At this point, Tesla is focused almost entirely on the mass-market Model 3, for which it has received more than 400,000 reservations. A new report from Autocar claims that the Elon Musk-led company could unveil its Model Y compact SUV sometime next year. The compact crossover is said to be based on the same platform as Model 3, and will be more affordable than the premium Model S and Model X.

Tesla Model Y coming
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Tesla should speed up the Model Y launch

The Model Y is expected to cost a little more than Model 3, which is likely to cost around $37,000. However, the actual transaction prices could be even higher considering a large number of buyers would want to add optional features to their vehicles. Tesla CEO Elon Musk has confirmed in the past that Model Y would come with falcon wing doors similar to the Model X.

Another Model Y feature that Elon Musk has teased is its electrical architecture that would allow the California company to offer full autonomous driving functionality. According to Autocar, it will include eight cameras, 12 ultrasonic sensors, and a ‘new’ forward-facing radar that would work in all weather conditions. Elon Musk has described the new electrical architecture as a “supercomputer inside a car.” It will reportedly be 40 times more powerful than those used in previous Tesla vehicles.

It makes sense for Tesla to unveil Model Y in 2018 and bring it to the market by 2019. Elon Musk plans to unveil prototypes of an electric pickup truck and semi truck this year. The Model Y is said to hit the roads before either of the two vehicles. The Model Y has even greater potential than the mass-market Model 3 considering the rising consumer demand for SUVs and crossovers even as sedan sales continue to decline.

Tesla ramping up production

Model Y is part of Tesla’s plan to ramp up annual production to 500,000 vehicles in 2018 and one million units in 2020. The EV maker delivered 76,000 cars in 2016, with production reaching 2,000 vehicles per week in the second half of the year. Achieving the production target of one million units would help Tesla churn out healthy profits and secure its long-term future.

Amid all the optimism, it’s worth pointing out that the compact SUV might not be ready for unveiling by next year. Right now, the California company’s biggest priority is Model 3. On top of that, vehicle design, testing, and validation tend to take years. Since Model Y is said to have a greater frontal area than the Model 3, it may require a bigger battery pack to offer the same range as Model 3.