Elon Musk’s Tesla unveiled their new Model Y SUV recently, the first look at the new electric car left many unimpressed with the supposed SUV which looked almost identical to the company’s current Model 3 sedan.
Tesla unveiled its new Model Y SUV at a recent event at Tesla’s design studio outside Los Angeles in California. For many, the event was underwhelming for one primary reason — many felt they had seen this exact unveiling before with the Model 3 sedan. The Verge commented on the unveiling of the Model Y crossover SUV stating: “The reaction was slightly less enthusiastic than it was three years prior when the Model 3 sedan was revealed. And that’s because we’ve seen this car before: the Model Y is almost exactly like the Model 3, just a little bigger.”
As can be seen in the photos below, the average consumer would be hard pressed to point out the differences between the Model Y and Model 3:
$TSLA – 1/ Elon, How are you going to fund all these changes for the PT Cruiser…er I mean the Model Y?
We know you don't have money for all these changes.
— phoenix10 (smartish) (@phoennix10) March 15, 2019
Musk advertised the car stating: “It has the functionality of an SUV, but it will ride like a sports car,” Musk said. “So this thing will be really tight on corners.” But public reaction to the car was not particularly excited. Musk stated that the Model Y will use 75 percent of the same parts as Tesla’s low-cost Model 3, which makes the Model Y “likely to cannibalize the Model 3,” according to Morgan Stanley analyst Adam Jonas. Given Tesla’s attempt to boost Model 3 sales with a recently announced $35,000 version, that may not be a good thing.
Many analysts were not impressed by the unveiling, Deutsche Bank’s Emmanuel Rosner said in a note: “Overall, we found the event somewhat underwhelming with no major surprises.” Cowen analyst Jeffrey Osborne stated that the “Model Y reveal underwhelmed us,” adding that “the night held no surprises.” Bernstein’s Toni Sacconaghi said that the reveal still left concerns about the company’s manufacturing timeline: “We remain concerned about the manufacturing timeline… Last night’s unveiling essentially reaffirmed Tesla’s target of ‘volume’ production by the end of 2020.”
Goldman Sachs gave Tesla stock a sell rating, writing in a note:
With the Model Y vehicle only priced at a $4k premium to the Model 3, we think investor focus will hone in on potential cannibalization of already waning Model 3 demand and the company delivering on margins as it moves to larger scale production. And with no incremental products unveiled (like the pickup truck the company is working on or a potential refresh of the S/X) and no further commentary on Model 3 demand (which investors have been looking for), we think shares could see pressure in trading today. … we estimate the company is likely to see between 200k and 400k orders (in totality) for the product given consumer preferences for utility vehicles vs. sedans.
Cowen commented on the Model Y in an investors note stating:
Tesla’s Model Y reveal underwhelmed us … The night held no surprises – no S/X refresh, no new software, and no details on 1Q19 … We believe investors will leave the Model Y launch with a neutral to negative outlook on the Tesla story for multiple reasons … We believe the event was more of a capital raising effort and branding exercise. We do not see the new Model Y igniting elevated demand or enthusiasm for the Tesla brand … There was no refresh of the S/X platform … There was no “one more thing” – nothing incremental to get the Tesla bulls excited.
Tesla stock is down by nearly five percent at a price of $275.75 at the time of the writing of this article.