Tesla’s Elon Musk signals new factory for Model Y SUV

Tesla chief executive Elon Musk is talking about building a new factory for its next sport utility vehicle (SUV) the Model Y.

“There’s just no room at Fremont,” Musk told shareholders at Tesla’s annual meeting regarding the Silicon Valley automaker’s nearby assembly plant, The Wall Street Journal reports. “We’re bursting at the seams.”

Musk says Tesla is on track to start production of the Model 3 next month and then will begin taking order configurations. He is counting on the new sedan to help boost production next year to 500,000 from about 84,000 last year.

The Model Y could be on the road in 2019. “Probably demand for Model Y will exceed the demand for Model 3,” Musk says.

Acknowledging criticism over his plans to build the Model Y on a different vehicle platform than the Model 3, Musk says there are “major manufacturing improvements” that can be accomplished and the capital expenditure can decrease “by a factor of two” between the two vehicles.

“We actually made a mistake in trying to derive the Model X from the Model S platform,” he says. “It would’ve been better to just design an SUV the way an SUV should be designed. Design a sedan, the way a sedan should be designed. Otherwise, you’re just trying to shoehorn something that doesn’t make sense.”

Musk says he is giving “serious consideration” to three factories, ultimately at least 10 globally and possibly more.