This Is The Death Knell For Tesla
This Is The Death Knell For Tesla
Or, at least, it could be.
Over the years, Tesla has solidified itself as the EV company. Their cars could go further and charge faster than any other at the same price point by a huge margin. It’s no wonder they have dominated the EV market. But, as their competitors have caught up in recent years, Tesla’s grip on this market has slipped as buyers can now get cars with better specs for the same or less than a Tesla from companies like Volvo, BYD, Hyundai or VW. Rather than doubling down on the technology that got Tesla into this amazing position, namely gigacasting, fast charging technology, next-gen batteries and cheaper models, Musk has decided to effectively scrap all development in these directions, even scrapping the highly anticipated affordable “Model 2” in favour of developing their self-driving AI. This has opened the door for Tesla’s competitors to swoop in and take their position in the market, and Kia is one of the first to take advantage of this with their upcoming EV3, which could spell disaster for Tesla. Let me explain.
Kia is no stranger to EVs, with its Niro, EV6 and EV9 being some of the best-selling, most reliable and highest-praised EVs ever made. But their recently announced EV3 is a game changer.
The EV3 is a small SUV, about the same size as their current e-Niro, with a 460-litre boot and a 25-litre front boot. When it goes on sale later this year, The EV3 will come in two flavours, standard range and long range. The standard range has a 58.3 kWh battery pack and a predicted WLTP range of 255 miles, translating to roughly 200 miles in real-world range. This pack charges at a peak rate of 100 kW, meaning 10% to 80% charging takes 32 minutes or charge speeds of 260 miles of range added per hour. The long range uses a massive 81.4 kWh battery, giving it a WLTP range of 373 miles, translating to roughly 280 miles in the real world. This pack charges at peak rates of 135 kW, meaning 10% to 80% happens in 33 minutes, with charge speeds of 350 miles of added range per hour. Both variants have the same 201-horsepower drivetrain, giving them a 0–60 mph time of just over 7 seconds.
All of this seems pretty mundane and par-for-the-course. There are many EVs with specs similar to this. However, the EV3 is significantly cheaper than any of them. The standard range launch price is set to be only £35,000, and the long range launch price is set to be only £40,000 (both on-the-road prices). Bearing in mind here that these prices are likely to drop after launch, as almost all car models do. What’s more, Kia has routinely dropped the price of their EVs over the years, so this cost will likely tumble in time.
Despite the fact this is likely the most expensive the EV3 will ever be, it is already a direct competitor to the already well-established Tesla Model 3. The standard range 3 costs the same as the long range EV3, yet it has 54 miles less WLTP range, and only charges marginally quicker than the EV3. What’s more, Kia’s driver assistance system, which is standard on all Kias, is one of the most praised on the market, with many claiming it is better than Tesla’s Autopilot.
Meanwhile, the standard range EV3 is really Kia’s answer to Tesla’s cancelled Model 2. It effectively has the same battery pack as the fast-selling Hyundai Ioniq 5 standard range RWD, except it costs around £7,000 less! It also costs the same as Volvo’s EX30, but with 30 more miles range.
But again, this is just the start. Kia and their partner company are looking to deploy what they are calling “hypercasting”. This is identical to Tesla’s gigacasting, which uses giant high-pressure die casts to produce EV chassis at a fraction of the cost of current methods. Kia and Hyundai are expected to deploy this technology by 2026, which could help drop the cost of their models by thousands of pounds! So don’t be surprised if the EV3 starts selling for bellow £30,000 in the coming years.
So, why is this a death knell for Tesla? This Kia’s specs and price are hardly lightyears ahead of Tesla’s. Well, despite Musk’s claims, Tesla isn’t an AI company. They have had to slash the price of FSD in half just to get enough customers through the door, and Tesla’s own data shows that FSD customers only use the feature 15% of the time, heavily suggesting they don’t trust it. Tesla is only in its current position because it offered the most range and fastest charge times for your money. It made no sense to buy any other EV. However, with the cancellation of the Model 2, abandonment of gigacasting development, and complete refocus on AI development, Tesla’s progress in this bang-for-your-buck direction is set to stagnate completely. EVs like the EV3 show that the rest of the industry is developing rapidly in this direction and are not only gunning for Tesla’s market share, but are in a fantastic position to take it. So, if Tesla can’t get its self-driving car to work or brings it to market too late, its revenue could be significantly damaged as cars like the EV3 muscle them out.
The question is, can Musk crack self-driving and shift Tesla’s income streams in time? Personally, I don’t think so.
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Sources: Reuters, TG, Autocar, EV Database, EV Database, EV Database, EV Database, EV Database, IIHS, Electrek