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Tesla Says Shanghai Gigafactory Already Producing 1,000 Model 3s Per Week

Earlier today, Tesla hosted the first vehicle delivery event at its Shanghai Gigafactory, delivering a small number of Shanghai-made Model 3s to employees. At the event, Tesla China general manager Wang Hao said that 1,000 Model 3s are already being produced each week, with 280 units per day having been demonstrated. This production level comes less than 12 months since Tesla broke ground on the Shanghai Gigafactory site.

Earlier today, Tesla hosted the first vehicle delivery event at its Shanghai Gigafactory, delivering a small number of Shanghai-made Model 3s to employees. At the event, Tesla China general manager Wang Hao said that 1,000 Model 3s are already being produced each week, with 280 units per day having been demonstrated. This production level comes less than 12 months since Tesla broke ground on the Shanghai Gigafactory site.

Tesla Gigafactory Shanghai Team / Image Credit: Tesla

Tesla has previously said it plans to begin volume deliveries of the Shanghai-made Model 3 in earnest before the 2020 Spring Festival starting from 24th January. If the 1,000 units per week is already a sustained rate of production, and gradually climbing, Q1 2020 should see at least 12,000 Shanghai-made Model 3s delivered to customers. My guess is that 20,000+ deliveries may be possible in Q1 if adequate supply of cells and motors can be lined up.

There are already a few hundred Model 3s awaiting shipment at the Gigafactory site, but the employee deliveries today and perhaps tomorrow are likely only comprising 15–30 vehicles or so. Depending on accounting regulations, once either production or deliveries begin, the Shanghai Gigafactory may start to shift from being an ongoing investment to an operational part of Tesla’s business. This may trigger amortization and depreciation accounting, which might attract negative narratives about some lines of Tesla’s 2019 Q4 accounts. Employee deliveries (potentially able to be booked as a different class of transaction) may not trigger this shift of the Gigafactory to operational status, but general customer deliveries likely would trigger the shift.

Due to these considerations (which are only rough guesses on my part, with some guidance from Maarten), Tesla may favor beginning general customer deliveries in Q1 2020. So, let’s see if Tesla makes any number of general public deliveries in the next day or so or holds off until early January. Please jump in the comments if you have an accounting-savvy perspective on this.

We can see the large numbers of Model 3s already being produced at the Gigafactory in these recent aerial videos by Wuwa Vision and Jason Yang:

Tesla China also live-streamed a video of today’s delivery event and presentations, which you can watch on Tesla’s Weibo account (all in Mandarin Chinese).

For the sentimental amongst us, here’s a cute Youtube video from 岩常 of one of the new employee-owners taking the opportunity to propose to his girlfriend at the event:

If the Tesla Shanghai Gigafactory is already producing 1,000 units a week (and presumably steadily ramping up), what’s your best guess for Shanghai-made Model 3 delivery volumes in Q1 2020 and the full year? Please share your thoughts in the comments.

 
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Max is an anthropologist, social theorist and international political economist, trying to ask questions and encourage critical thinking about social and environmental justice, sustainability and the human condition. He has lived and worked in Europe and Asia, and is currently based in Barcelona. Find Max's book on social theory, follow Max on twitter @Dr_Maximilian and at MaximilianHolland.com, or contact him via LinkedIn.

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