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Sunday, October 15, 2023

Tesla's 2 Million Vehicle Production Year Will Have to Wait

Looking at the production volumes from Tesla last year, it sure looked like this would be the year to hit 2 million vehicles produced in a single year. Fremont and Shanghai Gigafactories were going all out and Giga-Berlin and Giga-Austin were ramping.

The battery cell constraints that have held them back in previous years were resolved.

My hopes for 2023 were high. Tesla sent more reasonable guidance and said that they were expecting to produce 1.8 million vehicles. Tesla is not known for softball targets. They set aggressive targets. They may not always meet them 100%, but they still deliver incredible results. 

I hoped they'd blow past the 1.8 million guidance in November; allowing December's production to push them over the 2 million mark. 

It does not appear that 2 million will happen this year. Tesla announced early in Q3 that they'd be shutting down lines during the quarter for maintenance and upgrades and that's exactly what happened. Q3 of 2023 is one of the few quarters where Tesla didn't set a new production record. It still has impressive year-over-year growth, but it's about 50,000 fewer cars than Q2'23. 

Given all of this, here's the new 2023 estimate. 
Our production prediction for Q4'23 is 555,000 vehicles. If achieved, it would be a record quarter and the first time that they've produced more than half a million vehicles in a single quarter. That would bring the year's production to 1,906,000. This is well ahead of Tesla's guidance, but short of the 2 million I wanted to see. 

Regardless, 2023 already has over a million vehicles rolling off the line with the iconic T logo on the hood. That's millions of vehicles without tailpipes deployed. Far ahead of any other auto manufacturer. 

For Tesla to meet their guidance, they'd have to produce 450,000. They've done more than that in Q2 of this year, so it looks very likely that they'll meet their production target and maybe even a little upside surprise to end the year. 

Disclaimer: I'm long TSLA. Feel free to use my referral code http://ts.la/patrick7819.

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