Model Y to give Tesla its toughest challenge yet

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Compact SUV will pitch Tesla against tough EV rivals and demand slick production


Tesla is finalising production plans for its crucial Model Y ahead of the SUV’s unveiling later this year – and the company is hoping lessons learned from the Model 3’s “production hell” can help it capitalise on the “massive” opportunity presented by its most important new model yet.


Model Y to give Tesla its toughest challenge yet
Model Y to give Tesla its toughest challenge yet

The Model Y is due to go on sale in late 2020 and design work is now complete ahead of an imminent launch. Although company boss Elon Musk has previously said on Twitter that the Model Y would be revealed in March, he later clarified that was an estimate. Even so, the firm is readying its production line and pre-production models will shortly begin testing.

Tesla sold more than 120,000 examples of its Model 3 last year, making it the world’s top-selling electric car. The Model 3 was also the best-selling saloon car in the US, although its sales were still dwarfed by those of pick-up trucks and SUVs. For comparison, Ford sold more than 900,000 of the F-Series truck and the Toyota RAV4 topped SUV charts with 427,170 sales.

The continued shift of the market from saloons to SUVs is why Musk says the Model Y presents “massive” growth opportunities for the firm. Tesla currently produces the Model X large SUV, but the high cost and complexity of that model limit its volume.

Musk recently told investors: “The demand for Model Y will be maybe 50% higher than Model 3; could be even double.”

The Model 3 has never suffered from a lack of demand: Tesla’s problems have been about supply, as it struggled to scale up production. It is currently producing around 1000 Model 3s a week and says it expects to be able to build 7000 a week on a sustained basis by the end of the year. With that plant at overcapacity, the Model Y is set to be built at Tesla’s Gigafactory 1 site in Nevada, where it currently produces battery packs and electric motors. The firm has started tooling up the production line at the site with the aim to start volume production next year.

Ironically, the much publicised problems building the Model 3 could benefit the Model Y, as it has demonstrated the ability to create a new production line far quicker than is standard in the car industry. Producing the car alongside its batteries and motors will also ease transport logistics.

With rivals such as Audi, BMW and Mercedes-Benz all in the process of launching their own premium SUVs, it will be vital for Tesla to ramp up production of the Model Y quickly. To aid that, it will be built on the same platform as the Model 3, with Tesla saying the two cars will share around 75% of their components, likely including powertrains.

The entry-level Model 3 features a single motor making around 271bhp, with a 125mph top speed and 0-60mph time of 5.6sec. It is also offered with a 145mph dual-motor system, which features in a Performance variant that boosts top speed to 155mph through an output of 444bhp.

The long-range dual-motor model has a range of 338 miles on the WLTP test cycle, giving it the longest official range of any EV currently being sold in Europe. The Model Y will have a slightly shorter range – due to the extra height and weight of the SUV body – but is still set to top 300 miles. That could give it a crucial edge over premium rivals and even smaller electric SUVs such as the Hyundai Kona Electric and Kia e-Niro.

Basing the Model Y on the same platform as the Model 3 suggests that it will be a compact crossover and it is set to have sleek styling closer to the Model 3’s than the Model X’s.

The Model Y is expected to be slightly longer than the Model 3, which measures 4690mm, but a similar width (1930mm). That makes it a similar size to the Mercedes- Benz EQC and slightly shorter than an Audi E-tron.

Musk described 2018 as the “most pivotal year” in Tesla’s history and 2019 is set to be even more important – and not just because of the Model Y. The firm has started work on its first factory in Shanghai, which gives it far greater opportunities in the world’s largest EV market. Tesla is aiming to produce 3000 Model 3s a week there when it starts production later this year. Combined with the 7000 per week target for Fremont, that would give the firm the ability to produce 500,000 Model 3s a year by early 2020.

Tesla has also begun European deliveries of the Model 3 to left-hand-drive markets, with the first shipment arriving in Zeebrugge, Belgium, earlier this month. Only the dual-motor and Performance versions are available in Europe at the moment. Right-hand-drive deliveries to the UK are due to start later this year.

Tesla is working on a number of other new vehicles, including a new Roadster, Semi lorry and a pick-up. Musk also recently revealed the firm is developing a minibus that will be built on the Model X platform.

Elon Musk called 2018 ‘the most pivotal year’ in Tesla’s history and 2019 will be even more important.

Model Y’s styling will be influenced by that of its saloon sibling.


DON’T BET AGAINST TESLA

JAMES ATTWOOD

Elon Musk described 2018 as “pivotal” for Tesla. My suggestion would be ‘tumultuous’. But through numerous Model 3 production challenges – and several controversies of Musk’s own making – the firm ended the year on a high.

It is now producing and selling the Model 3 at a decent volume and the innovative machine has rightly earned praise (including from Drive-My).

But the firm can’t afford to celebrate. In America, it largely has the EV market to itself, but not for long – and it faces more rivals in Europe and China. Competition is coming and that competition has incredible resources and proven ability to produce cars at volumes Tesla can still only dream of.

So beating those rivals in the SUV market with the Model Y is vital. Tesla must capitalise on its head start. Still, 2018 has shown what Tesla is capable of: rivals who speak of producing ‘Tesla killers’ would be wise not to underestimate what this company can achieve.

Model X is larger, more expensive and lower volume than Model Y.

Top-selling Model 3 will donate about 75% of its parts to Model Y.


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