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The First Tesla Model Y Deliveries Are on Track for Next Month

By Daniel Sparks – Feb 26, 2020 at 8:03AM

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The new SUV could become Tesla's highest-volume electric car yet.

According to various media reports, some early Tesla (TSLA 11.00%) Model Y customers are receiving emails notifying them that the new vehicle is almost ready for delivery. The wording of the emails from Tesla to its customers implies that the first deliveries of the all-electric crossover could be just a few weeks away.

Tesla management and investors both have big expectations for Tesla's Model Y. The vehicle will better position the electric-car company in a growing market for SUVs, serving as the automaker's next act after its wildly successful Model 3

A person driving a blue Tesla Model Y

Model Y. Image source: Tesla.

Deliveries as early as March 15?

"Congratulations! Your Model Y is ready for delivery in March 2020," read recent emails to some Model Y customers. In the email, Tesla proceeds to ask customers to select a date to confirm their delivery availability. The earliest reported day for customers to select is March 15.

News that customers are being asked to confirm their delivery dates as early as March 15 further confirms that Tesla is ahead of schedule with its Model Y. After initially promising the first Model 3 deliveries to begin in the fall of 2020, Tesla said in its fourth-quarter update in January that the Model Y production ramp had already begun and that deliveries were slated for the end of Q1. 

With the Model Y coming to market just one year after the company first unveiled a prototype of the vehicle, Tesla is executing at an impressive pace. 

Big potential

The Model Y could give Tesla's sales a substantial boost in 2020 and beyond.

Not only does the new model give Tesla another compelling vehicle in the SUV market, but it will expand the company's addressable market for SUV customers significantly since the Model Y is much more affordable than the Model X -- the company's only current SUV in its vehicle lineup. The Model Y's starting price, at $52,990, is about $32,000 lower than the Model X's. 

Tesla CEO Elon Musk has previously estimated global annual demand for Model Y to grow to around 1.25 million units. Even if this is possible, it would likely take Tesla several years to ramp up Model Y's production to this level.

Tesla said in its fourth-quarter earnings call that Model Y deliveries during Q1 would be limited. But deliveries of the new SUV "will ramp over subsequent quarters," explained Tesla CFO Zachary Kirkhorn. Expectations for sales growth from Model Y in 2020 is one reason management guided for full-year vehicle deliveries to increase from about 368,000 deliveries in 2019 to more than 500,000.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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