Published on March 6th, 2020 | by Zachary Shahan
March 6th, 2020 by Zachary Shahan
This is something that has struck me several times, but I haven’t really seen people discussing the matter. It demonstrates, in its own special way, how far Tesla has come in a few short years. There are a few sides to it — production, company health, and stage of Tesla options. I’ll quickly discuss each of these.
First of all, on the production front, it’s night and day how Model 3 production ramped up compared to Model Y production. There was so much attention on Tesla’s ability to produce the Model 3 in large volumes (or inability to do so for a while), and how much of a change that was for the company. Every single step in the Model 3 production ramp seemed to be public. (I’m sure many steps weren’t public, but the point is how closely the process was watched and covered.) Tesla Model Y production, on the other hand, just started rolling almost invisibly. We published two months before anyone else (second being Deutsche Bank and Reuters) that production would probably start in the 1st quarter of 2020. When commencement of Model Y production was announced in a Tesla shareholder letter, it almost seemed like it was slipped in as an afterthought. Several other topics dominated Tesla headlines. Where was the insane enthusiasm and hype around Model Y? I almost felt like we were getting something wrong in our coverage due to the sound of crickets around the web on this topic. For sure, many Model Y reservation holders were eagerly awaiting their vehicles (though, not as much as Model 3, which I’ll come back to in a moment), but there just wasn’t that enormous buildup of public emotion around the Y.
One big factor here is company health. Tesla was famously in a “ramp or die” moment with the Model 3. This was the last “bet the company” phase for Tesla, according to CEO Elon Musk — who didn’t exactly have the easiest time of his life trying to get the Model 3 to mass production. Production of the Model S and Model X were small potatoes compared to what the Model 3 would bring. So, all eyes were on Model 3 production in good part because it was much more than a popular model — it was the life or death of Tesla as we knew it. Model Y production should be much greater than Model 3 production eventually, but there’s no rush to get to the sales crossover milestone, and the scale of Model 3 production is already so high that the long-term Model Y target doesn’t seem as dramatic (for now). But, yes, a huge matter is that Tesla fans and TSLAQ-obsessed trolls aren’t on the edge of their seats seeing if Model Y production will increase quickly enough to put Tesla into the black. There is almost no discussion of the importance of the Model Y for Tesla profitability. The company mission is rolling forward like a high-speed bullet train in China or Europe one way or the other.
The last factor that I think contributes a great deal to the lack of buzz and obsession around the Model Y (not to say there isn’t some buzz and obsession, of course) is the stage of Tesla’s product options. For the past couple of years, you’ve been able to buy a semi-affordable Tesla — the Model 3. The Model Y doesn’t all of a sudden mean non-millionaires can buy a Tesla. Yes, many people have been waiting for the slightly larger, hatchback, crossover version of the Model 3, but let’s be real — anyone who was too exuberant about Tesla to wait for the Model Y is already driving a Tesla. In fact, many initial Model Y buyers probably already have a Model 3 and will just be adding the Y to their garage! As Chris Boylan pointed out long before I gave this deeper thought, this meant there was not much anguish waiting for the Model Y, as there was for the Model 3.
There’s one more point to take away from all of this. Coming in with such a quiet, seemingly non-menacing entrance, the effect of the Model Y may shock. Without all the hype leading into production and initial deliveries, the Model Y is quite stealthily slipping in under our radar. When it starts selling in large volumes, the *bang* of it being noticed in public and in the sales results of competing crossovers may strike us more. Considering this is the hottest vehicle segment on the planet, the impact could be both large and influential. It’s one thing for other automakers to lose millions (combined) of sedan sales. It’s a bit of a different thing to lose millions of crossover and SUV sales — after losing millions of sedan sales. And if that effect hits quite suddenly without the buildup of anticipation we had with the Model 3, it may feel stronger, like when your Tesla-driving friend suddenly boosts off the line with their foot all the way down to the floor. The surprise is a big part of the visceral reaction.
Are automakers going to be surprised by the “Tesla effect” from the Model Y? Is the public going to be thrown back onto its heels? Is the stock market ready for it? How about Big Oil? What will the political ramifications and snowball effects be? How long until the mainstream market in the middle of S-curve or J-curve adoption trends starts noticing that there’s a new brand in town that has multiple vehicles at every stop light and in every parking lot? What happens when they notice vehicle after vehicle next to them has a computer sticking out in the middle of the dashboard?
Things are about to get interesting, and perhaps in some very different ways than they did from the Model 3.
Photos by Kyle Field, CleanTechnica
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