Tesla preparing for a cheaper Model Y with 4 million unit annual production capacity: Report

Tesla is reportedly working on a production capacity plan for a smaller version of the Model Y, according to a new report from Chinese media outlet 36kr.

Citing several industry insiders with knowledge of the plans, the report claims that the automaker is building an annual capacity plan of up to four million units for a “low-priced small Model Y.” The sources stated Tesla is still in the early stages of planning, but that production capacity will be spread across its factories worldwide, including the newly announced Gigafactory Mexico.

The report stated that Tesla’s North American plants, Fremont, Giga Texas, and Giga Mexico, will take on two million units of capacity, with the Mexico plant taking on the bulk of that capacity. Meanwhile the factories in Berlin and Shanghai will each take on one million units.

We shouldn’t expect an announcement from Tesla on this smaller Model Y any time soon, with the sources explaining production is “at least one year away.”

The media outlet attempted to reach Tesla China for a comment on the report, but the company has not yet replied. Given Tesla China’s inclination to respond to reports such as this, it would not be surprising to see an official comment soon.

It is no secret that Tesla wants to produce a cheaper electric vehicle priced at around $25,000, with CEO Elon Musk saying at Battery Day in 2020 it could arrive as early as 2023. While this smaller Model Y is expected to be cheaper than the larger version, it is not clear if this is the same $25,000 vehicle that has been referenced over the years.

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