Tesla Model Y Will Arrive Faster Than Expected (and Expected At Less Than US $ 40,000)

(CNN) – Tesla shares enjoyed their biggest increase in six years this week after the automaker reported an unexpected gain in the third quarter. But that might not have been the biggest achievement for the company.

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What could become much more important is that the Model Y, the lowest-priced SUV of the electric car company, will now go into production next summer. He had previously been planning to start production in the fall of 2020.

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"There may be some improvement there, but we are confident in the summer of 2020," Tesla chief executive Elon Musk said of the company's new time frame.

If that doesn't seem like such a big change, consider two facts about Tesla and the Model Y.

First, the company's history of meeting internal deadlines for the launch of new cars has been particularly bad. Sometimes, it has taken years to deliver new vehicles to production. Moving a deadline up, not back, is great news in Tesla.

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And second, the Model Y is by far the most important vehicle Tesla has planned so far.

Tesla has basically been relying on sedans, Model S and Model 3, for the overwhelming majority of its sales. But US car buyers. UU. they have moved away from sedans at full speed, and have approached SUVs.

"It's the body style chosen," said Michelle Krebs, senior analyst at Cox Automotive.

US sedan sales UU. They have fallen sharply, 40% in the last five years. Most of these sales have moved to SUVs.

But so far, Tesla's only SUV is the luxury Model X. Even Musk admitted this week that both Model X and Model S are nothing more than specialized products, and that they are not so important for the company's future.

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"I mean, they are very expensive, made in low volume," he said. “To be totally frank… we will continue to do them more for sentimental reasons than anything else. They are really minor. ”

Musk has suggested that Model Y will have sales 50% higher than those of Model 3, perhaps double. If you achieve that, the Model Y will have the opportunity to become the best-selling SUV of any kind, whether gas or electric, in the United States, a title currently held by the Toyota Rav 4, which had US sales of 427,000 last year.

It is also the market segment where established car manufacturers are concentrating their electric vehicle offerings. So if Tesla is going to be able to respond to the growing line of electric cars from other manufacturers, it will need an SUV.

Krebs said that even with the competition of other electric SUVs, the Model Y will be well positioned in the market due to Tesla's reputation.

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"The only thing nobody can compete with Tesla is the mystique of the brand," he said. “When we look at the perception of the consumer of several brands, there is no one who approaches the strength of the brand. It is very aspirational. ”

That's why Model 3 has been able to counteract the tendency to get away from sedans, he said.

"They (customers) buy it not because they want a sedan, they buy it because it's a Tesla they can afford," he said.

While Tesla has not yet given details about the price of Model Y, it is expected to be finally available for just under $ 40,000, much closer to Model 3 than Models S and X.

The question, of course, is whether Tesla can stay on his new and more ambitious schedule to begin mass production of Model Y, building more than 1,000 per week for next summer.

Musk insisted this week that he learned a lot from past delays and deadlines. And it points to the company's new plant in Shanghai, which essentially went from starting construction to initial production, in just 10 months.

"Gigafactory Shanghai will become a model for future growth," Musk promised.

So, if the company can meet this new ambitious program and achieve the even more ambitious sales target that Musk has set for Model Y, profitable quarters like the one he just reported will not be a surprise for much longer.

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