Tesla Model Y Production & Sales Expected To Far Outpace Model 3

Tesla Model Y is coming – volume production within two years

Tesla announced in its Q4 report that this year it will start tooling for Model Y production. The upcoming SUV will be most likely produced at the Gigafactory 1 in Nevada, as there is not much space left at the Tesla Factory in Fremont, we guess.

It’s expected that the car should be unveiled within months. There is no official hint, but beta prototypes soon probably appear on the roads soon. We are probably no more than a year from the production launch, especially since volume production is to be reached by the end of 2020.



“Additionally, this year we will start tooling for Model Y to achieve volume production by the end of 2020, most likely at Gigafactory 1.”



According to Tesla, the Model Y will share a platform with Model 3 and because of that, about 75% of components will be the same.

It’s a great indicator for several things:



development cost will be much lower

production line cost for Model Y should be substantially lower

margins for both cars will be higher because of the higher scale of particular parts

ramp-up phase of Model Y should be much faster



The production rate of the Tesla Model Y electric crossover is expected to be even higher than the Model 3.



“Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y production line should be substantially lower than the Model 3 line in Fremont, and the production ramp should also be faster.”

“This year should be a truly exciting one for Tesla. Model 3 will become a global product, the profitability of our business should become sustainably positive, our new Gigafactory Shanghai should start producing cars, and we will start tooling for Model Y production. Our growth opportunities are massive. Our accomplishments have been possible thanks to the exceptional effort of our employees and the support of our customers, suppliers and investors. We hope you’re as excited as we are about 2019.”



This article originally appeared on Inside EVs.

 

[FreqFlyer]

Even though based on the 3 will be interesting to see what structural improvements engineering made (which would include the 3 too) to the platform for the Y.

 

[FreqFlyer]

Per video, Y will not be shown in March, for fear of it slowing 3 and X sales. Production of Y will start next summer of 2020, full production end of 2020.

 

[11thIndian]

This type of thinking confuses me. While to a certain extent I understand people fearing the Osborne Effect, it doesn't work for me on two levels:

1. With the number of electric SUVs out or coming out, unveiling the Model Y could to a certain extent prevent someone from investing in a Kona, Niro, or some other mid-market competitor.

2. If someone is going to ultimately want a Model Y, they're going to buy a Model Y. The ongoing market for the Model 3 is going to be what it is. The attractiveness of owning a Model 3 was never enough to get me to buy a car that doesn't suit my needs. Tesla is ultimately going to be operating in a world where they sell both cars. Demand for each is going to fall where the market dictates.

I suppose the only advantage of waiting until the summer is that by then they may have the lower-cost Model 3 online, and that will maintain production demand thru the back half of the year (if it's soft, which we haven't seen any indication of yet).

 

[Uncle Paul]

Tesla will release information on the Model Y once they have it all buttoned up. Then they will take deposits for places in line. Then they will open the configuration page to begin to get an idea of what people want for their first production.

While all this is going on, Tesla will be ordering production equipment, setting up assembly lines, hiring people, getting governmental permits for paint booths etc. Raw materials will be contracted, parts stocked, suppliers trained, finances arranged etc.

Then, before you know it, they will begin rolling down the assembly lines to the hords of eager customers.

Believe this will be the most popular Tesla ever.

Then the rumor mill will start churning out information on the upcoming Semi, New Roadster, and Pickup.

All the while the current lines will keep producing (and upgrading) Model S/X & 3. Rockets will continue to be launched, Boring Company will keep drilling holes, and Hyperloop will become a reality.

It's good to be Tesla.

 

[vickh]

hmm 4Q 2020.

which car would have less depreciation while waiting to trade for Model Y. A new LeMR M3 or 15 CPO S at about the same mid $40K price

 

[tonybelding]

I hate to be the party pooper here, but I question the widespread assumption that demand for Y will far outstrip 3. It seems to be entirely based on the theory that vaguely SUV-like cars (CUVs, really) are the hot fad, and people will buy anything that's marketed as a SUV/CUV because… well, the reason is never really articulated. It's a trend. You can't argue with the trend, can you?

The market has spoken. Therefore, electric car buyers must be crying out desperately for a taller, less attractive and less efficient Model 3.

I don't believe it. I think the mania for CUVs is a mirage. It doesn't run as deep as everyone seems to imagine, and it's going to pass.

 

[Uncle Paul]

Cheap fuel is one of the driving forces behind the popularity of large trucks and all sizes of SUVs.

People like the ease of getting in and out and the higher riding viewpoint of the SUV.

 

[11thIndian]

I hate to be the party pooper here, but I question the widespread assumption that demand for Y will far outstrip 3. It seems to be entirely based on the theory that vaguely SUV-like cars (CUVs, really) are the hot fad, and people will buy anything that's marketed as a SUV/CUV because… well, the reason is never really articulated. It's a trend. You can't argue with the trend, can you?

The market has spoken. Therefore, electric car buyers must be crying out desperately for a taller, less attractive and less efficient Model 3.

I don't believe it. I think the mania for CUVs is a mirage. It doesn't run as deep as everyone seems to imagine, and it's going to pass.

I'm not sure why you'd think that electrification would change the demand for a particular body style. If magically tomorrow we woke up in a world where every vehicle made today was an EV, would people's needs suddenly change?

The SUV class across all sizes are popular for a number of reasons-
• aforementioned height for ease of getting in and out and higher vantage point
• popular with families who don't want to drive a minivan
• popular with people who live in a climate where the extra ground clearance is beneficial (snow)
• popular with active people who want to lean on the sport part, going off-road with bikes, hiking, camping, surfing, skiing
• popular with people who need to do towing but don't want a truck
• popular with people who intend to do lots of long distance driving because of extra passenger and storage room

The market doesn't "magically" make SUVs popular. They're popular because they meet a lot of varying needs.

 

[FreqFlyer]

I hate to be the party pooper here, but I question the widespread assumption that demand for Y will far outstrip 3. It seems to be entirely based on the theory that vaguely SUV-like cars (CUVs, really) are the hot fad, and people will buy anything that's marketed as a SUV/CUV because… well, the reason is never really articulated. It's a trend. You can't argue with the trend, can you?

The market has spoken. Therefore, electric car buyers must be crying out desperately for a taller, less attractive and less efficient Model 3.

I don't believe it. I think the mania for CUVs is a mirage. It doesn't run as deep as everyone seems to imagine, and it's going to pass.

I bet if you look around Hamilton, you will see Explorers,Suburbans and Expedtions. Then notice how many of your neighbors are driving Escapes, CRVs and Rouges. I think we have passed fad stage and are in full blown assimilation.

Been to Hamilton twice, too close to Hicco for me.

 

[Kant.Ing]

People love SUV and hatchbacks and I am sure Tesla will make small SUV sexy again!

Exactly! Most my neighbors are waiting to switch, from ICE or even M3 to MY.

 

[SoCalDude]

I am on board with putting a deposit down as quickly as possible for the Y so I can be a little higher in a vehicle with a little more cargo capacity. Hopefully I can order a split second before you all. . I would imagine many other Model 3 owners are thinking the same thing which means there will be a ton of used 3s for sale.

 

[GoBlue88]

Per video, Y will not be shown in March, for fear of it slowing 3 and X sales. Production of Y will start next summer of 2020, full production end of 2020.

Doh!

 

[dmurphy]

I don't believe it. I think the mania for CUVs is a mirage. It doesn't run as deep as everyone seems to imagine, and it's going to pass.

I think you’re quite a bit off the mark, to be honest. The crossover/SUV form factor is here to stay. The excellent command view of the road, practicality for cargo and passengers, easy ride height and perceived safety are all MAJOR factors. Not minor,
MAJOR.

I’ve sworn many times that I wouldn’t ever go back to a sedan. I meant that but the Model 3 has me torn. I’m all in on electric but to give up the crossover body style has me REALLY struggling with what to do when my current lease is up later this year. My heart wants to lease a Model 3 to bridge the gap until the Model Y is available, but there’s a very strong likelihood I’ll just get a new 2-year XT5 lease. That’ll get me into 2021 when the Model Y becomes realistically available.

The practicality of the crossover form factor cannot be overstated.

Go to the grocery store and look around the parking lot. It’s overwhelming, how many SUVs and crossovers you see.

Ever since I mentioned the Model 3 possibility to my wife, she’s been very down on it - simply because of the form factor. Everything else she’s good with — but the fact is, she’s right. Losing the cargo space limits practicality. Losing the command height reduces visibility.

I suspect that those dead set against the crossovers haven’t driven one as a daily driver.

I’m not talking about the track guys or the performance nuts - but your run of the mill average American family. It’s by far the most practical form factor.

 

[tonybelding]

I think you’re quite a bit off the mark, to be honest. The crossover/SUV form factor is here to stay. The excellent command view of the road, practicality for cargo and passengers, easy ride height and perceived safety are all MAJOR factors. Not minor,
MAJOR.

If they were that MAJOR, then sedans never would have been a thing. Cars up through the 1940s typically had that high stance and boxy space in back; many of them were what we today would recognize as CUVs. Then the industry shifted to longer-and-lower cars. To accept your argument, the entire time period of around 1950–2000 would be an anomaly when most people wanted something less practical? That's one heck of an anomaly.

SUVs and CUVs are hot now at least partly because sedans sold so well in the aftermath of the 2008 financial crisis and oil shock when everybody was looking for something cost effective and fuel-efficient. Cars now have a long service life, and a lot of those are still on the road and on the used market. Thus the shift toward CUVs has been amplified at the level of new car sales.

Going to BEVs does change the equation, though. There is no glut of BEV sedans on the used market, so it's much more of a level playing field between selling new BEV sedans and new BEV CUVs. A skateboard architecture undercuts one of the CUV advantages, of more cargo space, because now we can package a sedan with lots of flexible cargo space. But the big, important advantage of the sedan is that it has a lower frontal area, which makes it more aerodynamic, which makes it more energy efficient. That wasn't so critical with gas cars, but when you're trying to squeeze every mile of range out of a battery pack, and when electric cars are being judged and sold heavily on their range numbers, then it's critical.

Elon already said the Y is going to be about 10% less efficient than the 3, and there's not really any way around that. "I canna change the laws of physics, Cap'n!" Ten percent may not sound like that much difference, but range is still a pretty sensitive specification for a lot of people. When we see the Model Y up for ordering, and it's more expensive and the 3, and its best range is 280 miles (I'm guessing that all Ys will be AWD) vs. 325 for the RWD Model 3… Some people will balk. Not everyone will, and I'm sure the Y will do fine, but I doubt whetehr it'll crush the Model 3 any more than the X crushed the S.

 

[jboy210]

I hate to be the party pooper here, but I question the widespread assumption that demand for Y will far outstrip 3. It seems to be entirely based on the theory that vaguely SUV-like cars (CUVs, really) are the hot fad, and people will buy anything that's marketed as a SUV/CUV because… well, the reason is never really articulated. It's a trend. You can't argue with the trend, can you?

The market has spoken. Therefore, electric car buyers must be crying out desperately for a taller, less attractive and less efficient Model 3.

I don't believe it. I think the mania for CUVs is a mirage. It doesn't run as deep as everyone seems to imagine, and it's going to pass.

The X outsells the S, so there is Tesla sales data backing this up.

I know when we looked at the X and S, we barely sat in the S. We drove the X and ordered one 30 minutes later.

 

[FreqFlyer]

The X outsells the S, so there is Tesla sales data backing this up.

I know when we looked at the X and S, we barely sat in the S. We drove the X and ordered one 30 minutes later.

That's fascinating if true that the more expensive X sells more than the S. I could believe it though, the X is more interesting than the S.

 

[jboy210]

That's fascinating if true that the more expensive X sells more than the S. I could believe it though, the X is more interesting than the S.

I have not looked recently, but the price delta for an S and X when we bought in Feb 2018, was only about $7.000. And IMHO you get a much more refined product with unique styling, and the SUV many buyers like. Also, since your closing in on $90-100K, $7,000 more is not a huge additional stretch.

FWIW, here are the sales numbers quoted in Q4 2018 announcement from Tesla:

13,500 Model S, and 14,050 Model X vehicles.

Source: Tesla Q4 2018 Vehicle Production & Deliveries, Also Announcing $2,000 Price Reduction in US | Tesla, Inc.

 

[dmurphy]

The X outsells the S, so there is Tesla sales data backing this up.

I know when we looked at the X and S, we barely sat in the S. We drove the X and ordered one 30 minutes later.

This doesn’t surprise me one iota. The Model 3 of course appeals to the performance-sedan crowd. But for those of us workaday family schlubs, the SUV form factor is way more appealing. I predict the Model Y to be an unbelievably hot seller.

 

[jboy210]

This doesn’t surprise me one iota. The Model 3 of course appeals to the performance-sedan crowd. But for those of us workaday family schlubs, the SUV form factor is way more appealing. I predict the Model Y to be an unbelievably hot seller.

Agree about the Y being a huge seller.

But, the appeal is not just to workday families. I am an aging Baby Boomer and do not want to crawl into low slung cars and have my legs straight out. My back bothers me enough!!! Given me an upright seating position and let me see over the car in front of me, because I don't trust that that idiot is not texting on his phone.