Tesla’s CEO Elon Musk confirmed yesterday that he has already approved a prototype for the Model Y. This is the clearest indication so far that the all-electric crossover SUV could be hitting the market very soon. However, Musk said that full volume production of the Model Y won’t start until 2020. This has been Tesla’s plan all along and it seems the company is still on course.
During a call with investors, Musk said that the company has made significant progress with the Model Y. The news comes as Tesla gets ready to report the first profitable quarter in two years. Musk had previously teased fans on Twitter that the Model Y could be available as soon as March 2019 but it looks like things have changed now. However, the CEO didn’t offer more details on the car during the conference call. According to people close to the source, the main reason why the company is yet to start production is due to limitations with its manufacturing infrastructure.
Tesla is already operating above limits in its Fremont, California factory. In fact, a recent report noted that the company has to build a giant tent next to the factory in an effort to increase capacity as demand for the Model 3 sedan continues to increase. Although the American automaker has invested in a huge Gigafactory in Nevada, at the moment only 30% of this facility is being used. There seems to be enough room here, but the company needs money and time to put together the tools and the infrastructure needed to support car production and assembly.
The Nevada facility has largely been used to make batteries for all Tesla cars and other devices. However, internal documents from Tesla show that the company is planning to make at least two cars there. It’s very likely that these two cars will be Model 3 and Model Y. After all, Musk said during the conference call with investors that the goal was to get Model 3 production up and running by the end of 2019. The Model Y could also be produced in the factory. However, depending on the demand for the Model 3, by the time 2020 gets here, it may be too difficult to use the Nevada factory for the Model Y.
But Tesla doesn’t want to build another factory. This will take time and cost more money and when you consider that the company is on very tight production timelines, any delays will not be welcomed. The Model Y is expected to be one of the most promising opportunities for Tesla. The American car company has already recorded outstanding success with the Model 3 despite dealing with initial production struggles, and Model Y is expected to follow the same path. Analysts argue that Tesla has learned quite a lot from the success and challenges of the Model 3. They will be launching the Model Y at a position of strength in the market and this is likely going to have a positive impact on sales in the long run.