Elon Musk has a very specific vision for the ideal factory: densely assembled, vertically integrated, and unusually large. In the early days of Tesla’s mass production, he was criticized for being arrogant. Now, Tesla’s original California factory has taken on a laudable title: the most productive auto factory in North America.
In 2021, Tesla’s Fremont, California plant will produce an average of 8,550 vehicles a week, more than Toyota’s powerful car manufacturing plant in Georgetown, Kentucky, according to a foreign media analysis of production data from more than 70 auto plants in North America. Weekly 8,427, 8,343 at BMW’s auto production hub in Spartanburg, South Carolina, and 5,564 at Ford’s iconic truck plant in Dearborn, Michigan.
In a year when global auto production was held back by supply chain shortages, Tesla’s global production rose 83% from 2020 levels. Production at Tesla’s other car factory in Shanghai tripled to nearly 486,000 vehicles. In the coming weeks, Tesla is expected to announce the opening of two new factories, the first in Europe, the Berlin-Brandenburg Gigafactory, and the U.S. Texas Gigafactory in Austin. Musk had said in October that he planned to increase production by a further 50% at the Fremont and Shanghai factories.
Credit Suisse analyst Dan Levy said Tesla’s strategy of pursuing large manufacturing centers in its largest market is paying off. Global demand for electric vehicles has outstripped their production capacity, and automakers everywhere are scrambling to obtain limited access to batteries, raw materials and powertrain components. Tesla has made the largest early-stage investments in electric vehicle manufacturing and has established priority partnerships with many key suppliers.
Despite its rapid growth and dominance in electric vehicles, Tesla is still only the tenth largest automaker in North America. Levy believes the new Austin factory should change that. And it could help Tesla maintain its EV lead as long as the supply imbalance continues.
Musk’s long-term goal is to increase vehicle deliveries by about 50 percent each year. In order to maintain such growth, Tesla needs to open more factories or increase the production efficiency of factories. Last October, Musk said he was doing both. The site selection for Tesla’s next Gigafactory will begin this year.