On October 30th Tesla, the electric car maker, delivered just over a million vehicles in the past 12 years. But Elon Musk, its chief executive, has an ambitious target of producing 20m cars a year by 2030. Musk mentioned that goal in a Tesla Battery Day presentation in September, when he outlined new technologies that could dramatically increase battery production and reduce costs.
Musk then stepped up his bet, claiming on social media that Tesla could meet the capacity target by 2030.
Asked recently by Rod Lache, an analyst and managing director at Wolfe Research, a market research firm, Musk further elaborated on Tesla’s approach to achieving that goal. Simply put, he explains, it “looks like a good target.” “There are about 2 billion cars in the world, and producing 20 million cars a year means Tesla needs to replace 1 percent of the global fleet every year.
That’s a big goal, especially given that Tesla will deliver only 367,500 cars in 2019. Compared with the capacity of other carmakers, this figure is so insignificant. General Motors, for example, sold nearly 3m cars last year. The European Automobile Manufacturers Association reports that global car production will be about 70 million vehicles in 2019.
ARK Invest, a market research firm, found that global electric vehicle sales will be about 1.8m in 2019, but they expect to grow to 35m vehicles, or 40 per cent of total vehicle sales, over the next five to six years.
Musk has previously declined to give much details on how production will improve over time to meet his target of 20m vehicles a year. The chief executive has previously said it is difficult to predict how manufacturing will grow over time.
Musk’s record on forecasting is less reliable, and the Tesla Model 3 is a good example. The car was originally put into production in July 2017, and Musk aims to produce 5,000 vehicles a week by December 2017, resulting in only 202 units per week. By July 2018, the company had finally achieved its goal of producing 5,000 cars a week.
But on a recent earnings conference call, Musk gave some details of how Tesla might achieve that goal. Pierre Ferrau, an analyst at New Street Research, a research firm, points out that Tesla’s production capacity looks set to reach 850,000 vehicles a year by the end of the year.
Tesla is expected to increase production capacity at its Shanghai plant, which will also open plants in Berlin and Austin. “Am I right?” asked Ferragu. Next year, we expect you to deliver between 840,000 and 1 million vehicles. Musk replied: “We’re very close, we’re not far from achieving this goal!” “
Musk usually sets himself seemingly elusionable goals, but Tesla’s big increase in car production depends on the efficiency of battery manufacturing. This is also the focus of the Battery Day presentation, which outlines the progress that can be made to increase capacity tenfold. Tesla now aims to produce 3 thwart-hour batteries a year by 2030, up from about 35 gigawatt-hours in 2019.