I agree with these points.
One thing I'm unsure on is if we will be given a timeline for targeted start of production and targeted volume production. Also I wonder if we'll be told a final location for manufacturing.
I think Tesla are most likely internally aiming for pilot line in January 2020 and 3k per week production at GF1 by March/April 2020. This is so powertrain production exported to GF3 in China for Model 3s can immediately switch to Y production for GF1 when powertrain lines are ramped up at GF3 in March. Whether it is wise to disclose this ambitious timeline to the market given risks of delays I'm not sure.
In the Business Insider leak we were told:
- GF1 pilot line - 1 June 2020
- GF1 production - 1 August 2020
- GF1 2k per week - 1 September 2020
- GF1 7k per week - 1 December 2020
- GF3 Model Y pilot line - 1 October 2020
- GF3 2k per week - November/December 2020
- GF 5k per week - February 2021
These plans were reportedly sent to Tesla staff in September 2018, but at the time of the article at the start of December, Tesla said these were out of date. "The timelines and information shared here are outdated.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 company representative said."
One thing we know happened in this time period was a significant acceleration of the timeline for Model 3 production at GF3. This new timeline required ramping up GF1 powertrain production to supply GF3, potentially leaving excess production at GF1 once GF3 brings these components in-house. Therefore it seems logical for Tesla to accelerate Model Y plans to make use of this capacity.
So i think it most likely the Business Insider timeline was accelerated rather than delayed.
As to where it will be produced, I don't think Tesla necessarily has to make a firm decision until October/November. They can still order all the necessary equipment, but don't need to immediately specify the delivery address. I think it makes sense for paint, body line & assembly to take place at GF1, however, some equipment for components at Fremont/Lathrop/Seat factory may be capable of ramping beyond 7/8k Model 3s per week, and with minor capex may be able to also produce for Model Y. This will be a capex efficient option, and the marginal cost of delivery from Fremont to GF1 will be relatively low given Tesla already have empty trucks heading back to GF1 to pick up more battery packs.
Elon's comments on Y production on the Q4 call also said first production in early 2020:
- "And we're most likely going to put Model Y production right next to - in fact, it's part of our main Gigafactory in Nevada. So it will just be right there. Batteries and powertrains will come out and go straight into the vehicle. So that also reduces our risk of execution and reduces the cost of having to transfer parts from California to Nevada. It's not a for sure thing, but it's quite likely, and it's our default plan."
- "As I mentioned earlier, the Model Y, we think, most likely will be produced at Gigafactory, but that's - unless we encounter some obstacle - that's the default plan that we're proceeding towards. And it's fast, low risk and also low CapEx. In terms of the - I mean, probably there's like initial production of Model Y, very low volume, early next year. But then it always takes time to ramp up any production system, and that's difficult to predict the shape of that S-curve. So we feel confident in saying there will be volume production of Model Y by the end of next year, but in between the beginning of next year with low volume, it always starts with very low and it grows exponentially - from beginning of next year to end of next year, it's difficult to break that ramp. So that's our expectation for Y."
For context, Model 3 first production was July 7th 2017, it took around 9 months to get to around 1k per week, then another 3 months or so to get to 4/5k per week (which I'd really call volume production).
So Tesla took about 12 months to go from first production to volume production on Model 3 despite encountering huge difficulties, despite it being the first time they had ever mass produced a car and despite the vast majority of its components being unique and also having to ramp up for the first time.
In contrast, Model Y shares 76% of components with Model 3 - so 76% of the car is already in volume production. Tesla also now has experience of ramping to volume production and has learnt a lot from its mistakes.
So I think it very unlikely it will take anywhere near 12 months to get to volume production from first Model Y production "early next year".
