According to a recent leaked internal email, which so quickly did the rounds of social media gossip hubs that it is hard to attribute it to a source, Tesla is getting ready to increase electric-vehicle production following winning
record orders in the second quarter of 2019.
The EV maker has said that it plans to produce "significantly" more than the 360,000 to 400,000 vehicles the company expects to deliver in 2019.
Apparently, the company is making preparations to massively boost output at its plant in California in the US and this production is sorely needed, as it delivered nearly 100,000 vehicles around the world in the three months ending
This would be a credible figure for a small to medium-sized established carmaker and comes on the back of its previous best quarter in Q4 2018, when it shipped almost 91,000 vehicles.
This success has ramifications for the whole industry and the global supply chain, for if Tesla continues to make all of its vehicles at its lone auto assembly plant in the US and produces battery packs and drive units at its ‘gigafactory’
in the neighbouring state of Nevada, it casts doubt on whether such growth is sustainable without a lower labour cost base for supply and production.
The carmaker has said that its production may reach 500,000 vehicles globally this year but this is surely dependent on its factory near Shanghai reaching volume production early in the fourth quarter of 2019 and thus enjoying the
lower costs of making vehicles in China. Apparently many parts of the assembly line in China are already in place, including stamping, body, paint shop and final assembly lines and the company has said that these lines are “hitting
records in both line design and fabrication”.
There is an elephant in the room however; supplies of lithium and cobalt and some other rare earths are not only finite in China - it has been estimated that projected Chinese domestic EV production could consume the global supply
of these materials within two years without any being available to the rest of the world - but none of them have reached the tipping point of being recycled.
Indeed the thorny issue of the stock of recycled materials is impacting heavily on the EV battery sphere too. Much like the paucity of used EV batteries for inputting into the recycling or second use chain, the global stock of reusable
rare earths is still light years behind that of steel, aluminium or plastics.
The global automotive industry is said to be undergoing a fourth industrial revolution; for the first time we need to look harder at saving more and more parts of the vehicles we make, and for the first time we shall have to build
up a stock of materials to recycle and manage that chain more carefully than at any time in the past.
Simon Duval Smith