2021 Tesla S/X Production:
Some folks are now predicting 62K-ish total S/X production for the year, based on an annualized run rate of 100K for 2 shifts at Fremont. But this assumes that GA at Fremont is the limiting factor for S/X production. No surprise, it is not: the limiting factor is the supply of 18650 battery cells from Japan.
That cell supply is all but written in stone now for 2021 (indeed perhaps until 2023) via signed contracts with Panasonic). Telsa
WILL receive enough cells for 100K cars in 2021. They
WILL NOT reduce their order with Panasonic under
ANY circumstances (just like how their 'chip' orders remained stable in 2020, now to their great benefit).
Likewise, other parts for Model S/X are either from long-term contracts with external suppliers (which Tesla will NOT reduce), or they are parts which Tesla makes in-house, giving them ultimate control over supply and production. Parts, including battery cells, are
NOT the limiting factor.
So then,
does Tesla have enough GA surge capacity to assemble ~20% extra S/X over the remainder of 2021 to produce 100K by year-end? Let's look at peak S/X production for clues:
Quarter S/Xtot Comment
2016Q4 24,882 Model X production ramped
2017Q1 25,418 New record Quarterly Production of S/X
2017Q2 25,708 "severe production shortfall" of 100kWh bty packs **
2017Q3 25,076 past peak S/X production; Model 3 'hell' begins
2017Q4 22,076 Tesla reallocates some S/X labor to Model 3 line
**
Tesla Q2 2017 Vehicle Production and Deliveries | Jul 7, 2017
The major factor affecting Tesla's Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines.. The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history.
And there's the
clue:
2017Q2 was production constrained for S/X until
JUNE, but that quarter still resulted in record production, just edging out the previous quarter for the all-time best.
So, even handicapped by insufficient supply of bty packs for 2/3rds of 2017Q2, Tesla was able to surge production enough in the final month to set a new record at over 25.7K S/X per quarter. And that means that the
S/X GA line had extra capacity given enough bty packs in 2017Q2.
Tesla's statement that bty pack "
production was 40% below demand" until June implies
surge production may have been ~15.5K in June 201, implying surge
capability of
45K/qtr for GA.
Note that this was acheive on the old production line(s). Tesla will have made efficiency improvements on the new line, but
MOST IMPORTANT is that now S/X production will not be constrained by battery packs (as in 2017Q2) so peak production can be higher than 25.7K/qtr.
Going forward, we can expect that Tesla will return to 2-shift operations for the S/X GA line, and that production will quickly exceed previous records due to the lifting of battery pack constraints.
I'll make this final observation: Tesla Model S/X production planners
likely know exactly how many battery cells they have available this year, and how fast they can ramp production. I expect they will match these two factors so by year end they've used all of their available supply of cells.
TL;dr Tesla has the battery cell supply and GA capacity to produce 100K S/X total in FY2021.
Cheers!
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