Is the Y/3 similarity a problem, or irrelevant?

[mattjs33]

Hi Matt!

I sat in a Model Y that was driven. It’s better than my 3. If a transfer didn’t cost money I would do it in a heartbeat.

It’s instantly familiar to those who are comfortable with a 3.

Kate is not my favorite supermodel either. My point is those complaining about the Y can’t really name a competitor that can beat it. I think it has no competition overall and especially not on the EV space?

If no supercharging network, it’s dead to me. Literally (if I want to travel) and figuratively.

Hello MX! I was out for a while, had some network trouble too.

You gotta compare Model Y to the competition in 2020, not today, because that's when it comes out. You or I don't really know what the competition will be like at that time. I get that Tesla has certain competitive advantages but this space is evolving rapidly.

Curious to how you think the Y was "better" than your 3, considering it's 75% the same.

It's not pretty to me. Like a fat 3, and I really kind of like the 3 visually.

 

[Watts_Up]

Watching last night I was disappointed when I saw the similarity between the Y and 3, but it took me a while to think through exactly why.

I think the market space for cars is spanned by two sets of dimensions: functional and aesthetic. The functional dimensions are purely objective specs and capabilities together with pricing, while the aesthetic dimensions are subjective - mainly styling but also perceived brand or model attributes where the owner believes they are making a statement by owing that particular make and model of car. Car companies decide to make the significant up-front investments needed to develop and introduce new models in order to expand their market coverage and attract new owners who want a car from the part of the market space that the new model inhabits, thus expending the company’s sales and providing a return on the engineering investment.

Introducing a new model that differs along the functional dimensions is will do this, but so will introducing a new model that differs aesthetically. The classic example is General Motors in its heyday doing “badge engineering” where models from Chevy, Buick, Oldsmobile and Pontiac were all functionally the same car but differentiated aesthetically in terms of both styling and projected brand values. This allowed GM to cover the market and sell more cars than if they just sold the one model from, say, Chevy. Pure badge engineering like this seems no longer to work in today’s competitive world, so the Volkswagen group sells models from Volkswagen and Audi that strongly differ from each other aesthetically, but are also functionally distinct in terms of engineering and specs that differ at least somewhat, even when you compare their offerings in the same functional category. By varying their offerings along BOTH sets dimensions, car companies cover a broader swath of the overall market space.

Tesla’s problem with the Y is that although it is functionally distinct from the 3 and therefore addresses new market space in that way, the 3 and Y are more identical aesthetically than any other pair of sedan and CUV I have ever seen. They are so aesthetically undifferentiated that I think you would need to look pretty hard to know whether the Tesla heading toward you in the opposite lane was one or the other. Perhaps this won’t be as true when seeing the cars in person, but the Y and 3 look less distinct to me than the pre and post-facelift Model S once they changed the nose, or for that matter the pre and post-facelift versions of any other car from any other manufacturer, even though those would be versions of the very same model car. Who would strive to be the first on their block to own a Y when nobody could tell they were.

The point is that by not even changing the appearance of the headlights, or the look of some element of the interiors, Tesla is completely forgoing the aesthetic dimensions of product differentiation, reducing its coverage of the overall market space relative to what it could have been. I believe this means that sales of the Y and 3 together will be less (I’m not sure by how much) than they otherwise could have been.

Taken in isolation, the Y looks to be an absolutely great car, both functionally and aesthetically: probably the car that Tesla should have introduced instead of the 3 since it covers a bigger segment of the market functionally (CUVs instead of sedans). Thus I don’t expect it will be sales of the Y that suffer. However once the Y is available, why would the aesthetically undifferentiated 3 continue to sell in the long run? People who want cheap would only save $2k by buying the 3. Only a very few people who either care about the slightly sleeker lower lines of the 3 (I am one of those) or the slightly better handling of the 3 on the track (I am also one of those) would choose to buy the 3. By being so aesthetically similar to the 3, the Y becomes the 3’s closest competitor by far and will cannibalize its sales, probably beginning immediately. It’s analogous to showing off a car model’s redesigned successor a year and a half before it’s available for sale. In fact I suspect Elon plans to ship the Y in volume earlier than the late ‘20/’21 timeframe that he outlined, but he announced the long dates to reduce the Y’s Osborne effect on the 3 as much as he can.

So that’s why I felt disappointed when I saw the Y. Are my fears justified or misplaced?

Quite impressive analysis.

I think that the bottom line was the sale price.

So keeping simple (KISS) was certainly a big concern
and makes the Model Y a little bit vanilla.

I would not be surprise if the Model 3 and the Model Y might be built on the same production line.

Other versions with more distinctif style might then be build in the futur like a 2 doors Coupe or Convertible...

 

[MXWing]

Hello MX! I was out for a while, had some network trouble too.

You gotta compare Model Y to the competition in 2020, not today, because that's when it comes out. You or I don't really know what the competition will be like at that time. I get that Tesla has certain competitive advantages but this space is evolving rapidly.

Curious to how you think the Y was "better" than your 3, considering it's 75% the same.

It's not pretty to me. Like a fat 3, and I really kind of like the 3 visually.

What is the competition coming out in 2020
that I could sit in and be driven around in? You can’t announce a car in early 2020 and have it in our hands by end of 2020. No one can do that.

The Y is not sharper than the 3 overall but pretty close. Maybe Kate Uptons less attractive sister maybe.

The X on the other hand is a beached whale compared to the S.

Y dominates the 3 in the following ways from most substantial to least substantial.

1.) The space is massive with the middle row folding down flat. I’d love to know what size tv can fit. More frunk room to be certain due to the added depth.

2.) Those who want to cart around grandparents and grand kids can do it with a 7 seat option.

3.) Hatch and added depth allows the Y to store taller items not possible in 3.

4.) The almost 100 percent glass top inside is gorgeous. It’s surreal looking out. 3 feels claustrophobic with how much you see out of the Y.

People were really looking for cold fusion thrusters. But anyone paying attention knows the Y was by design to copy as much of the Model 3 as possible which would accomplish the following:

1.) Model Y in our hands as soon as possible.
2.) Model Y in our hands as cheap as possible.

How has Tesla failed?

 

[mattjs33]

What is the competition coming out in 2020
that I could sit in and be driven around in? You can’t announce a car in early 2020 and have it in our hands by end of 2020. No one can do that.

Actually, lots of people probably can, but it really depends on how far into the development process they are. I see a lot of 'concepts' that take years to come to fruition. Lots of times it's done early to gauge reaction to anything they might want to change before production specs are set.

My point is not whether anyone can do it faster. My point neither you or I can make any valid comparison of the Model Y, which is not out yet, to any other product that is not out yet. It's not late 2020 just yet, so saying the Y is the best on the market period, is a bit disingenuous. It will most likely comport itself rather well, but maybe tempering such declarations might be prudent.

2.) Those who want to cart around grandparents and grand kids can do it with a 7 seat option.

Erm… man I dunno. I saw a pic of Elon standing next to the thing just a bit ago, and frankly there is absolutely no f*cking way. I don't care how big a man he is. Take a look at the rear cut line of the rear door, that's where the "second row" seatbacks are. You mean to tell me there's another row of seats back there that anyone could possibly fit into?

How has Tesla failed?

Who said they did?

I think people were expecting to be blown away, instead they were whelmed.

 

[MXWing]

Actually, lots of people probably can, but it really depends on how far into the development process they are. I see a lot of 'concepts' that take years to come to fruition. Lots of times it's done early to gauge reaction to anything they might want to change before production specs are set.

My point is not whether anyone can do it faster. My point neither you or I can make any valid comparison of the Model Y, which is not out yet, to any other product that is not out yet. It's not late 2020 just yet, so saying the Y is the best on the market period, is a bit disingenuous. It will most likely comport itself rather well, but maybe tempering such declarations might be prudent.

The only Tesla competitor, and I use that term loosely that has any credibility is the Bolt. Model Y is far more real than anything else. Sitting inside it, looking around and seeing that it's mostly a Model 3 gives confidence it can be built fairly soon even factoring in Tesla time.

I can compare the Y against the 3. For the purposes of being a CUV, yeah the Y is better than the 3. Until you can buy another car, it is the best by default. Personally, I think it's a great car and if I could give them my 3 and drive home in the Y, I would do so.

Erm… man I dunno. I saw a pic of Elon standing next to the thing just a bit ago, and frankly there is absolutely no f*cking way. I don't care how big a man he is. Take a look at the rear cut line of the rear door, that's where the "second row" seatbacks are. You mean to tell me there's another row of seats back there that anyone could possibly fit into?

I requested to be in the back of the Model Y so I can specifically look at the third row myself. Elon is not sitting in the 3rd row. My kids under 8 could. I don't see 7 seats being the most popular option based on how limited the rear row is, but its an option. The seats however are an upgrade over the Model S jump seats. Tesla was able to make the Y bigger on the inside compared to the 3 to accommodate that setup.

Who said they did?

I think people were expecting to be blown away, instead they were whelmed.

I've yet to hear a single valid argument on what's actually wrong with the Model Y. Most of it is based on its too close to a Model 3.

Not yelling at you but everyone else - if you don't see the value of a Model Y over a Model 3 - BUY A MODEL 3.

It's cheaper, (especially with tax credit) and you can get it now. The Model Y can't be all things to all people but it made sense to me:

-More room
-Hatchback
-Modest price premium over the 3.
-Improved where they could - gorgeous almost 100% glass top.

 

[jboy210]

I expected an SUV with Tesla's design language, in the way that a Mercedes GLC shares brand cues with the C-Class sedan, but with the distinct shape and character of a SUV.

To me, Model Y is basically a Model 3 stretched vertically -- a Model 3 Plus if you will. They didn't even bother to give it different headlights, tail lights, wheels, etc. It's clear they want to release Model Y as soon as possible and put in as little effort in differentiation as necessary. The end result is awkward proportions and an underwhelming design.

Look at the X and S. Lot of similarities

 

[mattjs33]

I requested to be in the back of the Model Y so I can specifically look at the third row myself. Elon is not sitting in the 3rd row. My kids under 8 could. I don't see 7 seats being the most popular option based on how limited the rear row is, but its an option. The seats however are an upgrade over the Model S jump seats. Tesla was able to make the Y bigger on the inside compared to the 3 to accommodate that setup.

You know your kids are going to keep getting bigger, right?

I've yet to hear a single valid argument on what's actually wrong with the Model Y. Most of it is based on its too close to a Model 3.

Not yelling at you but everyone else - if you don't see the value of a Model Y over a Model 3 - BUY A MODEL 3.

It's cheaper, (especially with tax credit) and you can get it now.

Agree 100% with you here.

But, you touched on exactly what I think has some people worried. The Y is so similar to the 3 as to make one or the other completely unnecessary.

Which means, if you're the kind of person who thinks you need an SUV (I'll argue that most people actually don't), and you're contemplating a Tesla, you might just wait, if you can. What does that say for Model 3 sales until 2020?

If its the Model Y that's unnecessary, then folks will just buy a 3 and buy now. Which is good in the present, but not so good for the Y's prospects.

The Y doesn't offer enough more over the 3 to justify buying it over the 3. You think it does, and a good number of folks probably will too. But last I checked, the BMW X6 is not rocketing off shelves, and I believe that is due to it not presenting enough U to justify being an SUV.

I don't doubt that the Y is bigger inside than the 3, you were in one after all. But does it present enough advantage to even justify its tooling, much less its existence? After the X, I kind of figured the Y would be less of a vanity project and more of a "real" SUV, that you could use to transport a couple big dogs or the occasional large item from Menards or whatever.

I think the exaggerated fastback roofline will come back to haunt them. My $.02.

 

[MXWing]

You know your kids are going to keep getting bigger, right?

Agree 100% with you here.

But, you touched on exactly what I think has some people worried. The Y is so similar to the 3 as to make one or the other completely unnecessary.

Which means, if you're the kind of person who thinks you need an SUV (I'll argue that most people actually don't), and you're contemplating a Tesla, you might just wait, if you can. What does that say for Model 3 sales until 2020?

If its the Model Y that's unnecessary, then folks will just buy a 3 and buy now. Which is good in the present, but not so good for the Y's prospects.

The Y doesn't offer enough more over the 3 to justify buying it over the 3. You think it does, and a good number of folks probably will too. But last I checked, the BMW X6 is not rocketing off shelves, and I believe that is due to it not presenting enough U to justify being an SUV.

I don't doubt that the Y is bigger inside than the 3, you were in one after all. But does it present enough advantage to even justify its tooling, much less its existence? After the X, I kind of figured the Y would be less of a vanity project and more of a "real" SUV, that you could use to transport a couple big dogs or the occasional large item from Menards or whatever.

I think the exaggerated fastback roofline will come back to haunt them. My $.02.

I was very bullish on 3rd row and was stating against popular opinion it would exist.

It does but it has limitations so I’m less excited. It will have its use case for younger families but my 5 year old X at that time will be more functional.

Here’s an unpopular opinion but I believe the Y should have been what the 3 was. The Y is correcting Tesla’s “mistake”. When I use mistake I say so in quotes because hindsight is 20/20.

I would get a Y over a 3 no question but there’s two huge problems with the Y.

1.) If I can’t or don’t want to wait two years for a new Model Y, 3 is a great car TODAY.

2.) 3 is cheaper.

So where I see how things go in about two years is the Model 3 is probably pushed to the high end Corolla segment. Make it as cheap as they can and make the Y the main driver.

S and X of course make up the flagship.

I was actually wondering if the X was going to get killed off by the Y. After last night, the X is going to be here to stay.

Model Y and Y means “Y the point?” Lol

I have one response to not getting a Model 3 and just getting a Model Y instead.

If I'm just going to *sugar* again in two years, no point in wiping my ass until then?

 

[MXWing]

Look at the X and S. Lot of similarities

One MAJOR difference.

In the Model S, I don't stop, drop and roll when I hear a beep sound.

No risk of decapitation, amputation of limbs or blunt force trauma from S doors unexpectedly closing.

 

[jboy210]

One MAJOR difference.

In the Model S, I don't stop, drop and roll when I hear a beep sound.

No risk of decapitation, amputation of limbs or blunt force trauma from S doors unexpectedly closing.

Tesla has trained you in a very Pavlovian way!!

 

[abasile]

So where I see how things go in about two years is the Model 3 is probably pushed to the high end Corolla segment. Make it as cheap as they can and make the Y the main driver.

To move significantly further down-market, I think Tesla would instead introduce a new, cheaper model, perhaps a bit smaller than the Model 3. The Model Y isn't necessarily a better car than the Model 3; it just helps Tesla address the market for CUVs.

Model 3 advantages over the Model Y include:

1. Better looking. This is subjective, but sedans are generally considered to have nicer looks than SUVs. In my opinion, Tesla's best looking vehicles are the new Roadster, the Model S, and the Model 3, in that order.

2. More range. 25-30 more miles, at least with the Long Range battery, does make a difference on road trips.

3. Faster charging on a per-mile basis. Like the range, this is a function of being more efficient.

4. Slightly better performance.

5. Lower price.

If someone wants/needs more space than the Model 3 offers, then the Model Y may be a great choice. If the Model 3 is large enough, then there's really nothing to be gained by choosing a Model Y instead.

 

[North75]

You know your kids are going to keep getting bigger, right?

But, you touched on exactly what I think has some people worried. The Y is so similar to the 3 as to make one or the other completely unnecessary.

But what's wrong with giving people different options? Why does BMW make the 3 series, 3 series GT, Wagon, X4, etc...? They're basically all variations of the same car. Maybe different people want different things.

The way I see it the Y is basically a 3 that has the hatchback that tons of people were screaming for, along with the higher seating position (ie. easy in and out) that Americans seem to love at the moment.

Why do you think the Y needed to be something different?

 

[pipestem]

Hi Matt!
I sat in a Model Y that was driven. It’s better than my 3. If a transfer didn’t cost money I would do it in a heartbeat.
.

Tell us more. How is it better - i would guess seating position and hatchback, but what else ?



Also, Kate rocks. What are you thinking ?

 

[mattjs33]

Here’s an unpopular opinion but I believe the Y should have been what the 3 was. The Y is correcting Tesla’s “mistake”. When I use mistake I say so in quotes because hindsight is 20/20.

Agree 100%

If I'm just going to *sugar* again in two years, no point in wiping my ass until then?

Hahaha. Colorful, but then again most people are one to buy a car and then trade it in two years later. Why take the depreciation hit twice in 24 months? Now, if there was a 3 lease option...

But what's wrong with giving people different options? Why does BMW make the 3 series, 3 series GT, Wagon, X4, etc...? They're basically all variations of the same car. Maybe different people want different things.

The way I see it the Y is basically a 3 that has the hatchback that tons of people were screaming for, along with the higher seating position (ie. easy in and out) that Americans seem to love at the moment.

Why do you think the Y needed to be something different?

Honestly I have no idea why BMW needs 40 different versions of the 3/4 series. I can't even explain their lineup anymore.

If "everyone" wanted a hatchback Model 3, then they should have done that and called it a day. They had to build an SUV because everyone on earth is doing it but McLaren. I completely understand offering what people want, but did people really want a bloated 3 or did they want a midsize SUV that actually walked the walk?

One of two things will happen; either the Y is a total flop or it completely cannibalizes 3 sales. It will be a net wash. Tesla needed a midsize SUV, to be sure, but in my opinion this isn't SUV enough to have bothered.

Also, Kate rocks. What are you thinking ?

Ugh, I dunno. She's fine I guess but enormous boobs aren't really my hot button.

 

[MXWing]

Tell us more. How is it better - i would guess seating position and hatchback, but what else ?

I am selling the Y better than Musk can because I can tell you how I really feel versus Musk needing to hold back.

There are risers in the front so the driver and passenger sit higher. You have better road visibility in the Y.

The almost 100 percent glass roof is a marvel. Was amazing to see the sky above my head.

The middle row folds down flat to line up with the trunk. TV shopping would be amazing in the Y. You can fit a bike easy.

Deeper frunk, deeper trunk. Hatch makes it much easier to load things into the Y.

Wider flare outs where passengers sit so more room for middle row.

While I won’t make use of the 3rd seating row it would be amazing for new families with young children. Haul 3 generations in one of the safest vehicles ever made.

It’s not a marvel like the X is to the Y but lots of incremental improvements while keeping cost down and give us a car in 2 years versus more than 3 for the Model 3.

 

[dmurphy]

I am selling the Y better than Musk can because I can tell you how I really feel versus Musk needing to hold back.

There are risers in the front so the driver and passenger sit higher. You have better road visibility in the Y.

The almost 100 percent glass roof is a marvel. Was amazing to see the sky above my head.

The middle row folds down flat to line up with the trunk. TV shopping would be amazing in the Y. You can fit a bike easy.

Deeper frunk, deeper trunk. Hatch makes it much easier to load things into the Y.

Wider flare outs where passengers sit so more room for middle row.

While I won’t make use of the 3rd seating row it would be amazing for new families with young children. Haul 3 generations in one of the safest vehicles ever made.

It’s not a marvel like the X is to the Y but lots of incremental improvements while keeping cost down and give us a car in 2 years versus more than 3 for the Model 3.

It’s everything I was waiting for (except a heated steering wheel!)

That command seating is why I love my CUV. Even more so than the cargo room - that high up view of the road is one of those things .... once you have it, giving it up kinda sucks.

 

[MMBTUS]

My M3 is a fantastic car with a practically perfect skate and interior design. Using the same parts and know-how to build a larger fantastic vehicle makes great sense economically and from a new product development standpoint.

Tesla delivered with Model Y exactly what I want to see as an investor. Standardize parts and technologies. Leverage production lessons learned. Design bodies that consumers want. Duplicate the performance and driving magic of the M3. Sell it globally. On line. Sales people are vestigial, sorry. Anyway, no falcon wings, no new manufacturing complexities to master, no new production hell drama. They already know how to add a third row.

It’s ok if the low drag coefficient drives similar styling elements across platforms. All Teslas are unmistakable, if largely undifferentiated from one another. Isn’t that what counts most?

In person, impressions of this car versus M3 may change. The full panoramic roof is huge.

I see no problem with the design similarities. I have an M3 and will want to add an MY in 2022. Different color interior will do it for me.

Um, please don’t tell my wife yet.

 

[MXWing]

My M3 is a fantastic car with a practically perfect skate and interior design. Using the same parts and know-how to build a larger fantastic vehicle makes great sense economically and from a new product development standpoint.

Tesla delivered with Model Y exactly what I want to see as an investor. Standardize parts and technologies. Leverage production lessons learned. Design bodies that consumers want. Duplicate the performance and driving magic of the M3. Sell it globally. On line. Sales people are vestigial, sorry. Anyway, no falcon wings, no new manufacturing complexities to master, no new production hell drama. They already know how to add a third row.

It’s ok if the low drag coefficient drives similar styling elements across platforms. All Teslas are unmistakable, if largely undifferentiated from one another. Isn’t that what counts most?

In person, impressions of this car versus M3 may change. The full panoramic roof is huge.

I see no problem with the design similarities. I have an M3 and will want to add an MY in 2022. Different color interior will do it for me.

Um, please don’t tell my wife yet.

I’ll keep your secret if you don’t tell my wife my 3 in 2018 wasn’t 35K.

Thank you so much for discussing the Y from a common sense and practical business perspective.

People love spouting bull *sugar*, thinking they have it figured out, wondering why the Y is fugly.

Geniuses are not realizing this car needs to come in volume in 2 years - not 6.

Do you think Musk wants to sleep on the floor again to appeal to some TMCers sense of vanity with no business optics?

Musk was the most relaxed I have seen in his presentations.

The Y is going to likely get built faster than advertised, get built in volume and get built from more than one factory.

I figured out the strengths of the Y in about an hour and the pundits are thinking Musk had no idea what the Y offered because he didn’t “advertise” it.

Tesla has brilliantly made it a coin flip to get a cheaper 3 now or the better Y in two years.

Could they have made a Y that made it worth waiting 2 years if you were ready to get a car today? Yes.

Are they that stupid? No.

 

[ItsNotAboutTheMoney]

Y is a 3 that sacrifices some efficiency for utility.
I'm glad they didn't go Chinese-new-money-big-grille, or square out the front unnecessarily.
Like the 3rd row option, which should broaden appeal.
Kept the price in the entry-level premium segment, which should leave them in a nice space away from competitors.

 

[Doug_G]

Prediction:

• Crossover SUVs are huge right now. Witness GM dropping sedans almost completely.
• Model Y is a minor iteration of the Model 3 platform (compare with X)
• Due to that they will get the car out on schedule for once, instead of two years late (compare with X)
• Sales will be huge