Tesla, Inc., is an automotive and vertically integrated sustainable energy company that operates primarily in the US, China, and Norway. It designs …
Tesla, Inc., is an automotive and vertically integrated sustainable energy company that operates primarily in the US, China, and Norway. It designs, develops, manufactures, and sells electric vehicles, electric batteries, and solar panels. Key products offered by Tesla include Model S, a five-adult passenger sedan; Model X, a sports utility vehicle; and the Model 3, a third generation electric vehicle, as well as energy solutions such as Powerwall, Powerpack and Solar Roof. Tesla’s main production factory is in Fremont, California, and it also operates two production/assembling facilities, notably Gigafactory 1 near Reno, Nevada, and Gigafactory 2 in Buffalo, New York.
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Tesla revealed the Model Y small crossover at its Southern California offices late Thursday night. The new product introduction comes at the same …
Tesla revealed the Model Y small crossover at its Southern California offices late Thursday night. The new product introduction comes at the same time that the EV pioneer is going through a bit of a restructuring.
Tesla has held parties like this in the past, including for the Semi electric truck and the Roadster refresh unveilings in November 2017, and for the solar roof display in October 2016. None of those products are yet in mass production.
However, the Model 3 reveal (and its $35,000 price target) brought in hundreds of thousands of reservations at $1,000 each — essentially an interest-free loan for the capital-hungry EV market leader.
On Thursday, a relaxed and jovial Musk gave an adoring crowd an “extended history lesson” on Tesla’s decade-long trajectory.
Musk said that there was a time when making a car company was “stupid” and making an electric car company was “stupid squared.” But, “Now we’ve made around 550,000 cars,” he added.
The CEO proceeded to roll out each of Tesla’s vehicles — the Roadster, Model S, Model X and Model 3, as well as the planned Roadster refresh and Semi truck. Musk said that the company got a bit carried away with the Model X, creating something like “a Faberge egg meets a space ship.” There was no sign of the Tesla pickup truck.
Musk spoke of the car and battery factories, the pain of manufacturing and described the 20,000 people at the Fremont plant as a “giant cybernetic collective.” Musk showed a rendering of the Chinese factory with a completed shell targeted for the end of the year. He cited the company’s 12,000 charger at 1,400 stations and that it was great to see other auto makers going electric.
Musk also said, “This is the year of the solar roof and power wall.” Batteries were at a premium in 2018 “because all resources had to reallocated to Model 3 production — otherwise we were going to die,” said the CEO.
“But, now that Model 3 production is going well, we’re excited about the solar roof, solar retrofit and power wall,” he said.
“A future you can be excited about”
Solar installations have plunged at Tesla. According to data from Wood Mackenzie Power & Renewables, Tesla’s residential solar installation market share has dropped from 33.5 percent a few years ago to 9.1 percent, allowing Sunrun to clinch the title of market leader.
Tesla deployed 73 megawatts of PV in the last quarter of 2018 compared to the 272 megawatts SolarCity installed in the last quarter of 2015. And Tesla’s guidance for solar deployments for this quarter is down.
As for the solar roof, Back in October 2016, Musk unveiled the product on the set of a TV show. Now, two-and-a-half years later, and after having received deposits from interested homeowners, Tesla has connected just a dozen or so solar-integrated roofs to the grid.
Musk maintains, “Solar plus battery plus electric vehicles is a sustainable future you can be excited about.”
Finally, the Model Y
After that long windup, a blue Model Y rolled onto the stage in a bit of an anticlimax — it was difficult to distinguish the Model Y crossover from the Model 3 sedan, at least online.
Musk said the Model Y had the “functionality of an SUV but the ride of a sports car.” He said it would do 0 to 60 miles-per-hour in 3.5 seconds with an actual true usable range of 300 miles.
Higher-end versions of the crossover will be available in Fall 2020 at a price of $47,000 to $51,000. Musk did not reveal where the Model Y would be built, how it would be financed, and who in the company’s reduced workforce will build it. The company is accepting $2,500 deposits.
Musk also suggested that driving a Model Y on Mars in ten years was not out of the question.
Eleven years after founding a battery-electric car company few expected to succeed, Tesla CEO Elon Musk rolled out the upstart automaker’s latest …
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March 15, 2019, 6:12 AM GMT
By Paul A. Eisenstein
Eleven years after founding a battery-electric car company few expected to succeed, Tesla CEO Elon Musk rolled out the upstart automaker’s latest vehicle, the Model Y, late Thursday.
Surrounded by a standing-room-only crowd at the company’s Los Angeles design center, Musk said he expects the new battery-powered SUV to quickly become the company’s best-seller. “I think we’ll do more Model Ys than S, X and 3 combined,” the South African-born executive said.
During an earnings conference call in January, Musk told industry analysts the Model Y could double sales of the carmaker’s current leader, the Model 3 sedan, reflecting the overall shift to SUVs in the American market.
The new Tesla comes at a critical time for a company that has been struggling to turn a profit. It was in the black during the second half of 2018 but has cautioned investors it will lose money again during at least the first three months of this year. Complicating matters, a wave of new competition is coming from established automakers such as Volkswagen which, this week said it plans to have more than 50 different all-electric models in production by 2025.
The decision to name the new battery-electric vehicle the Model Y completes an inside joke at Tesla, its four product lines spelling out “S3XY.” The company wanted to name its compact sedan the Model E but discovered that name was registered by one of its Detroit rivals.
“Ford killed ‘SEX,’” Musk told a cheering crowd.
The 47-year-old executive spent half of a nearly hour-long presentation going over Tesla’s history before rolling out the new Model Y. He offered a number of details about the vehicle but left other questions unanswered.
Among the key points:
The Model Y can seat up to seven with an optional interior package;
It will be offered in four different versions, initially starting with a long range version capable of 300 miles “useful range,” an all-wheel-drive model getting 280 miles per charge, and a high-performance version capable of hitting 150 mph and launching from 0 to 60 in 3.5 seconds;
They will go on sale in autumn 2020;
A fourth, “standard range model capable of 230 miles per charge and still able to hit 60 mph in 5.9 seconds, will debut in spring 2021;
Prices will range from $39,000 for the base car to $60,000 for the high performance Model Y. Those prices are before options and like other Tesla products will no longer qualify for federal tax incentives;
They will be equipped with Tesla’s autopilot technology which, Musk said, will be upgraded over-the-air later this year to allow virtually full hands-free driving.
Among the details Musk didn’t discuss was the size of the battery packs used by the four Model Y variants. But “three-quarters of Model Y parts are common with the Model 3 so (investments in the vehicle) are much lower,” Musk said during that January conference call. That includes the underlying, skateboard-like “architecture,” suggesting the Model Y will share the same spectrum of lithium-ion battery packs which range from 50 to 75 kilowatt-hours.
Musk made a point of comparing the Model Y to the bigger Model X sport-utility vehicle. But the new entry doesn’t feature the unusual “falcon wing” doors found on the early SUV, which have been a technical nightmare for Tesla. They forced the automaker to fire the original door supplier and then caused much of the nearly two-year delay in bringing the Model X to market. Since then, they’ve been the source of ongoing quality and reliability problems, a key reason influential Consumer Reports rates Model X poorly.
Musk notably sidestepped where the Model Y will be built in the U.S. He previously said the company was still debating where the new crossover-utility vehicle will be produced, though it was leaning towards adding capacity at the Gigafactory battery-plant in Reno, Nevada, rather than taking the limited remaining space in Fremont, California, where the Models S, 3 and X are produced.
The challenge of going to Nevada is that the company will have to start from scratch and then try to avoid what Musk has called the “production hell” that held back the ramp-up of the Model 3 for nearly a year.
Manufacturing, he said Thursday night, is “insanely difficult. It’s 100 times harder to design the manufacturing system than the car itself.”
Musk did indicate, however, that the Model Y will be one of the products rolling out of the massive new factory Tesla intends to open in Shanghai later this year. That plant will give the automaker a footprint in what has become the world’s biggest market for plug-based vehicles and it also will help Tesla sidestep any escalation in the U.S.-China trade war.
The Thursday night event was something of a love fest for Musk, the audience filled with fans wildly cheering almost everything he had to say. But his smiles might not last long considering all the problems the CEO faces. For one thing, the Securities and Exchange Commission is expected to fire the next shot in an ongoing battle over a tweet Musk posted on Feb. 19. In it, he discussed production plans for the year.
The SEC says the tweet violated terms of a settlement Musk agreed to last year in a case centered around his claims that Tesla was going private, backed by a sovereign Saudi Arabian fund. But for its part, Musk’s lawyers contend the agency simply wants to limit his First Amendment rights. If a federal judge rules against Musk, the potential penalties could include his removal as Tesla CEO.
Even if Musk survives that battle there are others facing him, including an ongoing investigation by the U.S. military after he smoked marijuana on a podcast last year. And he is being sued for alleged defamation by a British diver involved in the rescue of a youth soccer team from a flooded Thai cave after Musk referred to him as a pedophile.
The good news for Tesla is that it has become the world’s biggest producer of battery-electric vehicles. But it faces plenty of challengers who’d like to take down the upstart king-of-the-hill. That includes a who’s-who of the auto industry, including Ford, General Motors, Jaguar, Mercedes-Benz, Nissan and Volkswagen. VW this week announced plans to sell 22 million all-electric vehicles by 2029, a 50% increase from earlier plans.
Beyond the challenge of taking on so many well-funded competitors, Tesla has to worry about what Detroit consultancy AlixPartners recently warned could soon be a “pile-up of epic proportions” as scores of new products come to market.
For his part, Musk told his audience on Thursday night that “our goal, all along, has been to try to get the rest of the industry to go electric,” adding that it is “it’s extremely rewarding to see” that begin to happen.
Paul A. Eisenstein
Paul A. Eisenstein is an NBC News contributor who covers the auto industry.
While Musk remains optimistic about the vehicle, some on Wall Street have expressed concerns about the Model Y eating into sales for the Model 3.
In a note to clients earlier this week, Goldman Sachs analysts said that the Model Y could put further pressure on the Model 3.
“While the unveil of the Model Y could drive incremental reservations— given a much larger global market for crossovers than sedans — and help cash balances given likely deposit collection, this new product could further weigh on Model 3 demand as consumers decide to wait a little longer to purchase a Tesla crossover vehicle (a segment that has seen significant increases in demand across the major auto markets the past few years),” Goldman analysts said.
While Tesla saw a steady increase in Model 3 sales from October to December of 2018, the company saw a drop off in January and February of this year.
Tesla sold 17,750 Model 3s in the US in October and 25,250 in December. However, in January, the company only sold 6,500 Model 3 sedans in the US. That number dropped even further in February to 5,750.
What to know about the Model Y
Tesla is currently selling three versions of the Model Y SUV.
The long-range rear-wheel drive begins pricing at $47,000 before incentives and has a range of 300 miles per charge.
The dual-motor all-wheel drive will have a range of 280 miles per charge and begins pricing at $51,000 before incentives. The Performance model will also have a range of 280 miles, but will begin pricing at $60,000.
According to Tesla’s website, the company plans to begin manufacturing these three versions late next year. But customers can place an order now on the company’s website for a deposit of $2,500.
Those looking to order the standard version of Tesla’s Model Y will have to wait even longer for their SUV.
According to Tesla’s website, the Model Y standard range version of the vehicle will begin production in 2021. Customers cannot yet place an order for this version of the vehicle.
The standard Model Y version will have a range of 230 miles per charge, a top speed of 120 miles per hour, and begin pricing at $39,000. The SUV will also be able to go from 0-60 mph in 5.9 seconds, Tesla says.
The Model Y SUV will seat five people, but two seats can be added for an additional cost.
Speaking on Thursday at an event at the company’s design center in Hawthorne, Calif., Elon Musk, Tesla’s chief executive, touted the new vehicle’s …
Various versions will be produced in North America, Europe and China, Tesla said. A long range version will be able to drive 300 miles on a single charge, it said, while the $60,000 Performance model will have a top speed of 150 miles per hour. The new vehicle will be available in the United States, Canada, Mexico, China, Germany, the Netherlands and a number of other European countries.
The Model Y unveiling comes as Tesla confronts sales challenges in Europe and China, markets it has been counting on for expansion.
The company has also faced some operational uncertainty. Two weeks ago, Mr. Musk announced that Tesla would begin selling a long-awaited version of its Model 3 sedan priced at $35,000, $8,000 less than the cheapest current version. But he said Tesla would lose money in the first quarter, and analysts question whether Tesla can ever make money on the car at the lower price.
Tesla originally said customers would have to wait two to four weeks for delivery of the $35,000 Model 3. It now says the wait is six to eight weeks.
Sales of Tesla’s other models, the Model S luxury sedan and Model X sport-utility vehicle, have been flattening. And analysts suspect that demand for Tesla vehicles has softened since the beginning of the year, when the federal tax credit available to Tesla customers fell by half, raising the total cost for buyers. Until the end of 2018, Tesla buyers were eligible for a credit of $7,500. That fell to $3,850 on Jan. 1, essentially raising the price of Tesla cars.