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Publikováno 15. března 2022
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Tesla, Inc.’s (TSLA) new addition to its Model Y fleet line may be an SUV with an all-wheel-drive (AWD) powertrain and a range of 279 miles for a single charge on 123 miles per gallon equivalent (MPGe). Since the model, called simply the Model Y AWD, appeared on the Environmental Protection Agency (EPA) website, it seems to have been cleared with the EPA’s Certificate of Conformity.
The move is being seen as an opportunistic one as soaring gas prices are driving demand for e-vehicles and Tesla and its competitors seek to ramp up their capacity to match it. Yet the challenges from inflationary pressure that is driving up the price of metals make the near-term outlook unclear for electric vehicle (EV) manufacturers as a whole.
Key Takeaways
- Tesla’s Model Y SUV with a 279-mile range has been cleared by the Environment Protection Agency.
- Tesla cars are selling at a higher price due to inflation and supply chain constraints.
- As gasoline prices soar, production may need to ramp up quickly to meet EV demand.
- Gigafest in Austin, Texas, should unveil the latest developments in battery, range, and performance.
Model Y AWD and the LFP Strategy
Tesla’s older versions, the Model Y Long Range and the Model Y Performance, deliver 330 miles on 122 MPGe and 303 miles on 111 MPGe, respectively. While it is not clear yet whether the new version will carry the lithium-iron-phosphate (LFP) cell rather than the 4680 and structural battery pack, its range indicates lower battery capacity than the Long Range Model Y.
The decision to transition to LFP, which comes with a lower range of 253 miles per single charge and which has been in use in Asia and Europe since 2020, was made in August 2021 as Tesla tried to keep up with orders for its Model 3 in North America despite a shortage in mined nickel. In a tweet in February 2021, Tesla CEO Elon Musk announced that standard range cars would be fitted with LFP batteries. From a price point of view, LFPs on the AWD vehicle could potentially bring the cost down, although the 4680s would be cheaper, cleaner, and provide more range when they eventually come out.
War, Inflation, and Metals
The Russia-Ukraine war has led to inflationary pressure and a price hike for metals that is affecting Tesla. Tesla cars have seen price hikes all over the world as a direct result of the war and lingering supply chain problems. In a tweet, Musk cited inflationary pressure in raw materials and logistics.
Other EV manufacturers are also responding to inflation by cutting back production. EVs use metals not just for the chassis but also for batteries, which are the most expensive part of the vehicles, and silicon chips. While Tesla’s strategy of adopting iron-based LFP batteries mitigates this somewhat, the fact that most LFP patents are with China and are not set to expire until later this year remains a challenge, although the company plans to localize all key parts of its vehicles,
Gigafest in Texas
In its latest quarterly release, Tesla had indicated that it would not be launching a new vehicle this year. The announcement by EPA suggests a change of plans. While the company has been able to innovate out of the nickel shortage problem, the shortage of chips and constraints from the supply chain disruption of the semiconductor industry due to the pandemic and the Russian-Ukraine war will continue to be concerns.
Tesla’s gigafactory in Austin, Texas, is scheduled to hold a Gigafest on April 7. As the new cars roll out next month, we will be better placed to gauge the time frame for the 4680 and with it lighter vehicles with greater range and performance, including the Cybertruck.
Correction—March 16, 2022: A previous version of this article incorrectly referred to the Model Y SUV as Tesla’s first SUV.
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- Tesla has always tried to sell sedans when the market wants SUVs.
- The Model 3 is a four-door, and we’ll have to wait until at least 2020 for the Model Y SUV.
- It would be smart for Tesla to get a compact SUV to market as soon as possible.
One of the big stories in the car business is the decline of the sedan and the ascent of the SUV.
One of the other big stories is Tesla. Genius CEO, first new American car company in decades, electric vehicles, self-driving technology, sky-high stock price — you get the idea.
Interestingly, if there’s a carmaker that’s bucking the SUV takeover of the nation’s roadways, it’s . Tesla. With 400,000 pre-orders for its behind-schedule Model 3 and people flocking to Tesla stories to see the vehicle in person as if it were a shiny new Apple product, Tesla is singlehandedly arguing that the four-door isn’t over.
Unfortunately, Tesla is going to ultimately lose that argument.
The sedan isn’t a total goner just yet, but it will be
Honda and Toyota are still selling plenty of Accords and Camrys. In fact, those automakers recently designed both vehicles. But the segment is weaker than it has been, well, ever. And most companies, Honda and Toyota included, are rolling out new and revamped SUVs at a furious pace.
Tesla, meanwhile is selling two sedans and only one SUV. Sure, the Model S and the Model 3, with their additional cargo space thanks to the lack of an engine bay, have SUV-like versatility. But the Model 3 isn’t yet available with all-wheel-drive, and the Model S is still a luxury four-door, not a suburban family hauler.
The decline is passenger-car sales in the US is looking more and more like a permanent shift. Carmakers that had solid SUV lineups — I’m talking about you, Fiat Chrysler and the Jeep brand — have printed money over the past three years of booming sales.
Tesla, meanwhile, has largely missed out. The Model X arrived late to the game, and while it has amassed decent sales since 2016, it’s also playing at the upper end of the market. Logically, the Model 3 wouldn’t have been a sedan — it would have been a compact SUV. But Tesla didn’t go that route. And now there are rumors that the company is gearing up to start production of the Model Y — and SUV version of the Model 3 — but not until 2020.
That’s a long to wait for a vehicle that probably wouldn’t just sell as robustly as the Model 3 could — it would sell better.
Tesla can’t stay immune to market dynamics forever
Tesla has been somewhat immune to the dynamics of the rest of the auto market, but that can’t last forever, and it’s worth remembering that Tesla’s entire big story of the past seven years, post-IPO, has taken place during a massive surge in US sales, with records and near-records set in 2015, 2016, and 2017.
So Tesla has gotten away with having the wrong car at the wrong time, and given that the US market is unlikely to tank in the next year or two, it could ride out the period between the Model 3 hitting full-production in 2019 and the Model Y launching in 2020.
The risk is that it will launch the Model Y just as the market is either seriously declining or stalling. Numerous other EVs will be on the scene by then, as well, so some of Tesla familiar monopoly power over the electric-car space will have eroded.
And to top it all off, EV sales probably aren’t going to be all that much bigger in 2020 than they are today. If the global market doubles, EVs will be 2% of total sales. If the US market doubles, that means 2.5% of the total will be EVs.
Tesla will need an SUV to capture its share of those sales — and not a $100,000 ute with crazy gull-wing doors. In fact, Tesla would ideally have three SUVs: a full-size, three-row product, a mid-size, and a small, entry-level vehicle. Instead, Tesla will have a pair of luxury cars — S and X — the Model 3, the new Model Y, and maybe a pickup and a semi-truck.
It will be, without a doubt, a super cool lineup. But it might not be what the market is buying.
This column does not necessarily reflect the opinion of Business Insider.
