Proving he can handle his own public relations, at least internally, Tesla CEO Elon Musk told employees that the company’s original target of delivering 500,000 vehicles this year is still a possibility despite the impact of the pandemic.
In another of what are becoming hallmark messages, Musk told employees in an email that the company can still hit the mark, but if they can think of any way to improve output, they shouldn’t hesitate to put their hand up and offer their suggestions.
The company faces a monumental challenge to reach 500,000. “It will be tough but super exciting if we can exceed 500,000 cars made in a single year for the first time in Tesla history,” Musk wrote to employees on Wednesday.
“When we started Tesla just over 16 years ago, I never thought we would get this far, but, thanks to your hard work and ingenuity, we actually have a chance of making half a million cars in a single year. This all comes down to Q4. Please take whatever steps you can think of to improve output (while increasing quality).”
First quarter deliveries were 88,496 vehicles while Q2 jumped to 90,891 vehicles. The company reported Oct. 2 it delivered 139,300 vehicles — a new record. In total, Tesla’s delivered 318,687 vehicles through the first three quarters, meaning the company will need to set another new record 181,313 vehicles hit the target — nearly a 25% increase.
Such emails are almost a tradition at Tesla now, with Musk seemingly sending them out near the end of every quarter to hint at targets and potential new records. In fact, he implored everyone to “rally hard” in order to achieve record results for the third quarter. So he may be out a little early with his email this time, but to achieve this record, it’s going to require a lot of the Tesla workforce.
However, the company is smart enough to hedge its bets. While it remains publicly committed to beating the 500K mark, in its Securities and Exchange Commission filings, it’s modified its language, removing the phrase “comfortably exceed” from before 500,000 deliveries, to temper any investor expectations.
Aside from the “want to” part of the equation, there is a physical “can they.” In its record-setting 2019, the Fremont, California plant delivered about 367,000 vehicles. Add to that the target number of 150,000 Model 3 sedans delivered at Giga Shanghai, and you can “comfortably exceed” 500,000, but that was before the pandemic.
In recent years, Tesla’s sprinted to the finish line each year with the fourth quarter being its strongest. Tesla delivered 112,095 cars compared to the 95,356 and 97,186 in the second and third quarters last year.
The push to get to 500K would likely require two things: a newfound efficiency increase and some sacrifice on the part of workers.