New Tesla Model Y completes joke that Elon Musk has been working on for 10 years

'This could be Tesla's most profitable vehicle, with the giant asterisk that the company doesn't do some of the dumb things it has in the past'

A handout photo dated 07 March 2019 and  made available 15 March 2019 by US automobile manufacturer Tesla, showing the new Tesla Model Y electric car that Tesla says will be released as of from 2020
A handout photo dated 07 March 2019 and made available 15 March 2019 by US automobile manufacturer Tesla, showing the new Tesla Model Y electric car that Tesla says will be released as of from 2020

It has taken 10 years, but Elon Musk has finally got to the punchline.

The Tesla CEO has revealed the company's new car: the Model Y, the last part of one of Mr Musk's many long term plans.

It means that the company now makes the Model S, Model 3, Model X and Model Y. Parked next to each other, the model numbers spell out S3XY.

The release ends a plan that began more than 10 years ago, when Tesla unveiled the Model S.

He celebrated the move with a strange tweet on Twitter, posted soon before the car was unveiled at a launch event.

Mr Musk has said that he would have liked to have the word written with the "E", but that wasn't possible because Ford opened the copyright to the name.

The new all-electric SUV known as the Model Y was unveiled to cheers from a hangar-packed crowd of Tesla customers, employees and members of the media welcomed a blue Model Y as it rolled out onto a stage next to the automaker's other models.

"It has the functionality of an SUV, but it will ride like a sports car," CEO Elon Musk told the crowd. "This thing will be really tight on corners and we expect it will be the safest midsize SUV in the world by far."

The Model Y seats seven and has a panoramic glass roof and a 15-inch (38-centimeter) touchscreen interface for accessing all the car's controls.

The all-electric, mid-size SUV will start at $39,000 for the standard range version, which the company said can go 230 miles (370 kilometers) on a single charge. The long-range model, which starts at $47,000, has a range of up to 300 miles (483 kilometers) on a single charge - less range than the Model 3.

A dual-motor, all-wheel drive version of the Model Y starts at $51,000 while the performance version of the car, which boasts acceleration of 0-60 mph (97 kph) in as little as 3.5 seconds and a top speed of up to 150 mph (241 kph), starts at $60,000.

The Model Y may be Tesla's most important product yet as it attempts to expand into the mainstream and generate enough cash to repay massive debts that threaten to topple the Palo Alto, California, company.

Tesla got a huge boost toward ensuring its survival with the 2017 debut of its Model 3 sedan, but an SUV could have even more mass appeal, given how popular SUVs have become in the U.S., Europe and Canada.

The U.S. market share for SUVs, crossovers, vans and pickup trucks stood at 69 percent in January, up from just 48.5 percent a decade ago, according to the research firm IHS Markit.

But most SUVs still run on gasoline, leaving Tesla to cater to consumers looking for an all-electric alternative. The Model Y's main competition in this still-nascent market is likely to be the Mercedes-Benz EQC, and to a lesser extent, the Jaguar I-Pace, according to the research firm LMC Automotive.

"This could be Tesla's most profitable vehicle, with the giant asterisk that the company doesn't do some of the dumb things it has in the past," said Gartner analyst Mike Ramsey.

Many of Tesla's past follies have been tied to Musk's penchants for making grandiose promises that the company hasn't been able to keep in terms of production, delivery and execution.

Production of the Model 3 quickly fell behind schedule as Tesla struggled to come up with adequate manufacturing capacity and it took much longer than anticipated to lower the sedan's starting price to the $35,000 level that Musk had been promoting. Instead, the lowest priced version of the Model 3 had been selling for $43,000 until a couple weeks ago when Tesla reached the promised price point by laying off thousands of workers and imposing other cost-cutting measures.

Overseeing the ramp-up of Model 3's production nearly drove Musk to exhaustion last year, a factor that may have contributed to a mystifying pattern of behavior that included tweeting about having lined up the financing for a potential buyout of Tesla. That misleading statement jeopardized his job and resulted in a $40 million settlement with stock market regulators.

Musk alluded to the troubled production of the Model 3 during his remarks to the crowd Thursday night.

"Because of extreme challenges with the Model 3 production, we have to basically allocate all resources to Model 3 production, because otherwise we're going to die," Musk said with a chuckle, eliciting laughs from the crowd.

He then added: "2018 probably felt like aging five years in one. It was really intense."

Tesla expects to deliver the performance, long range, rear-wheel drive and dual-motor, all-wheel drive versions of the Model Y in the fall of 2020. The standard version of the Model Y is expected to roll out in the spring of 2021.

As with all electric vehicles, the distance that the Model Y can cover on a fully charged battery is likely to be one of its key selling points - or downsides. Teslapegged the Model Y's range at up to 300 miles compared to 325 miles for the Model 3.

Tesla is hoping there will pent-up demand for the Model Y, nearly four years after Musk first began touting the company's plans to make an SUV. Bringing in early down payments for the vehicles would help Tesla generate the cash it needs to repay nearly $1.7 billion in loans that come due within the next 16 months.

The company began the year with about $11 billion in debt and $3.7 billion in cash, but those figures presumably fell recently when it repaid about $920 million in bonds.

Another $566 million in notes are scheduled to be repaid this November followed a $1.1 billion credit line in June 2020.

Consumers who plop down their deposits for the Model Y may have to cross their fingers for their vehicles to be delivered on schedule.

Tesla's recurring production and delivery problems have resulted in consumers having to wait longer than they were originally told. Musk now says Tesla has worked out those issues.

Ramsey, though, remains skeptical about whether the company will have adequate manufacturing capacity for the Model Y. He expects the Model Y's journey to the mass market to provide another wild ride for the company, its investors and customers.

"Until Elon is gone, Tesla is going to be a crazy company that occasionally makes breathtaking products," Ramsey predicted.

Additional reporting by agencies

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in