New crossover could be in driveways earlier than expected, and will feature improved range for AWD variants too.
- shares

Production of the Tesla Model Y crossover has officially commenced at the company's Fremont factory in California.

In its 2019 fourth quarter earnings report, released overnight, Tesla said it has begun producing the Model Y this month. Essentially a high-riding take on the Model 3, the Y is designed to tap into rampant global demand for mid-sized crossovers, and will go head-to-head with cars like the Fisker Ocean when it launches.

The company originally anticipated the car would start its way down the production line in October 2020.

It cautioned the "production ramp" of the new crossover will be "gradual" as it installs extra machines at its Fremont factory. Once these upgrades are complete by around the middle of the year, annual production capacity at the factory will rise from 400,000 cars to 500,000.

The company expects to begin delivering Model Y crossovers to customers, at least in the US, by the end of March this year.

Numerous sightings of undisguised Model Y vehicles in the San Francisco region in the last month or two suggested the automaker had already begun producing the car.

In addition to this, "continued engineering progress" has seen the claimed range, using the US EPA standard, of the Model Y AWD variants increased from 450 kilometres to 507 kilometres.

With its plant in Shanghai now in operation, the company can produce up to 150,000 Model 3 sedans for the Chinese market once it is fully up to speed. The automaker plans to begin making the Model Y in China from 2021, while "limited volumes" of the the Semi freight truck will be assembled this year.

Tesla says it expects to easily deliver over 500,000 vehicles this year, although it cautions "production will likely outpace deliveries this year" as it continues to ramp up production of the Model 3 and Model Y.

The electric automaker reported a profit of US$105 million ($155 million) for the final quarter of 2019, and says its business has "grown to the point of being self-funding" and expects to make a profit every quarter "with possible temporary exceptions, particularly around the launch and ramp of new products".