Tesla (TSLA) is planning massive output from Giga Texas in Q1 2023
Tesla (TSLA) is planning a massive ramp up in Model Y production output from Gigafactory Texas in Q1 2023. In the meantime, the situation is a bit more complex in the United States with the pending tax credit.
Tesla has been keeping us updated on progress in the production ramp at Gigafactory Berlin, which has been producing 2,000 Model Y vehicles per week since last month. The automaker is also simultaneously ramping production up at Gigafactory Texas.
Tesla is a bit more tight-lipped, however, on the production rate at the Austin factory.
Tesla confirmed a production rate of 1,000 Model Ys a week back in June and confirmed having produced its 10,000th Model Y in September. But, the company never confirmed a production rate of 2,000 units per week, like it did for Gigafactory Berlin.
Nonetheless, we now learn that Tesla is feeling extremely confident about the production ramp at Gigafactory Texas.
A reliable source familiar with the matter told Electrek that Tesla is currently preparing for 75,000 Model Y vehicles to come out of Gigafactory Texas next quarter (Q1 2023).
That would put Tesla’s production rate at Gigafactory Texas at over 5,000 units per week throughout the whole quarter.
Even though Tesla is preparing for that kind of output in Q1 2023, it is not in a hurry to get there in Q4 as it is still establishing the logistics to be able to handle that kind of volume increase in the United States.
5,000 units per week is generally Tesla’s goal for volume production and where Tesla wants to be with the Model Y at Giga Texas before moving its focus to Cybertruck production.
Additionally, sources familiar with the matter told Electrek that Tesla is dealing with some level of cancellations in the United States right now due to long wait times leading to some customers’ situations changing between the time they place their order and the actual delivery.
Furthermore, Tesla is also dealing with some customers looking to push their deliveries into next year to take advantage of the upcoming new EV tax credit. As we previously reported, Tesla is not as accommodating as other automakers when it comes to the new EV tax credit, and it is holding its customers to their order contracts.
They can’t push deliveries to try to secure the tax credit that comes into effect next year.
Due to this situation, Tesla appears to be nervous about finding itself with a lot of vehicles in inventory in the United States – like it did last quarter.
Electrek’s Take
We have been starting to see signs that Tesla is having some demand issues in the United States, but it seems to be temporary, primarily due to the tax credit.
And if that’s the case, you can also expect a surge in demand when the tax credit comes into effect in January.
It appears that Tesla is getting ready with a massive new output at Gigafactory Texas.
You would think that the automaker could also try to ramp up production sooner in Q4 and build inventory for when that demand comes, but it looks like the automaker is being more cautious and trying to avoid having too many vehicles in inventory at the end of the quarter.
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Elon wants the US military to start buying Tesla Cybertrucks – and now they are! The Air Force has ordered two Cybertruck testers for target practice to determine how easy they are to blow up, while Jo makes up a whole new conspiracy theory on today’s explosive episode of Quick Charge!
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An it doesn’t stop there. We’ve also got exciting new home battery backup and V2X options for Tesla owners, and one Texas EV driver that decided to conquer the Texas floodwaters by harnessing the awesome combined powers of electrons and stupidity (it’s pretty awesome).
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Tesla’s Dojo supercomputer project is reportedly over. Bloomberg reports that CEO Elon Musk is killing the project after a mass exodus of talent from the Dojo team to a competing startup.
Dojo was the name of Tesla’s in-house AI chip development to create supercomputers to train its AI models for self-driving.
Tesla hired a bunch of top chip architects and tried to develop better AI accelerator chips to rely less on companies like NVIDIA, AMD, and others.
It has been running into delays for years.
We previously reported on significant setbacks. In 2018, Jim Keller, the famed chip architect who was first hired to lead Tesla’s chip-making effort, left the company.
Ganesh Venkataramanan succeeded him, but he left Tesla in 2023.
For the last few years, Peter Bannon, who worked with Keller for years, has been leading Tesla’s chip-making programs, but he is now reportedly also leaving the automaker.
Bloomberg reports that Musk has “ordered the effort to be shut down.”:
Peter Bannon, who was heading up Dojo, is leaving and Chief Executive Officer Elon Musk has ordered the effort to be shut down, according to the people, who asked not to be identified discussing internal matters. The team has lost about 20 workers recently to newly formed DensityAI, and remaining Dojo workers are being reassigned to other data center and compute projects within Tesla, the people said.
DensityAI is a new startup currently in stealth mode, founded by several former Tesla employees, including Venkataramanan.
It reportedly plans to build chips for AI data centers and robots, much like the Dojo program.
The company recently hired 20 former Tesla employees who worked on Dojo.
While the program appeared to be lagging behind for years as Tesla increasingly bought more compute power from NVIDIA, Musk has been claiming progress.
The CEO said in June:
Tesla Dojo AI training computer making progress. We start bringing Dojo 2 online later this year. It takes three major iterations for a new technology to be great. Dojo 2 is good, but Dojo 3 will be great.
During Tesla’s quarterly conference call in late July, the CEO claimed that Dojo 2 will be “operating at scale sometime next year.”
Electrek’s Take
It’s unclear whether the report is accurate or if it’s an extrapolation from the talent exodus to Elon killing Dojo, or if Elon was lying just a few weeks ago.
Alternatively, this development may be so recent that Elon went from being confident in Dojo a few weeks ago to disbanding the team working on it now.
Either way, I think it’s clear that the project has been lagging, and Tesla has been extremely dependent on chip suppliers rather than making its own.
I think Dojo being likely dead is not a big loss for Tesla.
When it comes to chip making, developing its own inference compute for onboard “AI computers” was always the more important project.
TSMC is set to produce Tesla’s new AI5 chip, which is coming soon, and we have recently learned that Samsung will be manufacturing its AI6 chip.
I think the bigger concern from this report is that it’s the latest example of an ongoing exodus of talent at Tesla.
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Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., listens during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021.
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Block shares jumped in extended trading on Thursday after the fintech company increased its forecast for the year.
Here is how the company did, compared to analysts’ consensus estimates from LSEG.
- Earnings per share: 62 cents adjusted vs. 69 cents expected
Block doesn’t report a revenue figure, but said gross profit rose 14% from a year earlier to $2.54 billion, beating analysts’ estimates of $2.46 billion for the quarter. Gross payment volume increased 10% to $64.25 billion.
Block raised its guidance for full-year gross profit to $10.17 billion, representing 14% growth from a year earlier. In its prior earnings report, Block said gross profit for the year would come in at $9.96 billion.
The company expects full-year adjusted operating income of $2.03 billion, or a 20% margin. For the third quarter, the company expects gross profit to grow 16% from a year ago to $2.6 billion, with an operating margin of 18%.
Square payment volume in the quarter grew 10% from a year earlier.
Block faces growing competition from rivals such as Toast and Fiserv‘s Clover, though its Square business still gained share during the quarter in areas such as retail and food and beverage.
Block shares were down 10% this year as of Thursday’s close, while the Nasdaq is up 10%. Last month, Block was added to the S&P 500.
— CNBC’s Robert Hum contributed to this report.
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