In yet another signal that Tesla (NASDAQ:TSLA) is getting better at manufacturing, the company's March-launched Model Y crossover is already beginning an international expansion, starting with Canada. The first deliveries of the vehicle in the market started last week. The Model Y's rollout to the country following the first U.S. deliveries of the vehicle happened much faster than the time it took the Model 3 to first make its way to Canada, highlighting the electric-car maker's accelerated pace of execution.
Here's a closer look at Tesla's progress with bringing to market its Model Y so far.
Canada meets Model Y
In March, Tesla impressed investors when it began deliveries of its Model Y six months ahead of its original schedule. Making the rollout even more impressive, Tesla said in its first-quarter update that its just-launched Model Y managed to contribute to profits during the period, marking the first time ever that a new Tesla product was profitable in its first quarter.
Now Tesla is achieving another important milestone for the vehicle by delivering the first units in Canada about three months after it was launched. For Tesla's Model 3, it took about six months for the first deliveries to occur outside of the United States.
It's not too surprising that the Model Y has already made its way to Canada. The company said in its first-quarter update that, thanks to a "simplified and scalable approach to manufacturing," it was able to build more Model Y vehicles in its first quarter of production than it did in the first two quarters of Model 3 production during 2017.
The Model Y represents a major growth opportunity
It's difficult to overstate the importance of the Model Y to Tesla's business. CEO Elon Musk has indicated he believes the vehicle will eventually outsell the Model 3 -- and the automaker isn't wasting any time investing heavily in the vehicle's production capacity. Tesla said it currently has the installed production tooling to produce 400,000 Model 3 and Model Y units annually on a combined basis at its Fremont Factory alone. In addition, Tesla is already building Model Y production capacity at factories in Germany and Shanghai, with deliveries of the important vehicle slated to begin in both of those markets in 2021.
Longer-term, Musk has said he estimates Model Y deliveries could grow to as much as 1.25 million units annually. Of course, this ambitious view for Model 3 is likely several years out, if it ever does materialize. Nevertheless, when viewed next to the approximately 393,000 vehicles Tesla has delivered over the trailing 12 months, it quickly becomes clear how imperative the Model Y is to the company's growth story.
Investors may want to keep an eye on any commentary management provides on the ongoing production ramp-up and delivery rollout of Model Y in future quarterly updates.