Tesla may equip its low-cost Model 2

Tesla may equip its low-cost Model 2

Elon Musk’s teased ‘very high’ production volume plans for Tesla’s first mass market electric vehicle may have led to the huge order for next-gen 3nm chips it has placed with TSMC. The new 2024 N3P production mode is faster and more frugal with power consumption than TSMC’s current 3nm chips.

Tesla has reportedly placed an unusually big order for chips made with the second-gen 3nm N3P process of the TSMC foundry. So big, in fact, that when the order starts being fulfilled, Tesla may wiggle into TSMC’s most important customers’ list.

The N3P production node is a second generation 3nm process with higher transistor density compared to the current N3E generation which offers a performance increase or reduced power consumption. According to TSMC’s Zhang, the “N3P is a performance boost, it has a 5% higher performance, at least a 5% higher than N3E,” as well as a “2% optical shrink, which bring transistor density to 1.04x.”

What’s more interesting than these slight performance increases and power draw gains, however, is that TSMC will begin mass 3nm chip production on the N3P process next summer, and it has listed Tesla among its biggest clients. This could mean that Tesla is not only readying the design of its next-gen Hardware 5.0 FSD computer, but it also plans to install it in way more electric vehicles than its current rate of production would suggest.

Given that Tesla also reportedly signed a contract with Samsung’s foundries for HW5 chips, and that contract is scheduled to begin in 2026, the TSMC’s N3P process would likely be used for a huge production ramp in 2025. This leaves Tesla’s upcoming Model 2, its first mass market electric car, as a plausible reason for the huge increase in HW5 chip orders.

Tesla has reportedly scheduled the Model 2 for 2025 release and could actually announce its price and specs next year. The cheapest Tesla may look like a shrunken version of the Model Y but with a more “futuristic” design that allegedly won the heart of Elon Musk the first time he saw its renders.

The battery is reportedly going to be a 53 kWh LFP pack that could propel it for about 300 miles on a charge, while the Model 2 price is reportedly going to be set at about $22,000, barring any federal subsidies it may ultimately qualify for.

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