Tesla Targets November 2019 to Begin Production of the Model Y Crossover
Electric automaker Tesla is targeting November 2019 to start production of the Model Y small crossover, with production in China to begin two years later, two sources told Reuters this week.
According to Reuters, Tesla is accepting preliminary bids for supplier contracts on the Model Y, a compact crossover version of the Model 3 sedan. Tesla has given suppliers few details about the program and had not provided a production time frame, but has now indicated the vehicle would begin to be built at its Fremont, California, plant in November 2019, the two sources with knowledge of the supply chain said.
Tesla just might have another hit on its hands if the company can pull off production of a new model. Sales of compact crossover SUVs are surging in the U.S. and the Model Y can potentially become a big hit for the company. But before introducing a new model, the company needs to reach its production goals for the long-awaited Model 3.
Nearly 500,000 people have put down deposits for Tesla's lower priced electric sedan, which starts at $35,000. At Telsa's current production rate, it will take years fulfill these orders. This gives rival automakers plenty of time to deliver a mass-production electric car to compete with the Model 3.
The new Model Y shows that Tesla is pushing ahead with agressive plans to build a new vehicle, despite production bottlenecks and costs associated with the Model 3. The sedan's launch has been plagued by delays and manufacturing bottlenecks leaving the company short on cash. The company burned through $3.4 billion last year.
Tesla tried to reassure investors last week and said its weekly Model 3 output had doubled during the first quarter and that production rates would accelerate through the second quarter to 5,000 units per week, or about 250,000 vehicles per year. However, since beginning production of the Model 3 in July 2017, Tesla only managed to build around 15,000 Model 3s.
Telsa's plans for a second factory in China might be vital to produce the Model Y. It does not appear its Fremont, California assembly plant can ramp up production anytime soon to make both the Model 3 and Model Y, while still producing the Model S and X.
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