Tesla Model 3 SR+ Reported To Have 39% Gross Margin In China

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A few more details on the made-in-China Tesla Model 3 with cobalt-free lithium-iron-phosphate (LFP) batteries have surfaced, as well as some financial speculation.

We’ve already covered some of the information on Tesla’s use of LFP batteries from CATL in its China-made Model 3 Standard Range Plus. The LFP prismatic cells should help the batteries last longer, they are extremely safe, and pricing appears to be highly competitive.

Some specs of the Tesla Model 3 made with the LFP in China include a max speed of 140 mph, 291 miles of range, 12.6 kWh energy used per 100 km, and a motor power of 202 kW. PushEVs notes that on the WLTP test cycle, the range should be around 218 miles. The energy density is 125 Wh/kg.

It is expected that CATL’s battery pack has four modules, with each of those having 27 cells, according to PushEVs. This would mean a total of 108 battery cells all together.

Tesla is expected to have a gross margin of 39% on this vehicle, according to Anxin Securities. Similarly, Xingye Securities estimates a profit margin of 35% per unit. We’ll take the opportunity here to gloat on behalf of CleanTechnica’s Maarten Vinkhuyzen, who wrote in June 2019, “If the SR+ gross margin in Fremont is 25%, the Chinese gross margin should be above 35%.”

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This Standard Range Plus (SR+) version of the Model 3 costs $291,800 yuan ($41,195) before any government subsidies are applied and $271,550 yuan ($38,336) after. Tesla China’s Model 3 Long Range reportedly has a slightly lower gross margin — 32%. Whether 39%, 35%, or 32%, though, those are tremendous margins in the automotive industry.

The Model 3 Long Range’s battery is different and is made with NCM 811 cylindrical battery cells from LG Chem, which is why LG Chem and Panasonic were neck and neck for the title of “Biggest EV Battery Producer in the World” in the first quarter of 2020.

A few years ago, the idea of cobalt-free lithium-ion batteries seemed impossible. Today, they are a reality, and it is great to see EV companies using cobalt-free batteries. It’s also great to see the race in terms of battery cost per kWh. We need companies competing and driving down cost, especially when it comes to EV batteries.

Related, from one year ago: The Chinese Tesla Model 3 “Super Margin” (Forecast).


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Johnna Crider

Johnna owns less than one share of $TSLA currently and supports Tesla's mission. She also gardens, collects interesting minerals and can be found on TikTok

Johnna Crider has 1996 posts and counting. See all posts by Johnna Crider