With Tesla Model Y party, Elon Musk back in the spotlight
Elon Musk needs a win, so he’s taking a page out of a tried-and-true playbook: throwing a party for a product that won’t be available for months before an audience of adoring fans.
The Thursday evening unveiling of the Model Y crossover follows a major flop. Tesla Inc.’s attempt to make a splash with the long-awaited arrival of a $35,000 version of its Model 3 sedan was overshadowed by Musk warning a loss is likely in the first quarter, and by his blindsiding decision to close almost all of the company’s stores. Ten days later, the chief executive officer backtracked. And all the while, Musk was again battling with the Securities and Exchange Commission over his use of Twitter.
Tesla shares have dropped 13 percent this year, though the stock rose 2 percent Wednesday.
The Model Y is debuting at a tricky time for Tesla. Musk needs to keep investors excited about Tesla’s future product pipeline while continuing to sell the products that are available now. Tesla has two sedans in its lineup-the high-end Model S and mid-priced Model 3-plus a costly SUV, the Model X, that’s never been a big seller. At a time when American drivers are increasingly ditching passenger cars, Tesla hasn’t had a more conventional crossover to offer.
But introducing the Model Y now, long before production will begin, risks cannibalizing interest from the Model 3. Goldman Sachs analyst David Tamberrino warned on Wednesday that “this new product could further weight on Model 3 demand as consumers decide to wait a little longer to purchase a Tesla crossover vehicle.” Tamberrino, who has a sell rating on the stock, wrote that the Model Y could help boost customer deposits and replenish Tesla’s cash.
Musk is nothing if not a salesman, and Tesla events are always entertaining. Fired-up Tesla customers, board members and friends of the company typically turn out for a party that kicks off late in the evening. Musk takes the stage and after much buildup reveals the product, which is often a prototype years away from volume production. Fans film it all on their phones. People scream, “We love you, Elon!” Many put down deposits on the spot.
Thursday’s unveiling of the Model Y will take place at Tesla’s design studio in Hawthorne, Calif., near Los Angeles. The company hasn’t given much detail beyond an 8 p.m. local start time.
Here’s a look at past reveals that give a clearer sense of how Musk uses the attention to communicate his grand plans.
• Boring Co. Tunnel: Musk’s most recent big event, held in December, was to debut Boring Co.’s first completed test tunnel. Musk stood in front of a large hole in the ground on the fringes of the headquarters of a third company he runs, SpaceX, and told reporters it was “incredibly profound.” Guests hopped into a modified Model X to ride through the mile-long tunnel. Some said the bumpy ride made them feel sick, but others pronounced the journey exciting.
• Semi Truck and Roaster: Tesla’s last big, high-wattage event was the reveal of the Semi in November 2017. Musk pulled off a Steve Jobs-ian “one more thing” surprise at the end, rolling a next-generation Roadster sports car out the back of the big rig parked on the stage. “The point of doing this is to just give a hardcore smack-down to gasoline cars,” Musk told a roaring crowed, touting the Roadster’s speed and range. “Driving a gasoline sports car is going to feel like a steam engine with a side of quiche.”
• Solar Roof: Musk showcased his ambitions to take Tesla beyond cars and batteries with the October 2016 unveiling of a solar-roof product on the set of “Desperate Housewives” in Los Angeles. “We have a solar roof that is better than a normal roof, looks better, last longer,” Musk said. “You want to pull your neighbors over and say, ‘check out this sweet roof.’” But a January letter to shareholders made clear the roof is still very much a work in progress, with design iterations and testing still underway more than two years after the stunt that helped seal Tesla’s controversial acquisition of SolarCity Corp.
• Model 3: A visibly thrilled Musk revealed the Model 3 in March 2016 in what was a seminal moment for the company. He talked in detail about climate change and the importance of accelerating the transition to sustainable transportation. Within hours of his remarks, more than 134,000 reservations were put down for $1,000 apiece. This was all for a car Musk said would cost $35,000 before federal tax credits. A version of the car at that price point was finally made available in the last few weeks.
• Tesla Energy: In April 2015, Musk unveiled a suite of batteries to store electricity for homes, businesses and utilities, touting them as a path toward a greener power grid that would further the company’s mission. It was a key moment that marked an expansion beyond cars and a precursor to the decision to drop “Motors” from the company name.