As the deadline for production parts for the Tesla Model 3 is just 6 months away, analyst Jennifer Liang of KGI, a respected Chinese research firm, did a supply chain check and found that Tesla is going “all out” to race the Model 3 to production. The analyst said that Tesla is working with “system integrators (SI) in the supply chain and strengthening automation.”
In a new note today, Liang wrote (via StreetInsider):
“Versus supply chain management for Model S and X, where nearly all parts and components are shipped to Tesla’s Fremont factory in California for sub- and final assembly, Tesla has brought in two SIs, located in Thailand and China, for various sub-assembly for Model 3. Its recent acquisition of Grohmann Engineering (DE), a specialist in automated manufacturing, is clearly another endeavour by Tesla to accelerate Model 3 production.”
The analyst noted that the large backlog of over 400,000 pre-orders for the Model 3 “provides volume visibility” for the company to work with its supply chain. Tesla has certainly come a long way from the Roadster and early days of the Model S when it had difficulties convincing suppliers to work with them.
Liang listed Bizlink, a wiring harness supplier based in Taiwan, a market Tesla recently entered, and Hota, an automotive part supplier, as companies to benefit from Tesla’s strong growth.
Interestingly, Liang sees over 50% growth for the Model S and Model X combined in 2017, but she expects Model 3 shipments to fall shorts of targets during the same period.
It would be important to note that Tesla didn’t officially set a goal for Model 3 deliveries in 2017 beyond stating that it aims to achieve volume production in late 2017. Tesla CEO Elon Musk did mention very tentatively that the company could deliver 100,000 to 200,000 Model 3 units, but he made it clear that it was only a guess and it’s highly dependent on a production ramp up that is difficult to anticipate in the first few months.
The only official volume goal of the automaker is to achieve an annual production rate of 500,000 cars in 2018 and that’s Model S, X, and 3 combined.
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