Even if Tesla (NASDAQ:TSLA) has just reached a significant production milestone, the EV manufacturing industry leader still has a way to go before it can realize its full potential and successfully combat the rising tide of competitors.
Elon Musk Tweeted About Tesla:
“Congrats Giga Shanghai on making millionth car! Total Teslas made now over 3M.”
It’s a massive number for the Shanghai plant, which started producing electric vehicles in the autumn of 2019. Musk said in July that the Fremont assembly line has manufactured its two millionth Tesla vehicle since it began producing electric vehicles in October 2010.
It is appropriate that the start of the company’s ambitious development goals coincide with its march to 3 million cars produced all-time from its two significant plants.
Tesla (NASDAQ:TSLA) revised its installed annual capacity, or theoretical maximum output, in its Q2 shareholder letter. Output at its Fremont facility increased to 650,000 cars from 600,000 in the previous quarter, while production at Giga Shanghai increased to 750,000 vehicles from 450,000. Meanwhile, TSLA (NASDAQ:TSLA) has announced two additional manufacturing facilities in Austin and Berlin, each with an alleged capacity of 250,000 cars per year.
As stated in the Q2 report, the total install capacity has grown by about twofold, which means that (NASDAQ:TSLA) could potentially supply over 2 million of its EVs yearly. This is a significant increase for a business that sold 936,000 cars in 2021.
Similarly, Tesla (NASDAQ:TSLA) has maintained its yearly delivery objective of 50% CAGR (compound annual growth rate), requiring the business to ship between 1.4 and 1.5 million cars in 2018. With just around 564K cars manufactured in 2022 so far, the company has a long way to go in the year’s second half to meet its delivery target.
It is theoretically conceivable for TSLA (NASDAQ:TSLA) to maintain its 50% CAGR objective until 2023 when it would need to create 2.1 million to 2.2 million cars. However, doing so would need all of its plants to operate at peak output, with minimum periods of downtime. You may remember that Giga Shanghai was out for a short period in the spring owing to COVID-related shutdowns and that it was offline only last month for improvements.
Even if Tesla (NASDAQ:TSLA) produced over 2 million EVs in a year, it would still be overwhelmed by its conventional car competitors. Although both Ford (NYSE:F) and GM (NYSE:GM) were hampered by component and chip shortages in 2021, Ford managed to sell 3.9 million cars worldwide while GM sold 6.3 million.
Ford (NYSE:F) and General Motors (NYSE:GM) want to manufacture 3 million electric vehicles worldwide by 2025. Even while that’s about what TSLA hopes to provide by 2025, it shows that its primary U.S. competitors are gaining ground quickly.
To what extent the multinational automotive and clean energy company’s early lead over its rivals will last far into the second half of this decade is the central issue for analysts and investors. Two weeks ago, Musk estimated that Tesla (NASDAQ:TSLA) would produce its 100 millionth car in the next 10 years.
Featured Image: Megapixl © Photomall
Author Shariq Khan 
