Tesla's Strategic Shift: Model Y Juniper Launch vs. Model 3 Highland Launch

Tesla Inc. (NASDAQ: TSLA) has recently launched the updated Model Y in the U.S., highlighting a different approach compared to the rollout of the refreshed Model 3 about a year ago.

What Happened: Tesla debuted the revamped Model Y on its website as a new option while keeping the older variants available. This launch occurred just weeks after its introduction in China.

In contrast, during the release of the Model 3, Tesla took several months to bring it to the U.S. market. The refreshed Model 3 made its debut in China in August 2023, with the U.S. launch following months later in January. The previous Model 3 variants were entirely phased out, and the new model was launched without any older options listed.

This strategy backfired for Tesla, as they faced challenges in ramping up Model 3 deliveries. The company attributed the decline in delivery volumes in the first quarter of 2024 to the challenges in scaling production of the new Model 3 at its Fremont factory.

When the updated Model 3 was launched in the U.S., it maintained the same starting price as its predecessor. However, the long-range all-wheel drive version of the new Model Y is priced 25% higher than the prior model.

Expert Opinions: Automotive researcher Troy Teslike expressed approval of Tesla's new strategy, which includes selling a fully loaded version of the Model Y Juniper design as a 'Launch Series' at a higher price alongside older Model Y models. This approach allows for a more gradual transition and suggests that initial production of the newer version may be limited.

“When the Model 3 Highland was introduced, the transition was abrupt, causing dissatisfaction among some customers who had recently purchased a Model 3,” Teslike noted on social media.

Why It Matters: In 2024, Tesla reported global deliveries of 1.79 million vehicles, a slight decrease from the previous year's total of 1.81 million, indicating the first drop in over ten years.

This past October, Tesla CEO Elon Musk projected vehicle sales might increase by 20%-30% in 2025. The differences in how the refreshed vehicles were launched could be a strategy to boost this anticipated delivery growth.

Tesla plans to start deliveries of the updated Model Y in March.

In its latest quarterly report, Tesla assured that the production schedules for new vehicles, including more affordable options, remain on course to start in the first half of 2025.

Tesla, ModelY, Model3