Elon Musk Reverses On Tesla Price Cuts

Mae Love
March 15, 2019

The reveal will happen at 8 p.m. PDT Thursday at Tesla's Hawthorne, Calif., studio.

While the Model Y's official launch will take place in a few hours, production won't get under way until next year.

This year also saw Tesla break ground on a new factory in Shanghai, which is planned to house production of the Model Y after its initial production at the company's Reno, Nevada, factory. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.Just days earlier, we reported that the company had frozen its previously disclosed plan of closing all of its retail stores.Some retail stores that didn't close were told to stop booking test drives last week.

In other words, this will be meaningfully smaller and cheaper than Tesla's current SUV: the Model X.

Musk estimated that once all options would be available, the average sale price of the Model 3 will be at around $42,000.

According to a series of tweets from Musk himself, the Model Y will be an SUV "about 10% bigger than Model 3".

The US Securities and Exchange Commission had asked the court to hold Musk in contempt, saying his February 19 tweet violated a September fraud settlement barring him from sharing material information about Tesla on social media without the company's pre-approval.

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Can the Model Y live up to the hype?

In addition, Musk expects significant synergies from building the Model Y on the Model 3 platform.

Musk has clashed with the Securities and Exchange Commission after he was fined $20 million and forced to step down as Tesla chairman for a tweet last summer about taking the automaker private if the share price reached $420, while falsely stating he'd already secured funding.

Since last week the company has started accepting orders for the Model 3 that costs $35,000. Recent price cuts have prompted concerns about demand for Tesla's vehicles. The Model Y will most likely be a much more conventional electric SUV.

Musk's "single, immaterial" tweet to his more than 24 million Twitter followers claiming the electric vehicle-maker would produce around 500,000 cars in 2019 also complied with company's communication policy for senior executives, a condition of the settlement, lawyers for the Tesla chief wrote in a filing in federal court in Manhattan.

Tune in to the event on Tesla's website on Thursday to find out details about the new vehicle.

Tesla is still testing the updated charging station with select owners, and is breaking ground on the first public V3 Supercharger location next month.

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