Musk has set Tesla an audacious goal of selling 20 million electric vehicles by 2030, a top priority of the company’s promise of growth to shareholders and a pledge to drive access to sustainable energy. If achieved, Tesla would be twice the size of the highest-volume automaker in history, capturing roughly 20 percent of the global auto market.
However, this exponential growth means that Tesla’s annual sales by 2030 will be as high as this year’s 13 times the expected sales of 1.5 million vehicles, and will pay an unprecedented cost of hundreds of billions of dollars.
“I think it’s the equivalent of the Manhattan Project in World War II (the code name for the U.S. nuclear weapons program),” said Michael Tracy, a manufacturing expert at Agile Group, referring to the massive U.S. effort to build the atomic bomb. effort.
In the process, Tesla will need to build seven or eight more “gigafactories”, one every 12 months or so on average, and take market share from each competitor to become a company the size of Volkswagen and Toyota Motor Corporation. It also needs about 30 times the battery capacity to supply all of its car factories.
The governments of Canada, Indonesia, India and other countries are already lobbying Tesla to build the next Gigafactory in their countries. Musk has said the location of the new factory could be announced before the end of the year.
At the same time, Tesla also needs to bear huge expenses. Over the next eight years, Tesla may need to spend $400 billion or more to build new car assembly plants and battery plants around the world, and another $200 billion or more to make or buy batteries, Including raw material costs. To produce 20 million vehicles a year, Tesla will not only need to expand its own battery production capacity, but also battery partners and suppliers of raw materials to expand capacity.
“In the long run, we expect to produce 3,000 gigawatt hours or 3 terawatt-hours of batteries per year. I think we have a good chance of getting there by 2030, but I’m pretty confident we can get there by 2030. ” Musk told investors in July. Currently, Tesla currently has a battery capacity of 100 GWh.
Tesla will need 2 million tons of lithium, 1.3 million tons of nickel, 200,000 tons of cobalt and 3.5 million tons of graphite to support its production of 3 terawatt-hours in 2030, according to Benchmark Mineral Intelligence, a research firm that tracks the global EV battery industry. battery expectations. That’s four times the projected consumption of lithium and nickel by the entire EV industry in 2022, twice as much as cobalt, and seven times as much as graphite. Benchmark believes Tesla’s 2030 goals are “ambitious.”
Intense competition from Chinese rivals
Meanwhile, rivals are rolling out more electric vehicles to compete with Tesla’s popular Model 3 sedan and Model Y SUV,
In China, local startups Xpeng Motors, NIO and Li Auto are lagging behind Tesla in sales, but growing rapidly.
Meanwhile, BYD is challenging Tesla on a global scale. BYD is currently the leader in China’s electric vehicle market, selling cheap electric and hybrid vehicles. In July, BYD knocked Tesla down from the throne of global electric vehicle supremacy. BYD delivered 641,000 electric vehicles in the first half of this year, up 300 percent year-on-year, surpassing Tesla’s 564,000 and ahead of Volkswagen, Ford or General Motors. Moreover, BYD is actively expanding overseas, setting up dealers in Australia and New Zealand, and recently announced plans to enter several countries including Germany, Israel and Thailand.
In North America, Ford Motor and electric vehicle startup Rivian Automotive have already launched electric pickups ahead of Tesla in the market. Electric pickups are an important emerging segment of the North American auto market.
Manufacturing expert Tracy is skeptical of Musk’s ability to build a global manufacturing giant over the next eight years, since it would mean Tesla’s capacity to nearly double that of Toyota, currently the world’s largest automaker by volume.
“Considering that it took Toyota decades to build this kind of production capacity, (if Tesla can do it), it would be a remarkable achievement,” he said.