The Model Y will transform Tesla's manufacturing process.

Tesla will take it's manufacturing to the next level with the production of the Model Y.

During Tesla's first quarter earnings call, Musk said that the company would make significant automation improvements to its production line with the Model 3, but the Model Y is where the manufacturing process will really become

"With the Model 3, I think we will be roughly comparable with the best high-volume vehicle production lines in the world. Better in some respects, a little worse in others, but roughly comparable," Musk said.

"Then where things will really be a step change beyond any other auto manufacturer will be the Model Y factory. And this is both a function of designing the product to be easy to manufacture and easy to automate as well as designing the factory itself. So Model Y is where I think it really becomes a step change," he said.

Tesla has been investing heavily in automating its manufacturing process.

In November, the automaker announced it was acquiring Grohmann Engineering, a German engineering company that specializes in making automated manufacturing systems.

At the time, Musk said Tesla's factories would become increasingly more important as the company grows its production volume.

"As the machine that builds the machine, our factories are so important that we believe they will ultimately deserve an order of magnitude more attention in engineering than what they produce. At very high production volumes, the factory becomes more of a product than the product itself," Musk said in a statement.