The Tesla Model 3 was essentially the flagship vehicle that launched the modern electric vehicle (EV) industry over a decade ago. At the time, Tesla EVs were cheaper and more advanced than any of their competitors, giving them an extraordinary advantage. However, Tesla’s dominant position in the market has since diminished. The revolutionary Tesla 4680 battery was expected to restore the company’s lead, but production issues and delays have led to stagnation. Now, reports suggest that Elon Musk has a new plan to bring Tesla back to the forefront.
Tesla is reportedly working on a new initiative codenamed “Highland.” According to an exclusive Reuters report, based on information from four anonymous Tesla employees, the company aims to reduce production costs for the Model 3 and possibly make changes to its drivetrain. These modifications are slated to begin at Tesla’s Gigafactory in Shanghai in Q3 2023, followed by implementation at the Fremont factory in California.
There’s a significant twist: Tesla’s EVs currently use cylindrical batteries, while third-party batteries often come in a prismatic form. This means Tesla would need to redesign its drivetrain to accommodate third-party batteries. If true, the reported drivetrain revisions could hint at Musk’s intention to incorporate external battery technology into Tesla’s production.
If this strategy is accurate and the “Highland” project succeeds, Tesla could retain its high profit margins while drastically reducing the cost of its EVs, leaving competitors in the dust for several years. Tesla might become even more successful than before!