The Los Angeles entrepreneur raised the curtain on the vehicle at Tesla’s LA Design Studio in Hawthorne, showing a blue version very similar to the Model 3 but with a higher roofline and more room in the back. It will fill a gap in the Palo Alto electric-vehicle maker’s lineup.
The car however, won’t be available at least until 2020, and won’t do much to solve the company’s current cash problems. A long-range version of the Model 7 with a 300-mile range was priced at $47,000 with an expected delivery of fall 2020. A standard-range model with a 230-mile range was priced at $39,000 with a delivery date of spring 2021.
Musk said the SUV will have the “functionality of an SUV, but it will ride like a sports car.”
By 2021 the market will be stocked with electric cars from almost every major manufacturer. Already Hyundai and Kia are selling electric versions of the Kona and Niro crossover SUVs priced around $36,000.
Dan Ives, managing director at Wedbush Securities, said the $39,000 and $47,000 price points for the standard and long-range versions were what investors wanted to see for mass adoption.
“I thought it was a lot of build-up and it met expectations,” he said.
Musk did not mention deposits for the vehicle during the event, an omission that Ives called a “more prudent approach,” given the pre-order and production issues with the Model 3.
Although the company’s well-documented financial and manufacturing struggles may have removed some of its luster, Tesla’s new model was still highly anticipated.
In addition to the Model 3, the company sells the Model S luxury sedan and the Model X luxury SUV. But it lacks a smaller crossover SUV, one of the hottest styles in the automotive industry.
The Model Y was rolled out by Musk after a lengthy introduction during which he recounted the company’s history and rolled out each of the company’s vehicles to hoots, hollers and clapping.
That only intensified when the crossover was finally brought out, but compared to other Tesla product reveals, it was a low key affair with Musk spending relatively little time talking about the new vehicle.
“It’s not groundbreaking, earth-shattering, revolutionary by any stretch of the imagination,” said Michael Harley, executive editor of Kelley Blue Book. “Obviously, Tesla is playing it safe, but it knows what its customers expect and what its customers like to buy. This is a very safe and conservative model, in terms of styling.”
He said he thought the Model Y would be Tesla’s most popular model and noted the similarities between the Model Y and Model 3 sedan, saying that it seemed like a decision meant to bring the SUV to market as quickly as possible and simplify production.
“The auto industry’s been making cars for well over 100 years now,” Harley said. “And Elon came in 10 years ago and decided he was going to do things differently. It looks like he’s finally conforming to the rest of them. But it’s good.”
Musk discussed vehicle production during his presentation, saying that the difficulty and value of manufacturing was extremely underrated.