Tesla Is Still Trying to Scale Production

With factories increasing output, and new plants on the way, the company seems focused on getting more cars into the world.

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Tesla is ramping up Texan production while eyeing a factory in Mexico, and Faraday Future has its sights set on March deliveries. All that and more in The Morning Shift for Friday, December 16, 2022.

1st Gear: Tesla Is Boosting Model Y Production In Texas...

Tesla’s Texan factory got off to a slow start. It was built to take advantage of the company’s 4680 battery cell, but that still hasn’t reached volume production — forcing the plant to take time to pivot back to older battery cells. Now, finally, it seems Giga Texas is getting into gear. From Automotive News:

Tesla Inc. is building 3,000 Model Y crossovers a week at its new Austin, Texas, factory — a sign the electric-car maker is making up for lost time at the money-losing plant.

Tesla shared the new production figure in a tweet Thursday. The milestone comes a week after Bloomberg reported that Chief Executive Officer Elon Musk had asked the head of the company’s China division to get the Austin factory up to speed.

Extrapolated out over a year, that production rate would get Tesla to about 156,000 vehicles, still short of the annual target of 250,000 the company promoted in its third-quarter letter to shareholders.

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I double-checked the math, and it turns out 156,000 is in fact considerably lower than 250,000. It’s a step in the right direction, though.

2nd Gear: ...And Reportedly Considering A Mexican Plant

All the cool kids are moving production to Mexico, so why shouldn’t Tesla get in on the fun? The company’s expansion south of the border has been long-rumored, but new reports say a full announcement could be coming very soon. From Automotive News:

Tesla Inc. and the Mexican border state of Nuevo Leon are firming up plans for a factory site in an automotive corridor that is home to assembly plants for Kia and General Motors, according to sources quoted by the Milenio newspaper.

Tesla CEO Elon Musk and the state government are “fine-tuning the final details,” Milenio said this week, “in order to announce the installation of a factory in the state, which is expected to be made public in early 2023.”

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As international trade relations with the U.S. remain in flux, shifting production to Mexico seems like a smart move. But with Tesla constantly spinning up new factories, even before the old ones reach full production levels, it’s unclear exactly what manufacturing volume Tesla is targeting — beyond “more.”

3rd Gear: Faraday Future Wants Its Cars En Route To Customers In April

Automotive startups all have big ambitions, dreams of revolutionizing the way people get from Point A to Point B. Then, more often than not, they run into the time-honored problem of “actually getting a car to a customer.” Faraday Future, with the help of some fresh investment money, wants that hurdle cleared early next year. From Reuters:

EV startup Faraday Future Intelligent Electric Inc (FFIE.O) said on Thursday it was in discussions with investors for additional capital of up to $170 million as it sets a target to deliver its FF 91 Futurist vehicle to customers in April 2023.

The Los Angeles-based company said it expects to start production of its FF 91 Futurist electric car at its manufacturing facility at the end of March 2023.

...

Faraday Future, which has been struggling to raise capital to start production, said on Thursday it had received a $30 million binding letter of intent from an existing investor.

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It seems like Faraday is constantly in the news, and rarely for good reasons. If the company actually manages to begin deliveries within the next few months, without further delays or issues, I’ll be impressed.

4th Gear: Volkswagen CEO Says To Remain Calm, All Is Well

Oliver Blume hasn’t had it easy, taking over a massive auto conglomerate at a time when the industry is massively changing. Still, he’s done well, getting the company a solid base from which to jump into new endeavors. At least, that’s how he sees it. From Automotive News:

Volkswagen Group CEO Oliver Blume said at an extraordinary general meeting on Friday that the group was on solid footing, with his first hundred days spent on tasks including reshuffling senior roles, defining the automaker’s strategy for China and North America, and revising its software and platform strategy.

“We are working on a globally balanced presence - in Europe, China and a strong third leg of North America,” Blume said, pointing to the need to diversify in light of geopolitical tensions.

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The idea of North America as a third leg, after China, points to just how quickly global markets are shifting. How long will it take us to dip into fourth, after India?

5th Gear: Lawmakers Want Connected Cars, And They Want Them Now

You never really hear about vehicle-to-everything systems anymore. They were all the rage a few years ago, but companies now seem more focused on their own autonomous systems — without reliance on any pesky communications. Lawmakers, it seems, want to change that. From Reuters:

The Democratic chairman and the top Republican on the House of Representatives Transportation and Infrastructure Committee urged the Biden administration to take an active role in helping automakers deploy “connected vehicle” technology to avoid crashes.

Democratic Representative Peter DeFazio and incoming chair Sam Graves in a letter Thursday urged Transportation (USDOT) Secretary Pete Buttigieg to help ensure automakers can deploy “vehicle-to-everything” (V2X) technologies to use cellular transmissions to avoid crashes and help address the rising number of U.S. traffic deaths.

The lawmakers were critical of the Federal Communications Commission (FCC), which in 2020 shifted much of a key spectrum block set aside for auto safety to accommodate the burgeoning number of wireless devices.

“Transportation stakeholders have highlighted the current challenges to V2X deployment, including regulatory uncertainty and a failure to quickly approve waivers for Cellular vehicle-to-everything,” the letter said. “Given the regulatory uncertainty caused by the FCC’s recent actions in the (connected vehicle) space, the (Transportation) Department must play a strong leadership role to support the deployment of V2X technologies.”

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I have to wonder if those lawmakers realize how much infrastructure would need to change, to support V2X. After all, those vehicles need to talk to everything — including traffic signals. Do they want to pay to update those?

Reverse: Did You Know The Tea Party Was Because Corporate Taxes Were Too Low? Neither Did I

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Neutral: Is V2X Actually Going To Happen?

I think not, for a couple of reasons. First, automakers seem loathe to agree on universal standards when they could instead lock buyers into corporate walled gardens. Second, no one wants to invest in infrastructure on a good day — let alone to install cell receivers in stop signs.

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