Tesla says the Model Y is coming in 2020

The Tesla Model Y - the SUV electric vehicle that CEO Elon Musk has been teasing and talking about since 2015 - will begin volume production by the end of 2020, the company said Wednesday in a letter to shareholders.

The automaker, which has yet to show a prototype of the vehicle, said it will begin tooling for the Model Y this year. And unlike Tesla's other electric vehicles, the Model Y will most likely be produced at the company's massive "gigafactory" in Nevada, Musk said during an earnings call.

Musk struck a bullish tone for the Model Y, predicting sales volume for the vehicle will be higher than its new Model 3.

Tesla also forecast that the cost of the Model Y production line should be substantially lower than the Model 3 line in Fremont, California because it will be built on the same platform and share about 75 percent of its components with Model 3.

The production ramp for the Model Y should also be faster, the company predicted.

Producing the Model Y at the gigafactory should reduce the company's risk of execution as well as the cost of transferring parts from Nevada to California, where the Model 3 is assembled, Musk said.

"This year should be a truly exciting one for Tesla," the company said in the shareholder letter. "Model 3 will become a global product, the profitability of our business should become sustainably positive, our new Gigafactory Shanghai should start producing cars, and we will start tooling for Model Y production."