Tesla Motors announced that the electric automaker achieved record production of 105,000 vehicles and delivered approximately 112,000 vehicles during the final quarter of 2019.  We the final quarter Q4 performance, the automaker was able to declare that it had achieved the company’s modified goal of delivering 367,500 vehicles during 2019, 50 percent more than in 2018. Full year production amounted to a reported 365,194 vehicles.

Highly followed Model 3 performance in the final quarter amounted to 86,958 vehicles produced with 92,500 deliveries to customers. Tesla Model 3

CEO Elon Musk had previously indicated to investors that the total vehicle delivery target for the year would be between 360,000 and 400,000 vehicles, thus the automaker was able to achieve the low-end of that milestone.

Once more, and fairly significant, the new Gigafactory Shanghai China facility that was announced in January of 2019, with a literal empty field background, managed to produce what was described as just under 1000 customer suitable Model 3 vehicles by the end of the year, The facility’s production manager told The Wall Street Journal in late December that the China facility can produce more than 28 Model 3 vehicles per hour and is now operating with a 10-hour workday. After incurring a delay, the associated battery manufacturing facility began production in late December. This facility represents the first wholly owned automotive manufacturing facility located in China, and as such, provides an important showcase to demonstrate China’s stated new liberalization rules related to foreign-owned companies. At full capacity, this facility is estimated to be able to produce 500,000 vehicles annually to support China and other Asia based electric auto customers.

 

Supply Chain Matters Perspectives

Obviously, we along with other supply chain management focused media need to applaud Tesla’s employees and leadership for accomplishing the 2019 milestone. Obviously, it was not pretty, featured with assembly lines housed in tents, It involved a lot of hard work, sweet and tears, but the operational goals were made. Shareholders will not know for a few added weeks whether overall financial performance met anticipated goals.   Obviously, there was a time where cash became critical which led to the unfortunate need for headcount layoffs and management turnover.

Candidly, we readily admit our ongoing skepticism, since Elon Musk often tends to set rather stretch or lofty goals in operational performance. That stated and out in the open, we applaud all Tesla Motors teams in their effort.

In our January 2019 commentary related to the aggressive timetable set for Gigafactory Shanghai, this blog stated: After reading such reports, the best analogy that comes to our mind is that we have likely seen this movie before, and it had very mixed reviews. A very aggressive set of financial, operational and market milestones has been declared with very little margin for the usual setbacks.

Well, events have made the above statement mute, and congratulations also to all those that worked to make the Shanghai facility a 2019 operational reality.

As manufacturing and supply chain management teams are all too aware, the time for celebration is often short since a new and more aggressive production milestone awaits in the year 2020 for both facilities, and Elon has already announced intentions to construct a new production facility in Europe.

The beat goes on.

 

Bob Ferrari

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