This Won't Save Tesla

The "new" Model Y and 3 aren't the answer.

Tesla — Tesla.com

When Tesla teased that it would launch a new vehicle last week, its stock rose in anticipation. Expectations were sky high. Tesla has been swamped by a tsunami of competitors offering arguably better EVs for less in recent years. Could this be where Tesla undercuts the entire industry once again? Could this pump their sales numbers back to pre-“Roman salute” levels and end their tepid slide into unprofitability? Then the event happened. All the vehicle was was a cheaper, stripped-down version of not just the Model Y but also the 3, dubbed the “Standard”. And as quickly as it came, the stock almost immediately slumped back down. Why? Well, it’s because these vehicles are nowhere near good enough, and they highlight just how badly Elon has cocked things up. Let me explain.

Over the pond, we have had a standard version of the new Model Y and 3 for a while now. Something Americans haven’t had for a good while. They are essentially identically specced to the Long Range variant, differing only in having a single motor and a slightly smaller battery. Here in the UK, we will continue to have the “old” EU standard variants, while the EU is switching to these “new” standard variants.

And that is an issue, because the “new” variants aren’t as good as the “old” ones.

For one, the “old” standard variant cars are significantly better equipped than the “new” ones. They have the exact same features and technology as the higher trim levels. But to make the “new” standard variants “cheaper,” Elon has stripped out the power-adjustable steering wheel, HEPA air filter, rear-row heated seats, adaptive beams, power-folding mirrors, panoramic glass roof, active suspension, autosteer (autopilot), the AM/FM radio and light bars. He has even fitted cheaper wheels, reduced the quality of the fabrics and reduced the colour options inside and out.

To give you an idea of how much this should cut costs, active steering and adaptive suspension alone typically cost thousands of dollars to spec.

So, you’d expect these “new” standard cars to be significantly cheaper than the “old” ones, right?

Well, no. They aren’t. Look at the table below:

**Comparing US car prices to EU prices is hard because we use a different currency and include taxes in the sticker price, while Americans don’t. As such, I have deducted tax from EU prices, and converted the currency to USD on the day of writing**

Let’s break this down, starting with the Model Y.

The “old” EU Model Y Standard, which we still have in the UK, is about $5,000 more expensive than the “new” one and has 21 miles less range. But, it is also a second faster to 60 mph, and has all that extra kit! As such, the “new” standard doesn’t actually have a better value proposition than the “old” one. In fact, it is arguably a worse value proposition, as $5,000 more for the “old” standard gets you arguably a whole lot more car.

The Model 3 is even worse.

The “old” and “new” variants actually cost the same, have the same range, and practically the same 0–60 mph time. But again, the “old” standard has thousands of dollars worth of kit that the “new” one doesn’t have. The “old” variant is a substantially better value proposition!

Tesla is going backwards. These new standard variants are ripping people off.

Why do that?