Tesla Shutters Production to Make Way for Its First SUV

Tesla Model X

Fremont, California-based Tesla Motors (NASDAQ:TSLA) has officially idled its factory for retooling purposes to get it ready for the production of the Model X crossover SUV, its second mass-market vehicle that’s expected to begin deliveries next year. It’s the first time the plant — Tesla’s only — has ceased production since coming online.

Tesla spokesperson Simon Sproule told Bloomberg in an interview on Monday that the reconfiguration efforts were a critical factor in Tesla’s jacking up production figures by 25 percent. He told the site that the upgrades mainly involve modifications to the factory’s body and general assembly lines, and will cost roughly $100 million.

“This represents the single biggest investment in the plant since we really started operations and enables us for higher volumes,” Sproule went on. “It gets us ready to build X and to do it on the same line as the S.”

Tesla is hoping to nail deliveries of 35,000 Model S sedans this year. That’s a 56 percent leap over the deliveries last year, but more impressively, it also comes as Tesla — for the first time — begins building a second vehicle, the X, at its facility. At the end of the first-quarter, Tesla was producing about 700 vehicles per week at it’s plant in Fremont.

TeslaFactory

But given how much is riding on Tesla’s ability to properly re-outfit the facility, don’t expect them to be sitting idly for long. “I’m sure with the popularity of the vehicle and need for production and the fact that it’s the sole production facility they are laser-focused on changing over and revamping it as quickly as they can,” said Michael Robinet, a managing director at IHS Automotive, told Bloomberg.

Sproule said that the pricing for the battery-powered crossover hasn’t been announced yet, but it’s expected to run at around the same price as the Model S, so $70,000 before federal and state incentives. Tesla employs over 6,000 individuals between its plant, headquarters, design center, stores, and service facilities.

“As they move forward and add more vehicles additional complexity will create more challenges,” Robinet said, also referring to Tesla’s third vehicle, the Model 3, which will be making its debut in 2016 or 2017. “Given what they had to do they’ve done a very good job. They are putting together very complex machines.” 

The idle is expected to last about 10 days, according to comments made by CEO Elon Musk back in May. Sproule added that the company had approached the 800 unit-per-week threshold ahead of schedule.

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