As big as the Model 3 electric car is for the future of Tesla, the sport utility vehicle known as the Model Y could be bigger, according to CEO Elon Musk.
“I would expect that the demand for the Model Y would be … maybe 50 percent higher than Model 3?” Musk said today during a teleconference reviewing the company’s fourth-quarter financial results. “Could be even double.”
Musk’s assessment is based on the fact that SUVs are the most popular sales category for gasoline-powered automobiles, plus his surmise that the same would hold true for the all-electric version, which has yet to be unveiled.
The Model Y figures prominently in Tesla’s long-range plans for filling out its product line, and filling out a geeky acronym that spells out “S3XY.” Musk said that the engineering and design work has been completed, and that the car will have about three-quarters of its parts in common with the Model 3. That should provide a shortcut through the “production hell” that Musk and his team went through during last year’s Model 3 ramp-up.
If all proceeds according to plan, the first Model Y cars should start rolling off a new assembly line at Tesla’s Gigafactory in Nevada early next year, Musk said, with production transitioning from low volume to high volume over the course of 2020.
Next year should mark the start of production for the all-electric Semi tractor-trailer truck, with the first units to be used for Tesla deliveries, Musk said.
He also touted the Tesla pickup truck, which he said will be “something quite unique.”
“We might be ready to unveil that this summer,” Musk said.
But Tesla’s biggest move for 2019 is likely to be the expansion of production to a new Gigafactory that’s due to go up in China. By the end of the year, Musk wants the plant in Shanghai to be turning out 3,000 cars per week, supplementing a 7,000-car weekly rate at Tesla’s factory in Fremont, Calif.
The expansion to China is key to Tesla’s goal of reaching an annual Model 3 production rate of 500,000 cars. Musk acknowledged that getting the Shanghai operation online is “the biggest variable for getting to 500K-plus a year.”
2018 was a year of ups and downs for Musk, in part due to troubles sparked by tweets and tokes. But the 47-year-old billionaire, who’s also in charge of SpaceX and the Boring Company, looked on the bright side during today’s teleconference.
“Last year was definitely the most challenging year in Tesla history, but also the most successful,” Musk said.
For the second quarter in a row, Tesla reported a profit — amounting to $139.5 million in the fourth quarter. The company reported quarterly revenue of $7.23 billion, beating the analysts’ consensus estimate of $7.08 billion. And it said it boosted its cash position from $2.9 billion to $3.6 billion, thanks in part to reductions in expenses. That has boosted the company’s confidence that it’ll be able to pay out $920 million in cash if necessary to cover a debt payment in March.
That’s the good news. The not-so-good news, at least from the stock market’s standpoint, was that earnings per share fell short of analysts’ predictions. Also, Musk announced the retirement of chief financial officer Deepak Ahuja. He’ll be handing over the reins to Zach Kirkhorn, the company’s vice president of finance.
Uncertainty about the company’s future stability and profitability sparked a nearly 5 percent drop in Tesla’s share price, which slumped below the $295 mark during after-hours trading. But if Tesla’s history is any guide, there’ll be plenty more ups and downs in the days and months to come.