Tesla Model Y Pricing Predicted To Start At $45,000, Top Out At $85,000

MAR 14 2019 BY ERIC LOVEDAY 115

$10,000 above the price of a standard Tesla Model 3.

If these predictions hold true, then the Tesla Model Y will start at a base priced of just $45,000, which is $10,000 more than a standard Tesla Model 3.

Tonight, Tesla will reveal the Model Y to the world, but ahead of that event, which we’ll be attending, J.D. Power released a new report. The report contains predictions on Model Y pricing and market size.

In regards to market potential, the J.D. Power report states:

Tesla’s latest SUV, the Model Y, presents one of the most compelling opportunities yet for the brand to increase the sales volume. The segment is big: SUVs currently account for 49% of the U.S. market. More than half (52%) of those who bought a vehicle in the $30,000-$50,000 price range purchased an SUV.

Moving on to pricing, J.D Power predicts the following:

Pricing for the smaller Model Y is unknown, but J.D. Power estimates a starting price of $45,000 before tax rebates, rising to $85,000. In 2018, 1.4 million SUVs were sold in the $40,000-$90,000 range. This means if Tesla captures only a modest portion of this segment, it will deliver significant sales growth.

$45,000 is a bit above the previously speculated figure of $40,000, but it’s in line with our expectations for various reasons. Even Tesla CEO Elon Musk already tweeted that the Model Y would be about 10 percent above Model 3 pricing, which would work out to $38,500. But, let’s remember that the base Model Y won’t grace our presence for some time. Let’s not forget about inflation.

Will the Model Y take sales away from the Model 3? J.D. Power doesn’t really seem to think so, stating:

While some have speculated that the Model Y may cannibalize demand for the Model 3, expanding into the SUV segment opens more sales potential with just one model than sales of all three of Tesla’s models offered in 2018 combined.

Consumer preference in the U.S. is for crossovers and SUVs over sedans, so the Model Y will surely open up more sales opportunities for Tesla.

Stay tuned as we’ll be covering the Model Y live reveal tonight. The livestream should start at, or around (Tesla time ya know), 8 PM Pacific and 11 PM Eastern time

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115 Comments on "Tesla Model Y Pricing Predicted To Start At $45,000, Top Out At $85,000"

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3,000 Pounds Towing Rating, please!

2500 minimum

And please no sloping down rear roof like the X.
But towing is needed on all EVs, not just the Y.
Even my E bike towed a trailer made from a canoe that doubled to take stuff to sell at the Key West flea market along with getting back out to my catamaran I lived on anchored out.

Too high. When the Model Y comes to production in 2020, the federal credit will have fully phased out. Today’s standard plus Model 3 will be the one available for $35K.

The base Model Y will be a Standard Plus, but with dual motors, raising the price to $39K, and then also adding in a premium for the larger form factor, bringing it to $42-43K.

It’s perfect for entry luxury EV. You crazy to think that will be the price point. You will just kill 3

the base probably wont be out for a year after it starts to I doubt there will be much canibalization for a while.

So what if it kills 3? Why does Tesla care if it sells more of Y or more of 3. As long as people are buying a Tesla and they are making money, it shouldn’t matter which Tesla they sell. Same arguments were going around when 3 was being launched that it will kill Model S. Did it? Also did BMW 3 kill BMW 5 series? Did BMW X3 kill BMW 3 series? Different people have different needs. We cannot generalize.

Precisely! Killing your own auto sales with another of your offerings that might have better margins, is not a bad thing in any way.

Not when you sink money into a program and trying to recoup cost

Because shorted and analysts will destroy the stock. You seen how they tried when the $35k and store closures were announced

Dual Motor 45K for S+ with AP is my guess plus a paint choice

Maybe a bit, but we must wait to see the interior, qualities and other specs… and the rivals.

Rivals will be like a year or two behind

What rivals the compliance manufacturer. Most manufacturers only sell about as many EV’s in a year as Tesla sells in a month.

Audi

Very important for strong demand to start at the lowest possible price. I expect 10% price rise above all Model 3 configurations so start price for Standard Range will be 38.500 USD. This is what Musk basically already has tweeted.

But I believe the standard Y will have dual motors so add $5K. I do not believe they will offer the Y in RWD only.

Exactly, comes down to this. I would like RWD model, BMW offers an X3 RWD for $41,000. I think aiming for that would be great, but I wouldn’t be surprised to see AWD only.

It wil probably start that way but I think they will eventually offer a RWD option once the high end sales slacken.

Exactly Tesla will offer higher trim levels first and the standard range will probably not see production until 2021.

The 38.5k USD will be rear drive only and range at 200 miles. Range could be better if Tesla can update their cell chemistry before launch.

That’s not what he tweeted.

“Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery” -Musk

“FOR SAME BATTERY”.

Absolutely no mention of the base price, or base models. Only 10% cost.

Musk never mentioned the base model. Just that Y as being ~10% bigger would cost (probably meaning cost to build) ~10% more.

That’s no indication or promise that the base Model Y configuration will have a price 10% more than the base Model 3.

Model Y base for example could have AWD standard. Or have a bigger battery.

Exactly, with Musk, always read what he says, if it wasn’t stated it probably isn’t the case. If you look at his old tweets for Model 3 this holds up pretty well. A lot of people added what they wanted to hear.

In this case, exactly what he said is that “for same battery” and that means that they might never offer a base Model Y (I think they will), but I wouldn’t count on it. He never said “all batteries will be in Model Y”. Honestly, I don’t suspect the standard will be available as range would be too low, but maybe they would offer it to have a sub $40,000 CUV.

However, I suspect Plus will be base model and start around $41,000 to compete with RWD X3 for the same price, add AWD and you are up near $45,000, and my hunch is most models will be AWD only, and they might not even offer RWD.

To add to above, go look at this site. Expect the Tesla to be faster and slightly cheaper, offer at least as much room, and generally exceed the performance specs of this vehicle:
https://www.bmwusa.com/vehicles/x-models/x3.html
It will likely cross compete with:
https://www.bmwusa.com/vehicles/x-models/x5.html

So it is possible it will be priced to compete with x5 first (Model Y LR AWD and Model Y Performance), and X3 later Model Y Standard/Plus and Mid Range.

This is what I believe, why would Tesla prefer to sell someone a $35K Model 3 when they could sell a $38,500 Model Y? Also let’s not forget the value of an infusion of $1000 reservations which would come in greater abundance at a $38,500-ish starting price vs $45K…

That money counts as a liability, so it doesn’t really help their books at all. I guess we find out soon enough though on which model is base and what they plan to do when.

I will probably get one of those or ID Crozz depending on price, specs, features, etc. My hunch is Model Y.

Well, it does help with cash balance… Though I don’t believe it’s a primary motivation.

Telsa is allowed to use the reservation monies for operations…However, I may change my stance…Lots of rumors that it will ONLY be offered in AWD at least initially…If true, Telsa adds about $5000 for AWD, making it $40K then a 10% premium is $44K so perhaps this analyst is fairly accurate…

X3 Sports Activity Vehicle $41,000 Starting MSRP
X4 Sports Activity Coupe $50,450 Starting MSRP
X5 Sports Activity Vehicle $60,700 Starting MSRP

The reason Tesla got 450,000 reservations for Model 3 was the 35k USD price. Had it been announce the starting price was 45k USD it would be more like 200,000 reservations. This is why I think Musk will announce a starting price of 38.5k USD for Model Y. That could generate 500,000 reservations over the next 6 months.

They don’t need reservations this go around. I think the only reason they will do them is so people can feel good about having an early place in line. I honestly think they will ramp fast enough it will be a non issue, even the Model 3 ramp went way faster than I expected. I bought a Clarity PHEV in part as I thought Model 3 would be years until I could get one.

Actually, the major reason for reservations is to get a feel for actual demand, so they can plan production accordingly…

The US market sold 1.5 million vehicles in 2018 costing over 50k USD but it sold 7.5 million vehicles costing over 35k USD. Tesla’s mission is to sell as many sustainable vehicles as possible so you bet the starting price for Model Y is not over 38.5k USD. I think you are right that the ramp will be faster this time and more predictable because they have done it before. However Tesla does not have accumulated the capital they need to get started. Tesla need to become profitable again before they can start on Model Y factory. I think they will not do anything until q4, 2019 and they need 12 month of preparing before production can start.

They are probably creating the Y in GF1 and therefore will need to come up with that highly automated production line capital…

I’m sure eventually it will be in the Gigafactory but I think this year they will be build the Y at the Fremont factory.

They can’t because no space.

Do Not Read Between The Lines

For the premium for the larger form factor are you just including the additional costs, or also the sucker tax?

I do not think the 35K model 3 SR will still be available in 2020, except maybe for those ordere after a last call to action in late 2019 for reservation holders.

I suspect production will be limited late 2019 with mass production in early 2020 as well, but others are more like late 2020 (ID Crozz, etc).

I think he is talking about Model 3… Which is of course pure FUD.

The focus is on affordability. Y will be just 10% more than Model 3. From $40k for Standard Plus RWD to $45k for midrange RWD, 48k for long range RWD, to $52 for long range AWD and $65k for performance AWD.

Like with Model 3 there should be several model options. Y should also get a terrain type AWD system that is not always on but based on conditions,

Tesla expects the Y to be the high volume seller, so pricing has to be close to 3 with a more affordable option as well.

And no worries about taking Model 3 sales because it’s 75% the same car…just different shape, but a sale for the platform.

*All* electric AWD systems use the second motor only on demand.

Tesla should thank the consumer brand ICE industry for conditioning the consumers to pay luxury brand dollars for consumer brand products with more trim and that 7 – 10 year loans are acceptable. Now the mid to upper trim level consumer brand and all range of luxury brand consumers are ready for the $40k to $65k Y compact SUV.

But I don’t expect the Y to be the common SUV/crossover, but something new, lower than the rest, faster than the rest, better handling than the rest, with more cargo capacity than the rest, lower maintenance, cleaner and cheaper per mile to drive…charging at home. So many long term, year after year benefits that outweigh an additional one time $5k in price over it’s conquest model.

Nope

I doubt they will significantly discount the SR+ Model 3 any time soon. I also doubt they will discontinue the base Model 3, until they have an even cheaper vehicle line available some years from now.

I’ll go $50k then all the way up the latter

If they find the cash to complete the development and produce it, that will sell it like hot cake and be out of trouble.

Sedans are totally has been

Sedans are still half of sales so no, that segment cannot be ignored, but neither can the SUV.

half of the sales ? in US perhaps, everywhere else SUV& Hatchback rulez

Sedans are no longer half of US sales.

There is no “if” there. Their financial planning obviously accounts for the costs of bringing Model Y to market. If they needed extra money, they would have no trouble raising additional funds for that purpose.

(And no, premium sedans aren’t anything close to a “has-been”. Sales are falling somewhat, but still very significant.)

Sedans/Coupes > SUV’s/Cuv’s

I thought Elon Musk had officially said it would be 10% more expensive Than Model 3, which would be 40k$

10% more than the dual motor Model 3 (he did not specify WHICH version of the Model 3!)

“Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery” -Musk

“FOR SAME BATTERY”.

Absolutely no mention of the base price, or base models. Only 10% cost.

Musk never mentioned the base model. Just that Y as being ~10% bigger would cost (probably meaning cost to build) ~10% more.

That’s no indication or promise that the base Model Y configuration will have a price 10% more than the base Model 3.

Model Y base for example could have AWD standard. Or have a bigger battery.

Base Model Y will probably have SR+ pack to stay above 200 miles of range, so 10% means 40,700 for base RWD. And yes, I do think they’ll eventually offer RWD. The vast majority of CUVs do.

Which conveniently is the same price as the BMW X3 RWD. I think they will compete with both X3 and X5, the Long range AWD and Performance Models with price of X5 and the Plus/Mid Range with the X3. People forget the Model 3 is about half a size class larger than most of the cars it competes with (and half a size class smaller than some), kind of between 3 and 5 series wheelbase.

One might argue that people are rather mistaken what cars it competes with 😉

Yes but the first ones we’ll be more expensive. You won’t see the lower price Y for two years after production starts.

Makes alot of sense to try and predict a price shortly before the announcement…. we can’t possibly wait until then 😉

Aka last possible moment so max rumors can percolate thru and marinade

exactly!

Do Not Read Between The Lines

It’s an analysis business. It’s part of the global use of vast amounts of intellectual capital to try to make money by guessing and acting on what other people are going to do, faster than other people who are also not doing anything.

Haha yeah…. and you could swap in speculation or advertising for analysis and still be right.

And it’s a worthless business, staffed with people who know nothing. I used to be at a tech-sector VC that spent $100Ks annually on subscriptions to those analysis firms. There is not a single known case in any industry where they predicted any significant new trend or disruption. At most, once a market is established & stable, they manage to get the “duh” extrapolation correctly.

As stated before, cannibalize applies to selling cheaper models that can undercut your sells of higher price ones. If you manage your customers to buy a higher priced goodie that is not cannibalization.

I think ModelY will top out @ $69000 usd.

It’s not going to be that complicated price wise.

There will not be a version corresponding to the 35K SR Model 3. they never promised that one so why should they do it?
Start at the MR version w premium and protect the margin.

Musk says they will sell 1.5-2x as many Ys as 3s. Can’t do that with a 45k base price.

I predict a base price of $40k-$43k, but we will not see that for over a year.

I predict a starting price (ie what you can buy at first) of between $45k-$50k going up to around $75k

Because you know, I cant wait to a couple of hours just to see, I have to make foolish uniformed predictions. 😆

Thats correct

I was going to go with 43 as well, figuring they would only have AWD and offer a standard battery version. Then it occurred to me that if Tesla sole goal is to speed the adoption of EVs, they might as well do a 38.5$ ish base model, which won’t be available until demand for the AWD and 300 mile range versions drys up.

Tesla has really been putting some serious price pressure on the competition. The base M3 is about what you can get a V6 Camry for, before the tax credits, and you can configure a M3P for 56000$ (pre-tax credit), which is close to 25000$ less than BMW’s M3 Competition (82000$). Imagine if Tesla actually advertised these differences.

I’d love to see Tesla ditch the premium first launch model. It made sense with the S, X and 3, but the Y is just a 3 on a new chassis; they already have the drivetrain and battery for a base model Y. Many drivers with (relatively) modest incomes are clamoring for an affordable electric SUV. There’s plenty of options for those who can justify spending $70k on a car; give us a $50K dual motor option with ~240 miles of range and modest towing capability. What are the advantages of premium first launch model now that the 3 standard is commercialized? Does this model still agree with the Tesla mission to “accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible?”

Should find out tonight. I can see it going either way. On one hand it makes alot of business sense to sell the most profitible versions first, and Tesla needs the cash. On the otherhand, as it shares 75% with the Model 3, one would think they already have enough volume production for components, to offer lower trims at the same time.

Good, thoughtful post, Matt.

My guess is they’ll stick with the “premium first” model because the Y will be seen by customers as being different enough from a 3 to justify trying to sell the higher margin versions first. While Tesla’s mission is as you quote, they still need to make enough profit to allow the company to pursue it. And I can see Musk, et al. saying, “We’re doing more mass market vehicles, so it makes sense to stick to the old economic model for now and diversify our product lineup.”

Of course, Tesla being Tesla, I wouldn’t totally rule out anything, including a $50,000 amphibious option.

I think they will to some extent. I assume first few months of limited production will be higher end models as they get new line working smoothly, then early 2020 mass production of all models? I think it will go much faster than Model 3.

They have to start *somewhere* — and starting with the more expensive variants just makes more sense, to get the extra cash needed while ramping production of the volume variants.

(Note though that the Model 3 started with a $49,000 variant, not a $70,000 one…)

Yep, Musk said they learned a lesson on the ramp up of the Model X, that it’s a bad idea to start with the top of the line versions because there’s higher risk of serious problems as the complexity of the product goes up. Make sure everything is working right on a standardized long-range model with a limited choice of options before adding further complexity.

I disagree. Tesla should stick with its premium first launch model, because they will need to ramp production up from lesser numbers to greater, so that problems encountered in the first months of production vehicles are not potentially catastrophically expensive to repair. Since production is necessarily limited in the first 6 months or so, might as well be selling the more expensive versions to keep the company’s books looking as good as possible to support ongoing development of other products.

$45k is in line with my guesses.

Agreed. It’s much easier to build a car that’s simple, that they don’t have to stop and slow down or change the general flow of the assembly line, if at all possible.

I think the Model Y is gonna be priced at what Tesla reveals tonight at 8 PM. Just a guess, though..

I dunno. By the time they actually start selling them, it’s likely to change from what they announce tonight 😉

Maybe.

Taking into consideration Elon’s recent words and Tesla’s past behavior in the market they should initially offer a long range awd premium interior Model Y for ~10% more than the equivalent M3 so 51700 .. maybe $52000. Best case scenario .. could be a little more.
What I don’t see them eventually doing is to offer a 200’ish miles of range spec.
IF there’s going to be a lower range Model Y, it’ll be using the medium pack, still have AWD, retain premium interior and cost about 10% more than the equivalent M3 with $2000 added for the second motor .. so ~ $46000. Best case scenario.

So 25% more expensive rather than 10%.

What happened to “10% more than Model 3”?
Unless Elon made a typo and “10%” actually meant “10k”.

You left out “for the same battery”. He never promised SR pack. IMHO the SR+ pack exists to give the Y 200+ miles of range.

I don’t care if they meet 10% precisely, but I don’t see the volume Elon wants at 45k+. Sure I don’t expect the base trim within the first 6-12 months, but if they want the sort of volume Elon expects they’ll need to drive to a lower price point.

My problem with people and Musk quotes.

Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery

There is some vagueness on what &/for applies to, but a fair assumption is both since it is the more restrictive option. That means it will cost about 10% more than the Model 3 for the same battery. He doesn’t say if all battery options will be offered (don’t assume that). We find out tonight in either case. It might very well be that all models will be offered and roughly 10% price increase on each.

He never said which Model 3 model. And the Model Y isn’t going to be made in 2WD. So there’s your starting point.

The Y may not cannibalize sales from the Model 3, but it will certainly hurt the Model X.

No more than the 3 hurts the Model S.

Not too much though, if Model 3 vs. Model S is any indication…

Thanks, but I will wait for the GM and Rivian competitors.

You’ll be waiting a long time then. Neither has even hinted at a future vehicle in this form. Ford has at least announced a ‘future’ 300 mile SUV/CUV.

Enjoy waiting. And enjoy the inferior charging network that comes with it, too.

49,300 USD for the AWD Mid Range based on 20% gross profit margin and 10% cost increase over model 3 and 3% price increase coming next week. That model could be available early 2020, which gives me time to make changes so we can go electric. Moving etc.

Hopefully Congress passes a $7,500 Tax Credit for BEV’s. It should be for households with less than $100,000 in income.
Eliminate the fossil fuel subsidies to pay for it.

First you’d have to convince Congress to acknowledge that Big Oil subsidies even exist.

Before that, you have to per$uade Congre$$ that middle to low income people matter.

You know I was wondering how on 2017 corporations tax receipts to the government was 9% less than 2016. Wasn’t all that offshore money corporations were bringing back to the states suppose to add a windfall of taxes corporations paid. I mean if they brought back 1 trillion and paid just 5% tax that would be 50 billion.
Instead corporations only gave 206 billion in receipts. Also 5% tax on the offshore money would be ridiculously low. So at least one year even I expected a bump in the amount of money corporations paid not less.

Will the Y be Tesla’s ugliest car? We’ll find out later

hope not.

If it mainly looks like the Model X then there is a high probability of this. But I’m hoping they make it look better than the X. The Model X just looks bloated and truncated.

So are they going to give us any evidence regarding Martin Tripp or the supposed pedo diver as well?

I predict it to be $42,000usd (base). (37K+1.2K)+10%=42K, …optional AWD +4K. Of course, tesla did buy Maxwell recently, so by the time mY comes out the may reduce the price of the base Y to under 40K, but never to 35K. Tesla stated they wont sell cars below 35K. It is the entry level price for entry level premium cars after all, what they might do is add a lot more standard options to the car, so that at 40K it will be a great deal that people won’t wanna pass up (same deal with m3). I expect a slight bump in range every 18months or so, maybe by 30-40m, similar to what they did with Model-S. If we go by what we saw with Model-S, than its easy to predict Model3 & Y future option & range, after all why would Tesla change their way all of a sudden, they want ur greenbacks just like everyone else, and since they will have only 2 entry level cars, 2 high price cars, and one supercar (possibly also a pickup). They will want to make it highly attractive to us all. I dont wanna be a “theorist” but lets look at… Read more »

what would be cool is beyond copy and paste of Model 3 in different body style, some engineering marvel.

Isn’t the reveal today? If so, we will probably know a lot more, soon.

They should have done model Y first, as I think demand for sedans is in general low. Then again, perhaps model 3 was a learning experience so that they could really knock it out of the ball park when doing the model Y, for which I think the demand will be much greater.

I think the base SR Model Y will be $39,000 (rounded up to the nearest thousand). It will be available after Tesla sells the higher trims (LR-RWD, LR-AWD, and P) first. The higher trims will be sold at a similar price points to the initial Model 3 prices ($49,000, $53,000, and $64,000 respectively).

The specs and prices will need to be comparable to the Models X, S, and 3. For example, there is a $5,000 premium between the equivalent S and X models. I believe there will be a $4,000 premium between the 3 and the Y.

Below is a link of a comparison and my guess on pricing for base prices with related specs.
https://docs.google.com/spreadsheets/d/1F5IQOynIawoXiJPVarLDgPQDJAdzY8b5Vamw-Vf3eSY/edit?usp=sharing

I’m sure Volkswagen is preparing another vaporware to flood our timelines in the upcoming weeks, as a Model Y rival. 😂😂😂

Presumably the direct competition is the VW Crozz, expected not far off the expected production date of the Y.

Model 3 announcement price? forgot – $50,000 ? So Model Y could intro at $55,000 and trend down, just as Model 3 did.

Yelp won the bet