Last night, Tesla unveiled its Model Y electric crossover. Based on the underpinnings of the Model 3, the resemblance to its forebearer is striking to the point of being comical. Then, when Elon Musk said he expects the Model Y to outsell the S, X and 3 combined, it had many of us returning to a thought we've had before. At a time when consumers — and, subsequently, some automakers — are moving away from sedans in favor of crossovers, why did Tesla even bother with the Model 3? Especially when you consider the price difference between the 3 and the Y is as slim as $2,000, the Model 3 seems unnecessary, even obsolete with the launch of the Y crossover.
Autoblog's own Zac Palmer, though, put it succinctly in conversation this morning as we ruminated on this question. "It's tough to say the Model 3 was the wrong car all along. Tesla has been selling every last one it's able to screw or tape together. But perhaps this Model Y will show otherwise." In the meantime, Tesla has built massive hype for its brand and future products.
At the risk of sounding cynical, I couldn't help but wonder how many early adopters of the Model 3 are going to go out and buy the Model Y as a replacement. Surely there will be some, especially among the die-hard and well-monied customers who were eager to plunk down the extra cash for the first 3s off the line, which were also the most expensive. If the Y had come out first, would they even have bothered with the 3? Did Elon just sell thousands of customers two cars, when they otherwise would have only purchased one if the Y had come first?
While that may have been the result, I don't think that was the plan. Tesla has stuck to its roadmap for product rollout — a roadmap established a long time ago, when sedans weren't quite considered consumer kryptonite (and Tesla is evidence that they still aren't). The Model 3 allowed Tesla to, at long last, achieve its high-optics goal of selling a $35,000 EV, even if it ends up selling a mere few of them. The 3 also allowed Tesla to figure out how to finally mass-produce a vehicle, and with the Y heavily based on that car, setting up production should be much easier than it was starting from near scratch with the Model 3. It's far less likely Tesla will have to trek so deeply through "production hell" this time around, if at all. That should mean lower costs and a better chance at quick profitability for Tesla.
Sticking to the basic product strategy has worked out in Tesla's favor, even if the day-to-day and week-to-week execution has seemed ... improvised. It also worked despite the declining popularity of sedans. In hindsight, sure, Tesla probably could have skipped the Model 3, but the experience it gained from it will only serve to improve the Model Y. Even better for Tesla if many of those 3s get traded in for Ys, or if the Y ends up being the second (or third) Tesla in the driveway. Whether or not Tesla planned it that way, or the timing proved fortuitous by sheer luck, the Model 3 was the right car at the right time (and for the die-hards, there'll never be a "wrong" Tesla). Because of it, the Model Y will be even righter.