Tesla Motors: Accelerating plans for production of 500,000 vehicles to 2018

Production at Gigafactory ahead of schedule, Panasonic to produce battery cells

2016/10/24

Overview
Announcement of the Master Plan, Part Deux, planning to release EVs in all major segments
Plans for launching new models, production, and sales: 500,000 vehicles to be produced in 2018
Tesla Motors: Construction of the "Gigafactory" large battery plant, Panasonic responsible for production of cells
Handling of Autopilot accidents: Strengthening measures to disable no-handed driving
Pessimism over the Model 3 sales target
Sales forecast by LMC Automotive: Tesla Motors' sales in 2019 to hit 210,000 units

Overview

The Model 3, which has received slightly fewer than 400,000 reservations (Photo: Tesla Motors)

In fall 2015 Tesla Motors released the SUV Model X, a variant of the Model S, and introduced the Autopilot highway semi-autonomous driving system on both models.

The company is expanding with unprecedented initiative. In 2015 it sold 50,595 vehicles globally, and plans to sell 80 to 90 thousand vehicles in 2016. Previously, the automaker had planned to sell 500 thousand vehicles in 2020. However, after 325 thousand reservations were received for the Model 3, which is scheduled to start production in the second half of 2017 at a base vehicle price of USD 35 thousand, the OEM decided to push its goal up by two years to 2018. Tesla will double the production capacity at its Fremont plant in California and accelerate its manufacturing plans for its Gigafactory, a massive battery plant, by two years. In September 2016, Panasonic, which is in charge of manufacturing battery cells, procured JPY 400 billion in bonds, and will use a large portion of the money to build facilities at the Gigafactory as well as for production.

Following the announcement of Q1 financial statements in May 2016, CEO Elon Musk announced that the OEM will accelerate its plans to achieve the production of one million vehicles in 2020 (a total of 100 to 150 thousand Model S and Model X vehicles, with the rest being Model 3).

There are many who voice concerns as to whether these plans for rapid growth can be achieved as they have been drawn up due to Tesla's lack of experience in mass production, and the massive investments that are needed from the OEM and its suppliers.

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