Published on September 22nd, 2018 | by Zachary Shahan0
10 Years After 1st Car, Tesla Production Rate = 300,000–400,000* Cars A Year
September 22nd, 2018 by Zachary Shahan
One of the most bewildering criticisms of Tesla that I routinely see is that it can’t mass produce cars. A common variation of that is that Tesla can’t quickly ramp up production. I find both criticisms a bit absurd. They are based on limited thinking and a warped grading system. We’ve explained some of the reasons why in other pieces, like “Elon Musk’s 2015 Tesla Forecasts Compared To Today” and “Is Tesla Model 3 Actually On Original Schedule?” and “If A Tesla Pattern Has Emerged, What Does That Mean For Model 3?“
The point of those first two pieces is that Tesla fell behind its Model 3 production targets after it had sped up its production targets, and the net result is that it seems to be on target with what it was initially expecting — or may even be over-performing.
The point of the third piece is that Tesla has had some production hiccups with every car, but the cars have ended up selling well and exceeding customer expectations. In fact, Tesla’s initial annual sales estimates for the Model S and Model X have been blown out of the water. Rather than selling 10,000–20,000 per year of each model, it’s selling approximately 50,000 per year of each model.
However, I’ve never made the point that’s in the headline of this article the focus of a full piece. It’s simply stunning to me — and to many of you — that Tesla produced its first car in 2008 and is now hitting a production rate of approximately 300,000–400,000 cars per year just 10 years later. Sit on that for a moment while I drop a chart in your lap.
Name another automaker that has seen such a large production ramp that fast.**
Now, consider how ridiculous the claims are that Tesla can’t mass produce cars or can’t quickly ramp up production.
Aside from the 10 year marker, perhaps more notable is that Tesla brought its first mass production car — the Model S — to market in 2012.*** That means that in a little more than 6 years, Tesla has gone from delivering its first mass produced car to mass producing cars at a rate of approximately 300,000–400,000 units per year. No one has ramped up production so dramatically so quickly in history!
I don’t know how many of you have ever tried to start and grow a young business, but I’m sure those of you who have done so know that it’s extremely difficult to get anything to a large scale in a decade. Getting something you physically produce up to a large scale in a decade is even more difficult. Getting a complicated, heavily regulated product like a car to a production rate of 300,000–400,000 per year in a decade is insane, nearly impossible.
Any complaints or giddy critiques about Tesla having a difficult production ramp with the Model S, Model X, or Model 3 should be put into better perspective. Missing production goals for a few months when you’re shooting for Mars is not necessarily a sign that you are not seriously freakin’ good at ramping up mass production, and it’s definitely not the end of the world. Ramping up production from 0 to a few hundred thousand cars a year in 6–10 years is wicked sharp.
Don’t lose touch with perspective.
*Yes, 300,000–400,000 cars per year is a fairly wide range. There are reasons for that. If you are pessimistic (or an optimistic TSLA short), you may expect Tesla to produce 75,000 cars in the 3rd quarter, and may not have much hope (or fear) that Tesla can produce more than that in the 4th quarter. If you presume, however, that Tesla has gotten up to a sustainable production rate of 7,700 cars per week, that comes to more than 400,000 cars per year.
**In case you’re curious, Ford was founded in 1903 and produced 170,211 Model Ts in 1913. That said, Ford founded another car company earlier, in 1901, which became Cadillac. I haven’t been able to find full sales of other Ford models in the first decade of its existence, but the scattered numbers I’ve found are quite low, so it seems an estimate slightly higher than 170,211 is a decent estimate of Ford’s 2013 sales.
***As a fun fact, I recently noticed that my first article about Tesla was in May 2012 to cover the news that Tesla was going to start delivering the Model S on June 22, 2012.
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