Giga Shanghai, courtesy of Tesla Inc.
Nicolas Caballero's picture

Tesla To Increase Giga Shanghai Production To A Million Units

Tesla produced almost one million units last year: all in all, it managed to deliver 936,000 units, which meant an increase of 83.6% as compared to 2020; not bad at all considering chip shortages and supply chain issues everywhere.
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But it seems that this numbers will not be enough and now Tesla is preparing to further increase capacity with the new facilities, mainly Giga Texas and Giga Berlin, but also with the expansion of the factory in China, Giga Shanghai.

Chinese media - citing internal sources - indicate that Tesla is working on increasing the production capacity of the Shanghai facility to 1 million units per year; something that would almost double the current capacity of this factory. The information indicates that this increase in capacity will basically start in April 2022. A good sign that this is accurate is the high number of job offers that Tesla has launched for this factory, where they seek to incorporate 1,500 new highly skilled workers; jobs that will be assigned to production and logistics, as well as research and development.

Tesla Model Y, Courtesy of Tesla Inc.

Another clue that the company is working to increase its production at Giga Shanghai is an environmental report that Tesla presented last November. According to this information, Tesla will be spending about $190 million on optimization of the factory between December 2021 and April 2022. Once this update is completed, the factory will have a total workforce of 19,000 employees, 9,000 more than at the beginning of operations.

Giga Shanghai currently hosts the final assembly of the Tesla Model 3 and Tesla Model Y, with Model Y deliveries ramping up since January 2021. The first assembled Model 3s were delivered in December 2019, just twelve months after Tesla began site grading on the Gigafactory in December 2018. The factory's initial production rate target was 3,000 cars a week, eventually ramping up to 250,000 electric cars per year, but now that number is also expected to largely exceed initial forecasts and reach more than one million units.

Tesla Model 3, courtesy of Tesla Inc.

Thanks to this investment Tesla will be able to continue increasing its production capacity and achieve the goal of producing that one million units in the coming years, at this plant alone; a figure to which we must add the production of the Fremont, Giga Texas and Giga Berlin facilities.

It can be assumed that once all the machinery is oiled up and running properly, Tesla will be able to achieve a production capacity somewhere between 2 and 3 million units by 2024. A striking figure for an electric car company, but still far behind the main ICE (internal combustion engine) traditional OEM groups; though it is important to point out that Tesla will achieve those numbers with models (Model Y and Model 3) that yield one of the highest profit margins in the industry - 30.6% in the last quarter of 2021 – and by the way reaching BMW/Mercedes Benz production volumes.

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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