SAN FRANCISCO -- Elon Musk needs a win, so he’s taking a page out of a tried-and-true playbook: throwing a party for a product that won’t be available for months before an audience of adoring fans.
The Thursday evening unveiling of the Model Y crossover follows a major flop. Tesla Inc.’s attempt to make a splash with the long-awaited arrival of a $35,000 version of its Model 3 sedan was overshadowed by Musk warning a loss is likely in the first quarter, and by his blindsiding decision to close almost all of the company’s stores.
Ten days later, the CEO backtracked. And all the while, Musk was again battling with the Securities and Exchange Commission over his use of Twitter.
Tesla shares have dropped 13 percent this year, though the stock rose 2 percent on Wednesday.
The Model Y is debuting at a tricky time for Tesla. Musk needs to keep investors excited about Tesla’s future product pipeline while continuing to sell the products that are available now. Tesla has two sedans in its lineup -- the high-end Model S and mid-priced Model 3 -- plus a costly crossover, the Model X, that’s never been a big seller. At a time when American drivers are increasingly ditching passenger cars, Tesla hasn’t had a more conventional crossover to offer.
Tesla hasn't indicated where it plans to build the Model Y. Reports last week suggested the automaker was just beginning to secure suppliers for the vehicle.
But introducing the Model Y now, long before production will begin, risks cannibalizing interest from the Model 3.
Goldman Sachs analyst David Tamberrino warned on Wednesday that “this new product could further weight on Model 3 demand as consumers decide to wait a little longer to purchase a Tesla crossover vehicle.” Tamberrino, who has a sell rating on the stock, wrote that the Model Y could help boost customer deposits and replenish Tesla’s cash.
Musk is nothing if not a salesman, and Tesla events are always entertaining. Fired-up Tesla customers, board members and friends of the company typically turn out for a party that kicks off late in the evening. Musk takes the stage and after much buildup reveals the product, which is often a prototype years away from volume production. Fans film it all on their phones. People scream, “We love you, Elon!” Many put down deposits on the spot.
Thursday’s unveiling of the Model Y will take place at Tesla’s design studio in Hawthorne, Calif., near Los Angeles. The company hasn’t given much detail beyond an 8 p.m. local start time. Here’s a look at past reveals that give a clearer sense of how Musk uses the attention to communicate his grand plans.