The Tesla Model Y Unveil: This is Electric Car Life After Leaf and Bolt

ANALYSIS AND OPINION: I continue the miniseries of stories of “Life after Leaf” in this beginning of the post-hybrid age when we are now getting over PHEVs and short range BEVs like Nissan Leaf, and taking a more serious look at new BEVs now that they’re more car and charging choices, better battery ranges, and cheaper prices. One option coming soon is a BEV CUV that’ll compete with the Hyundai/Kia SUV electrics. Here’s the unveiling of the smaller Model Y.

There is something unique being born in the middle of something to represent the middle, whether you’re born into a royal family or a luxury product line. You’re in an exclusive club but you’ll never stand out for anything. Most likely you’ll never be king or queen to be confined to being only a duke or duchess somewhere, nor will you be the flagship, neither the halo. Whether it’s about royal or luxury, you’re blue blooded no doubt, but there’s a mediocrity that fixes you between top and bottom.

In this case with Tesla, birth into the middle means this new product will never be the fastest, the slowest, the longest ranged, the most expensive but not the cheapest either. Neither will it be the biggest, the smallest, the most luxurious, or the most economy model Tesa could offer, for the matter. Stuck in the middle range. Until another Model letter comes to replace her, this is what the industrial life will be like for the Tesla Model Y.

She will not have the glamour of her big sister Model S, the Electric Queen of the Roads, she will not have the speed, guts, and glory with the Hollywood appeal of her halo sister Roadster, she won’t have the big muscles and long range of her giant sister on steroids, Semi, and she certainly won’t be labeled as being $35,000 cheap Iike her one step over twin sister, the Model 3. She won’t even have the falcon wings of her alter bigger sister she was made in the image of, Model X, that made driving a CUV really cool. Her wings were clipped before birth. So you have to wonder, what will make this Tesla so special to own if it is stuck in the middle with mediocrity?

The best that this new car can hope for, is either to be the greatest or best selling Tesla ever made. And ironically the only ones who are in a position to make that happen other than build quality, is not Tesla, but their customers who’ll drive and judge this car over time.

Tesla Model Y SUV will be unveiled March 14th at the Tesla Design Studio in Los Angeles. Until then, here’s what we know or is coming:

Model Y Highlights

• Introducing the 2021 Model Y with hopes for production EOY 2020.
• There was talk of an independent frame, but Y will be a CUV variant of Model 3 from the same third generation platform.
• A shareholders’ letter said the car will be assembled at Gigafactory 1, but now there’s an issue with that.
• With their recent mega debt payment and Q1 projections for a profit loss, they need to make this car on the cheap and for it to make lots of money like Model 3 did.
• The car will have 75% of the parts made from Model 3.
• It will be 10% bigger in size and cost than Model 3.
• Obviously it won’t be the cheapest or most economical model.
• If the entire model range now has a base version, Model Y should be expected as well. It just won’t be $35,000.
• It will use the same tray, platform, and battery as Model 3, so we should expect with the added size and weight that the range will be slightly lower than it is for Model 3.

Other Tesla News Highlights:

• Tesla’s new mega supercharging called V3 Supercharging is now online at major Tesla charging stations. Model 3 gets first digs, S and X will join it later this year after software updates.
• The base version of Model 3, long waited economy version to be doubtful coming at times, is finally here with a two week to June delivery to customers.
• Tesla suddenly seems to be in the same financial position it was over a year ago being severely cash short and still debt deep (next payment $1 billion USD March 30th), that it’s undergoing massive cost and 8% job cuts to stay profitable.
• Part of these job and operational cuts is to only have a few anchor flagship Tesla stores peppered around the country and to sell all vehicles online. Employees haven’t been told when that will happen or to who.

Why Model Y and Why Now

By adding a fifth vehicle to its portfolio, Tesla puts itself into a situation of cornering the BEV market as the legacy auto makers are just starting to bring their electric products to market. With the completion of Model Y and later this year the unveiling of Model U, the pickup truck, Tesla will just about have a vehicle that goes right through an entire model range that will and can compete in just about every market globally, and against the legacy makers. When that range is complete, Tesla will then have both a small and large CUV for a price point or size to suit any customer. Another issue to consider is that between the Hyundai Kona and Kia Niro and Soul CUV BEVs the Koreans are already laying groundwork that could cut into the Tesla consumer market position globally. That’s with just the Koreans, the Europeans haven’t even started with their smaller BEV CUVs. So it is important that the next vehicle Tesla introduces is a smaller BEV CUV that can compete in this segment against those three vehicles and get ready for the Europeans, the Chinese, and Japanese. This means more choices next year for consumers.

Another reason this is the right vehicle at the right time is market demand for SUVs in general. The Model Y will be the first affordable mass market American made BEV CUV in a market that’s already saturated will kinds of SUVs. Even in the shadow of her more expensive bigger sister the Model X, Model Y will still have plenty distinction to stand out in the US market. And as developing markets grow, Model Y will have plenty of room to gain dominance. According to vehicle market forecaster LMC Automotive: “While the US is the only major market where we expect SUVs to account for more than 50% of all Light Vehicle sales, growth in most markets, be they emerging or mature, is set to continue. For example, we forecast that SUV share in Russia and China will exceed 40% by 2025.”

There are also financial considerations. Tesla recently had to make a mega debt payment of almost $1 billion USD, and because of market conditions and the price of their stock, they were not able to make that payment in stock form as they had hope to. So they had to reach into their coffers and pay a big chunk of that debt in cash, and they used most of that windfall Tesla Model 3 money they worked sweat and tears from. It’s now almost gone. Finding themselves now in the similar situation they were in the same time last year, Tesla really now needs to pull rabbits out of hats again to make another money making machine vehicle to improve their cash position and continue paying down their debt. And once again, they need to make it count, a big selling one, and on the cheap. The next payment is the big one: $1 billion USD due March 30th.

Models 3 and X are more closely related to one another than actually Model S and X are. Inasmuch as the Tesla Model X shares the same platform as Model S, not many parts are shared in common between S and X, that Model 3 and Y will. To save tons of money in new vehicle development costs, Model Y will use 75% of the parts already used for Model 3. This is part of Tesla’s production and market strategy of introducing what they hope will be a more popular vehicle than Model 3, will cost less to make to maximize profit, and will hopefully sell more vehicles than the entire range has, combined.

Location Location Location

How Tesla is handling the Y unveil thus far is revealing and telling of the Tesla corporate style. They are planning on introducing a new product within an 18 month time period, a product that has the potential to sell more cars than Model 3, and they have yet to talk to any of their major suppliers or even their key non-management employees who can make such a project possible. They even haven’t figured out where the product’s final assembly will take place.

Could another tent of some kind be coming? What Tesla hasn’t really told us yet that we really all know, is that they don’t have any good room left to build this kind of car they really need for scale to maximize the profit that they also really need. So unless they can find a place somewhere to build the car for US assembly, the next place they’ll have to wait for is when their factory is finished and ready for production in China, and that seems unlikely they’ll wait.

At first it was a given that the car would be assembled at Gigafactory 1 in Reno, Nevada, the world’s largest building by footprint. Although a shareholders’ letter stated, “This year we will start tooling for Model Y to achieve volume production by the end of 2020, most likely at Gigafactory 1" it seems executives still aren’t sure where US assembly will be. But not so fast, according to sources at CNBC. They asked some present and former Tesla employees and were told that Gigafactory 1 is a joint venture with Tesla and Panasonic, and that any use of the building would require permission from the other. CNBC’s request to Panasonic to comment were unanswered, and the person at Panasonic who could give the okay recently left the company.

Even though Gigafactory 1 is the world’s largest building, those same sources also say that some parts of the plant are already crowded, and they can’t see how Tesla could squeeze a whole car assembly production line in there. There isn’t enough room to store the parts required for assembly, and there isn’t room for additional processes they need to put a whole car together. One option Tesla executives are toying with, is to combine S and X production onto one line so that they can start Y production at Fremont. They’re still in the process of introducing the international version for Model 3, so it would be wise to leave that production process alone, tent included. So unless Tesla can wait for Chinese production which seems unlikely, perhaps another sole purposed giant tent might be the solution.

Life in the Post Hybrid World

The addition of Model Y will augment the already closing chapter of what will be known as the Hybrid Era in the Electric Car Revolution. As former owners of Leafs, Volts, and Prii trade in their cars for Model 3, they’ll soon also have the option of driving Model Y. The compact SUV/CUV market is the largest and the most profitable segment of all in the auto market. By producing a compact CUV that’s all electric and a Tesla, the already storied company seals its fate and position of a cornered market with a full product line of light vehicles, and its survival through the rest of the 21st Century. There’s life after the Nissan Leaf . . .

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Photos are from Tesla Media and Twitter. Images are published here and all under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, and news reporting.

UPDATED NOTICE: I am so grateful that my publisher allows me the generous privilege within reason to express my opinions about matters related to the auto industry. I try to be judicious and respectful about the content. I ask you do the same in the comments section by refraining from inappropriate language and content. Please be nice, there’s no reason to get nasty, this is only about cars. The irony is if you came up on me on the street to recognize me I’d grab a beer with you and we’d talk about cars for me to thank you for being a reader! I may disagree but I truly do love you all, I’d take a bullet for many of you. And please keep in mind that the opinions expressed here are solely mine, and not those of Hareyan Publishing or its employees, including my staff colleagues.

Al Castro is a security expert and a retired LEO who is a staff and opinion piece writer on electric and autonomous vehicles for Torque News.

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