Late Thursday night, electric-car company Tesla (TSLA 1.35%) unveiled its follow-up act to its Model 3. The company pulled the curtains back on its Model Y sport-utility vehicle -- a midsize SUV priced similarly to its mass-market Model 3 sedan.

While deliveries of the new vehicle won't start for over a year, the Model Y is an important step in Tesla's plan to bring compelling, fully electric cars to the masses. Before the company's mid-2017 launch of its Model 3, Tesla's vehicles were too expensive for most consumers. But the Model 3 -- and now the Model Y -- encapsulate the company's concerted effort to make its vehicles more accessible to a larger customer base.

A blue Tesla Model Y

Model Y. Image source: Tesla.

Model Y: The specs

Starting at $39,000 for the standard range version of the vehicle, the Model Y is about 11% more expensive than the Model 3. A price difference that makes sense since the SUV is about 10% larger than the Model 3.

Don't expect deliveries anytime soon though. Tesla doesn't plan to start shipping Model Y units until fall of next year -- and initial deliveries will be high-end variants only, including performance, long-range, and dual-motor versions. These versions start at $60,000, $47,000, and $51,000, respectively. The standard-range Model Y for $39,000 won't start shipping until spring of 2021.

Check out the latest earnings call transcript for Tesla.


Driving Range

Starting Price

Deliveries Begin

Standard range

230 miles


Spring 2021

Long range

300 miles


Fall 2020

Dual-motor AWD

280 miles


Fall 2020


280 miles


Fall 2020

Data source: Tesla Model Y unveiling presentation. Table by author.

The vehicle comes in two seat configurations: Five or seven seats. But customers will have to pay an extra $3,000 to get the seven-seat configuration. And the seven-seat setup won't be available until 2020.

In typical Tesla fashion, all of the Model Y variants boast wild acceleration times, ranging from a zero-to-60 mph time of 5.9 seconds for the standard-range version and a 3.5 second time for the performance version.

Big expectations

A Model Y fills a missing spot in Tesla's vehicle lineup. When Tesla's luxury Model S sedan was the company's only vehicle in production, the launch of its Model X -- Tesla's full-size SUV -- essentially doubled the company's addressable market and doubled annual sales volume. But the lower-cost Model 3 sedan currently doesn't have a counterpart the way the Model S does. The Model Y will fill that void, giving Tesla's business a key catalyst.

A bar chart of Tesla's quarterly vehicle deliveries by model

Data source: Tesla quarterly shareholder letters. Chart by author.

With midsize sedans outselling cars in many of the world's top auto markets, it's safe to say that the Model Y could rival or even surpass Model 3 sales volume. And with Model 3 accounting for about 70% of the company's 91,000 vehicle deliveries in Q4, the sport-utility vehicle may provide a substantial lift to Tesla's overall vehicle sales volume.