According to Reuters, Tesla, Inc. (NASDAQ: TSLA) is aiming at November 2019 to be the start of production for its Model Y Sport Utility Vehicle. China production will begin two years later. This may drag down the company’s resources and capacity.
Elon Musk is accepting preliminary bids for supplier contracts on the Model Y, similar to the Model 3 Sedan. Tesla has provided suppliers vague details on the program with no production time frame but indicated that the production will be carried out in its Fremont, California, plant. Tesla has declined to comment on the matter.
Model 3 production has been difficult for Tesla but the company still pushes for the new Model Y. Although there were initial orders of about 500,000 in refundable deposits, the sedan’s launch has been disrupted by delays and manufacturing issues which is cutting in Tesla’s anticipated revenue stream and cash on hand.
Although Tesla has insured investors that it will not require additional funds, Moody’s has expressed its concerns about the company’s cash reserves and its ability to meet production targets. Tesla burned $3.4 billion last year. The sources claim that an annual production of 500,000 vehicles within the U.S., building 500,000 Model Y’s is the production target but the company is nowhere close to that target.