That silence is the disappointment of countless Tesla fans hoping for something new
- Elon Musk says that we can expect a Model Y of sorts in the brand’s new ‘affordable car.’
- Some fans are disappointed, while others express concern about Tesla’s business strategy.
- If released this year, the new model could become a very compelling product offering.
Elon Musk may have let the cat out of the bag on Wednesday when he mentioned the Model Y during Tesla’s Q2 earnings call. When asked about the company’s next vehicle, his response led many to believe it could end up being little more than a stripped-down Model Y. Whether that turns out to be the case or not, there’s reason to think the timing might actually work in Tesla’s favor.
Tesla just had an incredibly rough first half of the year. It reported the steepest decline in quarterly revenue (12%) it’s seen in over a decade. That comes despite the recently updated Model Y, the brand’s most popular car. As a result, the stock is down over $30 as of this writing.
Read: Robotaxis And Roadsters Can’t Save Tesla From This Revenue Crash
The company promised that it has high hopes for the future, and one is a new ‘affordable model.’ Set to go into volume production later this year, Tesla is apparently already building it in low numbers. Amid questions at the end of yesterday’s earnings call, someone asked what the new model would look like.
Hints at the Next Model
Elon Musk cut off another executive who was hesitating to answer the question by saying either “It looks like a Model Y,” or “It’s just a Model Y.” The audio from the video just isn’t crisp enough to be certain. That said, it gives us enough information to come up with some additional conclusions. For one thing, don’t expect some jarring, abrasive, futuristic design like a shrunken Cybertruck.
Whatever this turns out to be, it’s likely to look like, if not actually be, a Model Y with significantly fewer features. Tesla could cut back on battery capacity, remove elements like the rear-seat screen, reduce the number of cameras, and scale down on sound-deadening materials. It might also modify the battery chemistry or swap in different motors to lower production costs. Reusing existing Model Y tooling would almost certainly help keep expenses in check as well.
That said, not everyone is stoked about the possibility of a de-contented Model Y. Some called it out for just being disappointing as a new model. Others are worried it’ll be a massive problem for Tesla as a business. “Model S, Model X, CT are all failing, Model 3 was cannibalized by Model Y being such a success. And now the Model Y lite will crush the Model Y sales with lower margin.”
A Well-Timed Launch?
That may or may not be true, but fans of the brand still have reason to hope for good things. Tesla could still come out on top of this entire situation. Whether the cheaper vehicle coming looks exactly like the current Model Y or a scaled-down version, it sounds like it’s coming at the right time. Federal tax credits are about to go away, at least for the next few years, it seems.
That’ll make selling electric vehicles harder for just about every brand. If Tesla can launch this new ‘affordable model’ just as other brands are now having to sell their cars without the tax credit, it could help Tesla dig out of the hole it’s in.
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