Tesla Upgrades Model Y, Downgrades Model 3 In Mexico

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Automakers adjust their model lineups all the time as they seek to adapt their offerings to the ever changing moods of their customers. Recently, Tesla introduced several changes to its Model 3 sedan in an effort to make it more attractive to buyers. Those upgrades included the ability to change the colors of the car’s ambient lighting, an 8-inch touchscreen for rear seat passengers, and the removal of the traditional stalks for controlling turn signals and gear selection from the steering column.

Those are cosmetic touches that have little effect on the driving experience (some customers are turned off by the missing stalks, however), but the most important changes to the Model 3 involved a reworking of the front fascia to improve the aerodynamic efficiency, which translates to increased range. The more smoothly a car cleaves the air, the further it can travel on a given amount of electricity. The original Model 3 had a coefficient of drag of 0.23. The figure for the new model is 0.219, which improves the car’s range by 8 percent.

Autocar reports that similar upgrades are in the works for the Tesla Model Y — the best selling electric car in the world — and are expected to arrive sometime in 2025, along with a slightly revised rear end treatment that adds a full width light bar, a styling touch that is gaining popularity in the world of automobiles. If the new front end treatment for the Model 3 is carried over to the refreshed Model Y, that would improve its range from 331 miles today to about 350 miles, a number that would keep it competitive with similar models from other manufacturers.

What Autocar can only speculate about is whether the other components of the Model 3 refresh — customizable interior lighting, rear touchscreen, redesigned center console, and no stalks on the steering column — will be part of the Model Y update next year. There certainly is no reason to think they won’t be, but information about future trends at Tesla is about as scarce as chicken lips. What is fairly certain is the upgrades to the Model 3 Performance — which now features 453 horsepower, a 0 to 62 mph time of  3.1 seconds, and a top speed of 163 mph —  will be carried over to the Model Y Performance, making it one of the fastest crossovers on the market.

Decontented Model 3 For Mexico

In other Tesla news, the company is now offering a decontented version of the single-motor, rear-wheel-drive Model 3 in Mexico that sells for about $2,600 less than the regular Model 3 RWD model. To make that happen, Tesla has deleted a number of features from the newly introduced Highland version of the Model 3 to get to that lower price point. Inside EVs says the changes make the car more like a Toyota Corolla than the semi-luxurious car it has always aspired to be. Not that there’s anything wrong with that. The Corolla has served millions of drivers well for decades. If Tesla aspires to be a mass market manufacturer, emulating the Corolla would be a smart business decision. Not only that, BYD is now actively selling electric cars in Mexico, so Tesla will need to sharpen its pencil to compete.

There is a hint that Tesla may be experimenting here with what a $25,000 car might look like. The new Model 3 RWD for Mexico deletes the programmable ambient lighting and the 8-inch rear touchscreen. It substitutes ordinary glass in the rear windows and roof for the acoustical glass used in the dual-motor and performance versions of the Model 3. The number of speakers has gone down from 17 to 9 and both subwoofers have been removed. The audio system now uses a single amplifier.

Those are the minor changes. The big news is that, for the first time, the new model has cloth seats — oh, the horror! — instead of the vegan leather seats found in every other Tesla model. And that’s not all. The new seats offer no heating and cooling option and are not ventilated. In addition, the heated steering wheel has been dropped for this model. One might think heated seats and a heated steering wheel will hardly be missed in Mexico, but the ventilated seats might be appreciated south of the border. Still, many of us have grown up driving cars without these conveniences and are none the worse for the wear.

With all the changes, the stripped down Model 3 RWD now sells for 749,000 pesos in Mexico, which is equivalent to about $38,750. It still has about 270 miles of range and can scoot to 60 mph in a tick over 6 seconds. But it remains a far cry from a $25,000 car. For that, Tesla is going to have to dig deep to lower its costs of production and think of ways to remove features that many drivers hardly know are there and would probably never miss. Certainly many of us made do with the Toyota Corollas and Honda Civics of the world and never felt deprived. Can a luxury car truly be a luxury if everyone drives one?

Tesla Gearing Up For Competition From Others

The larger point is that competition from Chinese manufacturers is coming, no matter what tariff barriers the US and the EU put in place. Maybe not this  month or this year, but soon. Tesla has done an outstanding job of getting the EV revolution started, but a first mover advantage is not a guarantee of long-term success. If there truly are to be $25,000 cars in Tesla’s future, they will need to be closer to the original Saturn SL — a bare bones vehicle with cloth seats but without AC or a right side door mirror that originally sold for $8,900. People used to buy vehicles like that, or the lowly Chevette, because they needed basic transportation, not another bauble for their charm bracelets. $8,900 would be roughly equivalent to a $25,000 car today, as everything today costs at least three times what it did in 1990 when the SL first went on sale.

If we are looking for clues about how Tesla may approach the challenge of building a $25,000 car, the new RWD Model 3 for Mexico is a good guide. It will require Tesla to drop the pretense of being completely a luxury carmaker and transition to mass market cars for the masses. Will that be a bridge too far for Elon?