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Despite the troubles around the ramp-up of its Model 3 production, Tesla is already eyeing the launch of its next model, the Y, in November next year, two unnamed sources told Reuters.
This will be the carmaker’s first sports utility vehicle, and the company is currently accepting preliminary bids from suppliers. This is yet again a demonstration of Tesla’s aggressive approach to deadlines.
As Reuters notes, the competitive bidding process for car part suppliers usually takes between two and two and a half years. If, however, the start of production for the Model Y is slated for November 2019, this gives bidders little more than a year and a half to come up with their best offer.
Yet this time the shorter timeframe might just work, one of the sources said, because the Model Y will be assembled on the same platform as the Model 3. This will only be the initial production, however, as the factory in Fremont is not large enough to handle the annual target of one million Model Ys Tesla has set.
Capital spending on the Model Y will begin in late 2018, and observers are wondering if that won’t prompt Tesla to raise fresh funds given its unenviable cash position right now. Elon Musk said last month that Tesla does not need any more cash injections this year. But some analysts, notably Moody’s, said the carmaker would need more cash—and soon. Moody’s estimated its needs at US$2 billion, after last year Tesla went through US$3.4 billion.
Some are wondering if this is the best time to work on yet another model before production of the Model 3 has ramped up. Others are questioning the 1-million Model Y target, with Reuters’ sources suggesting that the suppliers that will bid for the project are probably estimating actual annual production targets of half that number.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.