Will Tesla Model Y Be Industry’s First Mainstream Electric Crossover?

By · October 12, 2017

In June, Tesla released the first teaser image of its future Model Y crossover EV.

American roadways are filling up with crossover SUVs—the ultra-popular vehicle segment that combines the compelling features of a car, SUV, and wagon. The dramatic rise of the crossover begs this question: When will EV buyers be able to buy one powered by electrons?

Perhaps that day is coming faster, based on the recent first sales of the Model 3, the stylish, affordable long-range car from Tesla. That’s because the Tesla Model Y—the company’s planned crossover—will share many of the Model 3’s components. It’s not clear yet if the two vehicles will be built on the same platform.

Tesla will have significant competition in the race towards a long-range relatively affordable crossover EV. There are at least three other companies with aspirations for a pure electric crossover that sells for around $40,000 vehicle and offers around 250 miles of driving range on a single charge.

Mainstream automakers recognize the immense popularity of crossovers. Lex Kerssemakers, the CEO of Volvo Cars of North America, told Automotive News that Volvo would produce a crossover as its first all-electric car. He said the vehicle, which will be built in China, is coming in 2019. Volkswagen and Ford are also expected to launch electric crossovers at a similar price with a similar amount of range in about 2020. It’s shaping up as an exciting race to the finish line—all to the benefit of shoppers who want the versatility and affordability of a crossover, but with long range and zero emissions.

Meeting Demand

Tesla CEO Elon Musk is very much in that race. Considering statements he made during Tesla’s Q2 2017 earnings call in June—when the first teaser image of the Model Y was released—Musk acknowledged the rapid growth of the crossover segment. In that call, he set “late 2019 to 2020” as a production target for the Model Y.

It’s not certain yet if the Model Y will be built on the Model 3’s platform. It’s also uncertain if it will feature the falcon doors used on the Model X and what other steps would be taken (e.g., changes in wiring strategy) to make sure that a Tesla all-electric crossover would be well-suited to quick, high-volume production. Some industry analysts believe that demand for the Model Y crossover will be higher than for the Tesla Model 3, which is a small four-door sedan. Tesla already has its hands full trying to deliver cars to the hundreds of thousands of people with reservations for the Model 3.

Musk said that he learned from mistakes in designing the Model X full-size SUV, which he believes was over-engineered. The complexity of the Model X led to multiple delays in its release. Now he favors an approach—sometimes referred to in the tech industry as a “minimally viable product”—in which a good first product is released and then followed by enhanced features that roll out over time.

The company hopes that a Model Y crossover will help it reach the scale of making and selling as many as 1 million vehicles per year by 2020, an ambitious goal. During the Q2 earnings call, Musk referred to the Model Y as “a car where we expect to see demand in the 500,000 to 1,000,000 unit per year level.” He added, “It’s the obvious priority after the Model 3.”

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