The Fremont Tesla factory is preparing for the production of the Y model, updating the S model

Tesla redevelops Fremont, Calif., Car plant to make way for the production of the Model Y crossover SUV, as well as an updated Model S with a more minimalist interior design and longer battery life, according to several employees .

These initiatives could once again drive up Tesla's costs, just as CEO Elon Musk is committed to personally reviewing every out of ten outgoing expenses. However, the start of production of the Model Y in 2019 allows Tesla to exploit the growing SUV segment as soon as possible, while an update of the Model S would help maintain or develop its share in the declining market for luxury sedans.

The company has just started ordering new equipment for the Y model, say employees. And while Musk hinted that Tesla would likely manufacture the crossover SUV in Fremont, Tesla did not officially announce that preparations had begun in the factory.

According to the insiders, Tesla has to combine the production of the S and X models by paving the way for the production of the Y model in Frémont. The lines of the car plant play an important role today, at least in part because the S and X are composed of many parts. The X model is particularly complicated to build – its features include falcon doors that open rather than suggesting that Musk compares it to a "Faberge egg".

In addition to the Y model, Tesla plans a complete update of the Model S, which, according to the employees, will probably include a minimalist interior of the new model 3, the same drive units and seats used in the upper part. model 3 and a battery with a range of 400 km with a full charge.

The company plans to start production in September for this update of the Model S.

Tesla has not responded to several requests for comments.

Tesla recently canceled plant visits due to "upgrades" to the plant, according to CEO Elon Musk, who did not say what the improvements were.

Meanwhile, production has already slowed down on the current S and X models. In the first quarter of 2019, Tesla laid off some of its production personnel from the S and X models and reduced the hours of work of those who remained, as CNBC had previously announced. Today, Tesla manufactures S and X only during Fremont's weekday workdays. According to current employees and former employees, there is no weekend or night production for these cars today.

Last week, Tesla reduced the prices of its $ 3,000 and $ 2,000 models S and launched a free boost incentive to seduce customers, prompting some badysts to question whether the demand for these models older and more expensive models faltered. This follows a series of upgrades made in April that have improved the range and loading speed of both cars.

Recently, in his calls to investors, Tesla reiterated its intention to deliver 90,000 to 100,000 cars in the second quarter of 2019 and at least 360,000 in 2019. He did not specify how many of them would be S models, X and 3, or finally, the Ys model.

Tesla shares fell by more than 10% last week due to investor concerns over demand, profitability and the impact of the US-China trade clash on Tesla. They recovered slightly after the disclosure of an email in which Musk had promised that Tesla was on track to meet its second quarter goals.

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