Tesla CEO Elon Musk has announced that preparations for the production of the company's new SUV, Model Y, has now begun. Other than simply introducing the new vehicle, Musk also predicted this vehicle line’s success upon release. Here’s what we know about this bold announcement.

According to CNN, Tesla will begin production of the Model Y SUV this coming 2020. So far, this is the second shot of the car company at making SUVs. However, Musk already seems to be confident about its success. “The demand for Model Y will maybe 50% higher than Model 3, could be even double,” Musk told investors during a conference last week.

Based on Musk’s figures, the Model Y is a valid contender against the leading SUV in sales, the Toyota Rav 4, in the U.S.

Previously, Tesla dabbled with SUVs with their Model X SUV, which was released in 2015. However, this SUV proved too difficult to produce and also costs around $132,000 to $144,000. This price is definitely far away from the budget of many of its customers, so they will definitely opt for a cheaper choice. Currently, the Toyota Rav 4 costs around $25,500 to $33,500 on its higher end versions.

It is uncertain if Tesla plans to release the Model Y at around the Rav 4’s price. However, Musk confirmed that the Model Y will be built on a similar platform as the Model 3 sedan and share 75 percent of its parts. This plan is aimed at reducing production costs and time needed to produce the upcoming Model Y. As of now, Tesla has at least more than half of this year to produce the Model Y if the company needs it out in the market as early as January 2020.

As of now, many prefer SUVs over sedans in America. While Tesla has been making strides with its electric cars, most of them are sedans which do not appeal to the American market. Other companies like Ford, General Motors and Fiat Chrysler have been focusing more on SUVs than sedans in response to this increased interest.

Tesla Model S and X Soon, we'll see another SUV among these Tesla Models by 2020. Pictured: A picture taken on July 31, 2018 shows a Model S (L) and Model X (R) electric cars of US car maker Tesla parked on a parking in Oslo, Norway. - In the first half of 2018, Tesla has become the fourth company with the highest number of complaints to the Norwegian Consumer Council. Photo: AFP/Getty Images/Pierre-Henry Deshayes