Published on May 7th, 2018 | by Steve Hanley0
Tesla — Two New Factories To Be Announced This Year?
May 7th, 2018 by Steve Hanley
One of the things that Elon Musk harped on at last week’s earnings call was how the Fremont factory is crammed to the rafters and running out of space. With talk about the Model Y already in the air — production may begin as soon as 2020 according to Elon — rumors of an electric pickup truck swirling, progress on the Tesla Semi moving forward, and who knows what other projects Elon Musk has in mind, Tesla clearly needs more manufacturing space.
With the Fremont factory being “jammed to the gills,” according to Musk, it seemed he also said that two new Tesla factories are largely planned and might be announced this year, one of them as early as … any day.
Elon noted that they may decide on a Model Y manufacturing location by end of this year — although, admittedly, it was not clear whether it would be announced this year even if the decision was finalized. A Gigafactory in China will be announced “soon,” he added in response to a question on that specific location. That seems to imply two factories being confirmed this year.
At present, Tesla manufactures battery cells at the Gigafactory in Nevada and vehicles in California. While that arrangement may work for now — Nevada did put up some fairly significant financial inducements to lure Tesla — bringing production together in one location seems to make more sense going forward.
Up to this point, China has shown a distinct preference — some might call it a bias — in favor of having the batteries used in electric cars for sale within China to be sourced from Chinese manufacturers. The long rumored Tesla factory in Shanghai will make batteries as well as cars, but it’s not clear at this point if Tesla will maintain the same relationship with Panasonic there as it has in the US. It seems unlikely China would smile on cars produced locally that used battery cells imported from another country, but we’ll see.
Assuming a Chinese factory is a given, where would the second new factory be located? Rumors of a European facility have been floating around for the past two years, ever since Elon made a tour of the Old Continent in the summer of 2016. Various communities from Spain, Portugal, and France have made promotional videos touting their access to skilled workers and transportation hubs. So far, no clear winner has emerged.
But what if the second factory isn’t in Europe at all? What if it is right in the good ol’ US of A? Lots of foreign manufacturers have found a home in America, especially in the Deep South where anti-union animus is strong. The Midwest has lots of skilled auto workers available. Wouldn’t it be something if Tesla set up shop in Michigan, a state where it is prohibited from selling its cars today and spiritual home to the Big Two & A Half US automakers?
There’s also rumor that Tesla is seriously considering Mexico.