Tesla Model Y: Price for Elon Musk's Electric Car Could Surprise Buyers
The Tesla Model Y, an upcoming compact SUV that forms part of CEO Elon Musk’s strategy to get electric cars into more consumers’ hands, could come with a reasonable price tag.
The electric vehicle is expected to be announced on March 14 at 8 p.m. Pacific time, at the Tesla Design Studio in Hawthorne, California. The company is set to livestream the event on its website. The invite image gives a small glimpse of the upcoming vehicle, demonstrating the car’s headlights against a blue backdrop, but until the reveal date, its design will remain shrouded in mystery.
Tesla has a tricky balancing act for pricing the Model Y. Musk named a compact SUV alongside the Model 3 and a pickup truck in his 2016 master plan. Unlike the luxury Model S sedan and Model X SUV, these three new vehicles will bring more consumers to electric cars through lower price points and a broad appeal. Tesla released the Model 3 in July 2017 at $49,000, eventually releasing a $35,000 model last month.
Tesla Model Y: How Much Will It Cost?
On March 3, Musk revealed that the Model Y will likely come with a price tag around 10 percent higher than the Model 3, owing to the fact that the vehicle is around 10 percent larger than the Model 3. This could mean that an entry-level Model Y could cost around $38,500. With a performance Model 3 costing $58,000, this would place a high-end version of the Model Y at around $63,800.
A price around this range would place a clear delineation between the Model Y and the company’s more premium vehicles: the cheapest Model S retails for $79,000, while the cheapest Model X retails for $88,000.
It also compares favorably to the competition. The Rivian R1S electric compact SUV starts at $72,500. The R1S offers a $7,500 federal tax credit that’s higher than Tesla’s $3,750 credit (set to phase out further this year), but the final price still outranks the Model Y. The Jaguar I-Pace electric SUV costs $69,500.
Tesla has been keen to sell the Model 3 as a cheaper version of the Model S, even producing a comparison guide that lists the reasons why the Model S is better. This includes a 0 to 60 mph acceleration time that’s 0.8 seconds faster, double the cubic feet of front and rear trunk space to 30 cubic feet, auto-presenting door handles and an air filtration system. It’s possible Tesla will use a similar strategy again, although it’s unclear how the Model Y will differ from the Model X at this stage.
The company is expected to avoid many of the issues surrounding the Model 3’s production thanks to its use of similar components. Musk explained in January that around 75 percent of the components are the same between the two vehicles, resulting in lower capital expenditure.
Whatever its price, Musk expects the Y to sell like hot cakes. During the company’s fourth quarter earnings call in January, he said that global volume could be “maybe 50 percent higher than Model 3,” as “the mid-size SUV segment is worldwide the most popular vehicle.”