Pending Model Y Could Become Tesla’s Best Seller

American vehicle buying patterns show that the Tesla Model Y crossover could become the key to hitting high sales targets when the electric automaker’s production ramps up to a projected 500,000-plus.

That was behind a Morgan Stanley research analyst report earlier this month predicting that the Model Y was most likely to become Tesla’s best-selling model.

Michael Ramsey, an analyst with Gartner Inc., agrees with that scenario.

“Fundamentally this is a super important vehicle because this is what Americans are buying,” Ramsey said. “The sedan is essentially being eaten alive by the compact crossover.” took a look at the numbers. Through February, Autodata Corp. reported that U.S. new vehicle sales consisted of 62.5 percent trucks, SUVs, and crossovers. That made for an increase over the 57.9 percent of the share from that same period last year. Trucks, SUVS, and crossovers made up nearly 60 percent of all U.S. sales in 2016.

The Tesla Model Y, which is expected to be a compact crossover version of the Model X built on the Model 3 platform, could be well suited to consumers who expect plenty of interior space and other functionality perks offered by an SUV or crossover. It could be a crossing bridge for consumers who had not previously gone for the possibility of buying an electric vehicle.

That assumption has been adopted by luxury makers in recent years, who have aggressively launched several SUV and crossover gasoline-engine models.

Tesla is taking the Model Y more seriously than thought with all the attention being placed on the Model 3 small sedan launching later this year. The company did have more to say about it.

CEO Elon Musk had directly tweeted an Ars Technica editor recently that more would be revealed on the Model Y “next week.” That was later updated; next week will focus on the Neuralink artificial intelligence project Musk is backing. More information is expected be revealed on the Model Y in 2018.

He did confirm in a separate tweet that its coming out as the Model Y at some point. “Oh Model Y is coming too in a few years. Kinda have to,” Musk tweeted recently.

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The Morgan Stanley report predicts the Model Y will be the key to Tesla’s future ridesharing program, which might be named Tesla Mobility.

Customers might also be willing to pay more for the Model Y crossover over the price of the Tesla Model 3. Consumers are usually willing to pay a premium for larger vehicles. Cars are appreciated for being small, mobile, and fuel efficient, but crossovers are making gains through their perceived added functional benefits over cars.

Musk might back Morgan Stanley’s statements. He predicted the Model Y will command sales between 500,0000 and 1 million annually on a global basis.

“It’s the obvious priority after the Model 3,” he said.

One challenge Telsa would likely face when rolling out the Model Y would be to avoid repeating mistakes blamed on the Model X SUV.

Consumer Reports was not happy with the Model X, stating in an annual reliability report that the all-electric SUV “has been plagued with malfunctions, including its complex Falcon-wing doors.”

Other problems cited by the publication included locks and latches, power equipment, in-car electronics and the climate system. It was given a 12 in the reliability rating, the lowest score of any vehicle in the luxury mid-sized SUV segment.

Tesla has been working hard on cleaning up these kinks in the Model X, and has confirmed that the Model 3 is being produced with the highest standards. That’s likely to carry over to the Model Y.

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