Photo: Tesla
Fremont gigafactory is Tesla’s first production facility and it started to show its limits. A recent visit to the factory by Morgan Stanley analyst Adam Jonas revealed the factory is “bustling” while producing way more cars than Tesla initially intended. A plant expansion is urgently needed, and this might happen rather sooner than later, according to a Musk tweet from two weeks ago.
According to a lengthy note to investors shared on Twitter by Tesla investor Sawyer Merritt, among the key takeaways of Jonas’s visit is the incredibly busy work environment at Gigafactory Fremont. Before Tesla’s takeover of the plant, Toyota produced in Fremont just 300,000 vehicles a year. Tesla somehow managed to increase the production rate by 50%, to 450,000, while building all its four models at the factory.
“The plant was never designed to produce 450k units (at its peak produced ~300k units before Tesla took it over from Toyota) which was immediately apparent at the tour, ” Jonas wrote. “Tesla does not shy away from the fact the plant is inefficiently designed with 4 assembly buildings, one of which is a tent that cars are assembled in.”
Simply put, Fremont is running out of space, and this hinders the logistics to supply the plant with the needed materials. The Fremont factory is so cramped that trucks need to offload their cargo in locations that make little sense. This is a problem that Elon Musk is well aware of, as confirmed in a March 3 tweet.
“Actually, we still operate our California factory, which is the largest auto plant in North America, at full capacity and are considering expanding it significantly,” wrote Musk. “It has built 2/3 of all electric vehicles in North America, twice as much as all other carmakers combined.”
Even while Fremont faces space constraints, Tesla is in full swing expanding production facilities both at home (Giga Texas) and abroad (with Giga Berlin). With the new gigafactories fully operational probably next year, Tesla would have enough production capacity to allow it to overhaul its factory in Fremont. In the meantime, Gigafactory Shanghai faces production problems due to Chinese health authorities tightening restrictions to counter a new wave of the global health crisis.
“The plant was never designed to produce 450k units (at its peak produced ~300k units before Tesla took it over from Toyota) which was immediately apparent at the tour, ” Jonas wrote. “Tesla does not shy away from the fact the plant is inefficiently designed with 4 assembly buildings, one of which is a tent that cars are assembled in.”
Simply put, Fremont is running out of space, and this hinders the logistics to supply the plant with the needed materials. The Fremont factory is so cramped that trucks need to offload their cargo in locations that make little sense. This is a problem that Elon Musk is well aware of, as confirmed in a March 3 tweet.
“Actually, we still operate our California factory, which is the largest auto plant in North America, at full capacity and are considering expanding it significantly,” wrote Musk. “It has built 2/3 of all electric vehicles in North America, twice as much as all other carmakers combined.”
Even while Fremont faces space constraints, Tesla is in full swing expanding production facilities both at home (Giga Texas) and abroad (with Giga Berlin). With the new gigafactories fully operational probably next year, Tesla would have enough production capacity to allow it to overhaul its factory in Fremont. In the meantime, Gigafactory Shanghai faces production problems due to Chinese health authorities tightening restrictions to counter a new wave of the global health crisis.
NEWS: Morgan Stanley analyst Adam Jonas toured the Tesla Fremont Factory on Tuesday March 15th, test drove the Model 3, Model Y and Model S Plaid and attended a meeting with IR.
— Sawyer Merritt ???????? (@SawyerMerritt) March 16, 2022
Here are his key bullet points (thread):
1/3 pic.twitter.com/2JqhcwDYHv
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