Tesla's Berlin Gigafactory is finally about to go into production. On January 23, tesla reported that Tesla had informed German employees that the Model Y from the Berlin Gigafactory was ready for order and would be delivered in March. This means that the production of Tesla's Berlin Gigafactory, which has been disturbed and the production time has been repeatedly postponed, has been dusted, and the problem of Tesla's tight production capacity in the future is expected to be alleviated.
In fact, in recent times, Tesla has been making final preparations for the start of production at the Berlin Gigafactory. Earlier, for example, Tesla received new approvals to pilot 2,000 Model Ys in a German factory as part of mass production. And this isn't the first time Tesla has received similar approval. Earlier, Tesla had been approved to produce 250 Model Ys for testing. It is understood that because the first batch of 250 Model Ys produced did not meet Tesla's expectations in terms of quality, there was a second trial production.
In addition, some media revealed that the Model Y made in Germany has a higher payload than the Chinese-made version. The data shows that Tesla's German version of the payload is 562kg, while the Chinese version is 390kg, a difference of 172kg between the two, which means that the structure of the German version of model Y may have undergone some obvious changes. And more and more information exposure points to a direction, Tesla Berlin Gigafactory production time is getting closer and closer. Musk had previously said that he would visit the Berlin factory in the near future to celebrate the successful production of the factory, but due to the leakage of his private plane itinerary, it may affect his personal safety, and finally had to change the itinerary.
The commissioning of the Berlin Gigafactory will be an important milestone for Tesla, which means it can focus more on the operation of the European market. With the commissioning of the Berlin factory, Tesla's global strategy will be better implemented, and the production and sales target of 1.5 million in 2022 will no longer be out of reach.
So does the smooth commissioning of Tesla's Berlin Gigafactory mean that the role of Tesla's Shanghai factory will be further reduced? For this problem, let's analyze it carefully.
The Berlin factory is fraught with difficulties
For the Berlin Gigafactory in Germany, it has always occupied a very important role in Tesla's system, which is Tesla's first Gigafactory in continental Europe, and one of the important reasons why Germany was selected by Tesla is also because it is the center of gravity of European cars. If Tesla can gain a foothold in Germany, it means that Tesla can focus on Germany and expand across Europe, which is why the Berlin factory has been an important reason for the attention since the construction was announced.
But the greater the expectation, the greater the disappointment. Although in November 2019, Musk announced that he would establish his first European factory and design center near Berlin, Germany, and added that the new plant will produce batteries, powertrains and complete vehicles, especially the Model Y model, and be completed and put into production in 2021.
However, the opposite happened, the Berlin Gigafactory in Germany was not completed and put into operation in 2021 as Musk expected, but the production time was delayed again and again, and although it has been in trial production, meeting all the preparations before the commissioning, but at the current pace, the fastest production time is also in early March.
In fact, Tesla has not only been delayed in terms of production time, but has been obstructing its progress since its inception, for example, after just buying the land needed to build a factory, Tesla has encountered obstacles. Because of an endangered species of bat living in the forest where the factory is located, Tesla will have to wait until the local nature conservancy has moved the bats before it can start construction.
The bat problem was solved, and local residents and environmental groups opposed Tesla's construction of the factory because they were afraid of water, traffic, noise pollution and other problems in the Berlin Gigafactory. Then, because of the spread of the epidemic, fears of the coronavirus and the US president's upcoming European travel ban, Tesla even directly withdrew all the American employees working at the Berlin gigafactory, bringing the construction of the Berlin factory to a standstill.
In April 2020, Tesla had to modify the foundation due to soil problems, resulting in another shutdown of the Berlin factory. To make matters worse, in October last year, Ivan Hortesky left as the head of engineering, procurement and construction of Tesla's Berlin Gigafactory for some reason, and the construction of the Berlin factory can be described as in internal and external difficulties.
Finally, by the end of January 2021, Tesla's Berlin Gigafactory has taken shape and is getting closer to production. Tesla also released a job post in March of that year to start production in July. However, contrary to expectations, although the super factory was built, the production time was delayed due to environmental protection approvals, and it was not until some time ago that the trial production began, and the commissioning time of Tesla Berlin Super Factory revealed a glimmer of light.
Garrett Nelson, a senior equity analyst at market research firm CFRA Research, said that "because the Construction of the Shanghai Gigafactory is incredibly fast, they may have misestimated the speed at which the Berlin plant was built and put into operation, perhaps without fully taking into account the significant differences between the two."
In fact, Musk had said during his visit to the Glenhead construction site that "less bureaucracy might be better" about the problems encountered at the Berlin factory.
Although Musk is dissatisfied with the construction progress of the Berlin factory, Tesla can finally breathe a sigh of relief as the start of the Berlin factory is approaching. Still, Tesla can't sit back and relax. As Tesla's share of the European market expands, an important issue facing the Berlin factory is how to quickly increase production capacity in a short period of time. For this question, I think for Musk, it is just a small matter.
The status of the Shanghai Gigafactory is unshakable
Does the smooth commissioning of Tesla's Berlin Gigafactory mean that the role of Tesla's Shanghai Gigafactory will be further weakened? Not necessarily.
Although the commissioning of the Berlin Gigafactory is getting closer and closer, according to the german government's previous attitude towards Tesla, there is still a possibility that the date of its official production will continue to be delayed. In fact, many institutions are not optimistic about the exact time when the Berlin plant will be put into operation, such as Dan Ives, a Wadebush equity analyst, who has said, "Given the red tape in Europe, this timeline is still uncertain." But the Berlin Gigafactory needs to be operational by March 2022, or it will affect Tesla's capacity targets. ”
Not only that, although the planned capacity of the Berlin plant in Germany is as high as 450,000 units, as a brand new factory, its initial production capacity cannot meet the needs of the European market. According to Tesla's previously announced plan, the assembly line of the Berlin Gigafactory can only be produced at a rate of 1,000 units per week at the initial stage, and then gradually increased. If at this rate, the one-month production capacity may be less than 5,000 vehicles, and the half-year production capacity is less than 30,000 vehicles.
The data shows that the Model 3 has become the most popular electric car in the European market, with Tesla selling 93,545 units in 11 European countries in the past year. Since the Berlin factory in Germany can only produce Model Y in the early stage, this means that the European market will still rely on the support of the Shanghai Gigafactory for a short time. If Tesla has no way to increase the production capacity of the Model Y in a short period of time, even in the early stage of 2022, the Shanghai factory will still have to undertake the delivery of a part of the Model Y in the European market, which is obviously inconsistent with Musk's original intention to build the Berlin Gigafactory.
Although Tesla has always intentionally or unintentionally weakened the role of the Shanghai Gigafactory, from the results, the position of the Shanghai Gigafactory has become increasingly stable. In the past 2021, Tesla has delivered 936,000 new cars worldwide, and its annual production has also increased to 930,000 units, approaching the million mark. The reason why Tesla can achieve such impressive results in 2021 is largely thanks to the Chinese market, Chinese users and Chinese manufacturing. Of Tesla's 936,000 global deliveries in 2021, 51.7 percent came from Tesla's Gigafactory in Shanghai.
It is worth mentioning that of the 484,100 units delivered in the Shanghai Gigafactory in 2021, more than 320,000 vehicles were delivered to the Chinese market, which means that the Chinese market has surpassed the United States to become Tesla's largest single market, and this is the result of Tesla's deliberately slowing down the delivery rhythm. In 2021, in order to meet the delivery of the European market, tesla's production capacity of the Shanghai gigafactory is mainly export-oriented in the first half of each quarter, resulting in repeated delays in the delivery time in the Chinese market. In May 2021, the Shanghai plant produced more than 34,000 Model 3/Y units, in addition to 22,000 units sold to Chinese consumers, more than 11,000 Model 3s were supplied overseas, and in August, Tesla's Shanghai Gigafactory exported even more than 31,379 vehicles. Although Tesla has repeatedly tried to reduce the delivery pressure in the Chinese market by adjusting prices, it still cannot stop the enthusiasm of Chinese consumers. At present, Tesla's official website shows that the delivery cycle of Model Y and Model 3 is 12-16 weeks.
In view of the soaring demand in the Chinese market, Tesla began the expansion of the Shanghai Gigafactory at the end of last year. It is understood that the total investment of the production line optimization project is as high as 1.2 billion yuan, which is expected to be completed in April next year. After completion, Tesla's Shanghai Gigafactory will become the world's largest new energy vehicle factory, and its annual production capacity will increase from the current 500,000 to more than 1 million. It can be said that if Tesla wants to complete its sales target of nearly 1.5 million vehicles in 2022, the Shanghai Gigafactory and the Chinese market are indispensable.
Summary: For Tesla, with the commissioning of Tesla's Berlin Gigafactory, the pressure hanging over it will be alleviated to a certain extent, which means that Tesla can spend more time expanding in the European market. You know, although Tesla continues to sell well in the European market in 2021, the sales champion is the Volkswagen ID family that has not made much progress in the Chinese market, and the production of the Berlin Gigafactory has given Tesla the confidence to compete with a number of European car companies. In addition, with the commissioning of Tesla's Berlin Gigafactory, Tesla can be regarded as a global car company, and the four major gigafactories in the United States, China and Europe can allow Tesla to fight everywhere in the future with a three-legged momentum.