Tesla Wants to Build 500K Cars a Year by 2018

Tesla is accelerating its goal of producing 500,000 cars a year.

Tesla gave its first quarter 2016 update saying that it will advance its goal of building 500,000 units annually by two years to 2018. The company originally scheduled to hit the mark by 2020, but given the demand for the Model 3 it has decided to focus its efforts to ramping up production for all three models. It’s a huge increase considering the fact that Tesla plans to deliver 80,000 to 90,000 new vehicles this year. That means within two years, the company wants to increase its production five fold.

For now, Tesla remains optimistic and confirmed that it is on track to achieve volume Model 3 production and deliveries in late 2017. It admitted that increasing production to 500,000 units per year “will be challenging and will likely require some additional capital,” but it is the American automaker’s goal and it will be working hard to achieve it. During the earnings call, Tesla CEO Elon Musk said he has set a goal of producing at least 100,000 Model 3 sedans by late next year.

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The change in production also means that the Gigafactory’s plans will be revised to accommodate the accelerated production plan. The company said that it plans on making the first cells at the Gigactory in the fourth quarter of 2016.

Through the first quarter of 2016, Tesla Model S orders increased 45 percent compared to a year ago with increased growth in North America and Europe. Orders saw a 160-percent jump in Asia compared to a year ago.

Last quarter, the automaker produced a record 15,510 vehicles, which is up 10 percent compared to the fourth quarter of 2015. A total of 12,851 Model S sedans were produced, meaning only 2,659 Model X crossovers rolled off the assembly line. Tesla admitted that the Model X production figure was insufficient to meet its projected level of deliveries.

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