Model Y: Tesla Is Getting Close to Choosing a Site for Its Model Y Ramp-Up

With the “most challenging and most successful” year in its history behind it, Tesla is now turning its attention to what CEO Elon Musk thinks will be its most successful car yet: A mass-market alternative to the SUV-like Model X called the Model Y.

“I would expect Model Y will be maybe 50 percent higher than Model 3, as I understand it,” Musk said, referring to volume, on the company’s Q4 2018 earnings call held on Wednesday. “The mid-size SUV segment is worldwide the most popular vehicle, so we’ll probably see more volume for Model Y than the Model 3.”

Musk’s definitely right about that one, people love their SUVs. Most of 2018’s best-selling cars in the U.S. were either SUVs or Trucks, including all of the top five. That’s enough to account for nearly 70 percent of automotive sales. Tesla already has an SUV, the Model X, which broke a record for heaviest haul on the part of a electric production passenger vehicle when it towed a Boeing 787-9 Dreamliner. But it also starts at $82,000, which limits it to the higher market.

The plan is for the Y to do for the Model X what the Model 3 accomplished, but better: Prove you can not only make a mass market electric car, but prove that you can make the electric car that everyone wants at scale, and for a reasonable price. It’s a tall order. After all, who could forget the massive, ad-hoc assembly line required — a process that included pitching a giant tent, no less — in order to make the Model 3 happen?

This time, however, will be different. For one, on the call Musk explained that in replicating the Model X, the Model 3 was replicating the “Faberge egg” of cars, implying that it was so intricate, “nothing like it will ever be made again, and maybe it shouldn’t.” The Model Y, by contrast, shares about 75 percent of the same parts and production process as the Model 3, which Musk said would make the product much easier to scale.

“3/4 of the Model Y is common with the Model 3, so it’s a much lower CAPEX per vehicle,” Musk says. “The risk is also quite low.”

Musk also said that the company plans to construct the Model Y at the company’s Gigafactory in Nevada, which “also reduces our risk” by eliminating the need to ship batteries and other parts between Nevada and California. Musk hedged this prediction, saying it’s “not a sure thing,” but also that it’s “quite likely.”

It’s not yet clear when this bad boy will be revealed in earnest, the above image is a concept for example. But at his shareholder meeting last year, Musk suggested it would drop some time around March 15.