Tesla Inc. (NASDAQ: TSLA) is reportedly targeting November 2019 to begin production of its Model Y sport utility vehicle, a SUV crossover of the Model 3, with production in China beginning two years later, two source told Reuters.
Reuters learned that Tesla’s Chief Executive Elon Musk has begun accepting preliminary bids for supplier contracts on the Model Y. The company has issued suppliers what is known as a “request for information” or RFI, but did not provide a time frame for production. The vehicles are expected to built in Tesla’s Fremont, California plant, said the sources.
Musk expects a target goal to build one million Model Ys per year eventually, but a time frame was not provided.
Tesla declined to comment when Reuters reached out for a time frame on the Model Y.
The sources said that suppliers could be estimating an annual production of 500,000 vehicles in the U.S., but anywhere in the tens of thousands in China.
The sources also said that any major Model Y program will likely require a new facility, but low volume of the Model Y could be built on the pre-existing Model 3 line.
Musk has been known to be very ambitious with projects, which has caused concerns for many investors and customers.
Tesla unveiled its electric Semi truck and its Roadster back in November, even though the company had many production issues with its Model 3 line. The announcement seemed to upset many investors, saying that Tesla should be more focused on the Model 3 instead of planning for future production.
Model 3 production was severely delayed due to bottleneck production, Musk said previously.
In Tesla’s first quarter vehicle production numbers, the manufacturer produced 9,766 Model 3s and delivered 8,180 vehicles. Tesla was just shy of its forecast of 2,500 per week, but the numbers were much better than investors and analysts had expected.
The Model 3 has been a significant growth driver for Tesla and the slowed rate of production has caused the company to falter. Shares hit a new 52-week low earlier in April of $252.48.
Although Tesla is promising investors that it is ramping up production to meet expectations, many analysts and investors are still not sold.
"We believe the sustainable production rate for the second quarter of 2018 is most likely below the 2,000 vehicle mark the company achieved in the final week of the [first] quarter," Goldman analyst David Tamberrino wrote Tuesday. "We see the company likely sustaining Model 3 production around the 1,400 per week mark."
In which Musk replied with, “Place your bets . . .” on Twitter Inc. (NYSE: TWTR).
Tesla has seen the dollar amount of shares shorted increase by 28 percent in the past month to $10.7 billion, according to S3 partners. The percentage of Tesla’s available stock currently sold short exceeds 25 percent, according to FactSet.
Tesla shares have fallen 4.6 percent this year.