Tesla just launched the Model Y - here's why it's the company's most important car

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Tesla just launched the Model Y - here's why it's the company's most important car

Elon Musk Model Y

Jae C. Hong/AP

Tesla CEO Elon Musk at the Model Y unveiling.

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  • The Tesla Model Y is the sixth original "clean sheet" design the upstart all-electric automaker has unveiled.
  • The Tesla Model Y is a crossover SUV, and that's the hottest segment in the car business these days.
  • The Model Y could be Tesla's most important vehicle for the future.


Tesla unveiled its Model Y crossover SUV at the company's design studio near Los Angeles about a week ago. The vehicle has been much anticipated - not so much for any "Wow!" factor (crossovers are kind of a boring segment), but because the segment is red-hot at the moment for sales, and Tesla can use all the money it can get.

Tesla CEO Elon Musk says the Model Y could eventually outsell every other Tesla combined, and he's probably justified in thinking that. Crossovers have dethroned sedans in the US, the world's most dynamic and competitive auto market. And the Model Y's pricing will span the upper end of the mass market and stretch into the lower reaches of the luxury space: $40-$60,000.

But the Model Y also needs to deliver in foreign markets, especially China, where Tesla is constructing a new factory. The new vehicle's versatility will be a critical factor for new customers globally.

So you get the idea: the Model Y is IMPORTANT. Here are some more details on why.

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Tesla CEO Elon Musk revealed the Model Y at the carmaker's design studio near Los Angeles.

Tesla CEO Elon Musk revealed the Model Y at the carmaker's design studio near Los Angeles.

I was on hand to check out Tesla's newest set of wheels. And here's why that set of wheels is Tesla's most important.

I was on hand to check out Tesla's newest set of wheels. And here's why that set of wheels is Tesla's most important.
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1. Tesla is now a real car company. Musk rolled out the entire Tesla family, including the Semi and New Roadster. Ten years ago, the company was selling one vehicle. It now has a lineup of three vehicles, and if you add the forthcoming models, six.

1. Tesla is now a real car company. Musk rolled out the entire Tesla family, including the Semi and New Roadster. Ten years ago, the company was selling one vehicle. It now has a lineup of three vehicles, and if you add the forthcoming models, six.

2. Crossover SUVs are selling like hotcakes! Consumers in the US have replaced sedans with SUVs. Many automakers expect the mix to be 70-80% SUVs and trucks to 20-30% sedans in coming years. Tesla has been late to this game — but with the Model Y, it's arrived.

2. Crossover SUVs are selling like hotcakes! Consumers in the US have replaced sedans with SUVs. Many automakers expect the mix to be 70-80% SUVs and trucks to 20-30% sedans in coming years. Tesla has been late to this game — but with the Model Y, it's arrived.
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3. The crossover trend will likely extend to developing markets — and Tesla has big plans for China. Tesla is constructing a factory in Shanghai that will be optimized to manufacture the Model Y, on the assumption that Chinese consumers will go for the vehicle's versatility.

3. The crossover trend will likely extend to developing markets — and Tesla has big plans for China. Tesla is constructing a factory in Shanghai that will be optimized to manufacture the Model Y, on the assumption that Chinese consumers will go for the vehicle's versatility.

4. Two affordable vehicles — the Model 3 sedan and Model Y crossover — could bring in the revenue Tesla needs to develop a pickup and redesign older models. The Model S and Model X have been around since 2012 and 2015, respectively, and could use refreshes.

4. Two affordable vehicles — the Model 3 sedan and Model Y crossover — could bring in the revenue Tesla needs to develop a pickup and redesign older models. The Model S and Model X have been around since 2012 and 2015, respectively, and could use refreshes.
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5. Good Model Y sales and leasing could compel Tesla to start offering more of its own financing. Tesla uses banking partners to arrange much of its financing. But that means it's leaving money on the table. The Model Y could bring in the funds to enable Tesla to write its own auto loans.

5. Good Model Y sales and leasing could compel Tesla to start offering more of its own financing. Tesla uses banking partners to arrange much of its financing. But that means it's leaving money on the table. The Model Y could bring in the funds to enable Tesla to write its own auto loans.
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