Tesla’s upcoming ramp this Q4 2018 is starting to look a lot more encouraging, as Gigafactory 1, the company’s battery and powertrain facility, is set to receive upgraded battery lines from Panasonic, as well as new machines from Grohmann Automation. With these upgrades in place, Tesla’s continued Model 3 push would likely be a lot smoother than the previous quarters.
It is no secret that the Model 3 production ramp has been difficult for Tesla. In an interview earlier this year, Elon Musk described the past twelve months as some of the most difficult and “painful” periods of his career. Despite being in “production hell” for the past year, though, Tesla has started hitting its stride with the manufacturing of the Model 3. This quarter alone, Tesla is aiming to produce 50,000-55,000 units of the electric car — a goal that even a longtime skeptic of the company believes is attainable at this point.
Inasmuch as Tesla would likely break its production records this Q3, the company is just around halfway done with its Model 3 ramp. Tesla expects to increase its output for the vehicle to 10,000 units per week sometime next year as it offers other trims like the $35,000 base Model 3, which will be fitted with a smaller battery pack. To accommodate this upcoming demand, Tesla’s Gigafactory 1 would need to be upgraded.
In a statement to Bloomberg, Tesla partner Panasonic Corp. has announced that it is poised to complete its planned upgrades to the facility’s battery cell production lines earlier than expected. Back in July, Panasonic announced that it would install three new battery cell production lines sometime at the “end of 2018,” but according to Yoshio Ito, head of Panasonic’s automotive business, the Japanese company is now aiming to complete the upgrades earlier than expected. Ito also noted that the bottleneck in Model 3 production had been the result of Panasonic’s challenges in meeting Tesla’s demand.
“The bottleneck for Model 3 production has been our batteries. They just want us to make as many as possible,” Ito said.
The completion of Panasonic’s upcoming upgrades to Gigafactory 1’s battery cell production lines comes amidst the arrival of new machines from Tesla Grohmann Automation, which are designed to boost the electric car maker’s production capabilities. Updates on the new Grohmann machines were related by analysts from Worm Capital who went on a tour of Gigafactory 1 back in August. According to the analysts, Tesla head of investor relations Martin Viecha noted that upgrades from Grohmann, which are set to be sent to Gigafactory 1 by the end of Q3 or the beginning of Q4, would help module production become three times faster and three times cheaper.
“Grohmann Engineering will help module production become three times faster, and three times cheaper, according to Viecha. Their new system will be sent to the Gigafactory by the end of Q3 or beginning of Q4. The Grohmann machine will be in Zones 1, 2, 3, and Tesla will be receiving three machines. The process was designed to alleviate the previous bottleneck in module production which delayed Model 3 production significantly. The machine is already built, and points to the advantage Tesla will have in building future Gigafactories. They have learned many painful lessons, but have a solid blueprint for porting the factory across the world.”
Tesla’s demand for battery cells is set to increase within the coming quarters. As the company sets its sights on more ambitious targets, upgrades to Tesla’s key facilities like Gigafactory 1 could be the determining factor on whether the electric car maker can smoothly ramp production or not. With Panasonic’s upgraded battery cell production lines and the new Grohmann machines, Tesla’s Q4 ramp could very well be the company’s most impressive yet.