Tesla recently cut Model Y output in China, according to data from the China Association of Automobile Manufacturers (CAAM), Tesla’s production of the Model Y in China experienced a decline of approximately 18% in March, and 33% in April, versus the same time last year.
Output Cuts
These output cuts can be attributed to Tesla’s recent decision to reduce production of the Model Y at Giga Shanghai by at least 20% from March to June 2024. This was attributed to an unnamed Spokesperson by Reuters last week.
This decision could be multifaceted – the primary reason being an economic slowdown in China as price wars continue to be waged between EV manufacturers, including Tesla. On the flipside, Tesla has continued its production of the updated 2024 Model 3, colloquially referred to as the Highland, with an increase of 10%.
There is a continued expectation that Tesla is pushing back its Model Y refresh – its best-selling vehicle – to make a bigger splash. This could include newer features – like the Cybertruck’s Steer-by-Wire, front camera, or other upgrades and changes – like the lack of stalks on the rest of the Tesla line-up.
Tesla currently offers free music streaming with every Tesla, although you’ll need Tesla’s Premium Connectivity package to stream over the vehicle’s cellular data or be on WiFi. In North America, Tesla includes what they used to call “Streaming,” and have just recently renamed to call LiveOne. However, in Europe, where LiveOne isn’t available, Tesla provides a free license for Spotify, which allows owners to stream the service for free without having to subscribe.
However, it looks like this may be coming to an end. We recently received an anonymous tip that Tesla would be ending this free benefit for its European customers. While we haven’t been able to confirm this just yet, it does seem likely. Let’s take a look at why we think this could be happening.
European Spotify Premium
Tesla’s European customers receive a free license of Spotify Premium right now – whether they’re subscribed to Spotify Premium or not. This means customers can listen to ad-free music, have unlimited skips, play music in any order, and be able to sort and queue songs for listening. However, the account is limited to listening in your Tesla, much like LiveOne in North America.
You’re also not given the credentials to the Spotify account, preventing you from using the same account on other devices. If a customer decides to subscribe to Spotify Premium on their own, they can still log in to their account in their Tesla and share the same Spotify account and playlists with other devices, just like you can in other regions.
Removal of Free Premium Benefits
Given the tip we received and some other recent information, we expect this change to happen. This appears in line with other changes to Tesla’s streaming services, including the changes to Slacker/LiveOne Radio in North America.
As Tesla adds additional music services like YouTube Music, Amazon Music, Apple Music, and SiriusXM in the future, it becomes more likely that Tesla vehicles have a music service someone may already subscribe to. This is especially true with the addition of Amazon Music, which is included with an Amazon Prime subscription. According to Statista, there are now over 180 million Amazon Prime members.
Subscribing to a music service has also become much more popular in recent years. In the United States alone, there are now more than 90 million music streaming subscriptions (Forbes), and that trend continues to grow year over year.
While Tesla likely only pays a small fraction of what a customer would pay for a Spotify Premium subscription, even if it’s just 50 cents per month, that amount would definitely add up with the more than 6 million Teslas on the road today.
Tesla certainly has the data to understand how many customers use the service that’s included in the vehicle and will use this to make the transition at the right time. At some point, it just doesn’t make sense to continue to pay for a service most customers don’t use.
Timeline
We were told that this change would happen this year, so it may not be much longer before we hear about this change officially from Tesla. What’s not clear is whether this would impact all customers or potentially only new customers. A lot may depend on their deal with Spotify and LiveOne and whether it’s based on a flat fee per vehicle or a monthly/yearly fee.
Based on industry changes alone, we would expect this to impact all customers. However, we’ll have to wait for official confirmation from Tesla, as until then, this should be considered a rumor.
Tesla purchased SolarCity, a large solar and backup installer, back in 2016 and shortly thereafter began installing its unique Tesla Solar Roof, regular Tesla Solar panels, and Tesla Powerwalls for both commercial and residential customers.
However, as the years have passed, Tesla has lost its interest in the actual installation portion of the business. They’re more than happy to continue producing Solar Roofs and expanding Powerwall production, but for the most part, their in-house rate of installations has slowed drastically.
Since Q2 2020, Tesla has seen a 10% or greater drop per quarter in the number of in-house Solar Roof, Solar, and Powerwall installations every quarter.
Third-Party Certification
Tesla has instead begun to certify third-party installers throughout North America and Europe for Powerwall and solar panels and within the United States for Solar Roof.
Tesla launched the Certified Installer Program in 2020 and said it has approximately 2,000 certified installers in over 14 countries—and those certified installers have set up over 1 million installations. James Bickford, Tesla’s Director of Global Sales, Residential Energy Products, announced the expansion of the Certified Installer Program and its new push on LinkedIn.
The Certified Installer Program provides several things to get third parties ready to install and commission Tesla’s home energy ecosystem, including virtual and in-person training, on-site training, custom installation tools, and the Tesla One Software Platform.
In addition to those supports, Tesla’s Partner Platform offers marketing support resources and a dedicated access system for a personal Account Manager from Tesla.
Tesla One Dashboard
The Tesla One dashboard offers third-party installers a one-stop-shop platform for managing quotes, installations, and repairs in one mobile app.
It is a convenient-looking application that lets third-party installers see what tasks they need to perform for specific installations and also helps them scale particular installations to customer requirements.
While this isn’t a new direction for Tesla overall, we’re seeing a distinct move in the energy business from Tesla as a first-party installer of its products to a more hands-off approach where local electricians and contractors will install Tesla products under its auspices.
We’re interested to see where Tesla continues to go with this, as they’ve seen their Powerwall business expanding in the last few years, while Tesla Solar and Solar Roof have dropped off many people’s radars lately.
![Elon talks about Twitter and job cuts at Bloomberg forum [video]](https://www.notateslaapp.com/images/news/2022/elon-musk-qatar-forum_300w.jpg)
