2 New Details About Tesla's Forthcoming Model Y Crossover

By Evan Niu, CFAMarketsFool.com

Tesla's (NASDAQ: TSLA) Model Y is coming -- that much we've known for quite some time. But there haven't been many details about the forthcoming electric crossover SUV, perhaps most importantly when the Model Y may see the light of day. It's an important vehicle, as the categorical popularity of crossovers isn't going anywhere anytime soon. If anything, the trend is only accelerating; crossovers and small SUVs were the only two meaningful vehicle categories that grew in April (crossovers were up 7%).

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Even false rumors can send Tesla shares higher. On Tesla's earnings call yesterday, the company teased a few new details about the Model Y, which will complete Tesla's S-3-X-Y vehicle lineup.

Tesla's current SUV, the Model X. Image source: Tesla.

It could come as early as 2019

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Tesla is still targeting 1 million vehicle deliveries by 2020. When asked what it would take to get there, CEO Elon Musk said that the Model Y will be instrumental in hitting those volume targets:

Historically, Musk has a bad track record with promising timelines, so the temptation will be to automatically assume this will be delayed. But many skeptics have applied that same thinking to Model 3, which is misplaced since none of the underlying reasons why Tesla has had past delays actually apply to Model 3. The affordable sedan remains on track to commence production in July.

How quickly Tesla will or will not be able to ramp production is another question and remains to be seen. The only target that Tesla has articulated is reaching production of 5,000 per week "at some point in 2017."

It will be a whole new platform

For over 50 years, automakers have built numerous vehicles on standardized manufacturing platforms in order to streamline costs and improve production efficiency; Model S and Model X are based on the same platform. Given this, the presumption has been that the Model Y will be built on the Model 3 platform.

Nope. Instead, Tesla plans on creating an entirely new platform for Model Y. Musk has been talking at length over the past year about Tesla's "machine that builds the machine" concept, believing that its engineering resources are better used to innovate on the manufacturing side as opposed to product design. Anyone that follows Tesla (that isn't a science fiction enthusiast) has probably heard the term "alien dreadnought" more in the past year than ever before. Investors probably never thought they'd see that term in official SEC filings, either.

Musk believes that Model Y production will be meaningfully more automated:

Subsequently asked to clarify if that meant a new platform, Musk added, "It will be, yes, a different platform." In some ways, Model Y will be just as important as Model 3, as it will dramatically expand Tesla's addressable market once the company reaches the market for mainstream, affordable crossover SUVs.

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Evan Niu, CFA owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.