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Why choose Model 3 over Model Y if you can have more trunk space?

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It's not actually smaller, it's much taller, in fact even taller than Model Y (at 63.9"). That's going to bring all the negatives of a Model Y that people brought up.

A Model 3 wagon instead would keep pretty much the same height, just extend the cargo area back.
That height is wrong. 58" on Polestar's website

 
It's not actually smaller, it's much taller, in fact even taller than Model Y (at 63.9"). That's going to bring all the negatives of a Model Y that people brought up.

A Model 3 wagon instead would keep pretty much the same height, just extend the cargo area back.

I think that the body size comparison between the Polestar 2 and the Tesla Model 3
needs more deeper analysis than just looking at the overall exterior dimensions.

The Polestar 2 is 8.7 inches taller tahn the Model 3, however the front and rear headrooms for both vehicles are very simillar.
May be the booster thickness of the seats or how high above the ground the Polestar 2 is, can explain this.

Headroom, FrontHeadroom, Rear
Tesla Model 340.3 inches
37.7 inches
Polestar 239.5 inches
37.0 inches
 
Polestar 2 seats feel much higher off the floor than Model 3, especially the rear seats. That's largely because there is not a battery under your feet, so there's room for decent footwells without making the vehicle a crossover.

P2 sits higher than a 3, with more ground clearance and suspension travel, so it's sightly taller but not by much, the styling exaggerates the height difference.

Polestar 2 Performance drives like a good car, not a crossover. Much better than a Model Y. P2 has far less space inside than a Y though, it's not a crossover, it's a Model 3 competitor. I think it drives as well as a Model 3 overall but quite differently, with different strengths and weaknesses. Suspension refinement and chassis stiffness are much better in the P2. It's way better over rough roads, and much more settled + stable feeling through high speed turns. Model 3 feels more nimble and tossable though, and the 3's quicker steering ratio is nice.
 
If I had to replace my 3-P now I would do it with a Y-LR.
The increased rear interior room and cargo volume offsets the ugliness. We do lots of long trips and airport runs and it would be handy.

The difference in performance is not relevant for its daily use. The 3-P accelerates quicks and is nimble, but without the sounds, the gearshift, the tactility, I scratch my "sporty car" itch elsewhere.
 
The MY is blown upward M3, handles like one too given the higher center of gravity. If you are happy to get a kid hauler and grogetter the MY is the answer. If you want fun on the twisties it is the M3. Rear impact cab intrusion should be a lesser problem in the M3, just as rollover given the presence of the B pillar top brace or whatever they call it splitting the roof, frame should be more rigid with this and the parcel shelf.
 
The MY is blown upward M3, handles like one too given the higher center of gravity. If you are happy to get a kid hauler and grogetter the MY is the answer.
Of course, the kid hauler and grogetter function is best served by a van.
2024-volkswagen-id-buzz-115-1646839025.jpg
 
Snowboards fit in the M3 no problem. I can lay flat in the trunk (I'm 5'8"). Cargo space in the M3 is simply astounding compared to most every other sedan this size. I keep my gym bag in the trunk, so the station wagon layout is not for me. I prefer to have the cabin separated from the trunk area by a good solid seat back rather than a cargo cover.
 
I made a pre-order on Rivian prior to their price increases, which in my opinion is the better route than a Model Y (if wanting more room than a Model 3). I made my Model 3 work for surfing every morning but a truck would be so much nicer to have. My price is $73,000 but also still qualifies for the Federal Rebate of $7500, making it just slightly cheaper than the Model Y.
 
We've had our Model 3 since July 2018, having reserved it way back in the mad rush in 2016. The Model Y simply wasn't a thing yet.

We have been stymied a number of times by things we can't fit in the back because of that 17-inch vertical clearance under the shelf. So we dream and drool from time to time about an upgrade to a Y.

It's interesting several of you report poorer handling in the Y. We're both pretty conservative drivers, not going to the track and such, so I wonder whether we'd care. That is, do you only really notice the handling difference when doing edgier maneuvers?

Also, a bunch of you mentioned ugly. Now, that's interesting. I think all four Teslas look essentially similar, but most especially the 3 and the Y. (The Cybertruck will shatter the pattern.) Obviously the Y is taller overall, with a bigger nose and ass. But I've found so many people can't even tell them apart unless they're side by side. So I guess I'm okay on the ugly index. The handling I want to know more about, though.

And then there's towing. The Y is rated to drag up to 3500 pounds around. We've been thinking of a small 2-person camper trailer. That'd go nicely with a Y. And when we're not doing that, we could have a hitch-mounted bike rack to take our bikes on adventures, like we used to with our old Prius.

So we're still thinking. Maybe the electric F150. ;)

PS: our 3 is in the Tesla hospital in Bend at the moment, and we have an X as a loaner. Now that is a big car! It barely fits in our garage, and it's way taller. But it was great when we had three grandkids in car seats last weekend!