Tesla has just presented its next high-volume production vehicle, Model Y. The Model Y is an affordable, electric, SUV meant to complement Tesla’s affordable sedan, the Model 3.
The Model 3 went through a “production hell” when production first began, so Tesla has worked hard to avoid a repeat with the Model Y. To achieve a smooth transition into production, Tesla will be using assembly lines built with the lessons learned from the disastrous Model 3 production.
The Model Y will also have significantly more demand than the Model 3, due primarily to the sheer size of the SUV market. Although there is a lot of competition in the SUV market, the Model Y will be able to outsell its competitors, especially in the electric segment.
While another author critiqued this move as desperation, though Elon Musk, Tesla CEO, announced date of the reveal via Twitter almost a year ago.
Tesla will become more cash-flow positive into the foreseeable future as a result of the Model Y’s production.Tesla will become more cash-flow positive into the foreseeable future as a result of the Model Y’s production.
The Model Y’s production still has some mysteries surrounding it; however, the information currently available to the public covers many important characteristics of the vehicle. There is no doubt that Tesla faced a production hell when it first began assembling the Model 3 for the masses.
The ramp was excruciatingly slow and left many customers waiting for years to receive the cars they had ordered. Tesla had full confidence upon the announcement of the Model 3 that it could successfully rapidly ramp its production, so what justifies Model Y as a “manufacturing revolution?”
The Model Y is very similar to the Model 3, sharing 75% of the components with the Model 3. The Model Y will also be built on the same platform as the Model 3 which, as I have discussed before, is the most advanced of all electric vehicles (EVs). At the reveal, Tesla confirmed that the Model Y will not be built with the falcon wing doors of the Model X in order to cut costs and further streamline production.
However, the Model Y will have 95% less wiring than the Model 3 according to the company’s 2017 Q1 earnings call. The Model 3’s 1,500 meters of wiring was a cause of many headaches in early production and the reduction to 100 meters greatly simplifies the production and reduces the cost of materials.
This simplification will allow for faster production as well as reduced cost per vehicle produced. The reduced wiring is possible with a Tesla-made flex circuit, a component patented in 2013 that changes how automakers traditionally wire their vehicles.