Elon Musk is putting himself in an awkward position with Tesla's new vehicles (TSLA)

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Elon Musk is putting himself in an awkward position with Tesla's new vehicles (TSLA)

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Maurizio Pesce / Wikimedia Commons

Tesla plans to launch its $35,000 Model 3 later this year. The vehicle is a big deal for the company — its first real foray into the mass-market, after selling luxury vehicles for several years.

This hasn't created much dissonance in the auto industry.

General Motors, Ford, Toyota, Honda, and Volkswagen all sell expensive cars and cheap ones. They also sell lots of different types of vehicles, from compact hatchbacks to hulking pickups.

Tesla, in the other hand, currently sells just two vehicles, the Model S sedan and the Model X SUV. The Model 3 will change that, but as the launch grows nearer, a fair amount of media attention has shifted to Tesla's future vehicle plans.

The first post-Model 3 vehicle will likely be a compact SUV, dubbed the Model Y. With Tesla due to announce its first-quarter delivery numbers in the next week, there's some buzz around whether the company might divulge some details about the Model Y.

It would makes sense, as with not much happening that really new with Tesla until the Model 3 arrives, CEO Elon Musk will want to sustain media interest. Outside the tech industry, the Model Y looks obvious and logical — but it also looks like a classic example of what in the car business in knows as "platform engineering." Big carmakers use common undergirdings to built a variety of different cars. 

This has been the Model Y story since Tesla started talking about it, and anyone familiar with carmaking gets it. Musk now needs to guard against the impression that Model Y will somehow be dramatically different product, especially if Tesla wants to capitalize on surging consumer demand to crossover SUVs. 

Tricky business

This is going to be tricky because Tesla is followed more like a tech company than a carmaker. With the Model Y, given its likely price point of around $40-50,000, we're talking about an electric BMW SUV. Cheaper trim levels will be akin to a nicely optioned Honda CR-V. These are popular, ho-hum vehicles.

The big carmakers know that it's almost impossible to get people excited about these type of car, so they concentrate on creating sexier machines to grab attention: sports cars, concepts cars, and out-there concept cars.

Tesla has never done this, taking instead a page from the consumer electronics world, where for example Apple and Samsung can generate excitement by rolling out yet another glass rectangle. That approach seems to work for them, but it's unclear whether Tesla will be able to head toward the unemotional mass-market car business and sustain the thrills it's grown accustomed to. 

So Musk finds himself in a tough position — a showman who, increasingly, is betting on vehicles that aren't that exciting to show.

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See Also:

• People are expecting too much from the Tesla Model 3
• Tesla is about to confront dueling best- and worst-case scenarios, and anything could happen
• Tesla has a dangerously valuable asset that no one is talking about

SEE ALSO: People are expecting too much from the Tesla Model 3

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via Business Insider http://ift.tt/eKERsB

March 31, 2017 at 02:21AM