Motors
Published on January 10, 2021 |
by Loren McDonald
10 January 2021 by Loren McDonald
Half a year after Elon Musk said in July 2020 that Tesla would not launch a Model Y standard range of less than 250 miles, the company did so and launched the cheaper Model Y on its website on Thursday, January 6th. .
In the US, this means that the popular Model Y crossover is now available in three variations and at significantly different price points and range combinations:
- Standard Series: $ 41,990 | 244 miles of EPA Series | $ 172 / kWh
- Long Distance: $ 49,990 | 326 miles of EPA Series | $ 153 / kWh
- Performance: $ 59,990 | 303 miles of EPA Series | $ 198 / kWh
At $ 8,000 more and with another 82 kilometers of distance, the long-distance version of the Model Y has the lowest cost per kWh. But at a starting price of about $ 42,000 versus $ 50,000, the Standard Range is becoming much more attractive and affordable for many more U.S. households.
Why did Tesla and Elon Musk have a heart change?
I will be honest, I did a little celebration dance at the dinner table when I discovered this news Thursday night. In July 2020, my CleanTechnica article “Is Elon Musk wrong about a Model Y under 250 miles? ‘ walked and the reaction in the comments as well as on Twitter was overwhelmingly negative towards my suggestion that Elon was wrong and that Tesla should offer a Model Y standard range at or near 250km EPA range.
When I shared this news on Twitter on Thursday night, Tesla and Elon Musk fans pulled up and said things like: “This is Elon, he changed his mind” and “So, they lowered their costs.”
I will allow others to deepen the details of what enabled Tesla to offer now, 6 months later, a Model Y for $ 42,000. But I assume that: 1) Since the company increased the production volume of Model 3 and Model Y (which share 73% of the same parts as Model 3), this resulted in lower cost per unit. ; and 2) continued improvement in efficiency of the battery packs.
But my focus in this article is on the “why?” Musk, and presumably Tesla leadership, had clearly changed their minds about the fact that a Model Y of less than 250 miles was not acceptable to American consumers, and that he would release a Model Y standard range (which Musk clearly stated would not be made). Again, cost-effectiveness may have made a lower cost and lower-range Model Y more acceptable from a margin perspective, but what made a heart change less than 250 miles away unacceptable?
250 miles EPA unacceptable” srcset =”https://cleantechnica.com/files/2021/01/Elon-Musk-Tweet-Model-Y-SR-250-mile-EPA-unacceptable.png 1546w, https://cleantechnica.com/files/2021/01 /Elon-Musk-Tweet-Model-Y-SR-250-mile-EPA-unacceptable-270×161.png 270w, https://cleantechnica.com/files/2021/01/Elon-Musk-Tweet-Model-Y- SR-250-mile-EPA-unacceptable-570×339.png 570w, https://cleantechnica.com/files/2021/01/Elon-Musk-Tweet-Model-Y-SR-250-mile-EPA-unacceptable-768×457 .png 768w, https://cleantechnica.com/files/2021/01/Elon-Musk-Tweet-Model-Y-SR-250-mile-EPA-unacceptable-1536×914.png 1536w” sizes =”(maximum width: 1546px) 100vw, 1546px”/>
In the above tweet on July 12, 2020, in response to a question about the Standard Range Model Y, Musk replied: “No, as the range would be unacceptably low (<250 miles EPA)." In my article of July 25, 2020, I wrote:
Musk did not share what the EPA series of a Standard Range Model Y would come up against, but I will choose a random 235 miles as my assumption for this article. As the Standard Range version is literally just under 250 – let’s say 245 or 247 miles – rated – I would assume that with software adjustments, battery upgrades and tire combinations, Tesla could easily bump the range to the magic number of 250 within 3 – 6 months. And everyone will forget the initial series, just as no one cares about the first series of the Model S. ”
So, the Standard Range actually comes in at 244 miles (although there is ‘estimate’ on the site), a little higher than my assumption of 235 miles. But in the last 6 months, Tesla could easily have found an additional ~ 10 miles through various efficiencies compared to what was expected at the time.
On the Q2 2020 earnings call, Musk said:
‘As far as passenger vehicles are concerned, I think the new standard for series unit, in US EPA terms alone, will be around 300 miles. So I think people would really expect this to be almost 300 miles normal. ”
So, six months ago, Musk argued that U.S. households are now basically expecting about 300 miles away than the new normal for EVs. And in his earlier tweet, he exclaimed that “<250 kilometers of EPA series was 'unacceptably low'."
Data and Graph by Loren McDonald / EVAdoption.com
On one level. Musk is about the 300 mile number. Nearly every survey among prospective BEV buyers puts 300km as the most common response for the number of miles needed to make an EV acceptable. And according to my own analysis, BEVs available in the US will reach about 20 km of reach by 2023. My analysis also puts the current average range of BEVs at 255 miles.
So, what would lead to Musk and Tesla’s leadership now essentially saying that a little less than 250 miles is perfectly acceptable to American car buyers?
Three probable reasons why less than 250 kilometers distance is now acceptable
There are probably three major market-driven reasons why Musk and Tesla have decided to launch the 244-mile Standard Range Model Y series now:
Declining demand: BThat’s why all Tesla fans are starting to reach for the arrows in their quiver, I do not for one moment suggest that there is no demand for Tesla models. (For the record, I drive a Model S – our second – has Tesla solar power and is not anti-Tesla.) What I suggest is that there is a greater market opportunity for EVs in the $ 40,000 +/- range . And with several electric SUVs and CUVs now available or coming in this price range this year, Tesla would expect many buyers to opt for EVs in this lower price range. And without the benefit of the $ 7,500 federal EV tax credit, Tesla is already a significant downside in this segment with the Model Y Long Range.
US market acceptance of lesser extent: While the distance of 300 kilometers is still the magic number that American consumers are looking for in a motorcycle, many, especially those in homes with two or three cars, acknowledge that 200 to 250 kilometers distance is sufficient for probably 95 to 98% of their annual riding needs . If you need to take your child to college, visit grandma or take the kids to Disneyland 800 km away, you can stack the family in the Chevy Tahoe or a long-distance EV. (For the record, we drove our first Tesla Model S, the 60-mile model at a distance of 210 miles, three times on 900-mile return rides – so I can testify that even less than 250 miles is ‘OK’ for long journeys. )
Graph source: The geography of transport systems
Lots of new competition: According to my analysis, a potential 30 new EVs (BEV and PHEV) are expected to be available to buyers in the US by the end of the year 2021. However, I assume that at least some of these will be delayed until 2022, or at least we will not see any significant deliveries until then.
Data and table: Loren McDonald / EVAdoption.com
And of these 30 new EVs, ten of them are to some extent direct competitors for the Model Y. These include:
- Ford Mustang Mach-E
- Volkswagen ID.4
- Nissan Ariya
- Audi Q4 e-tron
- Volvo XC40 Reload
- Chevy Bolt EUV
- Ford Escape PHEV
- Lincoln Corsair PHEV
- Toyota RAV-4 Prime (PHEV)
- Hyundai IONIQ 5
None of the above BEVs have the Series Y series or access to Tesla’s charging networks. But all of the above vehicles (except the Chevrolet Bolt EUV) come / qualify for the federal EV tax credit. And of those that do, all qualify for the $ 7,500 credit, except for the Ford Escape and Lincoln Corsair PHEVs, which amount to $ 6,843.
And in addition to the above ten new SUVs / CUVs, the Chevrolet Bolt EV, Kia Niro EV and Hyundai Kona EV remain options for buyers who want an affordable electric crossover with a range of about 250 kilometers.
Maybe Tesla and Musk had always planned to offer a 250m Y series in the low range of $ 40,000, but just waited until the competition justified it. Regardless, the Standard Range is here and I have no doubt it will be a big seller in the US.
The good news for American consumers is that for the first time ever, there are several compelling electric sport utility vehicles / CUVs in the $ 35,000 to $ 50,000 range to choose from. This is a wonderful thing and will help a lot in increasing the adoption of EV in the US.
(Disclosure: I already own 1 share in Tesla share.)
Related: Tesla Model Y = 2020 CleanTechnica Car of the Year
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Sell Teslas in 2012 versus 2021
About the author
Loren McDonald writes about the factors that influence the adoption of electric vehicles and the opportunities and challenges that the transition to EVs presents to businesses and entrepreneurs in the automotive, utility, energy, retail and other industries. His research and content will be published on CleanTechnica, his own blog / website, www.EVAdoption.com, and in his forthcoming book. “Filling station zero” about the major shifts and changes in various industries driven by the transition to battery electric, autonomous and shared vehicles.