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The
new Model Y, costing just under $40,000 with a stripped-down
interior, comes in a brutal year for Tesla as it tries to
attract more customers despite an aging lineup, stiff
competition from foreign EV makers and anti-Elon Musk boycotts
targeting the company.
The reaction from the stock market after the news broke suggests
the new models are not expected to help much.
“Investors were looking for something truly different, not an
iteration of a old product,” said Edmunds analyst Ivan Drury,
speaking as Tesla stock dropped sharply in the last minutes of
trading. “I can’t imagine this will bring levels back to what
they want.”
Tesla also announced a cheaper version of its Model 3 for under
$37,000. For New York residents taking advantage of a state
rebate, the price was below $35,000.
Tesla has talked about a cheaper car to appeal to more
cost-conscious consumers for years, though the two new
“standard” models are priced well above the $25,000 price tag
promised. They come as customers are widely expected to hold off
from purchases over the next several months due to the recent
expiration of a $7,500 federal tax credit for electric vehicles.
Tesla stock fell 4.5% to $443.09 on Tuesday after closing the
day before up more than 5% on anticipation of the new model
announcement.
Compared to previous models, the new Model Y comes with a
shorter 321-mile driving range, fewer audio speakers and a
fabric interior, not microsuede. The model also lacks a
panoramic glass roof and a touchscreen in the second row.
This model faces stiff competition in the $40,000 range for EVs
from vehicles including Ford’s Mustang Mach-E, Chevrolet’s
Equinox EV and Hyundai’s Ioniq 5.
The new Model 3 has also cut down on the driving range, ambient
lighting and other features.
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