Despite the lockdown in Shanghai due to the COVID-19 outbreak in April, Ma Yilong remains confident in Tesla’s Q1 2022 financial report.
Before the outbreak, Tesla’s Shanghai plant already produced 66,000 cars in March. With this output, Tesla lost approximately 50,000 cars since they resumed production on April 19. Despite the Shanghai government’s strong assistance, Tesla’s CFO, Zach Kirkhorn, said, “Production is ramping up slowly, and we are working hard to restore full production as soon as possible.”
On the Q1 2022 financial report, Ma Yilong stubbornly claims that Tesla’s delivery volume in Q2 will remain stable compared with Q1 and will achieve the total delivery goal of 1.5 million cars this year.
In fact, Yilong had disclosed in the Q4 2021 financial report that expanding production was an essential goal this year. However, the Berlin plant, which opened on March 22, planned to produce an annual capacity of 500,000 vehicles, while the Texas plant, which opened on April 8, aimed to produce an annual capacity of 1 million vehicles. However, both factories have not reached their peak states and how many vehicles can be produced this year is still unknown. I had expressed my doubts about the production contribution of these newly-opened factories before.
Therefore, Yilong relies on expanding the Shanghai plant to meet production targets.
Shanghai Plant
We all know the construction myth of the Tesla Shanghai plant, which began production in just ten months. Yilong’s initial plan for the Shanghai plant was also extremely exaggerated, with a final goal of an annual capacity of 2 million vehicles.
In the entire year of 2021, the Shanghai plant delivered a total of 484,130 vehicles, and the capacity almost reached the peak of the design capacity of 500,000 vehicles per year. This already exceeded half of Tesla’s total delivery of 936,172 vehicles in 2021.
Production Expansion
On May 6, after the Labor Day holiday, Reuters claimed to have seen an internal document in which Tesla plans to increase the output of the Shanghai plant to pre-COVID levels by May 16, which is 2,600 vehicles per day.
During the Labor Day holiday, Reuters said that they saw a letter of appreciation that Tesla sent to the Lingang government in Shanghai.According to Reuters 1 and Reuters 2, Shanghai authorities have helped Tesla transport over 6,000 workers and conducted necessary disinfection work to enable the resumption of work during the city’s lockdown period.
Moreover, a surprising revelation has emerged from a letter, which states that Tesla plans to build a new factory near the Lingang plant. The new facility is expected to increase annual production capacity of Model 3 and Model Y by 450,000 units, making it the “world’s largest automotive export hub”!
However, there is currently no sign of construction at the new Lingang factory, which will have an annual capacity of 1 million vehicles when completed, and will work in conjunction with the existing plant.
This year can be considered the first year of Tesla’s production capacity liberation.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.