The upcoming compact SUV, which is based on the forthcoming Model 3, could become the firm’s biggest seller

Tesla Inc — newly renamed after nearly 13 years as Tesla Motors Inc — is on the verge of what it says will be a massive expansion of production, with two new models due to arrive in the next two years.

As well as the much-hyped compact Model 3, Tesla is also expected to launch a compact crossover based on the same platform. The rumoured Model Y will, like the Model 3, be far more affordable than Tesla’s current offerings.

The starting price of the Model 3 is likely to be around $37,000 (£30,000), with the Model Y expected to be slightly more expensive. However, Tesla founder Elon Musk thinks the transaction prices of the new compact Teslas will be rather higher, at around £34,000 for the Model 3 and perhaps £37,000 for the Model Y, because buyers will be keen to add cost options to their vehicles.

While the compact Model Y could turn out to be Tesla’s best seller – some seven million crossovers of all types were sold in the US last year – Musk recently tweeted that the Model 3 remained the biggest priority for the company.

The Model Y is unlikely to be unveiled until some time next year, with production set to follow late in the year. Little in the way of specification has been released, but it’s likely to have the same tophinged ‘falcon wing’ rear doors as the bigger Model X SUV.

The Model Y is also set to have the promised updated electrical architecture that will allow Tesla to offer full autonomous driving capability. Future Tesla cars will be equipped with as many as eight cameras, giving a 360deg view of the surrounding roadscape, as well as 12 ultrasonic sensors and an unspecified ‘new’ forward-facing radar that works in the worst conditions. Existing radar systems can be fooled by heavy rain and fog.

Musk also said the new electrical architecture has a brain that is as much as “40 times” more powerful than on previous Teslas, calling it a “supercomputer inside the car”. The cost of adding the fully autonomous driving technology to the Model 3 and Y is likely to be nearly £7000 for each customer. Even then, local regulations could prevent all of the autonomous features being used by all drivers.

Another challenge for the Model 3 and Y will be balancing their lower price against the need for a battery big enough to give an acceptable range.

The entry-level Model 3 may have a cheaper, sub-60kWh battery but will still need to have a range of at least 230 miles. The Model Y’s more bluff shape and greater frontal area might mean a bigger battery for the same range, and so a slight price premium.

Tesla is in a race against time to achieve the kind of production levels needed to turn around what is still a cashhungry operation. The firm has spent nearly $2 billion (£1.6bn) since 2010, with investments including building the batterymaking Gigafactory and trying to expand car production to a massive 500,000 units a year.

Tesla delivered around 76,000 vehicles last year, but says it was able to build around 2000 cars per week by the second half of 2016. With as many as 400,000 deposits taken for the Model 3, the company is looking to produce well over 100,000 of the BMW 3 Series rival before the end of this year. Musk predicts Tesla should be capable of building 500,000 cars per year by 2019.

Musk’s expansion plans will test the limits of the capabilities of Tesla’s suppliers and those of his own plant in Freemont, California. But getting to annual sales of half a million vehicles should finally push the car maker into profit and secure the company’s long-term future. 

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Comments
19

14 March 2017
Same story same page as those before it in the modern world. The more they make the lower the production cost. Remember those expensive TV sets which you can buy now for one third the original price.Musk will of course get that equation sorted and hot the market with a price which may or may not be discounted (I think not) and will hold their levels. The rest is up to the buyer. You want or you dont want. I still fear for the future with polluting dead batteries...

what's life without imagination

14 March 2017
[quote=5wheels] I still fear for the future with polluting dead batteries...[/quote] There are NO dead polluting EV batteries, every one is recycled as they are worth so much.

 

Hydrogen cars just went POP

14 March 2017
I'd be more worried about the millions of diesel cars pumping out NOx and soot EVERY DAY

 

Hydrogen cars just went POP

14 March 2017
What about the extra CO2 that petrols pump out, not to mention the carcinogenic benzine they emit ? What about the diesel ships, trains and trucks ? What about aircraft, especially ones that dump fuel ? Oh and what about the fact that Euro 5 and Euro 6 diesels produce much lower levels of NOx and soot that most people think ?

A34

14 March 2017
... when Facebook reports $1Bn spend on R&D - per quarter!

14 March 2017
Don't make the same mistakes as the Model X which was too complicated, heavier than it needed to be and expensive. As to "autonomous driving technology to the Model 3 and Y is likely to be nearly £7000 for each customer A" LEAVE IT OUT THEN or at least keep it as an option, hardly anyone will take it and Autocar will stop publishing Autonomous rubbish for 20 years at least

 

Hydrogen cars just went POP

JJ

14 March 2017
...I still can't see how Tesla will make cars profitability, longer term. Interest in their products is understandably high right now, as they lack direct competitors. But what will happen to them once all the major players in the relevant segments come out with their own dedicated lines of EV's? They will also try to smash Tesla's market share by selling their new lines of EV's at a loss. They can afford to do that because of the profits they rake in from other products and divisions. And they'll be doing it right when Tesla begins to struggle with its debts... Tesla will possibly reach a profitable level of output, but I can't see how they'll hold onto it, once everyone else is on board. More likely, they'll end up a profitable battery maker!

14 March 2017
When Jaguar come out with their Tesla rival next year how will compete with Tesla's network of charging stations and will we end up having Tesla, Jag, BMW etc... charging stations all over the country? Seems unrealistic. I haven't a clue about this, any info welcome.

14 March 2017
They need a standard plug now, if they haven't already devised one. Plus, with ranges around the 250 mark and expensive electricity from these stations there actually need isn't really as great as people on this website think it is.

 

Hydrogen cars just went POP

14 March 2017
No unwanted autonomous tech, no fancy doors that require use of the precious battery charge just to open them. Give us a quality compact electric car with excellent range for sub £20k. Shouldn't be too hard given the economies of scale and the lower cost without all of the unwanted technology on board. Tesla's Dacia, that's what I want to see.

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