Tesla passes production mark of 5 million EVs

Tesla has surpassed the five million cars produced for fifteen years of manufacturing. Most remarkably, the jump from four to five million units took the company no longer than half a year. The success is mainly attributed to the highly efficient Shanghai factory, where the symbolic model was assembled.

The news on the milestone was shared on the company’s Chinese Weibo page. The car was a white Model 3 and was herded by proud staff announcing the news. An even more important event is that the car represented the two millionth car made at the Shanghai Gigafactory, making the plant the world’s most productive car factory.

Pilot-free trade zone

Even within the Tesla universe, the Shanghai factory, of which construction started only five years ago, takes a particular place, outperforming the Texas facility that resides next to the company’s headquarters. It took the factory three years to reach the production number of one million units but only 13 months to double it.

Part of that success is attributed to the particular location of the plant. It is located in Shanghai’s pilot-free trade zone, which factory director Song Gang calls a “superior business environment”. The area benefits from relaxed custom procedures, increased investments, and simplified administrative procedures.

Industry-leading

Shanghai, which makes Model Y and Model 3 models, now stands very close to an annual production output of one million units, unheard of in battery-powered vehicle manufacturing.

But also for ICE models, very few factories reach a production of this size. After scaling challenges, which was often considered a characteristic advantage of legacy brands, Tesla now seems to be industry-leading in production numbers.

The news is painful, as rival Volkswagen announced a workforce cut in its electric vehicle plant in Zwickau last week, followed by the cost-cutting measure that it is also halting production at the Dresden factory, where it assembles its Model 3 rival, the ID.3. Tesla is reputed for beating its German competition with a three to four times faster production flow.

Tesla keeps expanding its global web of Gigafactories. A new one has been approved for Mexico, and after Turkish President Erdogan asked its CEO Elon Musk to consider one, the latter replied optimistically.

Tesla already works closely together with several Turkish suppliers. Both men met in New York on Monday. However, Musk is also in close contact with India and Israel about further expansion.