Tesla Motors CEO Elon Musk has unveiled a production target that could be considered a very ambitious one, even for the visionary CEO and his electric car company.
According to Musk, Tesla is looking to manufacture 500,000 electric cars per year by 2018, which is two years sooner compared to the previous target of 2020.
The goal is a massive leap compared to how many cars Tesla is currently producing, with only around 15,000 electric cars manufactured in the first three months of this year and about 50,000 cars produced in the whole of last year. Musk, however, believes that Tesla will be able to fulfill the lofty target.
Wall Street already considered the 2020 target of 500,000 electric cars produced per year as a long shot, and with the new target, Tesla would have to commit to a faster growth rate in production compared to Ford in the early 1900s. That was the time when Henry Ford began to manufacture the Model T, which was the first combustion engine vehicle released into the mass market.
The accelerated target is not without reason though, as Musk is looking to be able to fill the massive number of pre-orders that have come in for Tesla's $35,000 Model 3 electric vehicle, the company's first mass-produced electric car. Tesla is looking to fill over 325,000 orders for the vehicle by late 2017, with the aim of selling nearly 1 million units of the Model 3 by 2020.
To do this, Tesla released a target of no profit for the final quarter of the current year, and added that capital expenditures for the year would increase by around 50 percent than previously expected to $2.25 billion.
"It would reshape the entire global car industry," said Salim Morsy, an analyst for Bloomberg New Energy Finance. "But a lot of things have to go right, and they have to go right on the extremes."
Tesla faces numerous challenges to hit its goal, including the requirement of near perfection from its suppliers and the need for the development of the company's Gigafactory for producing batteries to remain on schedule.
Musk said he has moved his desk to the end of the production line in Tesla's facility in Fremont, California to be able to oversee the manufacturing process. Musk even said that he has prepared a sleeping bag near the production line, and if he wants Tesla to reach its ambitious target, he may have to use that sleeping bag often.
