The Tesla Model Y in already in production and has been given a boost in driving range, making it the most “energy efficient SUV” on the market, Tesla CEO and co-founder Elon Musk said on Wednesday (US time).

“When people do a teardown of the Model Y I think they will be impressed with what they see,” Musk said at Tesla’s fourth quarter earnings call, where he confirmed that production of the Model Y commenced in Fremont in January.

Musk said that thanks to Tesla’s engineering team, the vehicle now has an increase in “real world” driving range from 280 miles (450km) to 315 miles – more than 500 kilometres – on a single charge.

“We managed to achieve by far the highest energy efficiency of any SUV ever produced at 4.1 miles per kilowatt hour, which means the Model Y AWD got an EPA rating of 315 miles,” Musk said at Tesla’s fourth quarter earnings call.

“This improvement is reflected on the configurator as of today. This is above what we’ve previously stated by a pretty significant margin,” he said.

“With great acceleration and top speed, it’s really just incredible specs all around.”

To put this in perspective, the most efficient crossover currently listed by the EPA is the Hyundai Kona Electric, which is given a “fuel economy” rating of 27kWh per 100 miles (160km).

Converting the AWD Model Y’s 4.1 miles per kWh comes to about 24kWh – the same as the 2020 Tesla Model 3 Standard Range Plus (the Tesla Model Y is not yet listed on the fueleconomy.gov website).

It is not known how many reservations there are in the US for the crossover Model Y, which Musk has previously said will outsell the Model 3. In Australia reservations are not yet being taken.

But anticipation for the Tesla Model Y crossover, which will join the popular Model 3 electric sedan when deliveries start be the end of March, is high and the new range increase will only add to that.

With an annual production capacity of 400,000 a year for both the Model 3 and Model Y and a program now underway also at the Shanghai Gigafactory 3 to get ready for Model Y production in China, Tesla says that annual capacity will reach 500,000 units.

Asked if he thought the release of Model Y would stifle Model 3 sales, Musk cited the case of the Model S, which instead of suffering when the Model 3 was released enjoyed an uptick in sales.

He says keeping up with demand will be Tesla’s major challenge in the next 12 months – a nice problem to have and one that the company has dealt with and learned from before with the Tesla Model 3.

“From our standpoint we are not worried about demand, we are worried about production,” Musk said.

“We’ve got make sure we get that production ramp going and reach volume production as soon as possible.”

See also: Tesla adds $20 billion in value on news of quarterly profit, Model Y ramp

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