Here's Why The Model Y Will Be Cash Cow For Tesla

Name: Here's Why The Model Y Will Be Cash Cow For Tesla
Uploaded: 2020-02-21T17:20:45Z
Description: We know Tesla has high expectations about the Model Y, but do you have any idea why it promises to make a lot of money for the company? Check this video.

And we thought only the Cybertruck would do the trick…

Gustavo Henrique Ruffo

By: Gustavo Henrique Ruffo

Feb 21, 2020 at 12:20pm ET

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“Ultimately, the Tesla Model Y will have more demand than probably all the other cars of Tesla combined.” That was what Elon Musk said when he presented the Model Y Program at Giga Shanghai back on January 7. That volume alone could explain why it will be a critical model for the brand, but the video above includes a lot of reasons for the Model Y to be an amazing cash cow for Tesla. Perhaps even more than the Cybertruck, as Sandy Munro told the guys of Autoline After Hours.

Obviously, the first of these reasons is volume. If the Model Y is to have more demand than all other vehicles combined, we should remember how much that currently represents.

The production capacity for Tesla in 2020 will be 590,000 units, according to this Solving The Money Problem video. That implies we could one day see the Model Y have a demand for 590,000 by itself. Sold for around $50,000 a piece, that would represent revenue of $29.5 billion on the Model Y alone.

That seems oversimplistic. There is a repressed demand for Tesla vehicles due to the production capacity of the company, but the Model Y will probably cannibalize sales of other cars of the company.

While the production numbers will still grow, Tesla would have to be able to deliver that many Model Y units. And they will initially represent a smaller demand for other EVs Tesla sells. If the company manages to have more Gigafactories besides Berlin and Shanghai, perhaps the current vehicles will not suffer that much.

What do you think?

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But there are other aspects, mainly technical ones. The Model Y promises revolutionary manufacturing methods, such as extensive use of cast parts, a groundbreaking wire harnessing system, and other developments we have already covered.

Is there anything the video misses? Should it have included or excluded anything? Join this exciting conversation about the future EV in our comments below.

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