Tesla is ahead of schedule on its plans to launch the production of its Model Y electric crossover at the automaker’s factory in Fremont, Calif.
Elon Musk, the company’s chief executive, said Tesla has moved the Model Y launch to the summer of 2020. That’s up from fall 2020.
Musk gave the update in a recent conference call with investors and analysts detailing the automaker’s financial performance. The company posted a third-quarter profit of $143 million on revenue of $6.3 billion. That compares with a profit of $311 million on revenue of $6.8 billion in the same period a year earlier.
“Tesla is now building cash, winning market share, and boosting margins – all while preparing to launch products in untapped segments and regions,” said Alexander Potter, an analyst with Piper Jaffray & Co.
In a report to investors, Potter said Tesla’s cash crunch is easing. Higher profit margins and other financial improvements built the company’s cash holdings to $5.3 billion.
“If this trend continues, Tesla may be able to withstand the impact of large recalls or other events that, in the recent past, would have spelled financial ruin,” Potter said.
“Tesla now has the chance to unleash competitively-priced EVs in multiple regions, a process that we believe will awaken investors to the company’s market share potential. Strengthening our case further, the Model Y SUV is ahead of schedule to launch by mid-2020, and the Shanghai facility is ramping up more quickly than many had expected,” he said
The Model Y is key to Tesla’s success. It is a compact crossover that will share a platform with the Tesla Model 3 compact sedan. The styling draws inspiration from the larger Model X SUV, but the vehicle is smaller.
COMPACT CROSSOVERS POPULAR
Compact crossovers are one of the hottest segments of the U.S. auto industry. Just three crossovers – the Toyota RAV4, Honda CR-V and Nissan Rogue — accounted for almost 900,000 new vehicle sales through the first nine months of this year. They made up 7 percent of all light vehicle sales and are the best-selling models after pickup trucks.
Model Y will be a direct competitor.
Musk is already pitching it, saying it will outsell the combined sales of all Tesla’s other models.
“I’ve actually recently driven the Model Y release candidate and think it’s going to be an amazing product and be very well received,” Musk said.
He said Telsa is “confident” of ramping up Model Y production to 1,000 a week “no later than the middle of 2020.”
The Model Y Long Range will hit the market first at a $48,000 starting price. The Dual Motor AWD will follow, starting at $52,000 and the Performance grade will begin at $61,000. Tesla intends to begin Standard Range Y deliveries in the spring of 2021 with a starting price of around $39,000.
The vehicle will be considerably faster than a mainstream gasoline compact crossover. Tesla said the Model Y Standard Range will accelerate from 0 to 60 mph in 5.9 seconds. Pricier trims get there quicker: The Long Range in 5.5 seconds; Dual-Motor in 4.8 seconds and Performance in 3.5 seconds.
ELECTRIC RANGE CHOICES
How far the Model Y can drive before recharging depends on the configuration. The Standard Range will be good for 230 miles between charges. The Long Range is supposed to deliver up to 300 miles. The two Dual Motor grades each can go 280 miles between charges.
Musk said he doesn’t believe the new crossover will eat into sales of the compact Model 3 electric sedan. Tesla didn’t see sales of its Model S sedan fall when it introduced the Model X SUV, he said.
He also believes the automaker will launch the Model Y without the production delays and glitches that plagued the introduction of the Model 3.
“It should be smoother than the Model 3 because there’s a lot of commonality of parts. And I think if you look over a reasonable enough time frame, the production will actually be fairly smooth,” Musk said.
But from a week to week standpoint, Model Y production will gyrate, he said. The goal is to climb above producing 3,000 vehicles a week.