Tesla Plans Ambitious Production Boost In Spite Of Economy Woes

Tesla is reportedly planning a surge in production over the next four consecutive quarters, in spite of ongoing global supply-chain issues and broader economic turbulence.

The electric vehicle maker, which previewed a humanoid robot called Optimus at its AI Day on Friday, is looking to push up production of its Model Y and Model 3 vehicles in the fourth quarter and to build on that growth next year, Reuters reported, citing internal company plans.

Model Y and Model 3s make up about 95 percent of Tesla’s total vehicle production.

The expansion plans follow a drop in production in the second quarter due to Covid-related shutdowns at its plant in Shanghai and broader challenges that chief excutive Elon Musk referred to as “supply chain hell”.

Production boost

Tesla wants to boost production of Model Y and Model 3s to nearly 495,000 for the fourth quarter, which would take it to global sales of about 1.4 million for 2022.

The company then wants to produce 1.59 million Model Y and Model 3s through the first three quarters of 2023, putting it on track to end the year with sales of over 2.1 million vehicles.

That would make it bigger in terms of production than Volkswagen’s Audi brand and close to BMW’s 2.5 million vehicle sales for 2021.

The figure would be close to a prediction by Wedbush Securities analyst Dan Ives that Tesla would deliver 2 million EVs next year, up from 1.39 million this year.

‘Money furnace’

The forecast depends upon a sharp increase in production at Tesla’s new facilities in Austin, Texas and Berlin, which are currently running below capacity.

Austin production would jump to almost 101,000 by the end of the third quarter of 2023, while Berlin would jump from 51,000 in the fourth quarter to almost 90,000 by the quarter ending September 2023.

In late May Musk said the new factories were losing billions of dollars and compared them to “gigantic money furnaces”.

Tesla’s production plans may face difficulties from economic headwinds and other factors, such as an ongoing shortage of computer chips that has slowed production of everything from automobiles to gaming consoles.

Humanoid robot

At Tesla’s AI Day on Friday attendees were shown videos of Tesla’s Optimus humanoid robot performing tasks such as watering plants, carrying boxes and lifting metal bars.

Chief executive Elon Musk said the robots would be produced at scale and would sell for less than $20,000 (£17,900) with availability in three to five years.