Some observers had almost given up on the second quarter for Tesla, because at least every second of its electric cars now comes from the factory in China, which has been closed for a full three weeks since late March due to the new crown lockout. But a limited reboot was allowed on April 19, and the next day CEO Elon Musk surprisingly announced that despite everything, Tesla may still be able to produce even more production this quarter than at the beginning of the year. And as is now reported, the main Fremont facility is currently producing above its capacity and the Gigafactory in China will hit the next level from June.
Tesla analyst sees “monster neighborhood”
In the last quarter of 2021 phone conference, CEO Musk had already highlighted the Fremont plant, which had achieved record production that year. He did not give a number, but the US plant and the one in China would have contributed about half to the total production of 930,000 electric cars in the year. Three months later, Musk said, even without giving exact details, that production at Fremont was at a record high. And one analyst now expects a “quarter of the monsters” for Tesla after seeing the action there.
The Street Insider financial service reported on Monday. May had an extremely successful start for Tesla in terms of manufacturing, transportation and deliveries, according to Trip Chowdhry of Global Equities Research, who is keeping an eye on the Fremont factory. According to the report, it had at least 20% more car transporters at the site in the current quarter and therefore estimates that production is currently 10-20% above its (undisclosed) capacity. In the latest quarterly report, Tesla itself specifies 500,000 Model 3 and Model Y and 100,000 Model S and Model X annually.
And also in China, production seems to be returning well after the new lockdown. Tesla was one of the first 666 companies allowed to take workers back to their factories in Shanghai under strict conditions in mid-April. The local Gigafactory is coming back strong, Musk said the next day, announcing the next possible record this quarter. Last weekend it was reported that the production of Tesla and the other companies had already returned to 80% and that now as many as 1100 suppliers could restart.
Gigafactory next level in China
It seems to arrive in time for Tesla. According to a Chinese stock exchange portal, the general secretary of the CPCA automobile association said on Monday that the company would continue to increase production in China in June. Instead of 60,000-70,000 Model 3 and Model Y per month before the lockdown, 80,000-90,000 should be produced. Plans to increase Tesla’s capacity in China to one million vehicles per year by this spring were already known. Apparently, even the new lockdowns won’t be able to stop them for long. At the April conference, CEO Musk was confident that in the second quarter, despite missing weeks, at least Q1 production could be achieved – and a significant increase in the remaining two quarters of this year.