Elon Musk has seen the official start of production at Tesla’s new Giga Texas plant in Austin, saying it’s the nation’s largest by volume and will also be the largest US auto plant by volume when fully ramped up.
Speaking to more than 1,000 invitees and fans of the brand crammed into the sprawling facility of what Tesla called “Cyber Rodeo” late Thursday, Musk said the plant will produce at least 500,000 vehicles a year by next year. Initially, it will make the Model Y hatchback, with production of the hardcore Cybertruck truck starting next year, along with a new version of the Roadster sports car and Tesla Semi.
“The Model Y line will be the highest capacity line, I think, of any line in the world. In fact, I’m sure of that,” Musk, wearing a black cowboy hat, black sunglasses and a black Giga Texas T-shirt, told the audience. “Half a million units a year in one single product plant is the biggest dangerous thing in the world. This will be the largest auto plant by volume in America.”
The Texas plant opened as Musk’s outlook has never been stronger, as concerns about climate change and rising oil prices boost demand for electric vehicles. When fully strengthened, the Austin plant—with Tesla’s new Giga Berlin plant, the rapidly growing Shanghai Gigafactory and the Fremont plant in California—could give the company the ability to build about 2 million vehicles annually over the next few years. That’s more than double what Tesla produced in 2021.
The Austin facility has opened in less than two years since construction began, and is Tesla’s second new plant in a month, after the late opening of the Giga Berlin plant in March. Both facilities are a major step for the automaker that is still less than 20 years old and will likely help Tesla maintain its current position as the world’s top electric car maker for the foreseeable future.
However, the company’s growth may be constrained this year by an ongoing shortage of computer chips and increased competition for the raw materials needed to make batteries from auto competitors. Water is also a concern for both the Austin and Berlin factories.
Dan Ives, equity analyst at Wedbush Securities, says, in a research note. “The key to mitigating these issues is centered around the major Giga slots in Austin and Berlin which will ease Tesla’s production bottleneck globally.”
Unlike Tesla’s original Fremont plant, which consisted of multiple, separate buildings, Giga Texas is one massive facility that houses all of the manufacturing under one roof, including a new battery line that makes on-site packages for vehicles built there. The facility totals 338 million cubic feet, Musk said, or 15 buildings in the city. “It’s equivalent to three quintuples.”
In addition to building vehicles, the billionaire entrepreneur said the factory will also produce the humanoid Optimus robot early next year, a product that Musk has been touting a lot since it was revealed — in the form of a person in a dancing robot suit on stage — at Tesla’s AI Day. In 2021. Although he remains optimistic about the product, analysts and robotics experts don’t seem to share Musk’s enthusiastic view.
The new multi-billion dollar Texas plant is designed for maximum efficiency and will make vehicles primarily use three main components: a rear section made from a single casting, a battery pack designed to be the vehicle’s structural undercarriage and the front section also made from a single die cast.
“Just as with modern aircraft, where the wing is a wing-shaped fuel tank, with the new Y-style design, the (battery) cells themselves carry the load. This results in a vehicle that is lighter, with a smaller number of parts, lower cost and improved crash performance, so it’s a safety feature as well,” he said. “It’s a revolution in the auto industry to make the car basically out of three main parts.”
Shares of Tesla, the world’s most valuable automaker with a market capitalization of more than $1 trillion, fell 3% to close at $1025.49 on Nasdaq trading on Friday.
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