Tesla backpedals on plan to build Model Y at Nevada Gigafactory.

The company is now planning to add the crossover to its Fremont factory.

Tesla has decided not to build the upcoming Model Y at its Nevada Gigafactory as originally planned.

Speaking to "Ride the Lightning" podcaster Ryan McCaffrey, Tesla CEO Elon Musk admitted that he had been talked into building the Model Y at the existing Fremont, California, assembly site.

"I was skeptical about whether this made sense at first but my team convinced me the fastest way to get to volume production is to do the Y at Fremont," he said.

The company initially struggled to bring Model 3 production volume up to speed, requiring temporary soft-wall buildings to be constructed outside the walls of the main factory. The so-called 'tent' production suggested the site was at capacity building the Model S, X and 3.

A recent unofficial report claimed that Tesla is reconfiguring its Fremont factory to build the Model S and X on the same line. The Model Y borrows its architecture from the Model 3, suggesting Tesla may follow the same shared-line strategy for the mass-market sedan and crossover.

Tesla is currently aiming to begin Model Y production by the end of next year.