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Original Article

Why Tesla Model Y 3rd Row Is Key To It Becoming The Best Selling Vehicle In The World

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Published on March 15th, 2019 |

by Paul Fosse

Why Tesla Model Y 3rd Row Is Key To It Becoming The Best Selling Vehicle In The World

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March 15th, 2019 by Paul Fosse

At the Tesla Model Y reveal event, I was focused on 2 things. First that it not be hard to manufacture. Second that it have 3 rows of seating.

Easy To Manufacture
To be easy to manufacture, Tesla needed to not introduce any hard-to-manufacture features, like the falcon-wing doors of the Model X. Not a lot has to be said about that. It is obvious from looking at the car and riding in the car that it is very, very similar to the Model 3 (which I own). The battery and motors are likely to be the same, the steering wheel and 15 inch screen and software appear to be the same (with minor modifications). The radio and climate controls appear to be the same. The Autopilot hardware appears to be the same.

I was told on the test rides that the front 5 seats were the same as the Model 3, with different mounting hardware to raise them. Even parts that are clearly different, like the front fenders and doors (because the dimensions are different), look the same to the casual observer.

It was stated on a previous call that the Model Y and Model 3 share ~76% of their parts. It appears the 24% of the parts that are unique to the Model Y are not very different. For example, the doors are clearly different in size, but they aren’t different in style. This greatly reduces the chance of the Model Y sending the company into manufacturing hell. It also means it is very likely that Tesla can manufacture the 2 cars on the same manufacturing line if they choose to do that. That would allow them to easily react to changes in relative demand between the Model 3 and Model Y. They may have separate lines in the US, just because there is probably no room to manufacture more cars in the Tesla Fremont factory, but in China and in future gigafactories, Tesla may choose to share portions of the manufacturing line or maybe the whole manufacturing line.

Why Tesla Had To Include 3 Rows Of Seating

Image from Wikipedia

Why do I think having 3 rows of seating is so important to the Model Y? Look at all of the other vehicle manufacturers that Tesla competes with. Ford, GM, Toyota, Honda, Nissan, BMW, Mercedes-Benz, Lexus, and Volkswagen. How many different vehicle models do each of them manufacture, if you include their US operations, European factories, and Asian and Latin American operations? I would guess that the larger companies (such as the 5 listed above) make close to a 100 different vehicle models, and the smaller brands luxury brands like Lexus and BMW make at least 20 or 30 different cars and SUVs.

Tesla only makes 4 vehicle models now (and of course it doesn’t even make the Model Y yet), and will be adding the pickup and Roadster in a couple years following the Model Y’s commercial release. The company will also be adding a smaller, cheaper car or crossover a couple of years after that if all goes as planned. So, for the next 3 or 4 years, Tesla will have about 7 models.

Elon stated on a recent podcast with ARK Invest that he guesses they will make about a million cars in 2021 (the S, 3, X, Y, and Roadster should be in full production) and about 3 million vehicles a year in 2023 (the pickup and perhaps a cheaper car should be in production). Tesla wants to become one of the largest vehicle manufacturers in the world, yet it is obvious that it isn’t going to design another 95 vehicles in the next year or two. So, each vehicle that Tesla creates needs to serve a wide market. It appears Tesla has settled on 4 main versions of the Model 3 and Model Y.

Value model with competitive range
Long Range model with industry-leading range and better performance
All Wheel Drive model with even better performance
Performance model with mind-blowing performance at a reasonable price

Comparing The Tesla Model Y To Toyota & Lexus SUVs

Screen capture from Toyota.com

The Model Y value model will be competitive with the C-HR and RAV4. The Long Range and AWD models will be competitive with the Highlander and the 4Runner. It is just too small to compete with the Sequoia or Land Cruiser. Toyota doesn’t have an SUV that is competitive with the Model Y Performance, so with the versions of the Model Y announced, Tesla competes very with all the versions of the four Toyota vehicles.

Screen capture from Lexus.com

Comparing the Model Y to the Lexus lineup, the value model will line up against the UX and the NX. The Long Range and AWD models will compete with the RX and the GX. Once again, Lexus doesn’t have anything remotely competitive with the Model Y Performance.

So, this example shows how with 3 versions of a single car (based on an existing model), Tesla covered 4 different Toyota SUVs and 4 different Lexus SUVs and also produced a performance model that is about twice the acceleration of any of the Toyota and Lexus SUVs, so it will cut strongly into the many performance cars the two brands make.

You can see how Tesla saves a huge amount of money designing so many different cars — it designs one car to be incredibly good and then uses it to compete with hundreds of other cars.

Why Consumers Want 3 Rows Of Seating
I have 3 kids (my youngest is 19) and know many other parents with 2 or 3 kids. Why do you need seating for 7 when a 5 seater can cover the whole family? Two answers are obvious to me.

First of all, to keep my kids from killing each other. When I transported my 3 kids on a longer trip, they would get grumpy, so I put one in the front seat, one in the 2nd row and one is the 3rd row. With each kid in a different row, they fought a lot less.

The second reason is to transport a lot of kids to school or sports or whatever in a carpool. Most families have two working parents and if one parent can take 6 kids to school in their car, that is a really good thing. I helped organize many carpools and we loved parents who had cars that could hold more kids. I did some carpooling in my Nissan Leaf, but sometimes we had to send two cars to pick up all the kids we had to get back home. When we used our Honda Odyssey with seating for 8, we could always get all the kids in the car without sending two cars.

Model Y 3rd Row

Screen capture from Tesla reveal video from Tesla.com

Photo from my Model Y test ride

Photo from my Model Y test ride. You can see that the way the 2nd row seats are set, there are only about 2 inches of space between the 2nd row and 3rd row seats. The driver said the adjustment mechanism for the 2nd row seats had been disabled.

They didn’t let us ride in the 3rd row at the unveiling event, but I did get a quick look at it and it is rather small. I would say it should be competitive with other midsized SUVs like the Toyota Highlander, but not even close to as comfortable as large SUVs like the Sequoia or a minivan’s 3rd row.

I got a chance to talk to Franz von Holzhausen about the 3rd row. I told him that I felt it was an important feature that was crucial to the success of the Model Y. I asked him two specific questions about the seating. I asked if the second row was adjustable so the people in the 3rd row could have more room (I wanted to confirm what I had heard from the Model Y driver). I also asked if he had designed them so they would be able to hold child safety seats. The answer was yes to both questions. Although I would have liked more details, Franz was very busy and I am thankful that he had time for those two questions. He probably had to be careful about what he said as well.

Conclusion
I’m happy that my two biggest concerns were resolved in the unveil. Had the Model Y been a radical departure from the Model 3, it would have been another “bet the company” project. I am confident that it is simple enough that Elon can delegate a little more responsibility and not feel the need to get involved in a lot of the rollout of the car. Although I think Elon’s input is valuable, it is taking a heavy toll on his life and he can’t work 120 hours a week for long without many bad things happening.

The Model Y could be a huge success without the 3rd row seating, but it would have left a huge gap of people who needed more seating but could never afford the Model X. Tesla would be leaving millions of potential sales on the table for many years until they could design a vehicle between the Model Y and the Model X. The room you can create in such a small crossover is a testament to the wisdom of designing an electric car to be electric from day one and not trying to shoehorn an electric powertrain into a vehicle designed for a gas or diesel powertrain.

A couple days ago I looked up the best selling vehicles in the world and it looks like it goes back and forth between the Toyota Corolla and the Ford F-150 at about a million vehicles a year. With the Tesla’s ability to be competitive with hundreds of other crossovers in all the world’s markets and Tesla’s plans to expand the Gigafactory 1 and 3 to produce about a million cars a year, it looks like Tesla has a chance to make the Model Y the best selling car in the world, at least until their cheaper “Model 2” addressing an even larger target market overtakes it.

About the Author

Paul Fosse I've been a software engineer for over 30 years, first working on EDI software and more recently developing data warehouse systems in the telecommunications and healthcare industry. Along the way, I've also had the chance to help start a software consulting firm and do portfolio management for several investment trusts. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments in my investment trusts. Tesla investor. Tesla..

Crash tests slam some popular pickup trucks

Jeff Kowalsky | Bloomberg | Getty Images
A Ford Explorer XLT during a head on 30 mile per hour crash test at the company's Crash Barrier Facility in Dearborn, Michigan.

New crash tests show pickups with some of the oldest designs could struggle to protect passengers riding in the front seat.

The Insurance Institute for Highway Safety tested eleven mid-size and full-size pickups and found mixed results.

“In general, the pickup truck class of vehicles is not doing as good a job protecting right front passengers as other classes of vehicles,” said David Zuby, IIHS chief research officer.

Among the the full-size pickups, the Ford F-150, the Ram 1500 and Nissan's Titan received the best possible rating of “good” — one grade above the Honda Ridgeline which was rated “acceptable.”

By comparison, the IIHS says the Chevy Silverado 1500 and GMC Sierra provided “marginal” protection for passengers in the front seat when the right front corner of their truck slams into another vehicle or an object at 40 miles per hour.

Dan Flores, a spokesperson for General Motors says the automaker is continually working to improve the safety of it trucks. “GM designs our vehicles to protect the occupants in a broad range of crashes including front, offset, angle, side and rear impacts,” he said.

The IIHS gave a “poor” rating — the lowest possible — to the Toyota Tundra.

A spokesperson for Toyota told CNBC that “safety and reliability of its vehicles is a top priority.” He added: “We'll continue to look for ways to improve in an effort to exceed customers' expectations — particularly in new testing such as IIHS' passenger-side front small overlap (tests) for pickup trucks.”

Why might some of the most popular pickups struggle with protecting passengers in some of the most common front-end collisions?

The IIHS said part of the problem is that some pickups have older designs that did not emphasize front seat passenger protection to the degree it's expected today.

“We are reasonably confident that when those pickup trucks are redesigned, they will incorporate better protection for the front passenger,” said Zuby.

It's hard to know how much the tests will impact the decisions of truck buyers.

Pickup sales have been surging over the last five years, as more Americans have opted for a truck instead of driving a car. Last year, pickup sales in the U.S. climbed 4.3 percent, according to the auto website Edmunds, while auto sales overall were only fractionally higher.

Audi Sales, Mercedes Sales, Toyota Sales, Infiniti Sales, Acura Car Sales, BMW Car Sales, Honda Car Sales, & Lexus Car Sales Down In February In USA

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Published on March 19th, 2019 |

by Zachary Shahan

Audi Sales, Mercedes Sales, Toyota Sales, Infiniti Sales, Acura Car Sales, BMW Car Sales, Honda Car Sales, & Lexus Car Sales Down In February In USA

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March 19th, 2019 by Zachary Shahan

Here on CleanTechnica, we keep a close eye on electric vehicle news and sales. However, it’s important to watch competing areas of the market to get a sense of the full dynamic. As part of that, I track the monthly US sales of all the automakers that publish monthly figures. The story lately has been a downtrend in sales at major automakers other than Tesla, and especially those automakers’ car sales.

In the month of February, the following luxury auto companies and car divisions had the following sales drops:

Acura Cars: −12%
Audi: −12%
Audi Cars: −12%
BMW Cars: −12%
Infiniti: −17%
Infiniti Cars: −46%
Lexus Cars: −2%
Mercedes-Benz: −13%
Mercedes-Benz Cars: −4%
Volvo Cars: −77%

On the flip side, these luxury auto companies had the following sales increases:

Acura: 11%
Jaguar Land Rover: 29%
Lexus: 4%
Volvo: 6%

Overall, luxury auto sales from all of those companies were down 2,099 in February and car sales from those companies were down 10,775. No car division saw increased sales.

A few luxury brands are missing here — Buick, Cadillac, Lincoln, and Tesla — because they only report sales on a quarterly basis, and Jaguar doesn’t break out sales by model or class, so its car sales are estimated.

Regarding Tesla, our estimate is that Tesla Model 3 sales were somewhere between 5,000 and 10,000 in the United States in February, which would close the gap in 2019 versus 2018 premium-class auto sales, but wouldn’t quite close the gap in premium-class car sales. As has been written many times across the auto world, consumers have been moving from cars to SUVs & crossovers, so that is surely part of the story here as well.

However, as we’ve noted many times in many ways, the Tesla Model 3 actually competes with mass-market cars like the Honda Accord and Toyota Camry in terms of 5 or 6 year total cost of ownership, while being a much better forming, better driving, safer, higher tech car. So, I’ve also been curiously looking at mass-market brands. The following are the mass-market auto companies and car divisions that saw their sales drop in February 2019 versus February 2018 (and by how much):

Honda: −1.6%
Honda Cars: −5.5%
Toyota: −6.3%
Toyota Cars: −10.6%
Nissan: −11.4%
Nissan Cars: −9.4%
Kia Cars: −2.6%
Hyundai Cars: −22.3%

Hmm, among the Big 3*, sales are crap.

(*Let’s be honest — Toyota, Honda, and Nissan are the Big 3 in the US if you’re not talking pickup trucks.)

On the flip side, other than Tesla, the following two major automakers saw their February 2019 sales rise compared to February 2018 (despite their car sales dropping):

Kia: 6.4%
Hyundai: 2%

Those two sister companies had ~3,600 more sales, combined, compared to February 2018. Nissan sales were down more than 13,000, Honda sales were down almost 2,000, and Toyota sales were down more than 9,000.

So, what does all this mean in relation to electric vehicle sales, and more specifically Tesla sales?

Who really knows? But if Tesla’s going to deliver another 40,000 or so cars in the United States this quarter, there’s a solid chance Tesla is continuing to take sales away from these other automakers. Furthermore, based on owner satisfaction surveys from Consumer Reports and others, it’s unlikely those Tesla buyers are going to go back to those older brands. And with the Tesla Model Y coming to market in a couple of years, Model 3 owners may well abandon those other automakers completely as they convert their gasoline crossovers and SUVs to Teslas.

There’s a lot of hype among certain people who want to see Tesla fail that Tesla’s days are numbered, that it’s all a house of cards that’s about to fall down. I don’t buy that narrative, but I wonder sometimes how much the other automakers are under that exact threat.

Remember that it wasn’t a 100% collapse in auto sales that caused GM and Chrysler to go bankrupt approximately a decade ago. Overall, US auto sales dropped 11.7% from 2007 to 2008.

Scroll up again and look at those drops in US sales for numerous automakers.

Stepping back another month, in January, the following automakers saw sales down as follows:

Nissan: −20%
Toyota: −7%
Mercedes-Benz: −14%
Honda: −1.5%
BMW: −5%
Lexus: −3%
Infiniti: −3%
Audi: −2%

Nissan is already doing worse than the US auto industry as a whole in 2007–2008. Mercedes-Benz is also down worse than the auto industry as a whole in 2007–2008. Toyota is more than halfway there. Honda and BMW are holding on much better but are also down. Audi and Infiniti are down dramatically. Where will all of this lead?

Of course, I’m not implying that these companies will go bankrupt just based on huge drops in US auto sales. These automakers all have strong sales in other markets — China, Europe, and Japan, for example. Nonetheless, executives at the North America divisions must be sweating bullets. The problem is — how do you compete with Tesla?

About the Author

Zachary Shahan Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

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