30 Oct 18

Musk confirms Model Y as Tesla stock rises

Now that Tesla is finally making money, investors are buying shares again - to that extent that the stock price on the NASDAQ reached nearly $343 yesterday. Elon Musk must have found the time right to confirm the development of the Model Y - something he did with a Tweet this morning. The fourth Tesla model will be based on the Model 3 and is indeed to become a baby-Model X.

Musk wants to present the Model Y concept car to the public on March 15, 2019. Production should start a year later, but it remains unclear where Tesla will invest to increase its output. All current assembly lines in Fremont, California are taken by the Model 3, Model S and Model X. Some suggest the Model Y will be built in Tesla's Gigafactory in Nevada. That would come at a big cost, because that site only builds transmissions and batteries today.

$50,000 starting price

Interestingly, Tesla prices the entry-level Model Y at $50,000. That's $15,000 more than the promised $35,000 for the basic Model 3, which is still to be built. This can only mean one thing: the Model Y will not be offered with the smallest battery pack, but only as a mid range or long range model. The mid-range Model 3 costs $46,000 in the USA, but strangely enough, Tesla is allowed to advertise it at $34,200.

Indeed, that's by deducting the $7,500 incentive and $4,300 savings in the shape of fuel. Some would consider these practises deceitful.   

Profitability before customer

Musk has postponed the start of production of the cheapest Model 3 because it would cost the company money. By the looks of it, it won't be before Q2 2019 that the first customers will receive the Model 3 they reserved three years ago. It is in Tesla's interest to hold off deliveries of the cheap Model 3 as much as possible - priority number one is to become profitable, and that means prioritising higher margin cars.

Customers reserving a Model 3 even in the past few months who are willing to pay for a premium version of the car (starting at $49,000) may expect delivery sooner than the $35,000 holdouts who reserved when the car was first announced back in late March of 2016, reports Cleantechnica.com.







Authored by: Dieter Quartier