Yet here we are. So what happened?
European gas prices, for one thing. Tesla sales actually continued to fall in the U.S., where the electric car market as a whole still hasn’t recovered from tariffs confusion, the loss of federal subsidies, and other chaotic conditions over the past year. Tesla’s rally came instead from China and, interestingly, Europe: Registrations rose 39% in Denmark, 56% in Sweden, and 43% in Portugal and Italy.
It wasn’t so long ago that Musk’s politics had reportedly cratered interest in his cars in those countries. But European gas prices, which are typically much higher than those in the U.S., have also soared because of oil shocks related to the Iran War. EV interest, then, is up — so high that lots of buyers are willing to look past the personality of Tesla’s chief. (It doesn’t hurt that Tesla introduced less-expensive versions of both Model 3 and Model Y, with remarkably cheap leases and loans, to Europe this year to help overcome its struggles there.)
In China, meanwhile, Tesla has had something else up its sleeve to buoy sales. We’ve repeatedly noted the contraction of the company’s EV lineup: With the failure of the Cybertruck as well as the outright cancellation of the older and slow-selling Model S and Model X — the electric cars that pushed Tesla into the mainstream in the 2010s — the brand gets nearly all of its sales (more than 97% in Q2) from just two cars, the Model 3 sedan and Model Y crossover. And there are no signs it has an all-new mass-market car coming soon.
Instead, Tesla cobbled one together by making a new version of an existing car. In China, Musk has been selling the Model Y L, a version of his crossover with its platform stretched out by 6 inches to cram in an extra row of seats. (Tesla has offered a seven-seat version of its ordinary Model Y, but the two little seats in the back had just 25 inches of legroom compared to the 31 inches in this new version.) As a three-row SUV, the longer Model Y lets Tesla compete in a space that it vacated when it killed off the giant, expensive, gullwing-doored Model X. And as of last week, Model Y L is available in the U.S. Tesla hopes the vehicle can lead to a reversal of its sinking fortunes here, where its EV sales shrank by 20% in the second quarter.
Truthfully, the car is a bit of a kluge. Rear seats often require a compromise on comfort and space. In the case of the Model Y L, Jalopnik notes that even with the 6 inches added to the wheelbase, Tesla’s signature sloping roof doesn’t leave much headroom for the occupants of the way-back. Boxier EVs that were built to be three rows to begin with, like the Hyundai Ioniq 9, Kia EV9, and Rivian R1S, are more pleasant for the fifth and sixth passengers. Nevertheless, those who wanted a bigger Tesla at a starting price of around $60,000 can now get one, and that counts.
Model Y L is also a testament to the power of the platform. Yes, building a new vehicle from the ground up would have provided Tesla with a better all-around vehicle than what it got by hacking the Model Y. But the modified Model Y was much faster and cheaper to deliver, providing an entry into a popular segment of the car market just at the moment Tesla needed to right the ship.
Doing more with less, like creating a three-row EV on the platform of your two-row car, looks primed to become a big part of the future of electric vehicles. That’s particularly true when it comes to growing adoption in America, where legacy automakers and startups alike are trying to simplify manufacturing to bring down costs. The solution to get to market for a company like Honda was simply to borrow General Motors’ EV platform and build its first EV on top of it. Rivian has said it has no plans to sell a pickup truck on its new R2 platform the way it has with its original vehicle, but it absolutely could — and arguably should — if market conditions suddenly made such an EV pickup a hot item.
