Tesla (TSLA) Chief Executive Elon Musk wants to eventually build 20 million electric cars a year over the next decade — more than double the current production of other auto-making giants — so it’s now on a mission to rapidly expand its manufacturing capabilities. Meanwhile, Tesla stock has soared this year in response.
But the company has a long way to go, and Wall Street isn’t so sure Musk can get there. Still, Tesla stock analysts offer encouraging words.
While many analysts don’t see how Musk can reach that goal, they support his efforts to ratchet up production, especially with Tesla’s lock on the electric-car market.
“Tesla has such a huge lead in manufacturing electric vehicles over its competitors that it’s the only game in town,” Wedbush analyst Dan Ives told Investor’s Business Daily. “Right now in the electric-vehicle market, it’s Tesla’s world and everyone else is paying rent.”
Tesla’s Great Leap Forward
Tesla’s manufacturing plans took a great leap forward in late 2019 when it began making cars at its giant factory in Shanghai. The China facility now can produce 200,000 Model 3 vehicles a year. By 2021, it’s expected that Tesla will also be making 150,000 units of the Model Y in China, with additional capacity coming.
Tesla took another big step with its third manufacturing plant, where construction is now underway near Berlin. That plant is expected to be completed in March 2021, where it will produce the Model Y.
Then, in July, Musk confirmed that its fourth manufacturing plant would be built near Austin, Texas. That factory will be Tesla’s largest, built on a 2,000-acre chunk of land. It will produce the Cybertruck and its big-rig truck called Semi, as well as the Model Y and Model 3.
Right now, Tesla’s first manufacturing plant in Fremont, Calif., has the infrastructure in place to build 490,000 vehicles per year. Tesla expects to increase production at its Fremont facility by another 100,000, bringing the total to 590,000 by the end of 2020.
Couple that with the China facility and by the end of 2020 Tesla should have the pieces in place to manufacture 790,000 vehicles in total. But it won’t be able to ship that many just yet. Tesla shipped 368,000 vehicles globally in 2019. It’s looking to ship 500,000 this year, though analysts expect about 480,000 deliveries.