7 Comments

Summary:

Tesla says that the massive battery “gigafactory” is now in the plans. At the same time the electric car maker plans to significantly boost Model S production this year.

Tesla Model S

Electric car maker Tesla Motors ended a year of dramatic growth in 2013 by announcing in its fourth quarter and full year earnings report on Wednesday that it plans to significantly boost the number of its Model S cars shipped in 2014, and also confirmed that a massive battery production factory is planned with partners.

Tesla said it plans to boost the number of Model S cars shipped by over 55 percent in 2014 to 35,000 cars. Tesla shipped its first Model S about 20 months ago and in 2013 delivered 22,477 Model S cars. Tesla says it was able to hit its goal of 25 percent gross margin on these cars by the end of 2013 and will reach 28 percent gross margin by the end of 2014.

Tesla Model S

That increase in shipments means that Tesla will need to ramp up the amount of Model S cars it can make from 600 per week to 1,000 per week by the end of the year. The production increase will require extra factory build out and a reduction of “supplier bottlenecks,” according to the letter to shareholders. A big part of this growth strategy will occur with shipments to Europe and Asia. Tesla plans to ship its first Model S to China in the Spring.

But growth of Tesla’s future cars beyond the Model S will come with the help of a massive battery factory, which it’s calling the “Gigafactory.” Tesla CEO Elon Musk raised the idea of the Gigafactory in a previous earnings call, and said that to produce 500,000 of its Gen-III cars per year, Tesla would need to build a “giga factory” that would have the equivalent of all of the world’s current production of lithium ion batteries made just for Tesla in one factory.

In a letter to shareholders Tesla confirmed that the Gigafactory is in the works. The letter says:

Very shortly, we will be ready to share more information about the Tesla Gigafactory. This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.

This week an analyst said that he thinks Tesla is planning on building the $2 billion Gigafactory in New Mexico, in partnership with battery makers Panasonic and Sanyo. Musk said on the earnings call that more information about the Gigafactory could come next week. A factory would require substantial capital to build. Musk said that the factory would likely use more than one partner.

For the full year 2013, Tesla announced revenue of $2.01 billion, up from $413.26 million in 2012. Tesla showed a net loss of $74 million for the full year, which was a much smaller loss than the $396.21 million for 2012. For the fourth quarter 2013, Tesla generated $615.22 million, with a net loss of $16.26 million; that was up from $306.33 million in revenue and a $89.93 million net loss from the year earlier.

Tesla shares are soaring on the news, and hit a record of $217 per share in after hour trading.

  1. GAAP numbers are plain stupid – they assume that everyone who leased the car will return it and that Tesla would not be able to sell those cars at the price of scrap metal…

    Non GAAP results while not perfect do make much more sense.

    Reply Share
  2. Numbers apart, the make of gorgeous electric cars is an achievement of its own, specially if compared to the majority of electrics vehicles out there :)
    More Tesla, less Prius, please!

    Reply Share
  3. “Tesla Chief Executive Elon Musk recently noted that the soon-to-launch factory would produce more lithium-ion batteries than all other sources on earth combined. In fact, word that the factory will be powered by sun and wind helps Tesla toward its stated goal of changing the sustainability quotient of the auto industry and thus U.S. culture as a whole”

    Right. A battery factory bigger than all of the rest in the universe combined and powered by sun and wind power to boot. This will happen just like the thousands of “automatic battery changing stations” happened: zero installed.

    Still the press will lap this up and never follow up to find out it was all talk and nothing ever happened. Just like the battery changing stations.

    Elon Musk is nothing more than a latter day P.T. Barnum.

    Reply Share
    1. to asokasus – not sure what you’re talking about. he mentioned he would build the supercharging stations and nobody believed him. within a few months dozens had been built, with many more on the way.

      Reply Share
      1. This is not Rocket Science. Oh wait, Musk’s other company does… Rocket Science!

        Reply Share
  4. I was wondering how Tesla would tool their gigafactory. They know how to test, deplete and charge these cells, but manufacturing them from raw materials is something that needs a lot of specialty equipment. Especially on the scale they’ll be producing these cells. It makes a lot more sense that the factory be owned across several large producers, and the facility would also meet demand for Panasonic and Sanyo in other contracts. I’m *very* glad to see that it’s on this side of the ocean. North America can’t afford to keep generating wealth from debt.

    Reply Share
  5. Great news. Now charge those giga quantities of batteries with an EV charging system equipped with high efficiency Hyper X Solar modules. Hyper X’s small footprint, high efficiency and much lower pricing provides the perfect combination for a fast return on investment.

    Hyper X solar offers a better PTC to STC ratio “Real World” performance according to the California Energy Commission’s performance rating listings than over 100 of SunPower’s solar panel models. Hyper X solar also offers an incredible -0.27%/degree C temperature coefficient rating for awesome performance in hot/warm climates and best of all Hyper X solar systems are priced thousands less and even tens of thousands less on larger systems than a SunPower solar system.

    Reply Share