How will Coronavirus Impact Tesla?
Currently, Coronavirus is sweeping across the globe, presenting itself in all continents but one, Antarctica. Unlike many other multinational corporations, Tesla is yet to face very significant Coronavirus disruption.
Towards the beginning of the Coronavirus outbreak, when it was most present in China, the Gigafactory in Shanghai was ordered to close by the Chinese government. At this point, that factory is not up to its full production rate, so closing it wasn’t as much of an issue as it would have otherwise been.
However, the virus did cause disruption to Tesla’s supply chain, causing them to install the old computers in the car, rather than the new ones which were on the spec sheets. Predictably, this caused annoyance from Chinese owners and the Chinese government. Since then, Tesla has offered to upgrade those computers for free.
Coronavirus in the US?
Back in California, Musk has been suggesting the ‘Coronavirus panic is dumb’, stating that the factories will remain open despite the outbreak. That is, of course, unless the government orders them to close the factory.
At this point, North America is Tesla’s largest market. Although the virus is impacting people’s spending choices, Model Y deliveries seem to be rolling out no problem. Furthermore, the way Tesla’s delivery system works might play on their side here.
When a new vehicle comes out, customers can choose to place a deposit on the new car, costing them $2500 in the case of the Model Y. If this is done early and they are in one of the regions where the vehicle is rolled out first (usually California), then they are very likely to get one of the early production Model Ys.
However, this is only a deposit, meaning the owner hasn’t paid the full cost of the vehicle yet. Full payment happens upon delivery. The owner is able to cancel before delivery for a refund on their deposit, but that means they will no longer be prioritised in the delivery order, so may have to wait a long while for their car.
Either way, I think Tesla will make it out the other side of the Coronavirus. At the time of writing, the US has almost 3000 cases of the disease COVID-19, which is caused by the virus. Providing the factory isn’t forced to close, there could be some impact on this year’s guidance, but lit shouldn’t be too significant. Perhaps if this happened sometime in the past few years when Tesla was in the middle of ‘production hell’, it wouldn’t go down so well.
Tesla Searching for a Location for a Cybertruck Gigafactory
On the 11th March, Musk announced that he is actively looking for a site to place the Gigafactory which will produce the Cybertruck.
As Tesla’s sales increase over the next few years, the need for more production capacity will become ever more obvious. Somehow Tesla has been squeezing out capacity at their Fremont factory, which we thought was at capacity a long time ago.
This is mainly due to the California based automaker moving the battery production outside of the golden state and into Nevada. Specifically, the Gigafactory near Reno, Nevada. Furthermore, Tesla’s production lines have been getting more and more compact and efficient over time.
According to Musk, the new factory will produce the Cybertruck, as well as aiding with the production of the Model Y, which is currently produced in the Fremont factory. For the Model Y to get up to its full intended production rate, this will be a necessary step for Tesla.
Where Might the Gigafactory be Placed?
On his tweet, Musk indicated that the factory would be placed somewhere in the centre of the USA. Unfortunately, ‘central USA’ is an extremely large area, so quite a vague statement from Musk.
Speculation has been around the Gigafactory located in Tennessee, but really, this is purely speculative. Other possible areas could be Colorado or Utah, both areas which would allow Tesla to drive down the costs of its vehicles in the USA. This is primarily due to cheaper labour and reduced taxes.
Another reason for building a new factory for the Cybertruck is due to the complexity of the production line. Tesla has simplified the process of making Model 3s and Ys, which has allowed it to scale up production in under a year from announcement.
Despite this, it is likely that the Cybertruck will demand a completely different production line, due to its incredibly stiff body and unconventional shape. Presumably, the production line will also be larger in order to account for the powerful stamping machines which will be used to shape the body.
Once the Gigafactory in central America is built, Tesla will have 5 Gigafactories:
- Central USA
- New York (state)
Tesla Model Y Deliveries Start
The first Model Y deliveries began today, 14th March 2020. Right now, Tesla is only delivering the more expensive variants, many of which have the upgraded turbine wheels. This is typical of Tesla, selling the more expensive variants first allows them to find flaws in their production cycle and allows them to deliver the cheaper standard range variant on time, and on budget.
From the first images which have been shared of the Model Y, it seems as though the cargo capacity is impressively large. Tesla did state 65 cubic feet of storage, which isn’t too far off the Model X.
Reports suggest that the new SUV has a considerably larger ‘frunk (front trunk)’ than the Model 3, as well as having a large compartment under the boot in the back.
Impressively, the Model Y has a cargo capacity similar to the Volvo’s largest SUV, the XC90, with all its seats folded down. Additionally, it is capable of 316 miles of range, a level of efficiency which has not been seen before in any other electric SUV.
Autopilot May Soon Stop at Traffic Lights
Once again, a Tesla owner digging through the code of the vehicle’s software has discovered a potential new feature. This time, it’s in the form of Autopilot. A Twitter user named ‘green’ discovered some new icons in the code, which seem to depict traffic light icons.
Green speculated that the traffic light icons that were visible in the software were something to do with a new Autopilot feature. Such a feature would allow Tesla’s Autopilot system to stop at traffic lights and stop signs.
Over the past few months, Tesla has been updating its Autopilot Software to include driver visualisations. These are essentially visual icons which appear on the driver’s screen that show objects like trash cans, cones, and arrows on the road. More recently, stop signs and traffic lights were added.
Currently, Autopilot recognises the stop signs and traffic lights, then displays them on the driver screen. However, it takes no action to slow down or stop when approaching them. Doing this would be a major step for Autopilot, allowing a car to navigate intersections and junctions by itself.
These new icons could be an indication that this new feature is coming soon. Musk mentioned last week that Tesla was in the process of making core improvements to Autopilot. Perhaps this feature will come once that has completed, along with reverse summon.