4 ms·

Wow, they expect to be selling half a million vehicles/year in six years. That would make make a Tesla a major automaker, roughly in the same league as househo

by cs702 13y ago

Wow, they expect to be selling half a million vehicles/year in six years. That would make make a Tesla a major automaker, roughly in the same league as household-name auto brands -- you know, the ones that advertise in the Super Bowl.

mikeyouse 13y ago
Wow, they expect to be selling half a million vehicles/year in six years. No no no, they expect to sell batteries to power half a million vehicles per year.. They intend to supply other auto companies with battery packs. That would make make a Tesla a major automaker, roughly in the same league as household-name auto brands. It would still be a magnitude smaller than all 'major' manufacturers. Toyota sells ~10M/year, GM ~9.5M/year, VW ~9.2M/year, Ford ~5.5M/year, Chrysler ~2.4M/year, BMW ~2M/year.. There's no shame in being a wildly profitable smaller manufacturer though.
- basicallydan 13y ago
  The Gigafactory PDF does make it sound like it'll be 500,000 vehicles per year, though. Perhaps it's left vague because "500,000 batteries" just doesn't sound like a lot of batteries to most people.
  - cdash 13y ago
    Well they could just use the number of actual cells there are in a battery pack which I think is 7k. So that is 3.5 billion battery cells per year. I think 500k cars is much better to understand though.
    - Crito 13y ago
      Yeah, saying "3.5 billion battery cells per year [for cars]" could make it sound like they delusional expect every other person in the world to be buying a new electric car every year by 2020.
- cs702 13y ago
  Ah, that would make more sense. That said, half a million vehicles would make them 1/4th the size of BMW and 1/5th the size of Chrysler. For me, that's "roughly in the same league as household-name auto brands." (For reference, right now, they are around 1/100th the size of BMW and Chrysler.)
  - Crito 13y ago
    500k/year would put them in the same ballpark as the American subsidiarity of Hyundai (Hyundai Motor America) which made 720,783 cars in 2013 (http://www.hyundainews.com/us/en-us/Corporate/SalesReleases/PressReleases.aspx http://www.hyundainews.com/us/en-us/Corporate/SalesReleases/...). Obviously less than Hyundai internationally, but that might be an easier example to wrap your mind around.
- cwal37 13y ago
  A few hundred thousand vehicles does put them at Subaru's level in America though. http://www.subaru.com/company/news/ http://www.subaru.com/company/news/
- Aloisius 13y ago
  The Gigafactory pdf indeed says 500,000 Tesla vehicles on page 3: 2020 Tesla Vehicle Volume ≈ 500,000/yr
  - mikeyouse 13y ago
    Good find, but that contradicts many of their earlier numbers. More importantly, Tesla bought the old NUMMI plant from the GM/Toyota consortium to use as their manufacturing facility. The peak production under NUMMI was only 400k cars/year, so they'd have to get an additional 25% utilization out of a facility that was running 3 shifts/day in many areas. I'm fairly skeptical they can do that, especially by 2020. Going from 60 cars/day (current production rate) to 1,500/day is no small feat.
    - ghshephard 13y ago
      "The peak production under NUMMI was only 400k cars/year, so they'd have to get an additional 25% utilization out of the facility. " Or open a second factory.
      - mikeyouse 13y ago
        If they maxed out the "Tesla Factory" (formerly NUMMI), they'd still need ~100k vehicles/year from somewhere else. GM just announced they're spending ~$1.5B on a 150k vehicle/year plant in China. Assuming the new Tesla factory would be more expensive, since labor cost in the US demands more automation, they'd be looking at ~$2B to build a new facility. Plus the costs from the upgrades at the Tesla Factory. I have a hard time seeing Tesla deploying $5B in CapEx in the next 5 years when they only have $700M in PPE now and $800M cash in the bank. When they retool for the Gen III 'Model E', I'd expect about $1B in capital investment to satisfy a production level of ~150k cars/year.
        toomuchtodo 13y ago
        CapEx is probably significant robotics infrastructure. You can't automate everything in the plant. Yet.
- whistlerbrk 13y ago
  Very interesting, I did not know selling the batteries was part of the plan. Are the trying to remain independent though or would they be a very large acquisition target long term then? I suppose they could license out large format battery tech to a number of other industries as well?
  - mikeyouse 13y ago
    Selling batteries might be a bit of a misnomer since they'll probably be working with their existing partners (Toyota[1] and Mercedes[2] primarily) who would both presumably invest in the battery facility too. The 500k cars worth of batteries would probably be some combination of Teslas, Toyotas, and Mercs. Since the latter two companies have already invested in Tesla, and have working partnerships, they would probably get the batteries for the same price as the Tesla internal transfer pricing. (Mostly speculation on my part) It then wouldn't be a profit center for Tesla as much as it would leverage the scale of a bigger facility to lower tech costs for all three companies. [1] - http://www.teslamotors.com/about/press/releases/tesla-motors-and-toyota-motor-corporation-intend-work-jointly-ev-development-tm http://www.teslamotors.com/about/press/releases/tesla-motors... [2] - http://reviews.cnet.com/coupe-hatchback/2014-mercedes-benz-b/4505-10867_7-35832669.html http://reviews.cnet.com/coupe-hatchback/2014-mercedes-benz-b...
Geee 13y ago
I don't think that's just Tesla vehicles, they'll probably supply them for others too? Anyway, Tesla's goal from the beginning has been to eventually take the market leader position by being the first-mover in the electric car disruption.
deleted 13y ago
[deleted]
loceng 13y ago
It's very possible. Their factory has the capability to produce 500,000 vehicles per year - that's one vehicle every minute.

by cs702 13y ago

mikeyouse 13y ago

Wow, they expect to be selling half a million vehicles/year in six years. No no no, they expect to sell batteries to power half a million vehicles per year.. They intend to supply other auto companies with battery packs. That would make make a Tesla a major automaker, roughly in the same league as household-name auto brands. It would still be a magnitude smaller than all 'major' manufacturers. Toyota sells ~10M/year, GM ~9.5M/year, VW ~9.2M/year, Ford ~5.5M/year, Chrysler ~2.4M/year, BMW ~2M/year.. There's no shame in being a wildly profitable smaller manufacturer though.

basicallydan 13y ago
The Gigafactory PDF does make it sound like it'll be 500,000 vehicles per year, though. Perhaps it's left vague because "500,000 batteries" just doesn't sound like a lot of batteries to most people.
- cdash 13y ago
  Well they could just use the number of actual cells there are in a battery pack which I think is 7k. So that is 3.5 billion battery cells per year. I think 500k cars is much better to understand though.
  - Crito 13y ago
    Yeah, saying "3.5 billion battery cells per year [for cars]" could make it sound like they delusional expect every other person in the world to be buying a new electric car every year by 2020.
cs702 13y ago
Ah, that would make more sense. That said, half a million vehicles would make them 1/4th the size of BMW and 1/5th the size of Chrysler. For me, that's "roughly in the same league as household-name auto brands." (For reference, right now, they are around 1/100th the size of BMW and Chrysler.)
- Crito 13y ago
  500k/year would put them in the same ballpark as the American subsidiarity of Hyundai (Hyundai Motor America) which made 720,783 cars in 2013 (http://www.hyundainews.com/us/en-us/Corporate/SalesReleases/PressReleases.aspx http://www.hyundainews.com/us/en-us/Corporate/SalesReleases/...). Obviously less than Hyundai internationally, but that might be an easier example to wrap your mind around.
cwal37 13y ago
A few hundred thousand vehicles does put them at Subaru's level in America though. http://www.subaru.com/company/news/ http://www.subaru.com/company/news/
Aloisius 13y ago
The Gigafactory pdf indeed says 500,000 Tesla vehicles on page 3: 2020 Tesla Vehicle Volume ≈ 500,000/yr
- mikeyouse 13y ago
  Good find, but that contradicts many of their earlier numbers. More importantly, Tesla bought the old NUMMI plant from the GM/Toyota consortium to use as their manufacturing facility. The peak production under NUMMI was only 400k cars/year, so they'd have to get an additional 25% utilization out of a facility that was running 3 shifts/day in many areas. I'm fairly skeptical they can do that, especially by 2020. Going from 60 cars/day (current production rate) to 1,500/day is no small feat.
  - ghshephard 13y ago
    "The peak production under NUMMI was only 400k cars/year, so they'd have to get an additional 25% utilization out of the facility. " Or open a second factory.
    - mikeyouse 13y ago
      If they maxed out the "Tesla Factory" (formerly NUMMI), they'd still need ~100k vehicles/year from somewhere else. GM just announced they're spending ~$1.5B on a 150k vehicle/year plant in China. Assuming the new Tesla factory would be more expensive, since labor cost in the US demands more automation, they'd be looking at ~$2B to build a new facility. Plus the costs from the upgrades at the Tesla Factory. I have a hard time seeing Tesla deploying $5B in CapEx in the next 5 years when they only have $700M in PPE now and $800M cash in the bank. When they retool for the Gen III 'Model E', I'd expect about $1B in capital investment to satisfy a production level of ~150k cars/year.
      - toomuchtodo 13y ago
        CapEx is probably significant robotics infrastructure. You can't automate everything in the plant. Yet.
whistlerbrk 13y ago
Very interesting, I did not know selling the batteries was part of the plan. Are the trying to remain independent though or would they be a very large acquisition target long term then? I suppose they could license out large format battery tech to a number of other industries as well?
- mikeyouse 13y ago
  Selling batteries might be a bit of a misnomer since they'll probably be working with their existing partners (Toyota[1] and Mercedes[2] primarily) who would both presumably invest in the battery facility too. The 500k cars worth of batteries would probably be some combination of Teslas, Toyotas, and Mercs. Since the latter two companies have already invested in Tesla, and have working partnerships, they would probably get the batteries for the same price as the Tesla internal transfer pricing. (Mostly speculation on my part) It then wouldn't be a profit center for Tesla as much as it would leverage the scale of a bigger facility to lower tech costs for all three companies. [1] - http://www.teslamotors.com/about/press/releases/tesla-motors-and-toyota-motor-corporation-intend-work-jointly-ev-development-tm http://www.teslamotors.com/about/press/releases/tesla-motors... [2] - http://reviews.cnet.com/coupe-hatchback/2014-mercedes-benz-b/4505-10867_7-35832669.html http://reviews.cnet.com/coupe-hatchback/2014-mercedes-benz-b...

Geee 13y ago

I don't think that's just Tesla vehicles, they'll probably supply them for others too? Anyway, Tesla's goal from the beginning has been to eventually take the market leader position by being the first-mover in the electric car disruption.

deleted 13y ago

[deleted]

loceng 13y ago

It's very possible. Their factory has the capability to produce 500,000 vehicles per year - that's one vehicle every minute.