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March 7, 2019

Tesla Model Y factory location uncertain – report

Tesla executives still have not decided where to manufacture the company's forthcoming crossover SUV, the Model Y, according six current and former employees who spoke to

By Olly Wehring

Tesla executives still have not decided where to manufacture the company's forthcoming crossover SUV, the Model Y, according six current and former employees who spoke to

This despite the fact the company is planning to formally unveil the vehicle for the first time on 14 March 14 at its design centre in Hawthorne, California.

Two other people who work for Tesla vendors told CNBC the automaker did not contact them about working together on Model Y production until after CEO Elon Musk teased the unveiling in a tweet on 3 March. That's one indication Tesla has barely begun planning for Model Y manufacturing, they said.

Musk has already said the Model Y should cost about 10% more than the Model 3, which starts at US$35,000.

Employees told CNBC Tesla executives, including president of automotive Jerome Guillen, were wavering between two options for Model Y production, trying to decide whether Tesla should allocate space in the Gigafactory, the company's massive battery plant outside of Reno, Nevada, or combine the Model S and Model X body lines at its car plant in Fremont, California to make room to build the crossover SUVs.

One employee said if executives had made a decision, they hadn't given a green light to employees who will be involved in setting up the Model Y lines and eventually building the vehicles.

A Tesla spokesperson pointed to a February letter to shareholders, but declined to offer CNBC an update on Model Y planning. The letter said: "This year we will start tooling for Model Y to achieve volume production by the end of 2020, most likely at Gigafactory 1."

Current and former employees said setting up a Model Y line at the Gigafactory may require cooperation from Panasonic, Tesla's battery cell supplier and major partner in the Gigafactory.

When Tesla and Panasonic established their Gigafactory partnership in 2014, their agreement said the two companies would have to mutually agree on how to manage "the land, building and utilities" at the facility.

Employees told CNBC the Gigafactory is constantly under construction, and not currently set up to handle things like body panel stamping, glass and seat installation, painting of cars and end of line quality control for assembled vehicles. Parts of the Gigafactory are cramped already so it's to imagine how Tesla can make room for increased battery production, material flow and workers needed to make the Model Y there in high volumes.

Gigafactory workers told CNBC that, while the company's semi-automated battery production lines have improved by leaps and bounds in the past year, Tesla is still not consistently making 7,000 vehicle batteries a week there. Workers said they were striving to hit an 8,000 per week goal which should allow Tesla to make 416,000 cars in a year.

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