Despite hyping the product for a year and half, it is fairly clear that Tesla doesn’t want to sell its new cheaper Model Y. At least, in the US.
Here’s why.
Remember the Cybertruck RWD?
Tesla launched the new cheaper version of the Cybertruck in April for $10,000 less than the AWD and about $20,000 worth of features removed.
By September, Tesla discontinued the model. It lasted a solid 6 months.
Many believed that Tesla wasn’t actually looking to sell the new version, which served more as making the Cybertruck AWD seemed like better value.
We might be witnessing a redo here witht the new standard Model Y that Tesla launched yesterday.
It costs $5,000 less than the Model Y Long Range RWD, which Tesla now calls “premium”, along with the AWD and Performance versions, while Tesla removed roughly $6,000-$8,000 worth of features.
The value proposition is not great, but that’s not the only reason why Tesla doesn’t seem to want to sell it.
The automaker currently doesn’t offer a lease on the new version, which is not unusual after having just launched a new variant or model. For example, Tesla is still not offering leases on the Model Y Performance, which only recently launched in the US.
But more importantly, Tesla is financing the new Model Y Standard at an APR almost 30% higher than for the cheapest “Premium” version.
The result is only $72 difference in monthly payments between the two versions:
The difference is virtually the same as between the Premium RWD and AWD, but you get a whole additional motor for that.
Electrek’s Take
We have been anticipating a situation like this, but it is honestly even worse than we thought.
For example, we didn’t anticipate Tesla removing Autopilot as standard. That alone is a few thousands dollars of value removed before even accounting for the hardware changes, such as the cloth interior, cheaper seats, or even the power folding mirrors.
Then, there are the honestly quite lazy changes, like not actually removing the glass roof, but covering it inside with a headliner.
The only really good thing I see from this launch is that it is very efficient EV and Tesla still has a lead on that front over most.
However, I have to reiterate that it is getting lazy with this lead.
The standard version is only 125 lbs lighter than the premium despite Tesla seemingly using the same battery pack with a few cells removed. When you add up all the features removal, the weight loss should be much more significant, but that’s harder to do when you make decision such as covering the glass roof rather removing it.
Tesla has to know that the value proposition here is not good.
It’s a bummer that Tesla went with that rather than a new smaller and less expensive vehicle as originally planned.
Especially when you consider that the decision was made to try to increase the utilization rate of Tesla’s current production lines, which appears to be running at about 60% amid this demand slump.
I don’t think this, and the new standard Model 3, which is better value to be fair, solve this situation.
As I previously stated, I believe this boost demand between 10-15% and that’s after Tesla either drops the price or introduces 0% interest financing, which I expect before the end of the quarter.
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