Tesla's planned Gigafactory

Courtesy: Tesla

Tesla’s planned Gigafactory

General


In its quarterly letter to shareholders on Thursday, Tesla announced it will be on pace to deliver 100,000 vehicles annually by the end of next year.

At least it will, “provided that we execute well and there are no serious macroeconomic shocks,” the Palo Alto, Calif., electric vehicle manufacturer said.

That’s nearly triple the 35,000 Model S sedans that the company expects to deliver this year.

Several things are enabling that huge boost of the business, which has generally had bigger problems with supply constraints than with demand for its vehicles.

First, the company is ratcheting up production capacity at its Fremont, Calif., plant.

“We are building a new final assembly line and adding more automation to our body shop,” the company explained. “With advancements in automation and efficiency, our new assembly line has the capacity to produce more than 1,000 vehicles per week [in Q4] and the flexibility to build both Model S and Model X [the company's forthcoming SUV]. Production on the new line begins next week after a shutdown for the transition.”

The company later noted that it planned to “continue to invest in additional production capacity, continued Model X and Model S development” and other areas.

In addition, the company struck a deal late last year with Panasonic for 1.8 billion lithium-ion cells over the next four years, tripling its supply arrangement for the batteries that power Tesla vehicles.

The big leap clearly caught the attention of analysts, several of whom asked about it on the subsequent investor call. Meanwhile, Chief Executive Elon Musk called it “arguably one of the most interesting things” in its earnings announcement.

The production will likely be almost evenly split between the Model S and the upcoming Model X, Musk said.

“We’re talking roughly a thousand units a week of each,” he said.

UBS analyst Colin Langan asked whether the increase means that the battery constraints that have restricted Tesla’s production in the past were now “limited.”

“We see a path to potentially 150,000 cars a year, maybe if you really push it 200,000,” with available supplies, Musk replied.

Any big leaps beyond that, however, won’t be possible until the company’s much anticipated Gigafactory comes online later in the decade, Musk added.

Tesla announced earlier on Thursday a finalized partnership with Panasonic to construct the plant. By 2020, the company expects the massive facility to crank out batteries for up to 500,000 cars per year.




1 comments
markrogo
markrogo

That's an impressively misleading headline. The company's forecast is to be at 2,000 deliveries per week by the end of next year. It's forecast for this year is 35,000 vehicles. 


It has no forecast for 100,000 vehicles until at the earliest 2016. In fact, when pressed on 2015, CEO Elon Musk forecast less than a doubling of this year's 35,000, suggesting 60,000.


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