Tesla Model Y is set to be crowned as the world's best-selling vehicle for 2023. This achievement marks a significant milestone, as it is the first time an electric vehicle has led global vehicle sales, dethroning traditional automotive giants.
According to preliminary data gathered by JATO Dynamics, the Model Y sold an impressive 1.23 million units in 2023, representing a substantial 64% increase from the previous year. This remarkable performance signifies Tesla's growing dominance in the EV market, despite the company's relatively recent establishment. It also fulfills a bold statement made by Elon Musk in 2021.
When it comes to Model Y, we think Model Y will be the best-selling car or vehicle of any kind in the world.
-Elon Musk, April 27, 2021 (Q1 Earnings Call)
Dominating Key Markets
In the latest earnings call, Musk stated, “Model Y became the best-selling vehicle globally, as predicted. The best-selling vehicle of any kind, not just electric vehicles, with over 1.2 million units delivered.” Incredibly, that was the only mention of this incredible feat during the call.
The success of the Model Y was particularly pronounced in Europe and China, the two largest EV markets globally. In China, Tesla shipped over 456,000 units of the Model Y in 2023, showing a significant 45% increase from 2022. In Europe, the Model Y's registrations exceeded those of well-established models like the Dacia Sandero, Peugeot 208, and Volkswagen T-Roc, with over 255,000 units registered.
Competitive Pricing and Tesla's Reputation
Its competitive pricing strategy was key to the Model Y's success. In November 2023, the average retail price of the Model Y was 18% and 23% lower than the average EV cost in Germany and the US. This strategic pricing and Tesla's reputation for reliability and competitiveness in the EV market have significantly fueled consumer demand.
The Model Y's performance has considerably impacted Tesla's overall sales, accounting for two-thirds of the automaker's deliveries in 2023. This dominance underscores Tesla's influence in shaping consumer preferences and the growing importance of EVs in the automotive sector.
The rise of the Model Y signifies a shift in the global vehicle rankings, with Toyota's RAV4 and Corolla, which have consistently held top positions in recent years, being overtaken. Despite Toyota's strong global presence and diverse offerings, its lack of pure electric options has limited its competitiveness in the rapidly evolving electric car market. That said, Toyota, Honda, and several others are ramping up EV SUV production, and Lucid is also teasing a Model Y competitor. They have a lot of work to do to dethrone the new king.
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Elon Musk and SpaceX have set some ambitious dates for the first Mars landing. Musk envisions launching the Starship toward Mars by late 2026—less than two years away. There won’t be any humans on board in the initial launches. Instead, Optimus will fill in for humans. Musk stated that human landings could follow as early as 2029 to 2031.
There are certain windows that make flights to Mars feasible for humans. So SpaceX is aiming for humans to be a part of the second or third Earth/Mars launch windows from now, which are 5 to 7 years away.
Tesla continues advancing Optimus, and SpaceX remains relentless. Another Starship test launch is in the books, all while maintaining their steady weekly cadence of Dragon missions to space.
Starship departs for Mars at the end of next year, carrying Optimus.
Civilization On Earth
Musk goes on to state something interesting in another post on X. He says that the key will be whether “Earth’s civilizational technology level will last long enough to ensure Mars can grow by itself, even if supply ships from Earth stop coming.”
The statement suggests two possibilities—that Earth’s civilization collapses or fails to advance enough to solve unforeseen challenges of sustaining life on Mars.
The key concern is whether humanity will remain technologically and industrially capable long enough to ensure that Mars can eventually become self-sufficient. If Earth’s civilization weakens, either due to collapse, stagnation, or regression, Mars might not get the support it needs to reach full independence—leading to the colony’s failure.
Tossing Optimus on board Starship is a smart move, instead of having smaller, single-task robots. Optimus also has the advantage of being upgradeable on Mars as long as the hardware holds up. It could be a lot like what we saw with Tesla vehicles, where the hardware was present for many years before the vehicle was capable of driving on city streets. Optimus’ capabilities will also improve over time, even if the hardware is older.
But, how does Elon Musk envision Optimus’ role on Mars?
The answer might be simple. SpaceX can leverage a fleet of Optimus robots to assemble shelters and infrastructure before humans even arrive.
Optimus is already highly capable, with precise hands adept at manipulating tools and objects. On Mars, it could construct basic habitats, set up survival systems, and even handle ice processing, water recycling, and food production.
These facilities will be absolutely essential for the first humans to comfortably settle in and begin work on expanding, maintaining, and preparing for proper human settlement.
Beyond construction, Optimus has a major advantage—it doesn’t need oxygen. Instead, mission planners would only need to monitor battery levels, wear and tear, and any potential damage.
That said, even humanoid robots face risks. Martian dust has long been an obstacle in space exploration, clogging solar panels, damaging equipment, and causing malfunctions. Tesla will need to redesign Optimus to withstand the harsh conditions. Its joints and components will need to be sealed against Mars’ relentless environment.
Starship
Mechazilla catching Starship7 Rocket Booster for the first time ever! 🚀 Incredible Achievement by @spacex
Starship, the largest rocket ever built, is immensely capable—but still in its early testing phases. SpaceX has dedicated hundreds of hours between each flight test, refining and improving with every launch. With several Super Heavy booster catches now under their belt, the next challenge is proving Starship itself can land.
Once SpaceX can launch, complete a mission, and safely land both the booster and Starship, the dream of reaching Mars may no longer seem so far-fetched.
With that, Happy 23rd Anniversary, SpaceX! We’re with you all the way as you push humanity toward the stars.
Happy 23rd Anniversary to @SpaceX! Founded on March 14, 2002, and still pushing the limits of what’s possible, here’s to the next chapter of making life multi-planetary! pic.twitter.com/mzvrdEagAn
According to Chinese blog posts from earlier last week, now vetted by Reuters, Tesla intends to produce a cut-down version of the Model Y, initially for the Chinese market, sometime in 2026.
This follows the launch of Tesla’s cut-down Model 3 for Mexico, as well as news that Tesla intends to launch their new next-gen model sometime in the near future.
Cut Down, But How?
The new Model Y, internally referred to as Project E41, is designed to lower the entry price of Tesla’s popular SUV—one of the most compelling options on the market due to its size, range, and versatility, especially following the launch of the refreshed Model Y.
To achieve this, Tesla is reportedly aiming to reduce the Model Y’s total cost by nearly 20%, according to reports from China. While exact changes remain unknown, we can make informed guesses based on the cost-saving measures Tesla implemented in the scaled-down Model 3 for Mexico.
Textile Seats and Trim
One of the most noticeable changes in the cost-cut version of the Model 3 in Mexico was the removal of vegan leather throughout the interior. In its place, Tesla opted for a durable textile fabric for the seats, reducing material costs. Additionally, any Alcantara trim pieces were replaced with the same textile in various areas.
No Heated or Cooled Seats
Another major cost-cutting measure was the removal of heated and cooled seats, along with the heated steering wheel. While these feature reductions may seem minor, eliminating them reduces various things, such as electrical components, harnesses, and ductwork that are required for seat ventilation.
No Rear Screen
One of the more unexpected changes in the reduced-cost Model 3 was the removal of the rear screen, despite it being powered by the same front infotainment computer as the front display. Given that the screen functions primarily as an additional display rather than a standalone system, the cost to include it is extremely low. It’s one of those really smart additions Tesla has added that increases value for the consumer with minimal cost to Tesla.
Tesla is unlikely to redesign or modify the vehicle’s wiring harness for this change, meaning a rear screen could potentially be retrofitted later by the customer. Based on replacement part estimates, the screen likely costs Tesla between $5 and $20 per vehicle, which acts as a secondary monitor for the infotainment computer.
Ambient Lighting, Acoustic Glass, Speakers
The final set of changes also focuses on the interior. Tesla replaced the RGB-capable ambient lighting with a simpler white-only version—likely saving only a few dollars per vehicle. While this may seem like a minor and somewhat unexpected cut, it could serve as an upsell opportunity to the standard RWD variant.
Additionally, Tesla reduced the use of dual-pane acoustic glass, now limiting it to just the front windows and windshield. This change drastically cuts costs but also affects cabin noise levels. The dual-pane glass played a key role in making the refreshed Model Y noticeably quieter, so this downgrade will likely bring noise insulation closer to that of the original Model Y.
As for audio, Tesla scaled down the speaker system in the Mexican Model 3 from 17 speakers to just nine, while also removing the subwoofers and one of the audio amplifiers. While this cuts costs due to wiring and speakers, it also has a large impact on the audio quality in the vehicle.
Project E41 is Not the Next-Gen Model
It’s important to note that Project E41 is not the same as the upcoming, more affordable next-gen platform, which is internally referred to as Project Redwood. While Project E41 focuses on a reduced-cost version of the Model Y, Project Redwood is designed to test Tesla’s manufacturing capabilities, using their innovative unboxed assembly method to reduce both costs and production time. The goal is to create a vehicle that is smaller and more affordable, while also keeping it safe and capable of self-driving.
Tesla previously confirmed that they plan to unveil new models—distinct from cut-down versions of the Model 3 or Model Y—during their Q4 2024 Earnings Call. However, the executive team has been careful not to divulge too many details about the upcoming model during interviews. This suggests there may be a lot more that has yet to be unveiled.
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