Tesla Inc’s Elon Musk revealed the Model Y, a cheaper electric crossover SUV the chief executive officer said will be available from the spring of 2021.
The vehicle’s price will start at $39,000, said Musk, 47, who took the stage at the company’s design studio in Hawthorne, California, late Thursday before a crowd of Tesla customers and fans. A longer-range version will cost $47,000.
Getting the Model Y into production quickly will be key for Musk to build on the momentum of the Model 3, the less-expensive sedan that catapulted Tesla up the sales charts and helped the company post back-to-back quarterly profits for the first time.
Musk has made a series of unnerving moves since then with the aim of lowering prices of a still-costly lineup to offset shrinking US tax incentives.
The Model Y will join Tesla’s Model 3, Model S sedan and the Model X sport utility vehicle in stores the company decided this week to keep open.
With Americans increasingly ditching sedans for crossovers and SUVs, the newest addition to Tesla’s product range will play a crucial role in driving future sales. Musk said the standard Model Y will have a range of 230 miles (370kms) per charge.
“Entering the SUV/crossover market effectively doubles Tesla’s addressable market,” Gene Munster, a managing partner of the venture capital firm Loup Ventures, wrote ahead of the event. He correctly predicted the standard version of the Model Y would cost $39,000 and that it may take the company two years to make that version available.
Tesla doesn’t spend money on traditional advertising, instead relying on events that are typically highly produced affairs and streamed worldwide to market future products. When Musk unveiled the Model 3 in March 2016, the company was flooded with hundreds of thousands of $1,000 deposits from customers.
The Model Y is making its official debut after a rough patch for both Tesla and Musk. In late February, the company announced it would finally offer a $35,000 version of the Model 3, though it linked the ability to do so with a plan to close almost all of its stores and pivot to online-only ordering.
This blindsided employees and investors alike, and Tesla backtracked 10 days later, saying in a blog post that more stores would remain open and that it will need to raise vehicle prices by about 3 percent on average worldwide.
The US Securities and Exchange Commission has meanwhile reignited its battle with Musk over his use of Twitter early this year, after the billionaire tweeted about the company’s annual production outlook without clearing the post in advance with an in-house lawyer. The SEC’s next filing in the ongoing saga is due to a federal judge in New York by March 19.