Tesla internal timeline for Model Y changes

Tesla
CEO Elon Musk at the opening of the company’s Nevada Gigafactory
in 2014.
AP

• Internal documents seen by Business Insider reveal that
  Tesla had plans to build its
  next new vehicle, the Model Y SUV crossover, at its
  Nevada Gigafactory and its yet-to-be-built
  factory in China. 
• According to the documents, which were sent before the
  company’s earnings call in October, the company had
  planned to ramp both factory’s Model Y production lines up to
  7,000 and 5,000 cars, respectively, by early 2021.
• The Model Y, which will be built on the Model 3
  platform, was slated to have a third row of seats, an IP Riser,
  and a center consul riser, according to the
  documents. 
• A Tesla spokesperson told Business Insider that the
  timeline and information in the documents were
  “outdated,” but did not specify any
  further.

Internal documents given to Tesla employees a few weeks before
the company’s October earnings release reveal the company had
plans to manufacture its next car,
the Model Y SUV, at a rapid speed.

According to the document, Tesla planned a production ramp of
7,000 Model SUVs a week at its Gigafactory 1 in Nevada by
December 20, 2020 and 5,000 Model Ys a week at its China
Gigafactory by February 2021.

Other details in the Model Y documents include: 

• The company planned to have a pilot Model Y line built at
  Gigafactory 1 by June 1, 2020, with standard operating procedures
  in place by August 1, 2020. By September 1, 2020, the company
  aimed to ramp production up to 2,000 Model Ys a week at
  Gigafactory 1. 
• The China Model Y pilot line was projected to be built by
  early October 2020 with the line ramping up to 2,000 Model Ys by
  November/December 2020.
• The Model Y, like any crossover vehicle, is built on a car’s
  platform. In this case, that car is the Model 3, so to build the
  Model Y Tesla is simply making some additions and changes to the
  Model 3 line.
• The Model Y documents reviewed by Business Insider outline
  manufacturing/design changes or additions to the vehicle that
  will make it different than the Model 3. They include the
  addition of an IP Riser, a center console riser, and third row of
  seats.

Business Insider sent an email to Tesla including these details
as well as a series of questions about these projections and
whether or not they may be used in a pitch to raise capital for
the company.

In response, a Tesla spokesperson said that the details in the
documents were no longer accurate. 

“The timelines and information shared here are outdated.
When we have details to announce, we will certainly share them.
In the meantime, we remain focused on Model 3, which we are
excited to bring to Europe and China early next year,” the
spokesperson said. 

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The company did not respond to follow-up questions
asking to clarify when these dates were set as goals, or whether
or not the general goal to manufacture the Model Y in 2020 —
which CEO Elon Musk discussed on the company’s third quarter
conference call — remained.

“It does seem like these timelines are quite aggressive
based on what Tesla has achieved in the past,” said Rebecca
Lindland, an executive analyst at Kelly Blue Book. “There was a
lot of fanfare when the company hit 5,000 Model 3s a week over
the summer. With this schedule, they’re looking at 7,000 Model Ys
a week [at the Nevada factory] by 2020 and that just seems very
high.” 

In the past, Tesla has struggled with launching new models as
smoothly as traditional automakers. In an interview with Axios on HBO,
CEO Elon Musk said that the ramp of the company’s most recent
model, the Model 3, took the company “single digit weeks” away
from bankruptcy this year.

“Essentially the company was bleeding money like crazy and if we
didn’t solve these problems in a very short period of time we
would die,” Musk said.

It’s not clear how the
timeline might have changed. But auto industry experts told
Business Insider that the original schedule may have presented
its own particular set of challenges. For starters, new car
launches often take three to five years to execute, not two.
What’s more, Tesla would have to grapple with building a new
factory in China before manufacturing the car there.

A former employee told Business Insider that these documents were
given to engineers to signal the end of their work on the Model 3
line, and the beginning of their work on the Model Y.

If you are a Tesla employee or customer who has a story
to share about a car or experience with the company, give me a
shout at [email protected].

Tesla

The Model Y is being built largely based on plans for the Model
3. In the auto business, they call that putting “a top hat” on an
existing model. That should make the process simpler than
launching an entirely new vehicle.

That said, industry experts told Business Insider that even with
this simplification, Tesla is still likely to face challenges as
it ramps up production of the new SUV. 

Tesla still needs to build out space for the Model Y at its
Nevada factory. It also still has yet to build, tool, and train
the workers in its factory in China. 
Once
that’s done, they will still need to hire and train staff
overseas.

“China is notorious for
turnover,” Lindland said. “They’re going to face higher levels of
turnover than in the states and there are cultural differences to
account for.”

One current Tesla employee, who asked for anonymity, said
he was worried the company isn’t learning from its previous
mistakes. Instead, he said, the company is exporting
them. 

A former engineer who was familiar with the company’s Model
Y plans also said the company’s expansion to China could present
issues. 

“It [the Model Y manufacturing plan] looks like copying and
pasting what they’ve done at Fremont … but now they’re facing a
new problem, working from China,” one former Tesla engineer told
Business Insider. 

“I think that the main flaw is he [Elon Musk] thinks the system
at Fremont can be replicated and that that replication is the
best way to spend capital, which it’s not. The system in Fremont
could use some upgrading in terms of lessons learned … What I
could imply from looking at [these documents] is that they’re not
going to apply those lessons.”

As an example, the engineer pointed out that currently, Fremont’s
production line doesn’t have buffer space for cars. So if
something goes wrong at the end of the line, the entire line has
to stop because there’s no space to move any of the cars ahead.
Based on these Model Y plans, the engineer does not think Tesla
is going to fix that issue.

If you are a Tesla employee or customer who has a story
to share about a car or experience with the company, give me a
shout at [email protected].