Why Tesla Model Y Is More Important Than The Model 3; CEO Elon Musk Explains

Sep 05, 2016 06:45 PM EDT | Eve C.

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The sales for sedans and coupes are slowly declining over the last few years. With this, it appears that the present time demands more crossovers and SUVs. That might be the reason why people are looking forward to the Tesla Model Y rather than the Model 3.

Sourced from Autodata firm, Business Insider reported that the sales for passenger cars dropped by 12 percent in August while the profit for SUVs went up to 2 percent. The article stated that the value for sedans has been deteriorating.

They went on to explain that people are now looking to have pick-up trucks or the SUV's because they found it more profitable than the aforementioned. Thus far, major automakers have been focusing on developing the former.

Meanwhile, Tesla has released the Model X SUV to the market but it would only be attainable for those who have at least $100,000 before taxes. However, CEO Elon Musk offers a new alternative by introducing the Model Y.

The Tesla Model Y will be much cheaper than the Model X SUV. But the public must wait for the Model 3 to be available on the dealership first, and that could be as late as 2018. Given the timeline, Tesla might release the mass-market SUV within 5 years.

In that case, the car company might be facing significant competition with other huge automakers. According to Elektrek, Volvo is planning to release a model with the same features as the Model Y sometime in 2019.

Furthermore, Volkswagen is planning to offer five electric vehicles within four years and there is a chance that one of the models would be a crossover or a full-sized SUV. Aside from that, Mercedes might also showcase an electric SUV at the upcoming Paris Motor Show this October, with production possibly beginning in 2019.

Despite these circumstances, Tesla might still keep their good stand when it comes to producing electric cars. But still, CEO Elon Musk must make sure that the Tesla Model Y will be the next big thing after the Model 3 is released.

Make sure to catch all the car update here at Auto World News.

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