Tesla Gigafactory China: Mud, “Basically An Open Field,” Not Gonna Happen — Skeptical Claims Revisited

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We reported yesterday that Tesla was ending Model 3 Standard Range shipments from the US to China because it was starting to produce the base Model 3 trim in its new (and still under construction) Shanghai gigafactory, “Gigafactory 3.” It may surprise even Tesla optimists that the company was able to go from no construction at all to Model 3 production in such a rapid time, but it surely surprises Tesla skeptics the most. In fact, in light of the milestone, I thought I’d remind people of a handful of claims about Gigafactory 3 from just earlier in the year, a couple of quarters ago. Most of these were published within one month of Elon Musk joining a little ceremony for the Gigafactory 3 groundbreaking on January 7th, but note that skepticism about the factory has been common throughout the year.

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In a January 7th article titled “Elon Musk Sees a Future in China for Tesla, and It’s Muddy,” the Bloomberg writer doesn’t say the plan is impossible or unrealistic, but he comes close, while writing about Elon Musk in an unflattering fashion throughout the article. If, at the end of the article, you got the impression that one should be skeptical of Tesla’s Gigafactory 3 plans and the future of Tesla, you would digested exactly the narrative he was pushing.

On January 14th, Forbes published an article titled “Not So Fast: Can Elon Musk Really Open Tesla’s China Gigafactory This Year?” The article, exuding an air of authoritative skepticism, started off like this: “Elon Musk rarely shies away from setting bold targets for Tesla, despite a mixed record for achieving them when promised. So it was in character when he announced the electric-car company’s first Chinese Gigafactory could be operational in about 11 months.

“‘We’re looking forward to hopefully having some initial production of the Model 3 towards the end of this year and achieving volume production next year,’ Musk said at the Shanghai groundbreaking January 7.

“He may be disappointed.

“There’s no precedent for building a large, modern auto-assembly plant and starting its production in under a year, manufacturing experts say. In fact, even Tesla’s official goal of ramping up to 3,000 Model 3 electric sedans per week at some point in 2020 won’t be easy.

“‘Unless he’s mastered some approach that I’m not aware of to do everything in a more effective and efficient way, that lead time to build is going to be really challenging,’ said Laurie Harbour, CEO of manufacturing consultant Harbour Results Inc. in Southfield, Michigan. ‘It definitely seems completely optimistic.'”

Optimistic? Or realistic?

After claiming that Tesla was not known for meetings its production goals (note that Tesla is on track to nail Elon Musk’s 2014 forecast for 2020 production and delivery goals), Business Insider writer and frequent Tesla critic Linette Lopez expressed great skepticism about Elon Musk’s plan to have Tesla producing the Model 3 at its Shanghai gigafactory by the end of 2019. “So far, the China plant is, um, basically an open field with some digging going on,” she said. “It’s harder and harder to believe that there will be Model 3s coming out of the Tesla China gigafactory by the end of the year.”

https://twitter.com/flcnhvy/status/1151045167513837568

A February 8th article on GuruFocus by the president of Almington Capital — Merchant Bankers, short Tesla [TSLA] at the time, was titled “Tesla’s Shanghai Plans Don’t Add Up.” The article contained paragraphs like these: “Tesla has been talking about China for a number of years, but not much material came of all that talk. Then, in October, the company announced it had leased a plot of land in Shanghai’s Lingang area. The swampy land had found little interest among potential domestic anchor developers, which goes some way to explaining the slightly below-market $140 million price Tesla agreed to pay. …

“When Musk broke ground at Gigafactory 3, the plot was still nothing but a field with a temporary wall erected around it (and a worryingly muddy field at that). Tesla had claimed to be ramping up construction efforts even before the official groundbreaking, but there was little sign of construction activity, despite the convenient presence of heavy construction machinery at the event.

“Since then, updates have been somewhat scant. Some intrepid observers, however, have provided independent status reports via aerial drones. The most recent video footage of the site was recorded and released on Feb. 5. It shows little in the way of progress. There appears to be some poured concrete, yet there is virtually no visible work activity or sign of life around the place. That is certainly inconsistent with Tesla’s own extremely aggressive timetable.”

Timelapsed: 7 months ago, 5 months, … And Voilà! pic.twitter.com/7XfqfLyN3d

— Khalil Amar 🔌🇲🇦 (@khalilamar) August 8, 2019

That's a lot more polished for the @Tesla Gigafacotry 3 road, future #GF3 tourism can be great.😃#TESLA #GF3 $TSLA pic.twitter.com/CpXCa8ZrhF

— Chao Zhou 🧢 🔥🔥🔥 (@realChaoZhou) October 1, 2019

To be fair, there’s still mud on the site. But I think you get the point.

Is Elon Musk a magic maker? Or are people just too skeptical? Or have they simply been pushing an agenda, for one biased reason or another, that we can now see was completely disconnected from Tesla’s future in the physical world?

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