Elon Musk wants to manufacture half a million cars per year at the Fremont car factory (within a few years time). Possible?

Elon Musk wants to manufacture half a million cars per year at the Fremont car factory (within a few years time). Possible?

I think that this is an extremely high target. And yes, the Tesla Model S really is a super car, but only 1 model is not enough to create the demand to manufacture half a million cars per year. And the Model X is also a great car. But to really create a demand for half a million cars per year Tesla Motors must have 10 different Electric Vehicles on offer to all of the car markets in this world. That would mean that Tesla Motors will have to introduce 1 new Electric Vehicle per year as from 2013. Then it just might be possible to reach this target of manufacturing half a million cars per year as from the year 2020. But each of these 10 different Electric Vehicles must be succesfull. Will that happen? Is Tesla Motors that good? Both Model S and Model X are super cars, but will the next 8 models be also that good? I personally hope that they are, let me be clear about that. And ultimately time will tell. But I sure would like to know other people's opinion on this topic.

Hogfighter | 27/01/2013

I've had my car for about a month. Based on the rabid enthusiasm I've seen everyone, and I mean everyone, that I have shown the car to, That number seems quite realistic worldwide.

ghillair | 27/01/2013

After Gen III goes into production this is possible, but a lofty goal.
By then they will be producing:
Model S (version 2? Convertable?)
Model X
Gen III Sedan
Gen III Roadster

It will be GenIII that is most of the volume. There are many of us that beleive in Tesla but can not justify a Model S. If GenIII was announced tomorrow my reservation would be in before the sun set.

The plant is big enough for that volume. I beleive that when Toyota ran the plant they produced >400,000 a year.

Benz | 27/01/2013

The plant is indeed big enough to be manufacturing a half a million cars per year. That will certainly not be the problem for sure.

teddyg | 27/01/2013

I have heard Elon wants to be BMW size within a decade. That would be 1 million+ cars per year by 2022.
I imagine they will be around Porsche size when Gen III gets into production 150-200k cars per year in 2016 (with Gen III at 100k and Model S and X varients running around 50k each per year).

When they get to the 500,000 cars per year mark they will have to think of building another factory...I think eastern europe would be a good location here. European demand for EV's will be higher than USA due to higher gas prices, increasing taxes on ICE vehicles, and a more enviro friendly population. Eastern europe has lower wages so could keep costs down for would also allow for a central point for western european and asian deliveries.

Benz | 28/01/2013

Most of the major car companies have an enourmous range of models that they offer to their customers. One can buy a car in any size one can think of. There are many segments in the car industry (A to Z). The 3 smallest car segments are A, B and C.

The volume of small cars is the mostly the highest. Simply because these small cars are the cheapest to buy and to keep. That's why these small cars are sold in higher numbers every year.

Tesla Motors will also have to offer such a small car to be able to reach such high volumes per year.

Brian H | 28/01/2013

GenIII - a $40K car that is as cheap to own and run as a $15-20K car.

Benz | 28/01/2013

I think that first of all the Supercharger network will have to be completed in USA, Europe and Asia, before Tesla Motors will become a brand that sells really big numbers of cars annually.

RNB | 28/01/2013

Where does everybody "hear" all this stuff?

RNB | 28/01/2013

6K per week is what Nummi produced per wiki 312K a year

Benz | 28/01/2013

I am sorry, but I do not understand what you mean by:
"6K per week is what Nummi produced per wiki 312K a year".
Could you explain that please?

RNB | 28/01/2013

wiki=wikipedia, a popular internet resource to learn things
6k is shorthand for SIX thousand, you can figure what 312K means now

Benz | 28/01/2013

I know wikipedia, and I know that 6k is shorthand for six thousand, and that 312k is shorthand for 312 thousand. But what are you talking about? What is Nummi? And what did Nummi produce? Are you talking about cars?

Benz | 28/01/2013

The automobile manufacturing plant in Fremont, California, which Tesla Motors has bought in 2010 is called the Tesla Factory. And I think we should not talk about it as the NUMMI, because it has a new owner and they have decided to call it the Tesla Factory.

And 6,000 cars per week was the average since 1984. That does not mean that 6,000 cars is the absolute maximum number of cars that can be produced in the Tesla Factory. There is a big difference in manufacturing a car with a ICE and an electric car (which has far less components). If you would compare both cars technically (power train, transmission etc.), then you will understand what I mean. My point is that more than 6,000 cars per week can be manufactured at the Tesla Factory. Elon Musk has set a target, he must have thought about it very thouroughly. Time will tell if he is right or not.

Benz | 04/02/2013

The Tesla GEN III EV is going to be technically good.

In my opinion the new Mercedes A is a real good looking car. Therefore, it would be real nice if the Tesla GEN III EV would look a bit like this car. A good looking car is good for high sales volumes. And that is important to reach volumes of half a million EV a year.

Brian H | 04/02/2013

Elon has said the GenIII will look a lot like the MS, but smaller.

Benz | 05/02/2013

The Tesla Model S sure has got the looks as well, and a smaller version will do just fine.

Benz | 09/02/2013

And after GEN III? GEN IV? Will GEN IV be even smaller than GEN III?

Benz | 12/02/2013

If GEN IV will be a smaller EV than the GEN III, then it would be competing with the Volkswagen UP EV and the Chevrolet Spark EV. Both are to be revealed in 2013.

Bubba2000 | 17/02/2013

In order for a mass market GenIII to be viable, the battery energy density has to double and the cost/Kw-hr has to come down by half. In other words, we need a disruptive battery tech advance. I read about all kinds of possibilities, but now it is all pie in the sky. A higher density battery will reduce the weight of the battery, car and even energy requirements. Make the car affordable.

In the mean time, Li battery tech improves at 7%/year in terms of capacity/density. That should enable Tesla to address larger hi end markets, beyond early adapters. Meanwhile, costs can come down to $60k ASP for a 85P equivalent. Higher end cars could have 50% more KW-hr in 5-6 years. Advances in structural design, alloys could reduce the weight and extend nominal range to 500 miles.

Tesla will need hundreds of $millions if they want to built GenIII mass production capacity. So they better start selling more Model S+X, unless we get diluted again.

Competition will creep in sooner or later. Just Apple!

Benz | 18/02/2013

@ Bubba2000

Correct, yet it's only pie in the sky. And there will be more Model S+X sold, I think. Because more and more Model S are coming to the streets. And that is the best advertisement Tesla can have.

TeslaRocks | 01/03/2013

I don't think that the number of brands or models necessarily limit or support the number of sales. I think that price, quality, practicality, public awareness, and durability, for example, are much more important factors. I also don't see any problem with Tesla selling high luxury models while it also sells a model everyone can afford. People are smart enough to see the difference between two models, the same way jet engine sales for General Electric are not really affected because of the line of light bulbs. If a model (or brand) is a bad deal, people will (or should) vote with the feet and the dollars and it won't last. The thing is that if a lot of the technology of the model S finds it's way into Gen3 BlueStar, the model S will have to be refined further and get new improvements to remain a luxury car. That is how luxury cars used to work, back before people would buy them mostly just for the name in my opinion because an Audi is not much better than a Chevrolet and probably worse than a Honda in my opinion.

Superliner | 02/03/2013

Sure! "If they can be sold" or "the demand exists in the market" The sky is the limit as to how many cars Tesla can and will produce.

Brian H | 02/03/2013

In the nearer term, I think TM is going to blow Elon's 12/12/12 sales predictions for Model S out of the water. The demographics it is demonstrably appealing to are far wider than the standard 'premium plus' segment. One buyer, for example, sprang for more than the total of the 5 cars he had previously owned, lifetime. That is not a factor that any marketing model can cope with. Sales in the US this year will be surging again by this spring and summer. And the "owner-sales force" will hit like a tsunami.

In Europe and Asia, it's going to be even more powerful.


ttree | 02/03/2013

I have a 40kwh MS (Model S) due in a couple of months to come to me in Hamilton, Ohio, about half way between Dayton and Cincinnati. We have a Columbus, Oh, Tesla Service Center opening this month (March, 2013) which is 120 miles north of Hamilton and about 145 north of Cincinnati.

The MS 40kwh battery is enough to get me to Columbus where I have people there where I can charge up and also go to the Service Center there when needed. The closest public charging J-1772 outlet is in Monroe, OH, about 17 miles east of Hamilton, in the parking lot entrance of an outlet mall.

I'd be interested to know if there are any other Tesla reservation holders in the Dayton and Cincinnati areas.

khangng | 28/07/2013

Hi all! Tesla is in deed an amazing and revolutionary company. Besides Northern America, EU, and Asia, I wonder if will Southern America, Middle East and Africa get their own Tesla cars and service centers? Did anyone hear any news on that?

Thanks so much.

Benz | 28/07/2013

It's going to be worldwide, but that surely is going to take some time (I guess about 5 to 10 years?). Anyhow, there will be progres every year!!!

Teslation | 28/07/2013

500,000 car production at Tesla's Fremont plant by 2018-2020 no sweat with models MS, MX, MR, Supercar MR, G3ms, G3mx, Cabriolet MS (CMS), cG3ms, cabriolet MR, plus various versions of autopilot cars.

If that's not enough, Tesla's two skateboard platforms will allow for two small to mid size of trucks models MT & G3mt. Let us add semi-autonomous upgraded versions. For these autonomous models, put an A/a in front of all the abbreviations, AMS, AMX, AMR, Supercar AMR, ams, amx, AMT, aG3mt.

So that's 10-15 models/varieties at Tesla's Freemont plant.

But as others have said, Elon wants to get production into the millions. So I think a better question is how does Tesla get production to 5 million cars a year, with how many car plants and where, instead of can Tesla get to 500,000 cars a year.

Benz | 28/07/2013

@ Tesluthian

Well, Tesla Motors will advance it's production capacity step by step. Elon Musk said at the TESLIVE event that he thinks that they will be producing 800 cars per week by the end of 2014.

As time goes by Tesla Motors will open more car plants. I think that it will be good to have a car plant on every continent.

Teslation | 28/07/2013

For a European plant, a factory that produces a station wagon model would be good, since that seems to be a European specialty niche market now. Station wagons arn't as popular now in the U.S. as they use to be. So it makes more sense to have a station wagon plant over in Europe, since that's where those customers are. Not sure how the Asians feel about buying station wagons.

Now plant design. Should be built from ground up by Tesla for modularity and logistics efficiency. Buy plenty of land but start small, it should be expandable say from 500,000 vehicles to 2 million vehicles using a wheel and hub design. In the center is the metal stamping plant, spokes coming out from the center are different models/variations capable of 500,000 car production.

Now as sales increase keep adding spokes (different models) coming out from the hub.

The plant should have its own rail line and be located near a major rail line linked up to all of Europe. I think Europe has a good commercial rail line, perhaps you may know Benz ?

If possible have aluminum and steel recycling plants nearby for best ecology.

This might not be Tesla's 2nd or 3rd plant, but it could be the 4th or 5th Tesla plant.

I have some other ideas for plant number 2 & 3 that could get Tesla up to 5 million cars a year, two more platforms, and a sub 30k &sub 20k EV car.

Timo | 28/07/2013

@Benz, 800 cars / week is only about 13% of what NUMMI plant can produce when it is fully utilized. Tesla doesn't need to open more plants for some time, that one factory is enough for medium-sized car manufacturer for ever. If Tesla ever needs to build additional factories it would mean that it has grown to be one of the big ones.

Benz | 28/07/2013

@ Tesluthian

Generally speaking the rail system in Europe should be good enough for transportation of the Tesla EV's from the European Tesla plant to several countries.

By the way, the crash in Spain, that very much looks like to have been caused by a way too fast speed in a curb. You must have seen the news about it.

Benz | 28/07/2013

@ Timo

I did not say that they cannot produce more than 800 cars per week. Of course they can and of course they will do that. No doubt about it.

But Tesluthian and I were talking about production levels of millions of cars. That's a whole different game. More car plants will be required to reach that level.

And yes you are absolutely right that when additional factories will be built, it would mean that Tesla Motors will have grown to be one of the big ones. And that's what is going to happen. It's just a matter of time.

Timo | 28/07/2013

When you talk about millions of cars build, I think you might find this interesting:

I would be happy with Tesla staying comparably small high-end car manufacturer if others follow Tesla lead and turn to pure BEV production. I mean "millions of cars" is quite a bit more than for example MB produces each year. BMW already seems to take this seriously, I just hope that they make some sort of deal with Tesla to use their SC network with their cars. SC network is a key to BEV success, and I would hate to see tens of different solutions when one is enough.

Benz | 28/07/2013

@ Timo

I understand what you mean.

Elon Musk has said that the goal of Tesla Motors is: "Accelerate the advent of sustainable transport".

Tesla Motors is producing EV's, and they will keep on doing that.

At the moment the market share of EV's in the US is about 0.5% and that will rise in the coming years.

The question is how many car manufacturers will choose to produce EV's, and when (meaning how fast) they will decide that EV's are a viable solution to replace the ICE.

If many car manufacturers will soon decide to start producing EV's, then indeed you might be right, and then Tesla Motors may stay a comparably small high-end car manufacturer. But that would not be my choice. I would rather see Tesla Motors produce millions of EV's per year and someday even become the biggest car manufacturer of all. That would be really great. But time will tell.

Brian H | 28/07/2013

It is an interesting side not that TM got the ex-Nummi plant essentially for free. It paid Toyota about $40 million, and sold Toyota about $40 million worth of shares (from Treasury, before the company went public, so essentially cost-free). Terrific deal, even making it worthwhile to operate in Kookoofornia. (It had previously planned/committed to build in New Mexico.)

Brian H | 28/07/2013

edit: side note

Teslation | 28/07/2013

Timo, & Benz,

I think Tesla making cars in the millions will have the greatest affect in spuring real BEV production increases not just compliance cars. It will also allow Tesla to setup the most superchargers & battery swap stations.

Eventually battery swap stations could merge into repair shops/battery lease stations, especially when millions of Tesla cars start accumulating on the roads, which may be too many repairs for Road Rangers to handle. Fees at swapping/leasing stations may be one way to help finance those repair stations capex build out. Adding rental, loaner, test drive functions may also be a possibility.

I believe 5 million cars/year production is possible with just 2 more car plants, if Elon stays on as CEO until he is 60 yrs old. If Freemont is at capacity in 7yrs, the time to start thinking about plant #2 is now.

One aside. A really cool thing about autopilot cars, after testing they could drive themselves onto the trains & transport ships, convoy style, perhaps with only one lead driver. That would really save a lot of manpower.

Seems the military might also be interested in that sort of technology to save lives & might help fund it.

Benz | 28/07/2013

@ Brian

The Tesla Motors factory in Freemont (as I would prefer to call it, because I think that the name "NUMMI" now belongs to the past), is an important piece of the puzzle which was acquired right on time (and essentially for free), and as more and more pieces of the puzzle are placed on the right spot, the picture is getting clearer and clearer. Some people can already see the picture clearly, and some people need more pieces of the puzzle to be placed on the right spot before they will be able to see the picture clearly, but that's just a matter of time.

Benz | 28/07/2013

@ Tesluthian

"I believe 5 million cars/year production is possible with just 2 more car plants"

Wow, then those 2 other car plants must be huge compared to the Tesla Motors factory in Freemont (maximum capacity is 500,000 cars per year), right?

Bubba2000 | 28/07/2013

I think that Tesla can produce and sell 500,000 Model S+X alone at the Fremont factory. Model S is an excellent car and I expect Model X to excel.

The company could optimize the design of Model S to improve minor deficiencies like more headroom in the backseat, trim some weight with improved structural design use of stronger alloys, etc. Add safety features over time like smart cruise control, collision avoidance, park assist, etc. Same for Model X.

With economies of scale, falling battery prices, the cost of Model S and X could fall to the base price of $50,000 with a 85 KW-hr battery. With supercharge deployment in the US, Canada, Western Europe, and China, demand could take off. Many parts of the world have 100% taxes on ICE and $8-10/USG for gasoline and none for the BEVs. Until BEVs take off, this could continue.

GenIII is extra.


negarholger | 28/07/2013

the problem is not the car making - today the world makes in the order of 80-90 million cars a year. So there are enough factories and skilled engineers to run car manufactoring.
The growth will be in battery... 5 M cars x 5 k cells = 25 B 18650 cells - today the world makes 3 B Li-ion cells all formats. Who will control that production capacity.
And the battle will be in battery systems - Tesla proudly shows you the old car manufacturing with some new twists downstairs, but hides the interesting upstairs... battery systems is the secret souce. The company that is the low cost battery systems producer will dominate the market. And I think people don't realize how far Tesla is already down that path.

Timo | 28/07/2013

Five million cars is nearly twice as much as all cars combined build in US now. I think you are reaching a bit too far with that. If Tesla ever reaches even one million cars I think all other car manufacturers are doing the same by then. Remember that even that Tesla is successful it is still small compared to big ones, and they are not stupid, if they want they can conjure up cars much like Model S without much problems. After all there is nothing really new in Tesla cars.

Problem here is lack of want, not ability to do so. When others jump in this Tesla will have real competition and that pretty much halts the growth. Which doesn't mean that they are not successful, just that BEV has made breakthrough and ice-age is over.

negarholger | 28/07/2013

@Timo - the US consumes 12 M cars and produces 3 M ( including all the foreign brands BMW, VW,... made in US ). My main reson to support Tesla.
Germany, Japan are positive ( 3 M consumed vs 6 M produced ), but even China is negative ( 18 M vs 14 M )
There is room for 9 M cars produced in the US to become neutral. Will we ever get there ?

negarholger | 28/07/2013

"After all there is nothing really new in Tesla cars" - yes there is... battery system - can't buy a competetive battery system from a supplier. Boing, Nissan, GM are stuck on 19th century technology, only Ford seems to get it to some degree. My bet would be Ford, VW and BMW to catch up fastest, Benz and Toyota are in bed with Tesla anyway.

Timo | 28/07/2013

Tesla batteries as Panasonic batteries. I don't think Tesla deal prevents others making same deal.

negarholger | 29/07/2013

Wrong. Panasonic makes the batteries but they are Tesla specific design. Put these into your everyday device e.g. laptop and they are likely burn in no time. They only work safely in the Tesla battery system... and they are much cheaper to make then what Panasonic sells to other customers. That is the brilliance of Elon and his team. And btw Tesla has patents on that design.

Timo | 29/07/2013

Who cares if Tesla has patents, other manufacturers don't need to copy that, they only need to use similar kind of systems. They are Panasonic made for Tesla, but nothing prevents Panasonic to build for example BMW-specific system that doesn't work on Tesla. It's like touchscreens in Android/iPhone/Windows/whatever phones. You can't prevent others to use touchscreens with patents.

Brian H | 29/07/2013

No, they're TM proprietary chemistry and architecture, in the 18650 form factor, made by Panasonic for Tesla.
They are not available to anyone else, except through TM.

If you don't want to use the word NUMMI, at least spell Fremont right. ;p

negarholger | 29/07/2013

Timo - sure nothing prevents to make a different design which evades the patents. Question how much is the production cost. As I said the before the low cost battery system producer will win. Elon has a laser focus on that...
Exciting times to watch that battle to evolve