Tesla Drops Model Y Standard Range — For Now
Our site is filled with Tesla stories that laud the company Elon Musk built to the heavens. But sometimes, Musk and Tesla do odd things that make little sense to those of us on the outside. The fact that Tesla no longer communicate with the press doesn’t help. Finding out what is going on with the company today is a little like seeking news from Tibet in the 1800s — there just isn’t any, unless you want to read SEC filings or watch old Joe Rogan podcasts and hope some pearls of wisdom will drop from Elon’s lips (or his Twitter account).
Here’s the latest disturbance in the force that surrounds Elon and Tesla. On January 9, we reported the oft rumored Model Y Standard Range was now available for order. Just 4 days ago, we were happy to tell our readers that the price of the Model Y SR had even been cut by $2,000, to $39,990. The blogosphere approved, exulting that the prices of electric cars really were falling just as we predicted they would as the much heralded economies of scale began to kick in. My wife and I began to actively consider ordering a Model Y to replace our trusty 2015 Nissan LEAF.
As reported by Inside EVs, though, a person who had ordered a Model Y SR got a note from Tesla saying, “We no longer offer the custom standard range RWD Model Y anymore and we can only offer what’s left in our inventory and are honoring orders for those who have already placed their deposits.”
So, what to make of the news this morning that over the weekend the Model Y SR has disappeared from the Tesla website? As usual, Tesla has not said anything to anyone publicly about the change, leaving us all to interpret the tea leaves, hoping to gain some insight into this latest move. And so we are forced to speculate, which we are quite happy to do, bearing in mind that we don’t know anything more about what’s going on than you do. Here is a comment posted to the Reddit EV forum that seems to make some sense:
“My guess: Q1 demand is seasonally low, like normal. Tesla is hurting for 3/Y orders, so they drop prices across most trims & introduce the Model Y SR trim. But they don’t really want too much of the mix to be lower margin Model Y SR trim at this point. So when they get enough orders to fill their order books thru March, they removed the SR trim. This ensures no backlog of Model Y SR orders into the next quarter and some of those buyer will opt for a Model Y LR trim this quarter instead.
“Keep in mind the Model Y SR trim is clearly a rushed thing since it includes the exact same interior as the LR, which is different than how Tesla treats the Model 3. So they can’t be making too much $ on it. Tesla will probably sell a Model Y SR trim permanently, but they probably would prefer to hold off on as much lower margin Y SR sales as possible in favor of higher margin trims until their Austin factory is up and running.”
Here is my own interpretation. Keep in mind this is just my opinion and worth precisely what you paid for it. Tesla will need the Model Y SR at some point to compete with the entry level Mustang Mach-E, Hyundai 45, Volkswagen ID.4/ID.5, and several other electric SUVs that are arriving soon. But those cars aren’t widely available yet, so why not keep selling the higher profit dual-motor Model Y until they are? There may also be a connection to new EV incentives the Biden administration may be contemplating. If and when they materialize, Tesla will respond with the right models at the right time.
Your guesses are as good as mine. Maybe better. Tesla has slammed the door on the Model Y SR — for now. Make of that what you will. There is good news, though. The price of the Model Y that is still available has dropped by $1,000. Tesla giveth and Tesla taketh away.
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