Tesla Model Y update: Capital cost may go up significantly if Musk drops shared platform manufacturing model

By @ritwikroy1985 on
Tesla
Tesla Chief Executive Elon Musk smiles as he attends a forum on startups in Hong Kong, China January 26, 2016. Reuters/Bobby Yip

Tesla Model 3 is undoubtedly the most talked about electric vehicle (EV) currently, with the car slated to release this year. Another EV expected to come out of the house of Tesla is the Model Y. Though not much is known about the vehicle, there are whispers and rumours on the same.

The Model Y will complete the automaker’s “SE3Y” line-up, earlier meant to be “SEXY.” Details are still sparse, though CEO Elon Musk did tease in the past about a crossover electric SUV that would be similar to the Model 3.

The car could be out in 2019, though it is more likely to do so in 2020. In fact, it would play an important role in raking up production of Tesla vehicles to one million cars by 2020. The EV won’t be built on the Model 3 platform. Instead, it will be a genuine step change in terms of auto manufacturing.

With the Model 3 getting closer to getting completed, Musk will shift his attention to the Model Y. Musk’s product development and marketing techniques have always included products without a definitive timeline. This fuels media attention, boosts stocks and even pushes employees. Tesla Trucks and Tesla Automated Buses are also in the pipeline, though no one knows when. Automated and shared vehicles are slated to become the next big thing. Experts are also curious as to why the Model Y will not be built on the same platform.

Is it because the production prototyping is falling short in terms of low cost, speed and automation? Tesla has already chosen “early release candidates” over the traditional auto-industry approach of making beta cars, writes Green Tech Media.

Musk has already described the Model 3 manufacturing line as an “alien dreadnought.” How would he describe the Model Y manufacturing process? In the past couple of years, Tesla has acknowledged its mistake in “over-engineering” the Model X. It is a very complex vehicle.

However, Tesla may have understood that it is unwise to build cars with different purposes and different attributes on similar platforms. The Model X was meant to be built on the Model S platform, but the final product turned out to be way different. If Tesla is dropping its shared platform strategy, it could up capital costs significantly. Musk is spending millions of money in the Model 3, the Nevada Gigafactory and the EV platform. Will it do the same for the Model Y? That would mean continued massive spending on research and development.

Musk may also be preparing to hedge on Tesla’s over-aggressive manufacturing goals. The Tesla Model Y could be Musk’s way of meeting any shortfall from the Model 3. Stay tuned on IBT AU for more updates on the Tesla vehicles.