[Poll] - Is releasing Model Y so early a mistake?

[ggnykk]

Is releasing Model Y so early a HUGE mistake? Because it would take away sales of Model 3 just as demand for Model 3 is falling or flat, at least in America. And Model Y won't even be in production for 1.5 year at the earliest. So basically Model 3 demand will be depressed for the next almost 2 years by the Model Y. Especially considering that the pricing between Model 3 and Model Y are so close, only $4k difference. People may just hold on and wait for Model Y instead.

Please vote and discuss.

 

[Beltsbear]

Even worse...the price difference is $2000 for apples to apples comparison.

 

[Brave Ulysses]

I suspect that if Model 3 sales suffer (and they likely will) That Tesla will switch assembly lines over to Model Y production and release it sooner. In fact, I think that is possibly why they moved forward so quickly with this. I think they know that the Model 3 market is limited (sedans just are not as popular) and that late this year they may be in trouble. So I think they are rushing the Model Y to market.... with as much of a shared platform as possible but with higher margins.

The design center order option instead of a preorder deposit allows them to get very accurate stats for what model and features are most desired and plan to accelerate an assembly line for that particular model by the end of this year.

 

[ggnykk]

Even worse...the price difference is $2000 for apples to apples comparison.

how so?

 

[ggnykk]

I suspect that if Model 3 sales suffer (and they likely will) That Tesla will switch assembly lines over to Model Y production and release it sooner. In fact, I think that is possibly why they moved forward so quickly with this. I think they know that the Model 3 market is limited (sedans just are not as popular) and that late this year they may be in trouble. So I think they are rushing the Model Y to market.... with as much of a shared platform as possible but with higher margins.

The design center order option instead of a preorder deposit allows them to get very accurate stats for what model and features are most desired and plan to accelerate an assembly line for that particular model by the end of this year.

The Model Y was originally planned to be in production in Q1 of 2020, but now it get pushed back to Fall of 2020. So it get pushed back for 6 months delay there. So I really don't think Tesla is trying to move the Model Y production forward. Unless the released date of Fall 2020 is "fake" and they can easily move things forward if Model 3 demand take a huge hit.

 

[Brave Ulysses]

I don’t think it’s fake but I think it’s based on production capacity. They have no where to build it.

But, if Model 3 sales nose dive, I would put very good money on Tesla switching over to Model Y production at Fremont. It’s basically the same car.... just 10% bigger and with higher margins. It would actually kind of be stupid for Tesla to continue prioritizing Model 3 production over Model Y production.

 

[reardencode]

Voted none of the above, because I think it's potentially genius, but it's a tough row to hoe:

This event was meant to forestall SUV purchasers from going to other brands, shore up investor sentiment, and avoid cannibalising Model 3 sales. That's why they chose the specific details they chose to mention: 300 miles range, 7 passenger, 66cuft. Captures the interest of SUV shoppers but it's worse than the 3 in many ways.

Ok that all makes sense, but I think there's more:

They also now have multiple paths forward depending on ongoing Model 3 demand vs Model Y demand. If demand for the 3 flags, they could probably shift an existing line to Y production exactly as demoed without much trouble. Model Y buyers will be happy, revenue will be steady. Meanwhile they will be furiously building new factories that will build both 3 and Y with the new wiring loom, 12v battery delete and probably slightly higher range. If Model 3 demand remains strong they'll announce the upgrades at the same time they start building the Y, and everyone will be pumped for the bonuses.

It's a strong business move, covered up with Musk's awkward presentation style.

 

[ggnykk]

Voted none of the above, because I think it's potentially genius, but it's a tough row to hoe:

This event was meant to forestall SUV purchasers from going to other brands, shore up investor sentiment, and avoid cannibalising Model 3 sales. That's why they chose the specific details they chose to mention: 300 miles range, 7 passenger, 66cuft. Captures the interest of SUV shoppers but it's worse than the 3 in many ways.

Ok that all makes sense, but I think there's more:

They also now have multiple paths forward depending on ongoing Model 3 demand vs Model Y demand. If demand for the 3 flags, they could probably shift an existing line to Y production exactly as demoed without much trouble. Model Y buyers will be happy, revenue will be steady. Meanwhile they will be furiously building new factories that will build both 3 and Y with the new wiring loom, 12v battery delete and probably slightly higher range. If Model 3 demand remains strong they'll announce the upgrades at the same time they start building the Y, and everyone will be pumped for the bonuses.

It's a strong business move, covered up with Musk's awkward presentation style.

I wish that switching from Model 3 to Model Y in the Fremont factory is easy. Maybe Tesla is looking for production location of Model Y to be somewhere other than Gigafactory or the Fremont factory, and they need additional 6 months to build up a new location?

 

[Kant.Ing]

Y should have come earlier. But Tesla needed to keep the $35K promise, so 3 ended up earlier.

I predict Tesla will drive down 3's production cost and MSRP in a few months, even with a small refresh or throw in more options.

 

[Derek Kessler]

The overlap in customers is smaller than you seem to think. Normal people don't generally cross-shop send and crossovers. They know what they want and they look at vehicles that fit that criteria. Crossovers, SUVs, and trucks accounted for the top six vehicles sold in the US in 2018 — there's a large customer base that wouldn't even consider the Model 3. Now with the Model Y there is a Tesla in their price and style brackets.

 

[brkaus]

To some it’s only $4k, to others it’s almost 10%.

 

[Tony_YYZ]

The overlap in customers is smaller than you seem to think. Normal people don't generally cross-shop send and crossovers. They know what they want and they look at vehicles that fit that criteria. Crossovers, SUVs, and trucks accounted for the top six vehicles sold in the US in 2018 — there's a large customer base that wouldn't even consider the Model 3. Now with the Model Y there is a Tesla in their price and style brackets.

True, but a lot of CUV buyers bought a Model 3 because it was the entry point into a Tesla for them. If the Y had been available at the same time, I'd wager a large number of 3 owners would have opted for it instead. I know I certainly may have.

 

[TampaRich]

Seems like this poll is something you’d see in the short sellers forum.

 

[scaesare]

I voted "None of the above", because my stance is: Even if the Y steals some 3 sales, it's still an EV sale, and Tesla's ultimate mission is to move the world to sustainable transport, that is promoting sales of EV's...

Thus, it's not a "mistake", even if overall profitability is slightly compromised as long as they can advance that goal.

 

[Jonathantuba]

I think some people will now hold off buying a M3 and wait for a Y. But that is probably cancelled by keeping buyers in the Tesla brand so they don’t go and buy a competing offering, such as the iPace or e-tron.

Once the Y is available, I do think M3 sales will drop. For most people the Y is just a more useful car. Only the lowest price M3 being less than the Y and the Performance version M3 should not be affected, as I can’t see those buyers moving to Y.

You can see why Tesla discontinued the X 75D, as those buyers which mostly will be on a budget will now go for the new Y.

 

[DriveMe]

While some potential Model 3 buyers may indeed decide to wait for the Model Y, there will also be those who’ve been waiting for Model Y but will now decide to buy Model 3 because it is not that much different and is available now. 2 years is too long to wait!

In any case, having clarity about what to expect from the Model Y is very helpful for all Tesla customers!

 

[mattjs33]

I don't think it's too early, it's probably pretty consistent with what other OEMs do as far as "concept" launches vs. the production car.

It will steal some 3 sales because that's what SUVs do.

I agree with others above, getting it out now, gets people who are wanting an SUV soon to consider Tesla now.

The real deal is getting people to pony up for the car this far in advance. If the other OEMs had any idea they could do that, they probably would have done so ages ago. I know if you put money down for a Koenigsegg Jesko today, you won't see it for three years but doing it on a mass production level is almost unheard of.

 

[Derek Kessler]

I voted "None of the above", because my stance is: Even if the Y steals some 3 sales, it's still an EV sale, and Tesla's ultimate mission is to move the world to sustainable transport, that is promoting sales of EV's...

Thus, it's not a "mistake", even if overall profitability is slightly compromised as long as they can advance that goal.

Yes, and for Tesla it's still a sold Tesla. Like Apple, they'd rather cannibalize themselves (iPhone cannibalized iPod, big iPhones cannibalized small iPads, big iPads are cannibalizing MacBooks, and so on) than have somebody else do it. A Model Y sale is still a sale for Tesla, and it's going to be (I expect) a bit more profitable than a Model 3 sale.

 

[ewoodrick]

This is written as if no other manufacturer was selling two cars on the same platform. Oh yeah, did the X hurt the S? If you get a car sale, does it matter

 

[Arizona Willie]

Is releasing Model Y so early a HUGE mistake? Because it would take away sales of Model 3 just as demand for Model 3 is falling or flat, at least in America. And Model Y won't even be in production for 1.5 year at the earliest. So basically Model 3 demand will be depressed for the next almost 2 years by the Model Y. Especially considering that the pricing between Model 3 and Model Y are so close, only $4k difference. People may just hold on and wait for Model Y instead.

Please vote and discuss.

The Model Y is a huge disaster. It will not sell well.