What the Model Y means to Tesla, investors and future owners – TeslaWeekly

Yesterday I posted an article about the Model Y, Rumor: Tesla sending out drawing and specs to solicit quotes for Model Y crossover for production date March 1, 2020.  Today I’d like to follow up with that article and discuss the significance of the Model Y and what it means to Tesla, investors and future owners.

The Model Y is the small SUV crossover that Tesla is planning for production in 2020.  It will be built on the same platform as the Model 3 and share many of the same parts, and presumable the same battery pack.




Fundamentally the Model Y is a more difficult for Tesla to build than the Model 3, and much of that is because of the price point that Tesla is trying to achieve.  Tesla is reaching for the mass market with the Model Y (as they are with the Model 3) and thus they need to price the Model Y comparably to other small luxury SUV vehicles.  If the Model 3 base price is $35,000, then I would expect the Model Y base price to be $38-40,000.

The Model Y is also a more difficult vehicle for Tesla to do well because due to its larger mass and higher profile, the Model Y will be less efficient than the Model 3.  Thus, while the Model 3 can go 310+ miles with a 75kWh battery pack, the Model Y will likely get significantly less than that.

One example is the Model S 100D gets 335 miles (EPA) but the Model X 100d gets 295 miles (EPA) range.  In other words, the Model X gets 12% less range than the Model S, largely do to poorer aerodynamics and heavier mass.  If we apply the same 12% hit to the Model Y, then the Model Y with a 75kWh battery pack would have a range of 273 miles (EPA).

With the Model X, Tesla made the mistake of being too ambitious (as admitted by Elon himself).  However, the Model X also had a lot of requirements such as being aerodynamic yet seating 7 adults.  The falcon wing doors also added a lot of complexity and due to supplier issues Tesla had to redesign much of the Model X last minute.  This led to a slow and delayed production ramp, and also contributed to quality issues by early owners.

With the Model Y, it’s probably going to be Tesla’s best bet to base it as much as possible off the Model 3 which is a fabulous car.  I hope they forgo the falcon wing doors and go with conventional doors.  What people want is not a new door system like the falcon wing doors, rather they want a great compact SUV that drives like a Tesla, has great range, and is affordable.  If Tesla can make the Model Y in the image of the Model 3 (and avoid the temptation of over-complexity), then I think they will have a massive hit on their hands.

The Model Y is an important “next piece” in the ambitious growth plans that Tesla has.  2018 will be known as the year of the Model 3 production ramp.  And by 2019 they will reach their full production rate of 10,000 cars per week.  This will segue perfectly into the start of production for the Model Y in 2020 and also the production ramp of the Tesla Semi.

While the Model 3 still will have ambitious expansion plans with new gigafactories in China and Europe, the Model Y will be the dominant revenue growth provider for 2020-2022.  Then, after the Model Y will be the Tesla truck and other vehicles by Tesla.

Tesla’s lineup of vehicles they are expanding to is quite predictable and logical.  Tesla is making great cars at the best price they can, and they are addressing the largest markets possible.  They also are riding the wave of decreasing battery prices and using their scale and innovation to drive down costs as well.  This is allowing them to create vehicles, like the Model 3, at a price that most people thought were not possible just 5 years ago.

Tesla is also riding the wave of faster charging.  Over time Tesla has and will increase supercharging speed.  This will make their vehicles increasingly more appealing to new buyers since the inconvenience of long distance travel with a EV is still a challenge and concern for many.

Finally, another wave Tesla is riding is the wave of autonomous driving.  Tesla has added 8 cameras to the Model 3 along with advanced computing power that will enable Tesla to power and activate more and more self-driving features in the future.  Again, this is going to make their vehicles increasingly more appealing to new buyers.

So, with the Model Y, Tesla will be taking all that they’ve learned with the Model 3 and will be attempting to make the best small luxury SUV in the world.  And if the Model 3 is any indication, they have a very, very high likelihood of success.

That is, as long as they can avoid some of the mistakes with the Model X.

 




Elon Musk is turning out to have a knack for investing.While his focus is not necessarily on investments, the investments he’s made both in his own companies and others have grown tremendously.

What’s not known by many people is that Elon Musk has made many investments besides the investments he’s made in the companies he runs, like Tesla or SpaceX.

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Model 3 video review, episode 1 by YouTuber MKBHD

Marques Brownlee (aka MKBHD) is a YouTuber who is known for his quality tech videos.  His YouTube channel has over 5.7 million subscribers, and he’s been a Model S owner for some time.  His Project Loveday Contest video won first place last year.

I was able to meet Marques at the Model 3 delivery event last year and got a chance to talk with him as we were waiting for our Model 3 test rides.  Tesla had invited him to the event as a contest winner.

Recently Marques was invited by Tesla to test drive a Model 3 for a week.

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