Tesla will begin investing in a Model Y crossover in late 2018

Key Points
  • Tesla will invest in a Model Y crossover later in 2018.
  • The company wants to design the vehicle to be as easy to manufacture as possible.
The Tesla showroom at Park Meadows Mall March 31, 2016
John Leyba | The Denver Post | Getty Images

Tesla will begin making capital investments for its planned Model Y crossover late in the third quarter or in the fourth quarter of 2018, CEO Elon Musk said on a conference call on Wednesday.

The company wants to design the vehicle so that it removes as many of the headaches Tesla had to go through to produce earlier models. Musk spent at least one Thanksgiving working at the Gigafactory, which he does not want to repeat, he said.

He also said he may delve more into details about the Model Y on another earnings call later in the year. Tesla reported financial results for the fourth quarter of 2017 on Wednesday.

Justin Sullivan | Getty Images

The Model Y would be Tesla's first crossover vehicle — a segment that is growing faster than perhaps any other in the U.S. passenger vehicle market. Tesla currently makes one sport utility vehicle, the Model X, and two sedans. This is at a time when Americans are shifting away from cars and toward SUVs and trucks.

Tesla has struggled over and over again to ramp up production on earlier models. The company said it is on track to reach a key production goal on the Model 3, which it had previously delayed several times. The Model 3 is a more affordable electric sedan that starts at $35,000.

The company also was delayed on production of its Model X sport utility vehicle, which had dazzling but complicated features, such as falcon wing doors.

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