Tesla’s vehicle production to increase to 100,000 cars in Fremont Plant
Tesla Motors Inc. seems to have moved beyond the obstacles it was facing in terms of the production issues claims Mr. Dan Galves, the lead automotive analyst at Credit Suisse.
As per a recent visit to the company’s manufacturing plant situated in Fremont, California that complies with the company’s futuristic delivery goal, the company has given an Outperform rating on Tesla’s stocks.
The analytics company has observed a significant improvement when it comes to the operational patterns at Tesla factories. Moreover, an addition has been made in the machinery and space since the automotive giant will now initiate the simultaneous production of Tesla Model X and Model S. Other than that, the company will also launch the Model 3 sedan.
As per the firm, the manufacturing plant has transformed to a great extent. Initially, the plant had the ability to produce around 40,000 to 50,000 cars each year. However, now it can manufacture as much as 100,000 cars per annum.
This estimate has emerged since the company upgraded its body assembly domain which can now come up with 3,500 cars in a week. This accumulates to around 175,000 cars per annum. A top notch paint shop loaded with state of the art facilities can accommodate almost 500,000 cars per year. Other than that, the company has also constructed a second press for stamping that will bolster production by 10 to 20 times.
At this point of time, the electric car giant is pushing its output capacity so it can comply with it high sales goals. The company y needs to improve its annual deliveries by 60% and also minimize the costs of production. This currently acts as a major catalyst in igniting losses in the electric car fraternity each trimester. As per Credit Suisse, the cost differential relative in contrast to top automakers like General Motors is merely because of the small scale and lack of experience. Tesla is not stumbling because of the production issues and soon the gaps will be bridged.
The electric car behemoth is considering 2020 to be its turnaround year when it comes to bottom line performance. The company is devoted to retailing and manufacturing almost half a million EV cars all over the globe. As per an interview with John Wheeler, the chief financial officer, the company seems confident about the company’s financial capabilities. Moreover, their cash position is getting better and there is less reliance on the debts occurring externally.
Credit Suisse quoted the company’s new CFO that the automotive giant’s present credit line which is asset back will be good enough to cater to core expenses this annum. They have already been estimated to be less than that of 2015 as per the company itself. According to Mr. Wheeler, the residual value risks are quite low due to the big margins on the actual residuals; this implies on the original projections as well particularly the initially produced cars.