renault, Peugeot, Opel, Vauxhall and MG, just to name a few. So it’s not like they can’t also adopt this battery in their affordable EVs or even licence the IP themselves, rendering the Model 2’s advantage moot. So, while this revelation is excellent for us, the consumers, it’s not going to secure Tesla’s position as king of the EV world.
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Sources: Notebook Check, Reuters, GCC, Notebook Check, Will Lockett, Forbes