Elon Musk has served up some tantalizing new details about the Tesla Model Y, the company’s next entry-level electric car. The sports utility vehicle, a cheaper version of the Model X in a similar way to how the 3 is a cut-price edition of the S, will take some of the biggest lessons from previous vehicles to reach a staggering production rate of around one million cars per year.
“I’m pretty excited about how we’re designing Model Y, it’s really taking a lot of lessons learned from Model 3 and saying, ‘How do we design this thing to be easy to manufacture instead of difficult?’” Musk said during the company fourth quarter 2017 earnings call on Wednesday. The earnings report was tough for Tesla, which saw the company post its biggest loss ever of $675 million.
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The Model Y could help Tesla give other electric automakers a run for their money. While the Model 3’s $35,000 starting price tag has helped undercut the $62,700 price for the Model S, the $67,800 Model X means Tesla lacks an affordable sports utility vehicle for a more mass market audience. There’s big potential, and Musk knows it.
“I think we might aim for something like maybe capacity of a million units a year, something like that just for Model Y alone,” Musk said in the call.
The car has got fans excited. Jan Peisert, a web designer based in Düsseldorf, Germany, produced this concept art of the Model Y last June:
The company plans big investments for Model Y. While more than half Tesla’s approximate $3.5 billion capital expenditure for the coming year is expected to go toward the Model 3, Musk expects to make more investments in Model Y production around the fourth quarter. The CEO aims to share more details on production location in the next three to six months.
Musk is right that Model 3 production has been tough. When the company kicked production into gear in July 2017, the CEO referred to a “production hell” as manufacturing pushed through initial stages to produce cars at speed. It didn’t quite go tp plan, though: where Tesla expected to make 20,000 cars per month by December, the company only produced 2,425 Model 3s in the end.
“Seriously, how do we design out all the pain that we’re currently going through?” Musk said. “We do not want to experience it again. It was a lot of pain, I want to emphasize, the pain level is extremely high. I was in the Gigafactory on Thanksgiving Day as were many other Tesla people. It’s hardcore, okay. Seven days a week, there are no vacations. We don’t want to repeat that.”