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Tesla Will Reveal Sub-$40,000 Model Y On March 14th In California

Tesla CEO Elon Musk dropped the news today on Twitter that the Tesla Model Y will be unveiled at an event at the Tesla Design Studio in Hawthorne, California, on March 14.

The highly anticipated compact utility vehicle is expected to enjoy higher demand than Tesla’s Model 3, will be 10% larger, and will cost 10% more, according to Musk. The projection is in line with the pricing gap between the Tesla Model S and the Tesla Model X, with the larger, heavier X commanding a premium price from customers looking to wow their friends and impress their neighbors with its pair of falcon-wing doors.

Speaking of falcon-wing doors, Musk took the opportunity to clarify that the Model Y will not have the hotly debated, over-engineered falcon-wing doors, much to the relief of many potential customers and shareholders alike. Introducing the Model Y into one of the hottest segments of passenger vehicles with normal doors opens it up to the largest possible number of customers and all but ensures that it will have a shot at enjoying the same early success of the Model 3.

The announcement of the Model Y reveal event comes just days after Tesla slashed prices of vehicles across its lineup, the last part of Tesla’s journey to deliver the $35,000 Standard Range Tesla Model 3. Taking the 10% price increase into account, the base configuration of the Model Y would tip the scales at just under $40,000. That is a very healthy price point and puts the car in direct competition with its competition in the internal combustion world, just without any of the the nasty emissions.

Looking at the competition, the BMW X3 starts at $41,000, the Mercedes-Benz GLC starts at $40,700, and the Porsche Macan will set buyers back $47,800. That puts Tesla’s sub-$40,000 Model Y at a significant advantage compared to the competition, on price alone. Looking beyond that, the competition comes with a very real risk that cities will ban combustion vehicles from city centers in the near future as a lever for combatting urban air pollution. As the icing on the cake, the Model Y will also be available in a performance version that will surely put the competition to shame.

Musk previously announced that the Model Y will share 76% of its DNA with the Model 3, allowing Tesla to streamline its parts supply chains and leverage greater economies of scale to get better deals from its suppliers. Building up from the low chassis, the Model Y CUV will have a larger profile, resulting in a slightly higher coefficient of drag than the Model 3, translating to lower efficiency, according to Musk.

While it will not be as efficient as the Model 3, we still expect the Model Y to lead its class in efficiency. Tesla’s ability to design and engineer its vehicles from the chemical composition of its batteries all the way up to the curvature of the nose has translated to a fleet of vehicles that the competition simply can’t touch. Thankfully, early customers have not been as worried about the efficiency of vehicles, focusing instead on the range they are able to achieve per charge.

Make no mistake, though, as electric vehicles continue to move into the mainstream, miles per kilowatt-hour will become the new miles per gallon. The more miles that can be squeezed out of the battery and each kilowatt-hour of power that it contains translates to a lower and lower cost of operation. Looking out 5 or 10 years, that efficiency will form the foundation for the total cost of ownership discussion for operators of large, fully autonomous fleets of electric vehicles.

The March 14th event in Hawthorne, California, at Tesla’s Design Studio will give participants some time with the Model Y, including test drives or at least test rides in the new vehicle. We will be at the event, so stay tuned to CleanTechnica for all the juicy details as they unfold in just two short weeks.

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I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.


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