Investor's Corner

Tesla can produce 6M+ cars with 4 to 5 factories, suggests Musk

Elon Musk responded to a random tweet asking if Tesla could produce Ford’s entire global volume or roughly 6.6 million vehicles per year with a single factory, stating that it would make more sense to distribute four or five factories around the world to accomplish the feat.

Elon went on to add color to the jobs each Gigafactory would have, saying that they would have a ‘very high’ headcount ‘around’ each Gigafactory to keep it running. The serial tech entrepreneur presumably is not just talking about the manufacturing jobs in the factory, but the massive number of supporting jobs that each factory would need to move raw materials and finished products in and out of the Gigafactory. If one were to look beyond Gigafactory operations, an army of people will be needed for secondary support of the massive factory, namely lodging, food and transportation services.

He also shared that Gigafactory staff won’t be doing boring repetitive tasks. With production lines being almost the very definition of a repetitive task, this hints at an entirely new level of automation for the production lines for Model 3. As Tesla seeks to improve production line speeds by 20-fold, new automation must be integrated to eliminate the comparably slow pace of human installers. This is not to say that humans won’t be involved in the production process, just at fewer strategic locations and only performing the more refined tasks that are currently more difficult to automate by machine.

The update comes as Tesla is slated to announce another two to four more Gigafactories by the end of this year. Said another way, by the end of this year Tesla will have announced plans to achieve the same production volumes as each of the auto barons of the age gone past – Ford and General Motors.

The tweets came in response to a proposition by technology journalist Robert Cringely from a conversation he and a friend had while doing some back-of -the-napkin-math to figure out Tesla’s hypothetical production volumes. Cringely extrapolates the potential global impact Tesla’s step change in automotive manufacturing will have across other sectors, namely the number of goods produced per person as a whole.

Tesla can produce 6M+ cars with 4 to 5 factories, suggests Musk
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