New Tesla Model 3 Battery Line Could Increase Output By Factor Of 4

1 week ago by Eric Loveday 68

Tesla

Gigafactory Cell Production

It will arrive in March, if everything works out as planned.

Tesla Model 3 Dash Install

One of the overlooked takeaways from the recent Tesla earnings call was connected to automation in battery module production.

Following the call, we stated:

  • Regarding Model 3 production bottlenecks, battery module production is still the focus for near-term improvements. A new automated system for two of the four zones is nearing completion in Germany. It needs to be disassembled, shipped, then reassembled at the Gigafactory (it’s expected to arrive in March). This one line should be as productive as three to four of the lines they currently have and take up less physical space. They also have a “semi-automatic” line, which involves people working with the machines. It has been, Musk said, “remarkably effective,” and is exceeding the purely automatic lines.

Automation is key for several reasons. First, as stated above, production will increase as the level of automation expands. But there’s another, more important aspect to this. It was mentioned during the call:

“This is the year when we believe we can achieve true cost parity – producing a premium EV like the Model 3 will be no more expensive than producing an ICE vehicle, something that many believe is not yet possible.”

One way to reduce production costs is to increase automation and decrease the number of paid line workers. So, automation will be one of the major factors in Tesla’s effort to produce a “premium EV like the Model 3″ that “will be no more expensive than producing an ICE vehicle.”

As of right now, Tesla is losing money on each Model 3 sold. This info was released by the automaker in the earnings report:

Since Model 3 production was in the early stages of the ramp, allocation of full operating costs and depreciation made its gross margin negative. We are expecting a negative Model 3 gross margin in Q1, while generating positive operating cash flows.

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68 responses to "New Tesla Model 3 Battery Line Could Increase Output By Factor Of 4"

  1. William says:

    Bring it Elon!

  2. God/Bacardi says:

    If only this was all sorted out in March of 2017…

    1. Nick says:

      Yea, or March of 1995.

      1. sveno says:

        mmMMMMmm…. March of ’95

        1. Dave K says:

          Bottom line is it’s really hard to start a new car company, Tesla is I think the first in like 50+ years. Plus they are building a different type of car with a different business model, kind of like starting your own space program…

          1. Some Guy says:

            Well, then it can’t be so hard, given the fact that Elon Musk indeed has successfully started his own space program. The first ever made production Tesla Roadster became part of it, just a few days ago.

            1. Pushmi-Pullyu says:

              By that same argument, winning an Olympic gold medal must be really easy, because scores of of people manage to do it every four years. 🙄

          2. AnonyMouse says:

            “. . . Tesla is I think the first [new car company] in like 50+ years.”

            Sure, if you don’t count BYD and dozens of other Chinese new car companies.

            1. mzs.112000 says:

              Also, Fisker, a company that is now back from the dead and wants to build EV’s. Maybe Fisker is the zombie apocalypse Elon Musk was talking about with the Not A Flamethrower.

            2. vonweegen says:

              Sure, starting an EV car company is easy… if you got the entire friggin’ Chinese government financing your company!

  3. mhpr262 says:

    Wow, three to four times as productive as the current lines. Grohmann really seems to bring it..

  4. tftf says:

    More overpromising and underdelivering by Elon Musk.

    1. Get Real says:

      More trolling by admitted Tesla shorter trollftf.

      At least Musk and his companies makes something of value whereas you are just a financial vulture who is so desperate you try and influence the market with your repetitive, whiney posts here and of course over on Seeking Liars.

      1. SJC says:

        Facts are there, investors want results.

        1. floydboy says:

          Investors want just what they’re getting, growth. Short-sellers want the misfortune and the quick buck.

        2. krona2k says:

          I’m an investor and I want Tesla to carry on as they are. They cannot cut costs now for short term gain, it just won’t work.

          1. SJC says:

            One person does not speak for the investor community. In general they want results and profits.

            1. Nix says:

              Tesla is majority Institutional Investor owned. They want 1 thing out of their investment. Long term value.

              What other investors with a minority holding want is irrelevant. If they want to drive the ship, they can buy up a majority stake and try to take over the board. Until then, the majority stake holders have been happy with the current results.

              Especially early investors who have seen 10X return on their investment.

              1. Steve says:

                Isn’t it only a return if you cash out? Making someone who did that not a long term believer?

                1. Pushmi-Pullyu says:

                  Given that Tesla’s stock has gone up to 10x its original value — how many stocks achieve that mind-boggling level of appreciation? — it’s entirely possible for an early investor to cash in just a portion of their investment, and still leave most of the investment intact.

                  In fact, you can read posts over at the Tesla Motors Club who have sold off some of their shares, enough to take a tidy payoff and buy a Tesla car, and still remain an investor!

                  Good luck managing to do that with your short investment… Steve.
                  😀 😀 😀

    2. David says:

      He certainly has to improve his credibility these days. Long series of promises lately that are all missing the mark, often hugely missing the mark.

      Easy to have hockey stick projections. Everything will suddenly get fixed someday in the future.

      1. floydboy says:

        Promises? You mean PREDICTIONS?

      2. Nix says:

        Apparently you don’t know the difference between a “Forward Looking Statement”, and a promise.

        Please read ANY company’s SEC reports. They are chock full of documented “Risk Factors” that they list which detail reasons why they may not attain their “Forward Looking Statements”.

        When companies detail for you right up front in their publicly available SEC documents exactly how and why they may not attain their “Forward Looking Statements”, they clearly are not promising specific results. No company does.

  5. Another Euro point of view says:

    I wonder what is the current Gigafactory outpout as far as cells is concerned. If it is according to need of Model 3 it should be around 2 Gwh per year now ramping up to 10 Gwh by year end.

  6. Hart Ed says:

    Automation typically also improves quality through consistently.

  7. Another Euro point of view says:

    Whatever but bring it quickly, this company needs help now. I am most of the time really annoyed by the grotesque cult around this company but it nevertheless pushes other car makers in the back like no one as far as car electrification is concerned so it is no time to go belly up. Am starting to become really concerned by the figures I saw Wednesday.

    Go Tesla !

    1. floydboy says:

      Can’t be any more grotesque than the cult of bashers that inhabit these threads whenever the name Tesla is mentioned.

      1. Will says:

        But this basher is concern that tesla goes belly up and legacy automakers will stop making evs for the mainstream and making it a niche product again

        1. MikeG says:

          Then someone else will come along to fill the void.

          1. Philip says:

            What? Like, in another fifty years or so!

        2. ziv says:

          Will, that is my concern with the Tesla delays and losses. But I think that we are at the point where the 3 sales numbers are going to trend up and they should be able to wring some cost out of the build process. But I think the amount of $35k 3’s is going to be pretty limited simply due to the fact that it will be really difficult for Tesla to make any money on them.
          But with regards to Tesla going bankrupt and all the other automakers abandoning their BEV programs… I could see that happening last year. GM would ditch their program in a heartbeat. They have had engineers that really believed in the Volt and believe in the Bolt, but the beancounters/bosses never did.
          But now that Nissan has unveiled their new Leaf I really think Nissan is not only in it to stay, they have got a product that will complement the 3 in the sub-$40k range. Leaf on the low end with regards to price, and the 3 on the high end, probably closer to $40k than $35k.
          If the Buick BEV comes out next year, those 3 vehicles alone plus the Prime/Volt/Pacifica/Clarity lines will be enough to get the sub-$40k BEV/PHEV industry into 2020 when all bets are off due to decreased cost to produce and increased choice in BEV’s/PHEV’s.
          I think Tesla has the ability to get at least one more round of stock sales and probably two before the investors give up on them, and that should be long enough for them to stem the losses, and build the company the way they need to.

      2. Steve says:

        Equally grotesque is the fluffing of Tesla anything by fluffed who will take it from Elon all day and night without question or criticism. You are the reason the trolls exist , not because they are all shorting stock.

    2. Pushmi-Pullyu says:

      “I am most of the time really annoyed by the grotesque cult around this company…”

      I, too, am quite annoyed at how Tesla Hater cultists constantly disrupt meaningful and interesting discussion in comment threads here, by posting their FUD, their Big Lies, and their half-truths, all to promote their despicable objectives of damaging Tesla’s reputation and driving people away from reading about the advantages of EVs.

  8. Gasbag says:

    They also have a “semi-automatic” line, which involves people working with the machines. It has been, Musk said, “remarkably effective,” and is exceeding the purely automatic lines.

    So effective that the combined total of all lines has been under 450 packs per week. Give us actual numbers rather than vague adjectives. Elon could just as well be saying our automatic lines have been incredibly pathetic.

    If this is not a an intentional misrepresentation then logically it follows that sales numbers for April will be at a minimum 3 to 4 times that of Jan or 5,500 to 7,500. Yes?

    1. David says:

      Wonder what January sales were. Elon had said the last few days of the last quarter were at a 1k/wk run rate. The implication was that would continue, indicating sales of 4000/mo or better for January. Will be interesting to see what they’re really doing and if his 1k/wk statement was a misrepresentation.

      1. Viking79 says:

        No, it means they could produce cars at a rate of 1000 per week not that they actually were other than for a short burst. It sounds like they are limited by other parts, like batteries, at 500 per week or so. I imagine when the new battery machines come in they will hit 1000 per week at least.

        1. floydboy says:

          They said with the new battery machines, they could hit the 2500 per week goal rather quickly.

        2. Nix says:

          The new line will produce 2500 batteries per week on top of current production.

          1. Steve says:

            Sure it will, until it doesn’t and then there will be another excuse, probably blame it on Panasonic, or lack of Cobalt, or….

      2. I remember the number of actually produced Model 3’s, as reported, was 793 or so, for a full last 7 day week of December, 2017.

        860 was the number ‘in transit’ to buyers.

        So in January, 1st week, it might be not more than this, except, being likely a 4 day week, would be likely less produced.

        I figure 500-600 units for week 1. 600-700 for wk 2, would be a fair bet. Then, for wk 3, 700-800 is likley doable. Wk 4 should then be able to reach 800-900, as well.

        Just taking my low end guess for production of 500 + 600 + 700 for the first 3 weeks, allowing a reasonable 7-10 day delivery time, = 1,800 + 860 in Transit from December, gives me a low guess of 2,660 sales delivered in January!

        Using 600 + 700 + 800 (my higher end guess) gives 2,100 + 860 = 2,960 Sales and deliveries as a higher end possibility, in my view.

        I have my own thinking that says this higher number could also have been low, but I highly doubt InsideEVs ‘Pegged’ number of Model 3 January Sales, at just 1,875, and figure, since they provided no coment of the 860 in transit vehicles, that they missed adding them!

        1. ziv says:

          I believe that the quote was that 793 were produced on the last 7 working days, not the final week. I think the plant is only open 5 days a week so it actually took 9 days to produce 793 3’s. I believe.

          1. Nix says:

            The last week of December had 4 production days. Tuesday Dec 26th through Friday Dec 29th.

            1. ziv says:

              So it took Tesla at least 10 calendar days to produce 793 3’s at the end of December. What I am curious about is whether there has been a later statement about how many 3’s have been built per week in January. I have’t seen such a statement, but I could have missed it.

        2. Pushmi-Pullyu says:

          “I have my own thinking that says this higher number could also have been low, but I highly doubt InsideEVs ‘Pegged’ number of Model 3 January Sales, at just 1,875…”

          You’re confusing what Musk was talking about, which is production, with what is reported (or estimated) on InsideEVs’ “Report Card” articles, which is sales.

          Not that it’s fair to single you out here. This entire sub-thread is a rather eyebrow-raising collection of conclusions jumped to from a wholly inadequate base of a few vague descriptions and even fewer actual figures.

    2. Wally says:

      If it has been under 450/wk how did they produce almost 800 cars the last week of Jan?

      1. ziv says:

        They didn’t say that. The quote from Tesla is:

        “During Q4, we made major progress addressing Model 3 production bottlenecks, with our production rate increasing significantly towards the end of the quarter. In the last seven working days of the quarter, we made 793 Model 3’s, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3’s per week. “

        So it was 793 produced in the last 7 working days of December, not the last week.

        1. ziv says:

          On a second look, maybe I have missed their quote on their production in January? I have been reading as much as I can find but it is quite possible that I missed that one. It wouldn’t surprise me that they have ramped up a bit in a month, but I haven’t seen them saying anything if they have.

  9. Six Electrics says:

    Makes you wonder what they’ve been doing at the Gigafactory for the past three years. Obviously not testing production rates, even with fake or recycled cells.

    1. Tom says:

      It’s not very re-assuring is it? Hey we got this figured out and we have to get it from Germany and it’ll be there in March…is not very re-assuring that they ever had a good plan A and that this is plan B or something. This would appear to be the piece of the puzzle that the 2500 per week is dependent on. If that’s the case then Tesla has known for a very long time that 2500 wasn’t just around the corner. Whatever they were doing in the US simply was not capable of producing 2500 per week. Why in the world wasn’t this sorted out a long time ago?

      At least it looks like a good chunk of the log jam will get cleared by April hopefully and Tesla can get this thing rolling.

    2. Viking79 says:

      It appears the issue is battery production (not cell production, two different things). Elon said back in November that the battery machine was not producing as it should be and had to have the software rewritten. Sounds like the SW fix didn’t fix it and they are having a different company supply the machine?

      1. floydboy says:

        I got the impression they completely scrapped the failed machine and applied the new software to the super fast Grohmann machine. So now it’s just a matter of placing it in service in the Gigafactory.

    3. Three years? I remember that they only started cell production, about the last week of December, 2016, for Tesla Energy, and did not have the cells for the Model 3 start upthere until about March, 2017.

      As to the Robotic Module Assembly, it seems the story was, it was set up after that, but did not work right. I think it was started in late June, early July, 2017.

      1. Pushmi-Pullyu says:

        For once, something a Tesla hating FUDster said was at least partly true. Construction did begin on the actual factory (not just ground-clearing) in January 2015.

        However, contrary to that Tesla Hater cultist’s insinuation, Panasonic has certainly built its 2170 cell production lines inside Gigafactory One, and presumably they have fine-tuned them for mass production, or at least they’re working on that.

        We could of course wish that Tesla had made more progress in getting the factory ready for mass-producing battery packs, but to suggest they haven’t accomplished anything in that time is bull pucky that only a hardcore FUDster would try to sell.

  10. DJ says:

    It will arrive in March, if everything works out as planned

    I admittedly stopped reading right here because when the heck has anything ever worked out as planned for these guys???

    Best of luck, you’re gonna need it!

    1. Richard Arguile says:

      Tesla just filed with SEC a form explaining that “current” capacity at Gigafactory is sufficient for 2500/week production.
      That Germany-based production line to be disassembled, shipped and reassembled in Nevada is an ADDITIONAL 2500 per week capacity – making the 5,000/week goal for June far easier to reach..

      This is clarification of the earnings report call…

      1. ziv says:

        2500 a week is just 125,000 Teslas per year, total. Just 25% more than they produced this year. Lets hope they ramp that up fairly quickly. I believe they will improve that rate, but it may take until April or May to do so.

        1. Nix says:

          Actually, 125,000 Model 3’s will be ON TOP of their Model S and Model X sales. So no, it isn’t just 25% more cars than last year, they will be building way more than double the number of cars as last year.

          Tell me what other car company is doubling their entire company’s production numbers…..

    2. Nix says:

      The Model 3 is the top selling EV in the United States. Tesla has sold over a quarter of a million pure EV’s.

      How is it that somehow you claim that things never work out for Tesla?

  11. Luke Wernle says:

    This is something Tesla and Elon in particular have faced many times before. Subcontractors failing to deliver on time or on budget. If this German outfit gets it done, good on them; if not, look for Tesla to vertically integrate and design their own production equipment.

    Regarding all the criticism of Elon with regard to scheduling. It is easy to predict that such snafus will happen, but virtually impossible to predict when they will happen. It is understood that Elon’s forecasts represent best case scenario plans given the most current information. Virtually everything worth doing ends up being more difficult to accomplish than originally planned.

    Elon’s tolerance for this is one of his greatest strengths. It is why he his doing so many amazing things, while more accurate forecasters are not.

    1. alohart says:

      Tesla owns “this German outfit”, Grohmann. If Grohmann is incapable of producing what Tesla needs, Tesla will have to look to subcontractors, not subdivisions.

  12. Mulon Esk says:

    More lies from Elon.

  13. Get Real says:

    More stupid ass new usernames who are nothing and nothing more then re-registered existing shills shooters and haters.

    1. AnonyMouse says:

      Shooters? I don’t recall hearing any gunfire. Who are these shooters you speak of? In addition to hearing voices in your head, are you saying that you also hear gun shots in your head. Please seek help from a mental health professional.

  14. Get Real says:

    Its called autocorrect troll.

    Please go back to your fool cell troll farm and stay.

  15. Nix says:

    News: Tesla has a battery line on the way that alone will produce as many batteries each WEEK as Tesla’s next closest competitor built each MONTH in 2017.

    Reaction: Nutters and haters whine like crazy, clearly hate that more EV’s than ever before will be finding their way into the hands of drivers, cutting into gas consumption.

    1. Alex Clabburn says:

      This is the point. No-one has ever tried to build this many EV batteries before so Tesla really are in uncharted territory. The competition will have the same production hell to go through in 3-5 years time but will be doing it behind closed doors.

      1. Nix says:

        Yes, other companies are far behind. In fact, they are already suffering from lack of battery packs for their cars, even with vehicles that are being produced in a tiny fraction of the volume that Tesla is producing.

        For example, Porsche admits to a 3-4 month delay in their product, but nobody is saying the absurd things about Porsche that they are saying about Tesla when they have delays.

        https://insideevs.com/battery-suppliers-cant-keep-up-with-outrageous-demand-for-porsche-panamera-plug-in-hybrid/

        1. Steve says:

          Since when was Porsche taking reservations and making big deals out of delivering their first vehicle? If any company promised the things musk has promised, and flatly lied about, you flutters would be screaming about it.

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