Tesla: Aiming for annual production and sales of 1 million vehicles in 2022
New plants to operate in Germany and U.S.; production of batteries in-house at half the cost
2021/05/10
- Summary
- Production of Model Y at plants in Berlin and Texas to start
- China: Delivery of locally made Model Y starts in early 2021
- In-house production of batteries at 56% lower cost, enhancing partnerships with Panasonic, LG Chem and CATL
- Tesla launching the Cybertruck pickup truck and the Semi, a Class 8 heavy-duty truck in 2021
- Traffic Light & Stop Sign Control and FSD City Streets added via software update
- Tesla reports its first annual profit in 2020
- Deliveries expected to increase by 50% to around 750,000 in 2021
- Sales Forecast by LMC Automotive: Tesla’ s sales to achieve 963k units in 2024
Summary
Tesla plans to boost its annual production capacity to one million vehicles in 2021-22 while starting operations at new plants under construction in Berlin, Germany and Texas, USA. From 2021, Tesla’s global vehicle deliveries are expected to grow by more than 50% a year on average and exceed one million units in 2022.
In China, Tesla delivered 137,000 electric vehicles (EVs) in 2020 according to the China Passenger Car Association (CPCA). Sales of EV passenger cars by manufacturer were led by SAIC-GM-Wuling, followed by Tesla. In January 2021, Tesla started deliveries of the locally built Model Y and intends to boost its sales further. However, the competition is intensifying in the Chinese market as other foreign automakers are actively introducing EVs while Chinese manufacturers are launching low-cost EVs.
As a part of its cost reduction strategy, Tesla intends to also improve its battery business. At the Tesla Battery Day held in September 2020, the automaker announced plans to produce lithium-ion batteries in-house at half the cost by improving aspects such as battery cell design, production process, anode and cathode materials, and battery pack structure. Tesla’s plans include building an annual production capacity of 100 GWh (for 1.4 million EVs) in-house by 2022. Tesla will also secure rare metals used for its own battery materials and enhance its partnerships with battery suppliers.
Regarding new model launch plans, Tesla plans to release the Cybertruck pickup truck in late 2021 and the Semi, a Class 8 heavy-duty truck, in 2021, two years later than originally planned. In addition, a compact vehicle designed for European cities is scheduled to be released by 2023, and the Roadster and a minivan are planned to be launched after 2023.
As for autonomous driving technology, Traffic Light & Stop Sign Control and Full Self-Driving (FSD) City Streets beta testers have been introduced in Tesla vehicles via over-the-air (OTA) software updates in 2020. In October 2020, Tesla raised the price of the FSD software update option to USD 10,000. Despite its name, Tesla’s FSD technology is currently considered to meet the requirements of Autonomous Driving Level 2 (SAE), which requires monitoring by the driver.
Tesla’s revenues for 2020 increased by 28.3% year-over-year (y/y) to USD 31.536 billion and net income was USD 721 million (vs. a loss of USD 862 million in 2019). This was the first profitable year for Tesla since going public in 2010. Tesla benefitted from the start of operations at its Shanghai Plant at the end of 2019, which increased local vehicle production, reduced costs, and expanded profit in China. Tesla’s global production for 2020 increased by 39.6% y/y to 509,737 units while its global deliveries grew by 36% y/y to 499,550 units. The automaker’s results were supported by an increase in demand in China where economy recovered quickly from the impact of the COVID-19 pandemic in addition to the expansion of demand in the US.
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| Model S - Front Interior (Source: Tesla) | Gigafactory Shanghai – Model Y Die Casting (Source: Tesla) |
Related Reports:
The Battery Show & EV Tech Digital Days 2020 (Dec. 2020)
OEM Operations in the U.S. in 2020 (Dec. 2020)
Is Tesla an Auto Company or a Tech Company? (Nov. 2020)
Tesla Bets on Urban ADAS: Traffic Light & Stop Sign Control (Aug. 2020)
The Future of Onboard Computers (Jul. 2020)
Tesla: Improved performance with growing Model 3 deliveries, launching Model Y SUV (Mar. 2020)
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