Tesla CEO Elon Musk Sets Goal of Making 500,000 Cars in 2019
Elon Musk said Tesla Inc. will make about 500,000 cars this year, a prediction that’s difficult to gauge given the CEO’s proclivity for setting stretch goals.
The number Musk put in a Twitter posting late Feb. 19 is about in line with his previous comments, depending on which figures investors paid attention to when Tesla reported earnings Jan. 30.
In a letter to shareholders, Musk and his chief financial officer forecast as many as 400,000 total vehicle deliveries this year. But within hours, the CEO told an analyst on Tesla’s earnings call to expect sales for just the Model 3 to reach as many as 500,000 units in 2019.
Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.— Elon Musk (@elonmusk) February 20, 2019
To Musk’s credit, Tesla did make substantial progress in mass-manufacturing electric vehicles last year after overcoming the “production hell” he predicted the company would go through starting in the fall of 2017. Total deliveries more than tripled last year.
Still, making 500,000 vehicles in 2019 will be difficult based on the guidance Musk and CFO Deepak Ahuja gave late last month: that Tesla may need until the end of this year to reach a weekly production rate of 7,000 Model 3s.
Tesla made 0 cars in 2011, but will make around 500k in 2019 — Elon Musk (@elonmusk) February 20, 2019
If the company were to average that pace for the full year, without taking any time off at its plant in Fremont, Calif., it would assemble almost 365,000 of those cars. Tesla produced an estimated 101,500 Model S sedans and Model X crossovers last year but has dialed back output of those models in early 2019.
Musk and Ahuja, who is retiring, said in the shareholder letter the expiration of the full federal tax credit in the United States at the end of December probably pulled ahead some Model S and Model X demand and cautioned deliveries probably will be lower in the first quarter than a year ago.
To expand its business in China, Tesla is building a plant in Shanghai, though it’s expecting to start production there late this year.
The electric vehicle maker kicked off this year on a dull note, with fourth-quarter deliveries slightly lagging expectations. Multiple price cuts have followed for the Model 3 sedan to compensate for the gradual elimination of government incentives in the United States. Tesla’s quarterly profit, reported in late January, also missed estimates.