Tesla ramps up production, promises 500,000 cars per year by 2018

May 5, 2016

Tesla Motors and its CEO, Elon Musk, have spent a good bit of time talking about their plans to boost production in the near future. Though the company currently builds fewer than 100,000 vehicles per year (closer to 80,000 or 90,000, in fact), Musk and others have said that they want production to grow five-fold by 2020, reaching 500,000 cars annually.

But those kinds of statements were made before the debut of the Tesla Model 3 and the nearly 400,000 pre-orders it inspired. And so, the company is doing something that its electric cars can't do: it's shifting into high gear, hoping to reach its 500,000 goal by 2018

If it does so, Musk said yesterday that the company would hit 1 million vehicles per year by 2020.

Can it achieve all that? Maybe.

On the one hand, the incentive to do so is surely there. The company now has a huge number of orders to fill, mostly for the Model 3.

On the other hand, Musk himself has said that starting production on the Model 3 by his self-imposed deadline of July 1, 2017 will be difficult, if not impossible. And Tesla has shown that it's not afraid to push back launch dates again and again.

On the whole, though, the cards are stacked slightly in Tesla's favor. The company is in the midst of building many new facilities, including 70 retail and service locations and its massive gigafactory. As those facilities become functional, production and sales will grow exponentially. That, in turn, will generate additional earned revenue and could make the company more attractive to investors, allowing for further growth.

Perhaps the most important factor in all of this is Musk himself. He's clearly a force of nature and used to getting his way. As long as Musk keeps putting in long hours at the Tesla plant--occasionally sleeping in a conference room at the facility--chances are good that he'll see it through. Or at least he'll spin things so forcefully, we'll have a hard time telling the difference between success and failure. 

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