Tesla Inc

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Tesla Makes Abrupt Move With GigaFactory

Tesla Motors, Inc. (NASDAQ:TSLA)

Tesla Motors, Inc. (NASDAQ:TSLA) CEO Elon Musk has made some bold statements about production for the firm. While the company manufactured about 50,000 vehicles last year, and appears to be on track to hit 80,000 - 90,000 this year, Musk shocked everyone when he raised his guidance for 2018 to 500,000 vehicles.

Analysts had already been doubting the ambitious jump to half a million cars by 2020, but when the Model 3 demand so far exceeded everyone's forecasts, Musk pushed that half a million number up two-years earlier. A more cynical view could be that Musk sees competition ramping up from Apple Inc. (NASDAQ:AAPL) and rumors of the Apple Car have gone from curious to just about fact.

For Tesla, the conduit to achieving its manufacturing goals has always been the Tesla Motors Gigafactory. News broke today that shows how serious Musk is about reaching his goals.

The Nikkei Asian review broke news today that was a bit startling. Here's what the report read:

Panasonic will begin mass-producing components for electric-car batteries ahead of schedule at an American factory it is building with Tesla Motors.

The duo had initially said the lithium-ion-battery plant in the state of Nevada would be up and running sometime in fiscal 2016 -- a time frame taken to mean early 2017.

The plant is now set to open this July, with power cell production to begin in November.
Source: Nikkei Asian Review

All of this comes on the heels of the news out of Tesla Motors that Model 3 demand has been enormous. The Model 3 is Tesla's "affordable" vehicle, with an estimated starting price of about $35,000 and likely an average selling price of about $40,000. This compares to the Model S and Model X, both of which come out with average prices around $100,000.

We also note that Tesla Motors recently announced that it would be manufacturing a less expensive Model S for $65,000 to "meet demand." Whether Elon Musk is meeting demand or trying to create demand we'll have to wait and see, but no matter the driver, if Tesla Motors is going to make half a million cars, the Gigafactory better be a smash success in terms of manufacturing capacity.

It appears we will found out sooner rather than later.

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Thanks for reading, friends. The author is long shares of Twitter.

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