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Tesla Preparing to Build Model Y in Fremont Factory

Finally, a Tesla Model Y update? In order to prepare for the upcoming production of the Model Y crossover SUV, it looks like Tesla is doing some remodeling in its Fremont factory.  An article posted by CNBC today shared this report, as well as the news that Tesla is planning a full Model S refresh coming later this year, sourcing past and current employees for this information.

Reorganizing the Fremont Factory

While Tesla is only just beginning to order the equipment necessary to make the Model Y’s production happen, it sounds like there are plans underway for the Fremont factory to be remodeled to allow for another assembly line. 

But remember that Tesla is already manufacturing cars in tents outside of the main factory building because space is too tight, and even CEO Elon Musk admits that the site is “packed to the gills”.  So how is Tesla going to make this happen?

One of the biggest steps towards finding the necessary space could be by combining the production lines for the Model S and the Model X into one.  Both cars require a lot of parts for manufacturing, which is why these lines already take up so much space on their own.  But with the rumored upcoming refresh of the Model S expected this fall (updating the interior and likely the exterior as well), combining the lines will likely become much more doable. 

Update on the Tesla Model Y

Production of the Tesla Model Y was originally slated to start in 2020, but it sounds like Tesla may have stepped up the timetable.  According to CNBC, employees are saying that Tesla aims to start producing the crossover SUVs this year in order to tap into that market as soon as possible.  The SUV market is over twice the size of the sedan market in the U.S., so it is only logical to jump into it as soon as possible. 

While the Fremont factory is an expected manufacturing point, it is not the only one.  Production is also expected to occur at Tesla’s Shanghai factory, which is currently under construction, for the Asian market.  And if Tesla ever gets a factory up and running in Europe, we can expect it to be a starting point for the Model Y as well. 

Since the Model Y shares about 76 percent of its parts with the Model 3, that should make it relatively easy for the Fremont factory to transition to its production. 

Financial Uncertainty

After an awful first quarter, finances have not been looking the best for this fledgling car manufacturer.  Tesla was forced to lay off a portion of its Model S and Model X production staff during that time, and those who remained had their hours cut.  These days those cars are only being produced during weekdays over the day shift in Fremont, with no weekend or night hours given. 

With Tesla prices changing yet again and new supercharging incentives being offered, some financial analysts find themselves wondering if demand is waning for these older, more expensive models.  Let us hope that the SUV market is as lucrative as Tesla hopes it to be so that they can pull out of their slump.

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