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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.

@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.

@ 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.

@ 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.

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.

@ 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.

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.)

edit: side note

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.

@ 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.

@ 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?

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.


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.

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.

@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 ?

"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.

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

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.

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.

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

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

@ Brian & @ Kleist & @ Timo

OK agreed, spelling should be right, so Fremont it is.

"Exciting times to watch that battle to evolve"
That's right, it's exiting indeed.

I think that the only way for others to catch up with Tesla Motors is when there will be a major breakthrough in battery technology. Until then Tesla Motors will stay ahead of all the others.

But don't you think that it would be wise for Tesla Motors to build a battery cell factory nearby the Tesla Motors factory in Fremont? After all, Tesla Motors is the only buyer of these specific battery cells. Now they have to ship these specific battery cells all the way from Japan every week/month. If they start producing these specific battery cells in Fremont, then at least they can save some money on transportation. Seems like a good idea to me.

And why doesn't Tesla Motors start producing it themselves, instead of buying it from Panasonic ("they're TM proprietary chemistry and architecture, in the 18650 form factor")?

Brian H, I think they are Panasonic proprietary chemistry, not Tesla. Made for Tesla, and probably protected by their deal, but Panasonic owns the battery details, not TM.

Battery pack architecture and anything related to that is Tesla proprietary.

I think JB and others have stated that the cells are TM's own, and are not the industry standard.

"Exciting times to watch that battle to evolve"
That's right, it's exiting indeed."
The battle is just beginning; don't exit yet! ;)

TMC does believe in vertical integration. But, so far, battery manufacture is too big a mouthful, I think. Panasonic is a shareholder partner in TMC, too, so it is going to try and keep ahead of the curve with everything from research to QC. And TM is free to source cells anywhere. Suppose some other cell mfr comes up with a radical patented improvement. TM can turn on a dime and use those, instead.

It's a fascinating balancing act: promoting EV general adoption and assuring TMC is strong enough to force the mindset and paradigm change by inspiring demand and getting superior product into consumers' hands. The Secret Master Meta-Plan.

@Timo - Tesla has defensive patents on technologies that are similar to their battery design but not quite as efficient as the Tesla designed Panasonic 18650. This will make it difficult for anyone else to follow Tesla's path on battery technology. Tesla changed the 18650 so that it would be cheaper and more efficient for an automobile. They removed most of the outer metal protective jackets and also re-disigned the caps. I'm not saying no one else can create a good battery, but Tesla is further along than anyone else and they have put up a road block to anyone who wants to mimic their path.

Comparing Tesla's possible production to what NUMMI did in the same space is apples versus oranges. The level of vertical integration Tesla employs is a huge variable that was certainly different in the previous life of that facility. In-house production of motor/inverter sets, battery packs, and stamped metal parts takes up lots of floor space.

@ JZ13

"Tesla is further along than anyone else and they have put up a road block to anyone who wants to mimic their path."

Now, I find that really interesting. Could you please talk/explain more about that (more detailed). Thanks

@ Benz - there was a great thread in TMC about a month ago that you can search for. The poster explained Tesla's patents in layman's terms. It made the case that others will have to blaze a different trail if they want a battery as efficient as Tesla's.

@kleist - Thank you! That's the one.

@Benz - read the TMC thread and you'll see TM is already making most of the battery cells. What they buy from Panasonic are the naked cores.
Also TM just bought a big empty lot next the Fremont factory and that could be where Tesla plans to make next generation cells cores with a strong partner like Panasonic. Long term I think there is a strong possibility that Fremont will be mainly battery systems with only limited car manufacturing, most of the car body work and assembly at other sites - we can only speculate, time will tell.

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