Earlier this year, the electric car maker began producing its most expensive four-wheel-drive version of the Y model, which starts at $ 49,000.
Tesla had planned to launch a cheaper version of the Model Y, which is expected to be priced under $ 40,000, with a single engine, rear-wheel drive, and a smaller battery. But Musk tweeted that that vehicle’s range would have been “unacceptably low” less than 250 miles on a single charge.
Tesla says it is still planning a more affordable single-engine version of the Model Y, but it will have a larger battery and greater reach than the shorter-range version of Model 3. And because of that, it will probably be priced higher.
The company generally offers a “long-range” version and a more expensive “performance” version for each vehicle that could get fewer miles per charge but could, for example, accelerate faster.
Musk said in a follow-up tweet that the single-engine Model Y would be out “in a few months.”
The size and range of the battery is a key element in the costs of electric cars. Most drivers don’t get to nearly 200 miles a day on a regular basis, which means that even at a low range they could recharge every day and be trouble-free. But some buyers experience what’s known as “range anxiety” about how far the car goes on a single charge.
Musk previously said he expects the Model Y to be the best-selling Tesla model. American car buyers in particular are switching from traditional sedans to SUV models. If Musk is right about the eventual sales of the Model Y, it could become the best-selling SUV of any kind, be it gas or electric. Offering a cheaper version would help drive those sales.
By choosing not to, Tesla could be abandoning sales to other automakers that offer shorter-range SUVs at a lower price.
The Chevrolet Bolt, a compact SUV that has a range of 259 miles according to the EPA, has a starting price of $ 36,620. The Ford Mustang Mach-E SUV, for which the company is taking orders but is not yet in production, has a 230-mile range with a single engine, and only 210 for all-wheel-drive, dual-engine cars. It starts at $ 43,895, but that doesn’t include a $ 7,500 tax credit that isn’t available on Chevy or Tesla vehicles. That would lower the price to $ 36,395.
Tesla offers a cheaper “standard range” version of the Model 3 sedan, which has a 250-mile range. When he presented Model 3 in 2016 he had promised that he would eventually have a $ 35,000 model. But the lowest price available on Tesla’s site today for a Model 3 among U.S. customers is $ 37,990.
Investors have been even more eager to exploit Tesla (TSLA) the actions that buyers should upload to the cars.
Tesla shares rose more than 14% in Monday morning trading before slowing some gains, after a 10.8% jump on Friday. The stock is up more than 500% in the past 12 months, making Tesla one of the most valuable American companies.
It is the most valuable automaker, recently passing Toyota (TM) in market value, and is worth more than Volkswagen (VLKAF), General Engines (GM), Ford (F), Fiat chrysler (FCAU) and Sling (HMC) set.
The rise in the stock price has also made Musk one of the richest men in the world, by spending Berkshire Hathaway (BRKA) CEO Warren Buffett on Estimated Wealth on Friday. The value of his Tesla holdings increased about $ 8 billion with Monday’s profit.
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