Tesla Now Runs the Most Productive Auto Factory in America - Bloomberg

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Elon Musk has a very specific vision for the ideal factory: densely packed, vertically integrated and unusually massive. During Tesla Inc.’s early days of mass production, he was chided for what was perceived as hubris. Now, Tesla’s original California factory has achieved a brag-worthy title: the most productive auto plant in North America.

Last year Tesla’s factory in Fremont, California, produced an average of 8,550 cars a week. That’s more than Toyota Motor Corp.’s juggernaut in Georgetown, Kentucky (8,427 cars a week), BMW AG’s Spartanburg hub in South Carolina (8,343) or Ford Motor Co.’s iconic truck plant in Dearborn, Michigan (5,564), according to a Bloomberg analysis of production data from more than 70 manufacturing facilities.

In a year when auto production around the world was stifled by supply-chain shortages, Tesla expanded its global production by 83% over 2020 levels. Its other auto factory, in Shanghai, tripled output to nearly 486,000. In the coming weeks, Tesla is expected to announce the start of production at two new factories—Gigafactory Berlin-Brandenburg, its first in Europe, and Gigafactory Texas in Austin. Musk said in October that he plans to further increase production in Fremont and Shanghai by 50%.

Tesla’s California Factory Outpaces Every Auto Plant in North America

Average weekly output by year (dashed lines indicate estimated 2021 data)

Note: Tesla’s average weekly production was calculated from company reports and data from China. For other automakers, data came from Just Auto and a Bloomberg News survey of automakers. For more details, see our methodology section.

Sources: Just Auto, Bloomberg Intelligence, Bloomberg survey of automakers, company filings, China Automotive Information Net

Tesla’s Fremont factory is a scrappy site to behold. Originally built by General Motors Co. in the 1960s and jointly operated by GM and Toyota until after GM’s 2009 bankruptcy, new additions have been kludged together to form an anthill of manufacturing. In what was once a rear parking lot, a pair of industrial tent structures provide shelter for bustling assembly lines that wouldn’t fit inside the packed factory.

“When we first went in there, we were like a kid in his parent’s shoes,” Musk recalled at a shareholders’ meeting in October. “Now we’re like spam-in-a-can here: How do we fit more stuff?”

Tesla’s more recent factories were designed with more intention, each one further refining the diamond shape developed for its Nevada battery factory. The shape allows for long stretches of uninterrupted manufacturing lines, with parts access available along its length. The new factory in Texas measures three quarters of a mile long (1.2 kilometers). Musk moved the company’s headquarters from Palo Alto to Austin in December.

Note: Square-footage figures came from public filings and from a Bloomberg News survey of automakers and may use varying standards for the types of facilities included in the total. Only primary buildings are highlighted, which might not encompass the full extent of a regional manufacturing complex.

Sources: Google Earth, Sentinel Hub

Tesla’s strategy to pursue colossal manufacturing hubs in its biggest markets is paying off, according to Credit Suisse analyst Dan Levy. Global demand for electric cars has outstripped the manufacturing capacity to build them, and automakers everywhere are scrambling to secure access to a limited availability of batteries, raw materials and powertrain components. Tesla, with the biggest early investments in EV manufacturing, has become the priority relationship for many key suppliers.

“Giga Austin symbolizes Tesla’s plan to expand in the U.S. beyond its California roots,” Levy said in a note to investors. “The core priority for Tesla in 2022 will be unlocking capacity from its facilities.”

Aerial view of a car factory against the backdrop of a clear blue sky and rural Texas. — Tesla’s nearly completed Gigafactory in Austin, Texas.

Source: Tesla

For all its rapid growth and dominance in electric vehicles, Tesla is still just the 10th biggest auto manufacturer in North America. The new plant in Austin should change that and, according to Levy, help Tesla maintain its EV lead for as long as the supply imbalances continue.

Once Tesla flips the switch on two new factories, what comes next?

Musk has a longstanding target to increase vehicle deliveries by roughly 50% a year. To continue such growth, Tesla will need to either open more factories or make the facilities even more productive. Musk said in October that he’s working on both. Site selection for the next Gigafactories begins this year.

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