Tesla's 2023 Year in Review

Tesla Vehicle Line-up 2023

2023 was the year that Tesla turned 20; it was also the Year of the Tesla Truck (both Cyber and Semi). The first Cybertruck deliveries were kicked off in November and the Semi (officially launched in December of 2022) was put through its paces in 2023 as Pepsi-Fritos loaded them up and put the pedal to the metal.

Trucks were not the only Tesla vehicle news for the year though. Model 3 had its most extensive revamp ever with "Project Highland". Tesla partnered with tribes to dance around arcane state protectionist laws, an old Tesla founder returns as a new board member, and more. Let's look at each of these 2023 events:  

Cybertruck Launch 

Cybertruck was the biggest Tesla event of 2023 and we'll dive right into this one first. On November 30th, Tesla held the Cybertruck Launch event. The first owners took delivery of their vehicles on stage in Austin with crowds of onlookers in-person and online. 

Throughout 2023, the Cybertruck made news over and over. A glimpse of the frunk, the interior, exterior updates, the new user interface... Videos of four-wheel steering and crab walking, news.

The "No Flipping" clause in the Cybertruck purchase contract threatened to penalize violators $50,000 or more and never sell them another Tesla for the rest of their lives. This clause had the internet in a tizzy and customer backlash caused Tesla to remove it. However, it came back once again for the Foundation series Cybertrucks. 

Wraps 

Inspired by the paintless Cybertruck, Tesla started offering wraps and paint protection films. Black, white, or clear wraps are available for Cybertruck and six colors for the rest of the vehicle lineup. 

Tesla has some fun with Cybertruck wraps in 2023. They dressed one up as a Ford F-150 and another as a Toyota Tundra.

Cybertruck variants at launch

At the delivery event, final pricing, availability, and product details were announced. Three models were announced: single-motor RWD, dual-motor AWD, and a tri-motor AWD called the "Cyberbeast." Soon after the event a fourth variant was announced, the Foundation Series. This is a limited edition Cyberbeast that comes at a $20,000 premium and adds FSD and the special laser etchings seen above.

Compared to the 2019 unveiling of the Cybertruck many reservation holders were disappointed by the price increase compared to the more affordable $39,000. 

Range extender 

The range extender is an optional battery pack that increases the Cybertruck's range by 120–130 miles, taking the dual motor AWD range up to an estimated 470 miles. The range extender looks like a toolbox taking up about a third of the bed space. If you plan on towing any significant distance, this is something that you should consider. The exciting part of this is the possibility of range extenders being integrated into future accessories (trailers, campers...). 

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The ramp starts

As I write this, Cybertrucks are being delivered in California and Texas. There are about 2 million people that put down a $100 reservation. Many of them are eagerly awaiting there chance to configure and order. Currently, Tesla is making fewer than 100 trucks per week. Next year this production rate will grow and grow as manufacturing processes are improved and sped up.

48 Volts and Ethernet "Etherloop"

Before we leave this topic, we have to cover these two industry-changing Cybertruck innovations. 

Cars and trucks have been using 12 Volt batteries since the mid-1950s. The switch to 12 Volts (from 6V) was due to the evolution of car designs and features that required more power.

Today, we have more electrical demands on our vehicles than ever before. Automakers have occasionally released 48V prototypes, but they have never been able to bring the 48V architecture to market. Bringing a new architecture to market is not easy.

For 48V to work properly, all the accessories have to be designed for it. Every wiper motor, seat motor, light, computer, ABS, air bag controller... There are hundreds of components, made by hundreds of suppliers that have to be redesigned, tested, certified... 

Tesla was willing to do the hard work needed to bring 48V to market. They worked with their suppliers. When a part needed to be redesigned, Tesla would send engineers to work with the suppliers. It's a win-win. The supplier gets Tesla engineering to help update their product and Tesla gets a design that they know will meet their needs. 

If Tesla cannot find a supplier for a part that they need, they will bring the task in-house. They are not afraid of vertical integration. 

Now with all of the parts that they need working with 48V, how do you get that power to each of the components. In the Cybertruck there are 386 parts that need to be connected to aux power. The answer was to redesign the communications network in the vehicle and use those same connections for both communications and power delivery. Enter Ethernet. 

Today, vehicles typically use Controller Area Network (CAN) bus. The maximum data rate of CAN bus is typically 1 Megabit per second (Mbps). Tesla chose to replace the CAN bus with a 1 Gigabit Ethernet network. That's 1000 times faster than the CAN bus. And this same Ethernet network can deliver the needed 48V with a feature called Power-Over-Ethernet (POE). This reduces the number of wires that have to go to each of the 386 electronic components in Cybertruck. It also means the telemetry for all of the components can be delivered faster. 

Tesla refers to this as an Etherloop because they wire the Ethernet switches together in a loop with redundant bidirectional connections for fault tolerance. These higher voltage and faster data rates will be the new industry standard. Automakers have wanted both of these features for over a decade, but they had no leadership that could make it happen. Now that Tesla has cracked the code, others will be fast followers. 

Wrapping up Cybertruck 

This only scratches the surface of the Cybertruck (not an easy task). I'm sure there will be plenty more to discuss about the Cybertruck in 2024. 

Semi-truck

In September, the North American Council for Freight Efficiency (NACFE) conducted a study as part of their "Run on Less" program. This program tests electric semi trucks in real-world conditions with all results released in real time. A Tesla Semi truck traveled over 1,000 miles in a single day during these tests. This is something that many experts called impossible.

Jay Leno took the Semi out for a spin with Tesla's Senior Manager of Semi-Truck Engineering, Dan Priestley. Priestley explained how Tesla has iterated the semi over the last year. How they've collected data, talked to drivers, and used all of this feedback to make improvements to both the hardware and software in the semi.  

In October of 2023, Tesla began hiring to increase Semi production. 

Model 3 Highland

The Model 3 was introduced in 2017. With its sleek design, excellent performance, and more affordable price (compared to Model S and X), it quickly became the best selling EV in history. That title was soon overtaken by the younger sibling (Model Y), but more on that later. In 2023, Tesla offered a new version of Model 3 that added range and upgraded interior. This new version of Model 3 was codenamed "Project Highland." 

Highland offers significant chassis and suspension upgrades. The long range highland boasts an impressive range of up to 353 miles. The minimalist interior design, characterized by clean lines and the absence of traditional buttons and knobs persists and colorful LED ambient lighting is added.

Highland is shipping in China and Europe and is expected to launch in the North American market in early 2024. 
 

Model Y - Best Selling Car In The World

In 2023, the Model Y became the first all-electric vehicle to wear the crown of the world's best-selling car. As of July 2023, the Model Y edged out the Toyota Corolla for the top spot in new car sales worldwide.

5 Million EVs Produced

Speaking of production and sales, in September of 2023, Tesla announced that they had produced their 5 millionth EV. That's 5 million vehicles without tailpipes. 5 million cars that won't pollute as they wait in line at the after school pick up. 5 million cars that won't support the fossil fuel, drill and burn ecosystem.

50 Thousand NACS of Power- J3400

Tesla installed their 50 thousandth Supercharger in September of 2023. This network allows drivers to take their EVs on road trips. The Tesla network is by far the most complete and reliable charging network out there. 

Ford, GM, and others figured out that they could not compete with the Tesla network and their best course of action was to abandon the failing CCS standard and join the Tesla network. As you can see in the image above Honda, Kia, Jaguar, BMW, and others quickly followed. Stellantis and Mazda are among the few hold outs, but by 2025, if you want to sell an EV in North America, it better have a NACS connector, or it will be be considered by most EV shoppers.  

The automotive standards body known as SAE ratified NACS as J3400. This will make NACS stations eligible for National Electric Vehicle Infrastructure (NEVI) incentives.

Tribal Partnerships

Tribal lands are part of sovereign nations which exist within the borders of the U.S. Currently, 39 states include at least one tribal nation. As sovereign nations, tribal lands are not subject to state and local jurisdiction or restrictions.

Tesla has been partnering with tribal nations since 2021 to build showrooms, stores, or service centers on tribal lands. Some states have protectionist laws that require vehicles to be sold via a middleman (dealership) system. Tesla does not use dealerships. Instead, they sell direct to customers. Building on tribal lands allows Tesla sidestep these arcane laws. 

In 2023, Tesla opened two more locations on tribal lands. Tesla's tribal partnerships now include: 

• First Nation of Nambé Pueblo in New Mexico at the Buffalo Thunder Resort & Casino
• Santa Ana Pueblo: A partnership that builds on tribal land
• Mohegan Tribe in Connecticut at the Mohegan Sun Casino and Entertainment Complex
  
  

Master Plan 3.0

In April of 2023 Tesla released their Master Plan 3.0, subtitled "Sustainable Energy for All of Earth."

This is an outline for moving to a world of abundant, pollution-free, energy. 

Optimus

In September of 2022, the world got to see the first wobbly steps of Tesla's robot named Optimus. In 2023, Tesla made great strides (literally and figuratively) in the Optimus program. The perception system was demonstrated with the bot sorting blocks and picking up eggs. The walking speed is much faster and looks much more natural. 

JB's Return

JB Straubel is one of the founders of Tesla. He was the CTO until he left Tesla in 2019 to found and run a battery recycling company called Redwood Materials. In 2023, JB took a seat on Tesla's board of directors.

Stock 

Tesla stock started the year at $108 per share and it is ending the year $248. That 230% growth for 2023. 

Powerwall 3

In September of 2023, Tesla launched Powerwall 3. The battery portion of Powerwall 3 is very similar to Powerwall 2; however, Powerwall 3 adds a fully integrated solar inverter. Whereas Powerwall 2 could only be AC connected, Powerwall 3 can be AC or DC connected; allowing Powerwall 3 to be more efficient in some configurations. If you are retrofitting batteries to an existing solar PV system, you'll want to use Powerwall 2s, but if you are installing a new solar and battery system, Powerwall 3 is the way to go since you won't have to buy a separate PV inverter.

Wrapping It Up 

Above, we covered that Tesla is now offering wraps, but it's time to wrap this up. As every year has been for Tesla, 2023 was an exciting one to follow. They have accomplished things that legacy car companies would have never attempted. They are the vanguard of the future of the auto industry. While other car companies are announcing that they are slowing their EV programs, Tesla relentlessly pushes forward. I have no doubt that 2024 will be equally as exciting.

Disclosure: 
I am long Tesla

Tesla Model Y Snow Tire Range

2023 Tesla Model Y with Winter Tires

Winter is here and we've put snow tires on our new Model Y.  I was curious how this would impact our range, so I collected the data, crunched some numbers, and we'll look at the results. 

We recently installed a roof rack on our Model Y and we did a similar exercise. You can see the roof rack results here. 

Our vehicle: 2023 Tesla Model Y Dual Motor AWD
Options: 5-seater, 19" wheels

2023 Model Y Dual Motor AWD LR 5 Seater with 19" Wheels
	Stock Tires & Wheels	Winter Tires & Wheels
Tires	Continental ProContact RX 255/24 R19	Michelin X-Ice Snow 255 /45 R19 104H XL BSW
Wheels	19’’ Gemini	Vision VIS Cross II 73.10
Efficiency (miles/kWh)	4.2	3.4 (19% lower)
Efficiency (Wh/km)	147.6	183.3 (19% worse)

If you stop reading here, you might assume all of the efficiency decrease is due to the new tires. However, the pre-snow tire drives were in Sept. and early Oct. with temperatures in the mid-70s F (around 24C). The snow tire drives, on the other hand, were in late Oct. and Nov. with temperatures in the 30-50F (0-10C) range.

The colder temps reduce EV range in several small ways: 

• The air is thicker and it takes more energy to move it aside
• With the cold weather we turned on the cabin heater, seat heaters, and defroster 
• Much like humans, battery packs have a temperatures range where they run best. So, in cold weather, battery conditioning turns on and uses energy.
  
  

Range Impacts 

Our vehicle was EPA rated with 330 miles of range.  The colder weather and winter tires reduce this ideal range by 19% bringing it down to 266 miles. 

This is one of the reasons that we purchased a long range EV. The EPA rated ranges are in ideal conditions, real life is often far from ideal. I want to make sure we still have range enough to make traveling easy even if we're traveling over mountains, in winter, with luggage on the roof rack... 

Disclosure: 
Use my referral code for any perks Tesla may be offering https://ts.la/patrick7819
I am long Tesla

2024 is kNACkered For EVs Not Named Tesla

Jaguar (among others) will be using the
Tesla charging network in 2025

2024 is on course to be a lame-duck year for EV sales in North America for any automaker not named Tesla. Nearly every automaker (see list below) has pledged to support the Tesla-initiated charging standard now known as NACS or the North American Charging Standard for their EVs. The announcements from the automakers were largely made in late 2023; however, the charging port changeover doesn't happen until 2025 model-year vehicles. So in 2024, these automakers will offer-for-sale EVs with a charging port in its last year before being phased out. 

That charging port that is not long for this world is the CCS port. CSS has a patchwork of charging stations in various states of disrepair. JD Power has consistently ranked the CCS charging stations poorly.

Legacy automakers didn't have to build or support gas stations for their gas cars. They assumed the same would be true with EVs. However, the poor maintenance at CCS stations has hurt the EV ownership experience for their customers. EVs need a dependable charging network. This is a significant factor in owner satisfaction. If you have a car, you want to be able to drive it places. Occasionally, that means you might have to charge up someplace other than at home. This requires a robust "refueling" network. CCS was not that network.   

This drove automakers to leave CCS for greener pastures. More on this below in the 'Why CCS Failed' section. Reluctantly, automakers are embracing the solution from the upstart Tesla to gain access to the vast reliable charging network that Tesla has created.

Who is Joining NACS

Companies Joining NACS: 
• 2023.05.26 : Ford (Lincoln)
• 2023.06.09 : GM (Chevy, Cadillac, GMC)
• 2023.06.20 : Rivian
• 2023.06.22 : FLO (Charging Network)

• 2023.06.27 : Volvo

• 2023.06.27 : ChargePoint (Charging Network)
• 2023.06.28 : Blink (Charging Network)

• 2023.06.29 : Polestar
• 2023.06.29 : Electrify America (Charging Network)
• 2023.07.07 : Daimler (Smart, Mercedes-Benz) 

• 2023.07.10 : Lotus

• 2023.07.19 : Nissan (Infiniti)
• 2023.08.18 : Honda (Acura) 
• 2023.09.22 : JLR (Jaguar, Land Rover, a division of Tata Motors)  
• 2023.10.05 : Hyundai (Genesis, Kia)
• 2023.10.17 : BMW, Mini, Rolls-Royce
• 2023.10.20 : Toyota (Lexus)

• 2023.10.23 : BP Pulse (Charging Network)

• 2023.11.01 : Subaru

• 2023.11.06 : Lucid

 

Volkswagen, Stellantis, Suzuki, Mitsubishi, and Mazda still have not announced NACS support, but it's clear if you want to sell EVs in N. America after 2025, the NACS connector will be the standard. By the time you are reading this, many (all?) of these legacy holdouts may have already announced support.

Many EV buyers may be reluctant to buy the final year of a car with a charging port that will require them to use adapters for nearly every charging event (more on this coming up).

Why'd CCS Fail?

The largest CCS network in North America is the combination of Electrify America and Electrify Canada. These networks were created as part of the $2B+ Diesel-gate scandal settlement.

For a charging network, reliability is vital! When you pull up to a charging location, you expect to be able to, well, charge up. Sadly, far too often, at Electrify America stations this was not possible. Stations would be down for repair or blocked. This often meant that the few spots that were not blocked and operational had a long line of cars waiting to drink in the lepton juice. 

JD Power has repeatedly ranked Electrify America as poor for reliability. It's almost like forcing a business into existence via mandates and fines is not the best way to create a company filled with people passionate about their mission. A headline from The Verge says it well for the state of charging in the US in 2023, "EV charging in the US is still a no good, very bad time — and somehow it’s getting worse." If that was not enough, here's another, "Car Companies Are Beyond Fed Up With Electrify America: Report."

Surprisingly, customers occasionally want to drive their EV more than half a charge away from their home charging station. Drivers of CCS-equipped vehicles are fed up with the unreliable infrastructure and they are letting the automakers hear this loud and clear. 

Both Ford CEO Jim Farley and US Secretary of Energy Jennifer Granholm both attempted road trips in 2023 using CCS vehicles and found the infrastructure deficient.

Tesla owners charge about 3 times more often at Superchargers than owners of other EVs charge at CCS fast chargers. This is because Tesla drivers know that the Supercharger network is reliable. They will be able to charge up and continue the drive without major hassles.  

Vehicle makers that have joined the NACS coalition

Adapters & MagicDock

There will be adapters that allow CCS-equipped vehicles to charge up at NACS stations, so the CCS vehicles will not totally be left in the lurch. And there are the MagicDock Supercharger stations. MagicDock Superchargers have a built-in CCS adapter. If you just walk up and grab the handle, it will be the native NACS connector. However, if you login to the Tesla app (or an app that supports the Tesla app APIs), then you can request a CCS connector on a specific stall and the CCS adapter will lock onto the connector. Then when you pull the connector out, it will have CCS for your 2024 or prior year non-Tesla vehicle. 

While CCS cars will be able to charge, charging with an adapter or MagicDock is not as convenient as a native NACS experience. With NACS, you just grab the handle and plug it in. When the charge is complete, unplug and drive off. No app, no adapter, to membership card to deal with. Billing is handled automatically via Plug-n-charge. 

With CCS, you'll need an adapter. If you are using an adapter, the charging handle may not properly lock to the vehicle or the charging rate may be reduced. If you are using the MagicDock, then you'll have to use an app to tell the station that you want to charge with the CCS adapter. Then after the station is informed, only then will you be able to remove the charging cable with the CCS adapter locked on. Neither of these is as simple as the NACS experience. If you plan on keeping your car for years, that's years of dealing with apps and adapters for every on-the-road charging experience.    

Coopetition 

When companies compete, there's reason to innovate. A company that can make or do something better, faster, cheaper... has an advantage. There are times, however, when cooperation between companies is better for the customer and the companies. There are times when standardization increases the available market and allows companies to show their strengths in other ways. 

When this is the case, standards to the rescue. With all the automakers adopting NACS, they will all have the same robust charging network. This means that EV makers will have to compete in other ways, such as range, performance, price...

One Port To Rule Them All

There are no separate gas stations for Fords or Toyotas. If you drive a gas-powered car, you just go to the gas station (nearly any gas station) and fill up. The only consideration of concern is Diesel or gasoline. This is not that hard and with rare exceptions, people can successfully fill up every day.

Charging an EV is not that simple yet. With an EV, there are different networks. Some are AC, some are DC, some take credit cards, some require membership and have apps or membership cards; some have QR codes to scan. And there's another layer of complexity, the charging ports. You have to know if your car has just AC charging or if it also has DC fast charging and if so, which kind of port(s). In the US, there's J1772, CHAdeMO, CCS, and Tesla (now called NACS). You're out of luck if you pull up to the wrong type when you need to charge. Well, unless you have an adapter that allows you to convert the charging station connector to the type that your car needs. And when you use these adapters, you are often greatly restricted in the top charging rate.

For EV to go mainstream, this needs to be simple. Multiple network memberships, multiple connector types, adapters... this is all far too complicated. Most of the time an EV is just charging in its own garage, and this doesn't matter. However, when you go on a road trip, on-the-road EV charging is anything but simple (unless you have a Tesla, more on that later).

We need one continent-wide, universal connector, with payment simplicity and plug-in simplicity (without adapters). One plug, any place, AC or DC, that just works. For EVs to become ubiquitous, charging has to be easy. You should not have to know multiple standards, voltages, amperages... It has to be simple, plug in, charge up, drive off. When there are multiple competing standards like we have today, there's a layer of complexity that creates an obstacle to mass EV adoption. 

There are times when proprietary solutions are the right way to go. This can allow innovation and differentiation. There are other times when standardization benefits the manufacturers with commodity parts with higher volumes and lower prices. Standards make it more convenient for owners too. If there's one charging standard, then you won't have to know if you have a CHAdeMO, CCS, J1772, or NACS port on your car or which connectors are at the charging location that you plan on stopping at on your road trip.

This move by all automakers to adopt NACS removes a layer of complexity. Now, automakers will compete on other features like range, performance, price...

While I think this is the right direction, I wonder if automakers have Osborned themselves by announcing that they will have something cool in 2025, but then expecting people to buy their 2024 vehicles.

2024 Has Other Headwinds Too

Other Headwinds: Interest Rates

Most people buy cars with financing. They take out a car loan and make monthly payments. Other things being equal, the higher the interest rate, the higher the monthly payment. Car loan rates are about 8% for new cars and even higher for used vehicles. They have not been this high since the Great Recession in 2009.

Most people would rather spend their money buying a car that they like rather than paying interest. So some buyers are likely to sit on the sidelines, keep driving the car they currently have, and wait to see if 2025 has better rates.

Let's compare buying a $50,000 vehicle with a $10,000 down-payment (or trade-in) with $2,400 in title registration and other fees rolled into the loan at today's rates versus last year's. 

2022: 
1.2% Loan Interest Rate
Down-payment: $10,000
Loan Amount: $42,400
60 Month Loan
Monthly Payment: $728
Total Cost: $53,706

Today:
8.1% Loan Interest Rate
Down-payment: $10,000
Loan Amount: $42,400
72 Month Loan
Monthly Payment: $745
Total Cost: $63,675

There are a few things to unpack here. The first thing to note is that, if you're taking out a loan, overall you'll pay about $10,000 more in today's environment.  

The second thing to note is that the second loan is 72 months rather than 60 months. That's because most people are concerned with the monthly payment more than anything else. To make the payments similar for these two loans, the term of the second one had to be extended. 

Other Headwinds: Falling EV Prices

Falling EV prices seems like it would be a sales accelerator. In the long term, it will be; however, if the prices are dropping and they look like they might keep dropping, there's a temptation to wait and see how low they may go. 

Multiple battery factories are being built. Batteries are by far the single highest cost of EVs today. As these factories come online in 2024, battery prices will drop and EV prices will follow.

Falling prices of critical minerals will lead to a 40% drop in the cost of batteries for electric vehicles by 2025, with big implications for the pace of global EV adoption, says Goldman Sachs Research. So if you can wait, you'll likely get a better deal in 2025.

Wrapping Up

The current CCS charging network in North America is not good. The only network that is robust and reliable is the Tesla Supercharger (NACS) network. Automakers are giving up on CCS and moving to NACS as fast as possible, which is 2025 model-year vehicles.

This means that 2024 will be the final year of CCS cars. CCS is now officially the Betamax of charging standards and 2024 will be its final year of sales. CCS is a dead-end technology.

Will EV shoppers buy the final model year of a standard that's fading away? Or will they save their pennies for another year and see what 2025 brings? With high interest rates and falling prices in 2024, it is tempting for buyers to sit on the sidelines and hold out for 2025 where they may get a better vehicle at a lower price with better financing and a native NACS port.

You can call 2024 a transition year, a lame duck year, or an Osborne year. If buyers sit on the sidelines, non-Tesla EV sales in North America 2024 is kNACkered.

Counterpoints 

There are plenty of EV drivers that disagree with this assessment. They argue that the NACS changeover is not that big of a deal. Comparing CCS to Betamax is hyperbole since there will be adapters (unlike Betamax video tapes) and there's MagicDock meaning that more and more Tesla locations will be able to charge CCS vehicles after just a tap or two in an app. Plus the existing CCS network (as bad as it may be) is not going away and it will be better supported as more EVs hit the road and start using the network in 2024.

Similarly, the point about interest rate impacts is overplayed. Interest rates will hurt all auto sales, not just EVs. So the growth of EVs as a percentage of new auto sales will increase in 2024, even if the volume of sales is down or flat compared to 2023.

disclosure: I'm long TSLA and several other EV stocks