What turned Tesla into a "tin shack" is Elon Musk's new trillion-dollar bet.

The cost-cutting measures for the budget version of Tesla are even more drastic than expected.

On October 7th, a new model of the Model Y officially named "Standard" (hereinafter referred to as the "Standard Edition") was launched on Tesla's official US website as scheduled. Surprisingly, the Standard Edition of the Model 3 was also introduced simultaneously. The two Standard Edition models have reduced the starting prices of the Model 3 and Model Y by $5,500 and $5,000 respectively. The former now starts at $36,990 (approximately RMB 263,000), while the Model Y starts at $39,990 (approximately RMB 285,000).

On October 8th, Yuan Auto learned from a source close to Tesla China that the two new Standard Edition Tesla models are currently only available in the US market. Whether they will be launched in the Chinese market in the future remains to be further confirmed. On the same day, Yuan Auto contacted Tesla China to verify the localization plans for the two new models but had not received a response at the time of publication.

"The price cuts for the two Standard Editions compared to the previous entry-level models range from 11% to 13%. Even within Tesla China's pricing system, the starting prices still cannot be compressed below RMB 200,000. Coupled with the extremely streamlined configuration, their appeal in the domestic market is limited," the above source told Yuan Auto.

Turning a Shell House into a Tin Shed

In the domestic automotive market, Tesla's configuration is relatively simple compared to models in the same price range, so it has always been jokingly referred to as a "shell house" among cars. If the Teslas currently on sale in China are already "shell houses," then the Standard Edition Model 3 and Model Y are definitely "tin sheds."

Taking the more highly anticipated Standard Edition Model Y as an example, compared to the version that costs $5,000 more, its front and rear through-type headlights, interior ambient lighting, and rear entertainment screen have been removed. The folding function of the exterior mirrors and the steering wheel adjustment method have been changed to manual. The seat fabric, standard wheel size, power, and range performance have all been downgraded.

However, in fact, these are all expected cost-cutting measures. What really makes people "lose their composure" lies in the details.

For example, when you open the front hood of the Standard Edition Model Y, you will find that most of the plastic trim panels and noise-reducing materials have been removed, leaving a large number of metal components exposed. From the outside, the Standard Edition Model Y also has a glass sunroof, but when you open the door, you will find that the roof is covered with a layer of fabric stitching. There isn't even an FM radio function in the central control system of the Standard Edition Model Y.

In comparison, the cost-cutting measures for the Standard Edition Model 3 are slightly less drastic. The styles of its front and rear headlights are basically the same as those of the more expensive models, and the panoramic sunroof inside the car has also been retained.

If you still find the cost-cutting measures for the Standard Edition Model 3 and Model Y acceptable, then Tesla has prepared an operation that even many loyal fans of the brand can't understand - removing the Autopilot function.

The so-called Autopilot function refers to an assisted driving function based on adaptive cruise control and automatic steering. Once activated, the vehicle can stay centered in the lane and follow the vehicle in front automatically. Although it is not as intelligent as the Navigation on Autopilot, which can actively bypass obstacles and overtake other vehicles, it can still significantly relieve driving fatigue. It is the most popular assisted driving function among Tesla owners after the Full Self-Driving (FSD) function.

On the Standard Edition Model 3 and Model Y, since the automatic steering function has been removed, there is no mention of Autopilot. To experience Tesla's proud assisted driving capabilities, owners of the Standard Edition Model 3 and Model Y can choose to install the FSD Full Self-Driving function for $8,000.

Musk's Trillion-Dollar Bet

If you don't understand why Tesla has removed the Autopilot function from the configuration list of the Standard Edition Model 3 and Model Y, you might as well first review a new compensation plan proposed by Tesla's board of directors to CEO Elon Musk in September this year.

This compensation plan has a ten-year term. Musk can receive up to 423.7 million shares of Tesla's restricted stock, with a potential value of up to trillions of dollars. To obtain all these stocks, Musk needs to achieve 12 phased goals, each of which includes a market value target and an operational target.

Among this series of goals, four operational targets are regarded as the foundation of everything: first, deliver 20 million Tesla vehicles; second, reach 10 million active subscribers for the FSD Full Self-Driving function; third, deliver 1 million humanoid robots; fourth, have 1 million Robotaxis in commercial operation.

Currently, this compensation plan is still awaiting approval from Tesla's shareholders' meeting, but the outside world generally believes that it is only a matter of time. Now, Tesla's strategy for the Standard Edition Model 3 and Model Y happens to correspond to the operational goals of increasing new car sales and stimulating FSD subscriptions.

It is reported that the US federal electric vehicle tax credit policy expired on September 30th. In other words, the cost of purchasing electric vehicles in the US has also increased accordingly. Against this background, Tesla's move to lower the entry price threshold of the Model 3 and Model Y through the Standard Edition models is a positive coping strategy.

Considering the limited number of competitors and product strength of Tesla in the US market, it is expected that the Standard Edition Model 3 and Model Y will still have high appeal.

While maintaining or even expanding the opening of the conversion funnel in the US market through the Standard Edition models, Tesla officially pushed the first version, V14.1, of FSD 14 to US users on October 7th. Musk previously said that starting from FSD 14, Tesla will "feel like it has consciousness."

Currently, on overseas social media platforms, videos related to Tesla's FSD 14 have attracted wide attention. Some owners have filmed videos recording the process of their vehicles automatically passing through the drive-thru after the upgrade, and some owners have demonstrated that their vehicles can now actively avoid police cars behind them based on the sound of sirens.

With the overwhelming publicity of the functions and the fact that the Standard Edition Model 3 and Model Y do not offer Autopilot, which can meet the basic needs in the field of assisted driving, it is reasonable for owners to grit their teeth and pay $8,000 to become subscribers of the FSD Full Self-Driving function all at once.

In fact, globally, Tesla has basically bid farewell to the stage of wild growth, and there has been a decline in demand to varying degrees in its two major markets, the US and China. Therefore, for Musk and Tesla to achieve their next-stage development goals, implementing more region-specific market strategies according to local conditions is the key.

From this perspective, the six-seater extended Model YL launched in the Chinese market in September, like the Standard Edition Model 3 and Model Y launched in the US market now, is part of Musk's trillion-dollar bet.

This article is from the WeChat official account "Yuan Media Hub," author: Pan Zhuolun. Republished by 36Kr with permission.