Tesla plans to boost global production of the best-selling product Model Y and Model 3 tram strongly higher in the fourth quarter and build on that growth in 2023 as newer factories in Austin and Berlin ramp up production, internal plans reviewed by Reuters recital.
Tesla’s output forecast, if achieved, will put the electric vehicle maker on track to meet By Elon Musk production targets for the next quarter and bring the carmaker closer to the size of the German luxury carmaker BMW car by the end of 2023.
Musk and Tesla have a track record of pointing out goals the company doesn’t always hit. For example, in April, Musk said that Tesla could achieve 60% growth in deliveries. By July, the company had brought that target back to 50% for this year.
The ambitious target comes despite the risks of a stretched supply chain, a slowing economy, increased competition and a shrinking Tesla order backlog. But their forecast, which covers the next four consecutive quarters, sets an ambitious target of producing nearly 495,000 Model Y and Model 3 units in the fourth quarter of this year. These two models account for about 95% of Tesla’s production.
The production plans will see Tesla’s past projected growth in the global auto market down to nearly a factor of 10 by 2023 with a production increase of more than 50% on the year.
Reuters confirm global output target for Model Y and Model 3 with two people with knowledge of its forecasts. They spoke on condition not to be named because the forecast is private.
Tesla did not immediately respond with a comment.
And Tesla’s expansion has come at a heavy price. At the end of May, Musk said new factories in Texas and Germany were losing billions of dollars, comparing them to “huge smelters”.
Tesla is expected to announce Q3 production and deliveries as early as Saturday. That is expected to suggest the automaker recovered strongly from last quarter’s decline as output in Shanghai was hit by COVID-19 control measures.
Brokerage firm Piper Sandler predicts Tesla will deliver 354,000 vehicles in the third quarter. Citi expects to deliver 369,800 vehicles. Troy Teslike, a Tesla follower who tracks production and distribution data, predicts 343,779 Model Y compact sales intersect and Model 3 sedans.
If Tesla meets or exceeds analyst forecasts and then makes an internal forecast Reuters In the next quarter, the company will reach global sales of about 1.4 million vehicles by 2022.
Tesla’s production and deliveries in the fourth quarter were higher than in other quarters of the year since 2018.
Its production forecast of 1.59 million Model Y and Model 3 units for the first three quarters of next year will be on track by the end of 2023 with sales of more than 2.1 million EVs.
Including gas car sales, that will make it bigger Volkswagen’s The Audi and BMW brands will sell 2.5 million vehicles in 2021, the most recent year with comparable sales.
That output would also beat the forecast of Wedbush Securities analyst Dan Ives, who was upbeat about Tesla’s outlook. Ives forecasts 2023 to deliver 2 million EVs in 2023, up from 1.39 million this year.
Musk, Tesla’s CEO and product architect, told analysts last quarter that the company had a “good chance” of hitting a global production rate of 40,000 vehicles per week by end of 2022. Internal forecasts detailed to Reuters would suggest that Tesla can achieve and sustain that production in the first quarter.
Forecasts also revolve around a sharp increase in production at Tesla’s newer plants in Austin, Texas and Berlin. Output in Austin will grow to nearly 101,000 by the end of the third quarter of 2023. For Berlin, the equivalent increase will be from 51,000 next quarter to nearly 90,000 by the quarter ending September 2023.
Joerg Steinbach, Economy Minister for the region of Brandenburg, where Tesla has a factory near Berlin, said Tesla will switch to three shifts at the factory by the end of the year.
Sam Fiorani, vice president of global forecasting at AutoForecast Solutions (AFS), which tracks production, said it would come as no surprise to see Tesla’s output from factories in Austin and Berlin soar because of manufacturers. This machine has been operating under capacity.
“Berlin and Austin is coming out next year and that’s where a lot of these books come from,” he said.
But he said his baseline forecast doesn’t put Tesla at more than 2 million vehicles for 2023. “We don’t have them at that level yet,” he said. “It seems very optimistic.”
“The industry as a whole is still grappling with supply chain issues,” Fiorani added.
Tesla’s forecast also includes the assumption that production in Shanghai, a large factory that accounted for more than half of its output in the first half of this year, will level off throughout 2023.
Tesla recently upgraded the plant’s capacity. Sources told Reuters earlier this week the plan is to run production at 20,500 vehicles a week for the rest of the year.
Tesla’s output growth projections also face economic risk, an issue Musk himself has raised before. Global growth has slowed sharply, especially in China, the world’s largest electric vehicle market, where Tesla faces rapidly growing rivals. German industrial production faces uncertainties in the coming months due to the availability of gas for power plants.
In June, Musk told Tesla executives he had “extremely bad feelings” about the economy and was looking to cut staff.
Reporting by Zhang Yan in Shanghai, Hyunjoo Jin in San Francisco, Victoria Waldersee in Berlin, Ben Klayman in Detroit; Edited by Kevin Krolicki and Nick Zieminski
