Tesla targets Nov. 2019 to start Model Y output, report says

 

Tesla Inc. is targeting November 2019 as the start of production for the Model Y small crossover, with production in China to begin two years later, two sources told Reuters this week, shedding some light on the electric vehicle maker’s next project that could tax its resources and capacity.

Reuters has learned the Silicon Valley company is accepting preliminary bids for supplier contracts on the Model Y, a compact crossover companion to the Model 3 sedan. Tesla has given suppliers scant 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 of next year, the two sources with knowledge of the supply chain said.

Tesla declined to comment.

The new Model Y details show that Tesla is pushing ahead on plans to build a new vehicle even as it struggles to produce the Model 3, which launched in July. Despite initially attracting about 500,000 advance orders in the form of refundable deposits, the sedan’s launch has been plagued by delays and manufacturing bottlenecks, postponing Tesla’s anticipated revenue stream and exacerbating a cash crunch for the money-losing company.

Earlier this month, Tesla tried to reassure investors, saying 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.

Competitive bidding is a crucial early step in the complicated process of automotive manufacturing. After the automaker discloses its plans, suppliers compete based on factors including cost and technology.

Tesla issued to suppliers what is known as a “request for information,” which gives a directional view of what will be needed.

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