The new Tesla Model Y is introduced. Tesla has expanded its model range to include an SUV based on the current Model 3.
Hannes Breustedt | image alliance | fake pictures
Tesla reduced the price of its new offering, the Model Y, by $ 3,000, just four months after beginning deliveries to customers. On Sunday, CEO Elon Musk also said the company was canceling plans to produce a less expensive standard-range version of the crossover SUV, saying its expected range of less than 250 miles would be “unacceptably low.”
Now the lower-priced Model Y, the long-range all-wheel drive version, starts at $ 49,990, according to the Tesla website. The standard range version would have started at $ 39,000.
Model Y movements indicate that demand for Tesla electric vehicles is declining at the company’s base of operations in the United States, says Vicki Bryan, CEO of investment research firm Bond Angle.
According to Bond Angle estimates, Tesla faced a more than 50% drop in demand for its Model 3 sedans in the US in the second quarter, and has yet to see strong demand for Model Y since its launch, despite the positive reviews from auto critics.
But selling the Model 3 for the first time in China, where Tesla operates a plant in Shanghai, helped its second-quarter numbers. Tesla said it delivered about 90,650 vehicles in the second quarter, beating analyst estimates. But Tesla has been combining Model 3 and Model Y totals in its vehicle production and delivery reports at the end of each quarter, so there is no easy and accurate way for shareholders to measure the success of Model Y .
Also, Tesla has never disclosed how many preorders came for the Model Y. Musk and Tesla have talked in the past about preorders for other vehicles, including the Model Y’s predecessor, Model 3, and the successor, Cybertruck.
Bond said, about Tesla’s Model Y moves this week: “This seems to confirm my concern that Model Y is actually not profitable, as Musk has claimed. Even after effectively reducing its Model Y offering, Tesla still needs lower the price to encourage demand. ” “
Tesla shares have rebounded dramatically in the past two weeks due to speculation that the company will report a profitable second quarter: its fourth consecutive quarter in black and the first full year of reported earnings. This achievement would meet one of the main requirements for inclusion in the S&P 500.
Tesla CEO Elon Musk sent multiple emails to his tens of thousands of employees last month, some of which leaked and helped convince investors that profitability is near. But the emails also revealed Tesla’s difficulties in making Model Y a success.
In an email sent on June 6, Musk wrote:
“It is extremely important to us to increase Model Y production and minimize rectification needs. I want you to know that it really makes a difference to Tesla right now.”
Model Y, especially GA, is the top priority for both production and manufacturing engineering. GA4 is also the highest priority for facility improvements. For those of you working at GA4, thank you for enduring difficult conditions. It will improve faster. I will be walking personally every week.
We’re doing reasonably well with S, X, and 3, but there are production and supply chain challenges with Model Y, as is always the case with new products.
Let me know if there is anything I can do to help. “
In another email sent on June 29, Musk wrote:
“Breaking down even looks super tight. It really makes a difference for every car you build and deliver. Do everything you can to ensure victory!”
.
