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100% Electric Vehicles

Tesla Now Aims For 500,000 Vehicles A Year … In 2018!

Originally published on CleanTechnica.

Tesla just released its quarterly shareholder letter. The first item is a whopper: the company aims to move its 2020 target to produce 500,000 vehicles a year to 2018.


Tesla Model 3 @ Unveiling Event | Image Credit: Kyle Field, for CleanTechnica

Obviously, this is in response to the insanely (nay, ludicrously) high demand for the Tesla Model 3 (up to 400,000 reservations weeks ago, before Elon stopped updating us). If there’s the demand, there’s a way to achieve it, right?

As many commenters here on CleanTechnica and people Kyle and I talked to at the Tesla Model 3 unveiling said (the EVAnnex dudes, for example), with banks, investors, and Panasonic seeing how strong demand for the Model 3 is, Tesla should have no shortage obtaining more financing and agreements to increase battery and vehicle production further.


Tesla Model 3 @ Unveiling Event | Image Credit: Kyle Field, for CleanTechnica


Tesla Model 3 @ Unveiling Event | Image Credit: Kyle Field, for CleanTechnica

There have already been several signs that Tesla is aiming a much faster ramp, but that is now crystal clear thanks to the shareholder letter.

Other news this week (that we haven’t yet had time to cover in detail) that hinted at this was that Tesla just nabbed a huge warehouse lease in Livermore, near its Fremont factory — “just over 1 million square feet, or more than 17 football fields.” Yep, that had Model 3 fingerprints all over it.

Another tidbit that could be related to the ramp or could be related to the Model X production problems (or could be related to other matters altogether) is that two of Tesla’s production chiefs are on their way out — “Greg Reichow, Tesla’s vice president of production and one of its highest-paid executives, and Josh Ensign, vice president of manufacturing, will leave the company. A Tesla spokesperson confirmed both departures and said Reichow will remain until his replacement is found.”  One would think that has more to do with the ongoing Model X production problems, but who knows, maybe there’s a difference of opinion regarding the challenge of ramping up to 500,000 vehicles a year by 2018. Can I emphasize that target strongly enough?

Naturally, there’s a bit of a “he said, she said” going on with these departures, and we don’t have enough insight to pick a side, but here’s another quote from that Bloomberg piece: “A person familiar with the situation who isn’t authorized to speak about the matter said the executive changes are linked to delays, glitches, and a recall that have bedeviled Tesla’s Model X. Tesla denied any connection between the departures and production problems with its SUV. ‘This is not about the Model X,’ said a Tesla spokesperson. ‘After being at Tesla for over five years and leading its production team for the past three years, Greg Reichow has announced his intention to take a leave of absence from Tesla so that he can have a well-earned break.'”

Reichow made nearly $6.4 million in cash, stock, & options in 2014 + 2015, so I’m sure it wasn’t a lighthearted decision however it came about. And one could certainly see that the burnout from the past several years left him ready for a vacation rather than a daunting production task. I’m sure Tesla won’t have trouble finding a replacement, though. (Edit: Notably, Reichow’s LinkedIn profile shows no prior experience in the automotive world ahead of Tesla, but over 7 years at SunPower.)

Back to the Tesla shareholder letter, here’s the opening paragraph:

“The overwhelming demand for Model 3 confirms that compelling all-electric vehicles have mass-market appeal. In the first week of taking deposits for Model 3, we received more than 325,000 reservations despite no advertising or paid endorsements. This implies about $14 billion in future sales, making the Model 3 introduction the biggest consumer product launch ever. Since then, reservations have continued to grow to surpass even our expectations. With Model 3, our mission of accelerating the transition to sustainable transportation is more achievable than ever.”

I’ll update this article as I get further into the letter, or I’ll write new articles if it seems warranted. But my big take-home is the same as I repeated many times on Model 3 unveiling night: The conventional automakers (BMW, Mercedes, GM, etc) must be panicking and/or crying right now.

Full Disclosure: I’m long TSLA. Very long TSLA. My articles are not aimed at affecting the TSLA stock price and I’ve been writing in the same way about Tesla for long before I was a stockholder. Just sayin’.

Written By

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. Zach has long-term investments in TSLA, SCTY, FSLR, SPWR, SEDG, & ABB. After years of covering solar and EVs, he simply had a lot of faith in these companies and felt like they were good companies to invest in as a portion of his retirement strategy. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.


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