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Tesla Unveils the Model Y, the Company's First Electric Crossover SUV

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【Summary】Tesla will unveil its much anticipated Model Y electric crossover SUV tonight at the company’s design center in California. Tesla CEO Elon Musk has promised that a crossover model will join its lineup and the wait to see it is finally over.

Eric Walz    Mar 14, 2019 5:18 PM PT
Tesla Unveils the Model Y, the Company's First Electric Crossover SUV

Tesla will unveil its much anticipated Model Y electric crossover SUV tonight at the company's design center in California. Tesla CEO Elon Musk has promised that a crossover model will eventually join its lineup and the wait to see it is finally over.

The fully-electric Model Y is set to compete in the luxury compact SUV and crossover segment, as a slightly more affordable fully-electric premium crossover.

However, the launch of the Model Y comes as automakers are challenging Tesla for the first time. Tesla faces growing competition from global automakers rolling out their own electric vehicles.

Details of the Model Y have been kept secret, but Musk did say that the new crossover will be built on the same platform as the Model 3 and will use the same battery pack. Musk added that the Model Y will cost about 10 percent more than the mass-market Model 3 sedan, which starts at $35,000.

Due to its configuration, electric range will be slightly less than the Model 3. For comparison, the Long Range Model 3 can travel up to 325 mile between charges, while the Standard Range is rated at 220 miles respectively.

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The Model 3

An Important Launch for Tesla Given the Popularity of Compact SUVs & Crossovers

The Model Y is set to enter one of the most popular segments in the entire auto industry, the compact SUV and crossover segment. The category remains competitive and highly profitable for automakers, as consumer preferences have shifted away from sedans.

Many drivers today prefer vehicles with a higher more commanding view of the road, as well as something smaller than a full-size SUV that's easier to maneuver and offers more cargo space and utility and Tesla is counting that the model Y will fit the bill.

During 2018, market share of sedans fell below 30 percent for the first time in history.

Tesla might also lure customers away European SUV imports such as the Audi Q3, BMW X3, Mercedes Benz GLA and the U.S.-made Cadillac XT5.

The compact SUV space is also crowded with more affordable models gas-powered models including the Toyota RAV4, Honda CR-V, Subaru Forester, Ford Escape and Chevy Traverse.

Tesla CEO Promises Easier Production Ramp Up for the Model Y

It appears that Tesla has learned from its past production mistakes. Musk has promised an easier production ramp of the Model Y, since it shares about three-quarters of its parts with the Model 3 and would need only half the capital expenditures.

Musk said the risk is "quite low" to analysts in January.

In October 2018, Musk said "significant progress" had been made on the Model Y and that he had approved the prototype for production in 2020. In January, he said Tesla had ordered the tooling needed to build the car.

Tesla is looking to avoid the production setbacks of the Model X SUV, which launched in Sept, 2015.

The production of the Model X, Tesla's second vehicle, was plagued with production and quality problems which delayed its rollout, many of which can be attributed to the SUV's unique "falcon wing doors", which are hinged at the roof and swing upwards.

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The Tesla Model X "falcon wing" doors

The doors were equipped with hydraulics which allow them to open in tight spaces such as parking garages without coming in contact with low ceilings of other cars parked next to it.

In 2016 Tesla sued the Swiss company Hoerbiger, the manufacturer of the hydraulic systems, for the issues with the Model X falcon wing doors.

Tesla claimed that the hydraulic system developed by Hoerbiger was riddled with mechanical problems, saying it was a "unworkable engineering solution" that added additional costs and "more than a year of wasted efforts." The lawsuit revealed just how dependant Tesla is on outside suppliers to built its electric vehicles.

Tesla was forced to revised door design after the initial launch of the Model X in Sept 2015. Tesla used electromechanical parts from a new supplier instead of hydraulic ones. Many owners complained the doors did not latch properly or that the sensors frequently malfunctioned.

Musk said that the Model X was "the hardest car to build in this world."

That lawsuit was settled in 2016.

Assuming there are no production or quality control problems, the Model Y has the potential to become a huge hit for Tesla, given America's current love affair with SUV's and smaller crossovers.

Tesla has not said when or where it will build the new Model Y. The Automaker said previously that it might built it at its Nevada Gigafactory, however that remains unclear.

The event will stream live online beginning at at 8 p.m. PT (11 p.m. ET) at www.tesla.com/modely.

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