Having the Model 3 take sales from Model S or X wasn't great because it costs less. The Model Y is priced above the Model 3. People buying it instead would only increase their revenue.
Yes, but how many Model 3s will they sell when they start selling Model Ys? If they're selling 300,000 Model 3s a year, I would expect that number to decrease when the Y is released.
Suppose they don't compete with each other at all, so they continue to sell 300,000 Model 3s and then sell 200,000 Model Ys. Suppose they do, so in that case they drop to 200,000 Model 3s but sell 300,000 Model Ys. Isn't the second case better for them, since they get more for the Model Y than the Model 3?
