Tesla (NASDAQ:TSLA) held an event at its Los Angeles design studio last night, where its latest electric vehicle — the fifth to be produced by the company — was unveiled. The Tesla Model Y is a crossover SUV, based largely on the Model 3 sedan. CEO Elon Musk says the Model Y will ship next year at an initial starting price of $47,000 with a $39,000 version available in 2021.
SUVs are the hottest segment in the auto market, and Musk expects demand for the Model Y may be even greater than for the Model 3. Investors seem a little uncertain about that, with Tesla stock down 2.23% in pre-market trading.
Tesla Model Y Is Official
After months of speculation and teaser images, Tesla took the wraps off its latest electric vehicle last night. The Tesla Model Y is a crossover SUV and, like the Model 3, intended to be a mass-market offering.
The least expensive Standard Range version (230 miles) will be priced at $39,000 when it’s released in 2021. However, TSLA is starting off with several more expensive versions that will arrive in 2020. The Long Range Model Y (300 miles) goes for $47,000 while a version with All-Wheel-Drive ups that to $51,000. The Performance Model Y will set buyers back $60,000. In 2021, Tesla says that seven-person seating will be offered as an option.
Note: Those prices are as announced at last night’s event. However, at the time of this writing, Tesla’s website was indicating $48,500 for Long Range, $52,500 for All-Wheel-Drive and $61,500 for Performance.
the Model Y will be “the safest mid-sized SUV by far” and says that it comes feature complete, needing only software updates to unlock advanced self-driving capabilities.
In terms of size, the Tesla Model Y sits between the Model 3 sedan and the Model X SUV, a position it also occupies in terms of pricing. A panoramic sunroof is standard, and there is 66 cubic feet of cargo space.
Like all Teslas, the Model Y also offers acceleration that’s superior to traditional gas-powered cars. Rear wheel drive Tesla Model Y versions clock zero to 60 in 5.5 seconds, dual motor all-wheel-drive versions cut that to 4.8 seconds and the Performance model will hit 60 mph in 3.5 seconds.
Low Risk, High Reward?
TSLA is promoting the Model Y as a low risk/high reward vehicle.
On the reward side of the equation, SUVs are the auto industry’s
. The Tesla Model Y has the potential to be a mass market vehicle, with the additional room it provides over the Model 3 making it ideal for families.
How can a new vehicle be low risk? For one, the Tesla Model Y is launching into that hot SUV market and at a time when demand for electric cars has been ramping up. The combination of being all-electric and an SUV gives it instant appeal. Tesla says the Model Y shares three-quarters of its components with the Model 3, which should greatly reduce both development and production costs. And the company skipped the Falcon doors that have on the Model X.
All that sounds good if you own Tesla stock, but that being said, the Model Y is unlikely to have its own way in the market. Traditional automakers have ramped up their electric car offerings and many of them have also begun to release all-electric crossover SUVs. By the time the Tesla Model Y arrives in showrooms (assuming the company will still have showrooms), it will be competing against electric crossover SUVs that have been available for a year or more, including luxury options from the likes of Audi and Jaguar. And TSLA will be trying to convince buyers to shell out at least $47,000 at launch while also dealing with the winding down of its tax credit on purchase.
How to Pre-order a Model Y
Assuming it doesn’t run into any delays, the Tesla Model Y is expected to arrive in the fall of 2020, with the less expensive Standard Ranger version becoming available in 2021. If you want to , you can do so now with a $2,500 deposit.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
