Investors reportedly 'underwhelmed' by Tesla Model Y unveiling
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Last Friday (well, Thursday in American time) Tesla revealed their newest model; the Model Y.
The SUV with seven-seat capabilities is a mightily important car for the Tesla brand. It cashes in on the current fad of SUV popularity, while simultaneously sharing plenty of parts and characteristics to the popular Model 3. The numbers are naturally there, too — 0–100km/h in around 3.5 seconds, a top range of 480km to a charge, and reasonable pricing in the US to boot.
However, those who witnessed the Model Y's live launch will have noted that it didn't quite have the ceremony and fanfare that you'd ordinarily expect from a showy Tesla reveal. And that's somewhat reflected in the product, which — apart from looking more like a hatchback than an SUV the more you look at it — also doesn't pack many huge changes over the cheaper Model 3.
The lack of glitzy Falcon Doors and other needless gimmickry will have impressed those wanting Tesla to improve its production times and reliability, but according to reports off the back of the launch, it didn't necessarily impress investors.
Shares in Tesla dropped by over 4.5 per cent on the Friday following the reveal, with multiple investors noting that it was "underwhelming".
"Overall, we found the event somewhat underwhelming with no major surprises," said Deutsche Bank's Emmanuel Rosner. The sentiment was echoed by Jeffrey Osborne, an analyst at Cowen. "The night held no surprises - no [Model] S/X refresh, no new software, and no details on 1Q19," said Osborne.
"We believe investors will leave the Model Y launch with a neutral to negative outlook on the Tesla story for multiple reasons. We believe the event was more of a capital raising effort and branding exercise," he added.
"We do not see the new Model Y igniting elevated demand or enthusiasm for the Tesla brand. [...] There was no "one more thing" — nothing incremental to get the Tesla bulls excited."
An interesting further point was made by Morgan Stanley, who in a note suggested that the Model 3 is "likely to cannibalise the Model 3, in our opinion."
The reactions are curious ones, given that plenty of people in the motoring press praised Tesla's push to consolidate their range with a model that builds on the conventional appeal of the Model 3. The amount of parts carryover should also mean the Model Y will be easier and subsequently quicker to produce than past models — which you would think would be something investors would value.
While the launch may have lacked the fireworks some expected, it nonetheless did well to emphasise the importance of the Model Y. CEO Elon Musk alluded to the importance of the new SUV by saying he suspects Tesla will sell "more Model Ys than S, X, and 3 combined."
What the investor groups are potentially overlooking in their statements is that ... for want of a better set of words ... boring cars sell really, really well. And while the Model Y lacks new stuff, it'll sell like hot cakes. Guarantee it.