Tesla: Production Capacity Of Model 3 To Average 226,563 Units Per Year Over Next Five Years

George Orwell famously wrote that “to see what is front of ones nose takes a constant struggle,” and it turns out that the answer to one of the biggest mysteries in the auto industry has been hanging out directly in front of the public’s nose for some time. In a January 2017 application [PDF] for sales tax exemption (STE) from the CAEATFA program, the California Treasurer revealed that

“Tesla represents the Project will launch the Model 3 and provide the capacity to produce and deliver an average of 226,563 units per year over a five year period, in addition to its Model S and Model X production.”

This revelation provides an unprecedented clarity about Tesla’s production ambitions for its “more-affordable” Model 3 sedan, and contradicts representations that Tesla executives have made in quarterly conference calls with analysts and the media.

[Continue Reading]

CAEATFA Approves 48% Of Record Tesla Model 3 STE Request

Since 2009, the California Alternative Energy And Advanced Transportation Financing Authority (CAEATFA) has handed out more than $100 million in sales tax exemption (STE) tax relief to Tesla Motors, the main beneficiary of the state government program.  Tesla’s latest application, which requested about $100 million in STE on the purchase of more than a billion dollars worth of equipment that the automaker will use to develop and build its Model 3 sedan [previous coverage here], was by far the biggest application in the program’s history and comes as the program faces record demand for tax relief. As a result of this high demand and Tesla’s historical domination of the program, CAEATFA approved just 48% of Tesla’s massive Model 3 request at its December 13 meeting, leaving more than half of its latest request unfunded.

[Continue Reading]

Documents Show Tesla Expanding Annual Production To About Half Of 500K Goal

coverlet

The Daily Kanban has obtained Tesla’s application [PDF here] to the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) for about $100m worth of Sales and Use Tax Exclusion (STE) on its purchase of about $1.2 billion worth of production equipment to be used to produce its affordable Model 3. An analysis of key unredacted portions of this CAEATFA application shows that this massive investment –along with CAEATFA documents related to Tesla’s expansion of Model S and Model X vehicle production— will only increase the electric automaker’s annual production to between 230,000 and 300,000 units per year, well short of the firm’s 500,000 unit per year goal for 2018.

Though Tesla could reach its much-discussed half-million per year production goal through other means, these CAEATFA documents appear to validate Daily Kanban‘s analysis of air quality permits at Tesla’s Fremont plant which indicates a current production limit of about 230,000 units per year.  Tesla has yet to publicize any plans to apply for the new permits or make the new investments required to bring its production rate beyond these limits and towards its planned 2018 rate of 500,000 units per year.

[Continue Reading]

Tesla Battery Swap: CARB’s Bridge To Nowhere

Tesla and California’s Air Resources Board are standing by the controversial “fast refueling” credits that are directing as much as hundreds of millions of dollars to the California-based electric car maker for its little-used battery swap capability. At the same time, both Tesla and CARB admit that battery swap has not shown much promise and CARB staff tell Daily Kanban that they tried to completely eliminate the credits out of concern over Tesla’s “gaming” of the system only to be overruled by board members. The tension between Tesla and CARB’s defense of ZEV credits earned by Tesla’s battery swap capability and their apparent lack of optimism about the technology going forward confirms the fundamental concerns that surfaced in Daily Kanban’s initial investigation: battery swap credits seem to have done nothing to advance the cause of ZEV adoption, Tesla appears to have gamed the credit system for huge financial gain, regulators show little interest in ending Tesla’s obvious abuse and the public remains under-informed about the entire situation.

[Continue Reading]