March 4, 2019 2:30 PM, EST

Tesla’s Elon Musk Touts Model Y Event as Questions About Company Linger

TeslaStefan Wermuth/Bloomberg News

Elon Musk said March 3 that Tesla will unveil its Model Y crossover in less than two weeks, as questions about store closures, employee layoffs and demand in the wake of waning U.S. federal tax credits threaten the company’s growth narrative.

Tesla unveiled the Model 3 at its Hawthorne, Calif., design studio in March 2016. Tesla product launches, which feature throngs of customers willing to put down deposits on the spot, typically are highly orchestrated affairs that generate enormous interest and media attention. American consumers are increasingly shifting from sedans to SUVs, and the Model Y is the next offering in the company’s product pipeline. The Model Y unveiling will be March 14 at Tesla’s Los Angeles design studio.


Dania Maxwell/Bloomberg News

On Tesla’s fourth-quarter earnings call in January, Musk said Tesla had completed the engineering and design of the Model Y and that “three-quarters of the Model Y is common with the Model 3.” The company may produce the vehicle at Tesla’s gigafactory east of Reno, Nev., where batteries and powertrains also are made.

In subsequent tweets March 3, Musk said that the Model Y will have “normal” doors as opposed to the Falcon Wing doors that distinguished the Model X , and the Model Y will cost about 10% more than the Model 3 since it is a larger SUV. The company’s pricing is largely based on the battery range offered.

On Feb. 28, Tesla announced that customers can order the $35,000 Model 3 with the standard range battery, a long-awaited goal. The automaker also said in a blog post it is “winding down” many of its stores and shifting to an online sales strategy, a move that caught many by surprise. Shares tumbled 7.8% to $294.79 on March 1.

Phone calls to several U.S. stores March 3 went unanswered and were routed to Tesla’s California headquarters. Tesla declined to comment beyond the blog post.