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Tesla President talks about a factory in China and increasing production capacity to satisfy Model 3 demand


Earlier this month, Tesla confirmed that it is currently working on increasing its production plans to minimize the wait for the Model 3 following the storm of reservations it received for the $35,000 all-electric sedan – approaching 400,000 cars as of the latest update. The vehicles are set to be manufactured at Tesla’s main factory in Fremont, California.

While Tesla plans to manufacture about 90,000 vehicles in 2016, the company always refers to the Fremont plant’s total capacity to be around 500,000 cars per year once optimized, which is what Toyota and GM were producing when they owned the factory, and it also plans to add more manufacturing capacity in other regions.

Jon McNeill, Tesla’s President of Global Sales, is in China today for the Beijing Auto Show. He gave an interview to the English news channel of China Central Television (CCTV) and made the following comment when asked about Tesla’s plan to handle Model 3 demand:

“We’ve doubled production capacity each of the last several years and we will continue doubling – and one of the focus points for the entire company is making sure that we are ready to deliver Model 3 on time.

So we will have production capacity ready to do that. We have a factory in California that is sized for about 600,000 vehicles a year, but in addition as I mentioned, we are looking for an additional factory as well. That could very well may be in China.”

Following McNeill’s comment, a Tesla spokesperson told us that “600,000 per year” was a mistake and that “there has been no change” to the factory’s planned capacity. The company is expected to achieve the full capacity of the plant around the end of the decade – or about 2 years into the start of the Model 3 production.

Here’s a video of McNeill’s interview:

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The Fremont factory is one of the biggest buildings on earth with 5.3 million square feet of manufacturing and office space.

Here’s a map of the plant (via Tesla):


Tesla has also been acquiring more space in Fremont to expand its manufacturing capacity in the region. It also operates a tool and die facility in Michigan and a final assembly line in Tilburg, Netherlands.

As for China, McNeill said that Tesla’s next vehicle factory could “very well” end up in the country. Recent reports suggest that Tesla executives visited locations in the Suzhou region and talked to potential manufacturing partners. Earlier this year, Tesla CEO Elon Musk confirmed that the automaker plans on securing a location and a local partner for a manufacturing facility in China by the middle of the 2016. An announcement should be expected relatively soon.

While Tesla needs to partner with a domestic manufacturer to establish production in China, it will be able to avoid high import duties, have access to more EV incentives and free up production capacity in Fremont for local demand.

Here’s a video of McNeill unveiling the Model X in Beijing this weekend:

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  1. Nick - 7 years ago

    Could be that Tesla’s added efficiencies/robots squeak another 1/5th to get to around 600k by the end of the decade. I find it hard to believe a President of Global Sales would accidentally give a number that’s 20% off the mark; sounds more like a Freudian slip.

    As for Tesla denying this new figure, it may be to keep expectations in check until they know for sure.

    • I agree.
      I pretend i didnt hear it and act surprised next time i do. 🙂

    • Stetson - 7 years ago

      Probably just a difference between what they are hoping internally versus what they are promising externally. Those are usually pretty different.

    • Bubba2000 - 7 years ago

      I agree with you regarding increasing efficiencies of robots, stamping, forging, welding, material handling, assembly painting, etc. Plus the fact that BEVs are simpler. Battery packs are assembled in NV. I would think Tesla could produce 1,000,000 at the current factory space.

      • Nathanael - 7 years ago

        Good guess. Musk just let slip during the “earnings call” that he thinks that’s Fremont’s ultimate capacity.

  2. Steve Grenier - 7 years ago

    I wonder what kind of reservations there are on a country by country basis. Doubt we’ll ever know, but I assume the vast majority are in the US.

  3. Bubba2000 - 7 years ago

    With all the advances in robotics, stamping, welding, painting, etc I wonder why Tesla can not double the production within the existing factory? After all, the quoted production of 500,000 was about 10 years ago with older equipment. Furthermore, Tesla is building the battery pack at the Nevada site… that is the most complex components with the most parts. Rest of the MS, MX, M3 should easier to build than equivalent ICE autos. If Tesla needs additional space, it can use the parking lot… and find another parking space. Cheaper than a greenfield manufacturing site across the world, especially in the EU.

    I think the Holland assembly site must be to get a break of taxes. With China it is obvious: They favor local companies. Unfortunately, the same rules do not apply when the Chinese set-up shop here. Wonder what is the government thinking, especially when signed it WTO with China. The upside is that Tesla can get some big loans, tax breaks, rebates, dirt cheap labor and low income tax rates. Export batteries from the GF.

  4. Keith - 7 years ago

    The minute tesla establishes a manufacturing plant in China, is the minute tesla becomes just another big auto maker. Yes they’ll still be innovative and the producers of some of the best electric cars on the market, but there true business model will become evident to all of the consumers. They want to make as many cars as possible for as cheaply as possible. Aka just another auto manufacturers. If tesla were GM or Volkswagen, that would be great for them. The only problem is is there not, they’re the small kid that told the world that the environment was a priority and that going through American labor Chanel’s could yield the best car in production. Due to this ideal, tesla was able to sell cars at exorbitant prices. If tesla opens a plant in China this image will be severely tarnished and the clout associated with owning a tesla would dissolve like the like the Chinese bee population. Overall a big mistake for there company. After all how can you talk about increasing carbon dioxide and greenhouse gas emissions, and then establish production in a country that has less than 15 percent of their coal powerplants employing any form of environmental protection equipment, so bad, it leads to over 400000 sick per year do to inadequate air quality. It’s just not possible!


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