The company said on Wednesday that it has the capacity at its Fremont, California, factory to make up to 400,000 Model 3 and Model Y vehicles, combined, this year, compared to 90,000 Model S sedans and Model X SUVs. Tesla says it also has the capacity to make up to 150,000 Model 3s this year at its new factory in Shanghai.
Based on its production capacity, the Model 3 and Model Y could account for a significant majority of Tesla's 2020 sales. After setting a sales record of 367,500 vehicles last year, the company said it expects sales to "comfortably exceed" 500,000 this year. The Model 3 accounted for 82% of Tesla's sales in 2019, up from 59% in 2018.
While a further shift toward less expensive vehicles will likely dent the profit Tesla makes on each one, higher volumes and a more efficient production process could offset that effect, leading to higher overall profits.
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