Tesla Model Y, Courtesy of Tesla Inc.
Nicolas Caballero's picture

Tesla Aiming To Reach 2 million Cars A Year Production: Disrupting The Industry

Tesla wants to reach a production rate of 2 million cars per year by the end of this year; a very remarkable figure that would position it among the largest manufacturers in the automotive industry.
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Producing cars in series and in large numbers is not an easy task for any automaker; the last brand that is experiencing the issue is Lucid Motors, but as a matter of fact Tesla also knows something about it. There was a time when Elon Musk's promises seemed unattainable quarter after quarter because production could not be actually scaled at the desired pace; a tortuous path that cost the company more than a headache. There was also a time when the figure of half a million cars was the goal to beat: something that is now – luckily - far behind, as Tesla is already talking about manufacturing 2 million electric cars a year, a figure that would position the brand very high in the industry.

Elon Musk's statements have always had a mixture of optimism, bombast and a hint of haughtiness. After all, there was a time when he had to keep the company afloat as it was, as well as the price of its shares. With the passage of time and the stabilization of the company, everything begins to take a different turn: equally ambitious but more sensible, shall we say. At the company's last annual shareholder meeting, Elon Musk said that Tesla aims to reach a production rate of 2 million vehicles per year by the end of of this year, 2022.

Tesla Model 3, Courtesy of Tesla Inc.

According to the president and CEO of the company, Tesla has already reached a production rate of 1.5 million cars per year, as per current numbers. And far from shrinking, it will not stop growing: the Gigafactory Berlin-Grunheide (Germany) is still in its infancy and Giga Texas - Austin is working at 20-50% of its planned capacity for the end of this year. Although production peaks of 5,000 cars per week have been reached, regular production at the Texas Gigafactory is around 2,000 cars per week. The forecast for the end of this year is to reach 10,000 units per week.

Then we have the Fremont and Giga Shanghai plants that are working at full capacity, although there are also plans to make them grow. When the latest improvements are completed, the Shanghai Gigafactory will be producing around 3,000 cars a day. According to Elon Musk, "Depending on how the rest of this year goes, I think we're going to approach or hit roughly the 1.5 million mark, and end the year at a rate of 2 million units".

Tesla Model X, courtesy of Tesla Inc.

Scaling up production will depend, on the one hand, on the company's ability to continue increasing production in its current largest factories (Fremont and Giga Shanghai). And on the other hand, that the problems in the supply chain do not actually worsen: Tesla reaching a production rate of 1.5 million cars per year does not mean that it will end this year with that number of cars actually sold, although it should not take very long to achieve it. During the shareholders meeting, Elon Musk recalled that ten years ago Tesla was barely capable of producing 3,000 vehicles. Just a few days ago he made his car number 3 million.

Elon Musk and Tesla are already talking about making 2 million cars a year, all EVs of course. A figure that - if actually achieved - would position it among the best-selling car brands (that is, including ICE vehicles) in the world, and very close to Mercedes-Benz and BMW. Not a minor thing, for sure.

Now, who are the biggest car manufacturers in the world and how much do they sell? Last year Toyota was the world's largest car manufacturer, with 10.5 million cars sold worldwide including the Toyota, Lexus, Daihatsu and Hino Motors brands. Of the above total, Toyota and Lexus were responsible selling 9.6 million cars globally, 10.6% more than the previous year, by the way.

In second position, at some distance from Toyota was the Volkswagen Group with 8.9 million vehicles sold worldwide during 2021. However, the German group includes the figures of a large set of brands and various types of vehicles, including more than 270,000 trucks (as MAN, Scania and Navistar belong to the group). Obviously the brand with the highest volume is Volkswagen Passenger Cars, which delivered 2,719,000 cars last year, followed by Audi, which sold 1,009,000 cars, and Skoda with 784,000 units.

Model S, courtesy of Tesla Inc.

Behind Toyota and the Volkswagen Group, these were the largest car manufacturers in 2021:

Stellantis: 6,583,269 units sold
General Motors: 6,291,000
Honda: 4,136,018
Nissan: 4,065,014
Ford: 3,942,000
Hyundai 3,890,981
Kia: 2,777,056
Renault Group (Renault, Dacia and Alpine): 2,690,000
BMW (make, not group): 2,213,795
Mercedes-Benz (cars): 2,054,962

As you can see above, the figure of 2 million cars is close to the sales achieved by Mercedes-Benz and BMW last year. If we count it by groups (Holdings), it is out of the top ten list; but if we take into account brands, two million cars sold make you fully enter the best-selling in the world. And considering that all of Tesla's cars are electric, it will reinforce its position as the world's largest electric car maker, a distinction that Tesla seems to have guaranteed for a while, and reinforcing its position as the most disruptive brand in the auto industry.

Source: evannex

All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.


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