Are Tesla Semi Production & 4680 Production Finally Ready To Ramp Up?

Could the Tesla Semi and 4680 batteries be Tesla’s sneak attack in 2024–2025?

The Tesla Semi has been my favorite Tesla vehicle since it was introduced. Cutting emissions from long-haul semi trucks in a slick new design with super highway Autopilot offers a lot to love. So, it has been quite disappointing to see how slowly Semi production and deliveries have ramped up.

Was the electric semi truck just not ready for prime time? I know it’s delivering products for Frito-Lay, but … chips are chips. That’s not the largest challenge a semi truck is going to face. Furthermore, Tesla indicates the Semi is still in “pilot production” in the quarterly shareholder letter it published a couple days ago.

Or perhaps it’s just all about the batteries. Without more batteries, and particularly its own 4680 batteries, perhaps Tesla just can’t ramp up production, so it’s all in a bit of limbo until more 4680 battery progress is made.

Well, whatever the reasons (and it could well be a combo), it seems the floodgates may be ready to fall. Tesla began breaking ground on a big expansion at Giga Nevada (Tesla’s first gigafactory) last week.

But how big is this expansion anyway? Is this significant? Yes, it seems to be. Tesla announced the expansion almost precisely a year ago and noted that, when completed, it should produced enough 4680 battery cells for 2 million light-duty electric vehicles every year while creating 6,500 full-time jobs. Tesla is already posting more job openings for Tesla Semi production — in Sparks, Nevada, as well as Palo Alto, California, and Austin, Texas. So, it seems Semi production is getting ready to ramp up — once this expansion takes place.

It’s funny that Tesla didn’t highlight this in its shareholder letter, but that’s why I’m considering it a potential sneak attack. As everyone knows, ramping up production is tough. Elon Musk famously called the Model 3 ramp-up as “production hell.” Perhaps with the uncertainty that comes with it and other struggles with timelines, Musk just decided to stay quiet on this in the recent investor updates.

Overall, this Giga Nevada expansion is expected to be a $3.6 billion expansion adding 4 million square feet of manufacturing space. Two new facilities are being built — one for Semi production and one for 4680 battery production.

Can we be hopeful about this? In a time when Tesla is quite down in the dumps (see: stock price graph this week and talk of lower sales growth in 2024), is this pure hopium and hype, or is this a big news item worthy of celebration and optimism? I tend to think it’s the latter, but then again, I’m an eternal optimist.

On the flip side, Elon Musk is often not one to hold back good news or expectations of good news. Especially in the context of hurting sales growth and gross profit, one would think that he’d be eager to share news of growing Semi production and 4680 production if he was bullish on progress in the coming quarters. The only thing mentioned about the Semi in the shareholder letter is that it’s in pilot production. There is no mention of 4680 batteries.

What do you think? Will the Tesla Semi and 4680 batteries be a positive sneak attack from Tesla in 2024–2025? Or are we still far away from big news on these?