The 4680 Tesla Model Y Update We Didn't Expect…

Tesla has just released a brand new version of their Model Y SUV with the latest and greatest in electric vehicle design and battery technology and YOU aren’t allowed to buy one. Not that you’d probably want one anyway.

That’s right. Tesla’s brand new GigaFactory in Austin Texas is now delivering a very special Model Y variant that comes exclusively with the bleeding edge 4680 battery cell design and structural battery pack architecture tied into a dual electric motor power train that supplies all 4 wheels with Tesla’s famous instant torque. This allows the vehicle to achieve 279 miles of maximum range, a top speed of 135 miles per hour and acceleration from zero to sixty in 5 seconds flat. This is accomplished with the standard 19” wheels and 5 seat configuration all for the price of $59,990 USD. Good deal, right? Not really.

Especially compared to the existing Tesla Model Y Long Range that has been unchanged since its release in 2020, this tried and true favourite offers up 330 miles of range, top speed of 135 miles per hour and acceleration from zero to sixty in 4.8 seconds with those very same 19” wheels and 5 seat configuration - which comes in at a price tag of $62,990 USD.

So, you save 3 thousand dollars, you lose 51 miles of range, you gain the fancy new batteries but they make the car go slower. What the f*ck does this all mean? Well, let’s talk about it.

Why Pay Less When You Can Have More?

OK, so right off the bat there is a lot of speculation going on here and we’re going to try and approach this subject with the most level of heads that we can manage. Why even bother reporting on something you don’t actually know? I’m sure that’s a question many are asking right now, and rightfully so. But the fact of the matter is that everyone else is going to do it, so we have to do it too. We’re just going to do it better.

But having said that, as with all our videos, we’ll try to be as informative as the available information allows. And stick with me to the end because we are going on a journey folks.

So, taking it from the top, even if you did like this car, you couldn’t buy it anyway. The all new, Texas made Model Y Standard Dual Motor is exclusively available for purchase by Tesla employees. Every vehicle delivered from Giga Texas so far has gone straight into the eager hands of a company insider, that’s why legitimate details on these products have been so few and far between, and the reason that you are having to scour YouTube for information on the topic.

And it makes perfect sense to roll these out first to staff members, because the facts as we know them make this a puzzling decision for the general public to make:

Do we, the consumer, want to save 3 thousand dollars, or 4.7% of the total cost of a Model Y Long Range - and in return, sacrifice 51 miles of range, or 15.4% of the total offered by the current Model Y?

Tricky question - we’re talking about trading a relatively insignificant amount of money saved in exchange for a significant amount of range lost. 

Now, this conflict does go a little bit deeper than just the numbers, because the Tesla enthusiasts know that the new Standard Dual Motor Y has the 4680 batteries - these are the batteries that we have spent the past year and a half talking about, obsessing over, lusting over*... The satisfaction of knowing that these very special batteries were in our new car. Our very special new car that is marginally slower and can only travel a significantly shorter distance than the old car that was negligibly more expensive…

But because we already know everything about the 4680’s we know that they have a lower internal resistance than the previous cells due to their revolutionary tabless design and therefore will achieve significantly faster charging rates than ever before. Thus nullifying the loss in total range. Maybe. That could be true depending on where you live and how many Superchargers are available. I’m biased because we’re in Canada where they are few and far between up here and I’d rather not be stranded in the woods overnight and trampled to death by a moose. Don’t click off, I’ve lost friends to moose attacks. Good people…

Then there are factors with the structural battery pack like marginally improved crash safety and stability thanks to the new battery cell distribution concentrated in the center of the vehicle. Lower weight, better handling, and less noise from rattling parts.

Anyway, all that to say that the ‘range vs cost’ thing varies according to your own personal circumstances - decide accordingly.

In my own circumstance, this revelation about the 279 miles of range still feels very strange. Like in spite of seeing the EPA rating release, and the video from Giga Texas showing the range on screen and the source code from the Tesla website all corroborating the same number… This feels like some kind of a mistake.

Imagine if Apple were to spend a year hyping up a new battery that they had developed and then release it, like, “Check out our new iPhone battery, it doesn’t last as long but it’s slightly cheaper!” Literally no one would be hyped about that. Even Tim Cook would be like, “Wait, what?...” So, it’s a bad look.

Why Do They Do This to Us?

OK, so while I still can’t bring myself to say that this is a good thing that Tesla has done. I can at least say that I understand why they have done it. So let’s get back on track here and get practical.

The 4680 battery cell is, like we’ve said, a brand new product design. It’s not like Tesla just switched from using triple A’s to using double A’s, they went from a “known known” in the good old Panasonic 2170 cell, to a “known unknown” with their very own, unprecedented cell design.

And not surprisingly, it turns out that you can’t just Leroy Jenkins your way straight into the world of battery manufacturing without taking a few L’s in the process. For example - Back when we got our first look at the 4680 production line at Battery Day in September 2020, we were blown away by the speed and the scale of what we were looking at. Like, “holy shit bud, they’re just given’er with the cells in there, Elon will be sitting on a billion of those things in no time.”

Unfortunately that was not the case. Something was moving very fast through that video but it was not fully functional battery cells. We know this because it was only in February 2022 that Tesla announced that it had produced 1 million 4680 cells, with the hope that they could reach 2 million by the end of March. Now that’s not nothing, but put in perspective it’s not much either - 1 million cells is about enough to produce 1 thousand copies of the Model Y Long Range. 

Which is our first indication about why they’ve come out with this weird, kneecapped version of the Model Y specifically for the 4680 rollout, less range means there are less cells inside the car which means they can make more cars with fewer cells.

And that makes sense, I might not like it, you might not like it either, but it does make sense. Manufacturing a brand new product at scale isn’t just a big switch that you pull and everything happens all at one - it’s a process. Tesla is just making due with what they have. They’re just getting the machine in motion - that’s step one. And they’re doing a smart thing by rolling out these first cars to their own staff, because those staff already know the whole back story, they don’t need this big explainer about why the numbers are all weird.

But eventually Tesla is going to run out of employees that they are paying well enough to afford $60,000 cars, so they will have to sell some cars to the general public, and that’s where things get complicated. But again, Tesla has done this in a very smart way.

By shrinking the battery pack just enough to balance production numbers and battery supply, while shaving the price down just enough to make it *maybe* worthwhile, Tesla are managing customer expectations in the most civil way possible. So folks who have already ordered a Model Y or have just received a Model Y are not going to feel like they just missed out on the brand new thing, they might even feel like they got a great deal because they got the car with the longer range. And the people who receive the new Standard Model Y are going to be happy because that is either the car they chose based on their preferences or maybe just because they’re happy to get any car at all after spending the last 6 months to a year on a goddamn waiting list! So everybody gets to win.

This avoids a social phenomenon known as the Osborne Effect - this is when consumers refuse to buy a current product that they feel is soon-to-become-obsolete. If you know that a better car is coming soon, then you won’t want the car that’s on sale today, and that leads to a drop in order volumes, which is bad for business. 

Tesla had never run into this problem before because each new product they’ve released has been pretty well differentiated - meaning that it’s unlikely someone would hold off on buying a Model Y if they were waiting for the Cybertruck, totally different vehicles.

For the time being at least, Tesla have two separate products that are both called Model Y and both look identical on the outside but are very different on the inside - they’re getting dangerously close to an Osborne Effect here, so they will have to play it cool for a little while.

And then maybe, at some point down the road when Tesla get this whole GigaFactory thing smoothed out a little bit more, and the whole global supply chain catastrophe calms down a little as well, then I think we are going to see two things happen:

Number one - the price of the Model Y Standard Dual Motor will actually come down a significant amount. I’d set a price target of like 55 grand when that actually starts to become a pretty good buy.

Number two - Tesla will roll out a new Long Range model Y that has significantly more than 330 miles of range. With the 4680 and the structural pack fully optimized and without supply constraints, they should be able to get the Y up around 400 miles range no problem. I think the price on that car is going to stay up above 60 grand, it won’t come down, but you will get more car for the money.

And bonus third thing - they’ll make a new Model Y Performance that is just ludicrously fast with amazing handling, like being able to easily smoke a Lambo on a twisty track level of good. Maybe they even go Model Y Plaid, I don’t know. But something crazy.

And that way Tesla would have two very appealing vehicles at two distinct price points and maybe some crazy rocket ship version thrown in there just for fun. At that point, Giga Texas will be running faster than a greased weasel and it won’t matter so much about the demand because there should be plenty of cars to go around.