Tesla, the electric vehicle manufacturer, has affirmed its production target of 1.8 million vehicles for the year 2023, as announced during its Q2 earnings call. However, the company also mentioned that there will be factory upgrades in the third quarter, which could lead to a slight reduction in production.
Elon Musk, the CEO of Tesla, informed investors that they should anticipate lower production figures in Q3 compared to the record-breaking results achieved in Q2. During the second quarter, Tesla produced 479,700 electric cars and delivered 466,140 of them.
The reason behind the anticipated decrease in production is the temporary shutdown of some of Tesla’s factories during the summer for implementing upgrades. Elon Musk explained, “We continue to target 1.8 million vehicle deliveries this year. Although, we expect that Q3 production will be a little bit down because we’ve got summer shutdowns to – for a lot of factory upgrades. So, just probably a slight decrease in production in Q3 for sort of global factory upgrades.”
Zachary Kirkhorn, Tesla’s Chief Financial Officer, echoed Musk’s remarks during the call, emphasizing that the Q3 volumes will be affected by planned downtimes for factory upgrades, which may incur some factory idle costs. However, the company is actively working to minimize the impact.
The reason for the factory shutdowns is likely to facilitate upgrades in production and possibly retooling. Tesla is gearing up to launch two new models: the Cybertruck and the facelifted Model 3, known as “Project Highland.” It is highly probable that these shutdowns are related to the industrialization efforts for these new electric vehicles.
Since the Model 3 is manufactured at two of Tesla’s plants – the Fremont Factory and Gigafactory Shanghai – and considering Musk’s statement about “sort of global factory upgrades,” it is reasonable to assume that Project Highland is the primary reason behind the planned factory shutdowns in the upcoming summer.
Although Tesla has not officially confirmed whether the line upgrades are specifically for the Model 3 Highland, there have been numerous sightings of test prototypes for both vehicles across the United States, particularly in California and Texas, as well as overseas. These sightings indicate that the testing process is in full swing. Excitement continues to build around Tesla’s latest offerings as the company aims to push the boundaries of electric vehicle technology.
