Tesla (TSLA) silently suspended the sale of its Giga Texas-made Model Y electric crossover SUV a few days ago.
The base Tesla Model Y AWD variant for the United States which was only offered to customers in the United States, disappeared from the automaker’s online car configurator last week.
While the rest of the world has a China-made base Model Y variant with a Rear-Wheel Drive drivetrain, the US Model Y started with an All-Wheel Drive (AWD) Model Y.
Before closing orders for the base Model Y AWD, Tesla sold it for $47,740. After the suspension of this variant, the Tesla Model Y Long Range AWD has taken its position as the base variant and its price tag is $50,490.
Regarding the Tesla Model Y base variant, the US and Canada are not on the same page. Earlier this April, Tesla started importing a less expensive Tesla Model Y RWD version to Canada from China. With a cheaper price tag, the Canadian Model Y RWD became eligible for the CA$5,000 iZEV incentive.
The sudden disappearance of the Model Y AWD from Tesla’s US vehicle ordering page has triggered a variety of speculations in the Tesla Community. However, it’s confirmed that Tesla is expecting a Model Y production halt at Giga Texas in the coming months. Tesla will fulfill the existing orders which mentioned an estimated delivery date of Sep – Oct 2023.
So, why would Tesla discontinue the Model Y AWD base version? There might be one of the following reasons or a combination as well.
Since Model Ys produced at Giga Texas use the 4680 cells for its structural battery pack, Tesla is probably going through a shortage of these cells. The shortage might be due to two reasons, increased demand for these cells due to Cybertruck release candidate production at Giga Texas, or Tesla is upgrading 4680 cells from the existing first-generation (V1) or the next-gen (V2).
Some experts on the matter believe that Tesla is in the process of replacing the V1 4680 cells with the next-gen V2 cells. The automaker needed this upgrade because the original 4680 cells (V1) actually did not provide a significant range and efficiency advantage over the older 2170 form-factor cells (used in Model S/X Plaid).
The other reason looks more valid to me, the Cybertruck production requires a large number of 4680 cells. Till the last official report, Tesla reached a 4680-cell production capacity of 868,000 cells per week at Giga Texas in December 2022. But this is still considered a shortage of the 4680 cells, especially as Cybertruck deliveries are on the horizon
However, the electric automaker has a huge back order to fulfill for the Cybertruck. According to the latest information available, Tesla Cybertruck pre-orders have crossed the 2 million mark. If 2 million Cybertruck pre-orders are materialized, they are potentially worth a $152 Billion revenue for Tesla (the automaker has not yet announced pricing for the Cybertruck).
To back this theory, I got some clues from the latest drone flyover coverage of Giga Texas by Joe Tegtmeyer (video below). Tesla received a number of large boxes and other equipment that went into the 4680-cell production building at Giga Texas. Tesla also shut down the entire power of Giga Texas las week to switch over the electricity supplier.
In anticipation of the Cybertruck production for actual customer deliveries that are touted to happen next month, Tesla is making upgrades and changes to its Ggiafactory in Austin, Texas. The automaker might temporarily halt Model Y production at Ggia Texas to focus on Cybertruck production and deliveries.
4680 cell production will also need to be re-routed to Cybertrucks to scale its manufacturing quickly. The delivery of new machines and equipment to the 4680-cell plant suggests that Tesla is scaling up cell and battery production at Giga Texas.
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“The automaker needed this upgrade because the original 4680 cells (V1) actually did not provide a significant range and efficiency advantage over the older 2170 form-factor cells”
actually 4680 cells brought a 13kWh capacity loss with no significant weight gain…so basically the opposite of what Tesla promised