ARK Invest believes that Terafactories could resolve Tesla’s battery production constraints and help the company scale its manufacturing to one million units per year. Terafactories first came about when Tesla Chief Finance Officer Zachary Kirkhorn mentioned how massive the company's Gigafactories could be in the future. “It could start being called Tera,” said Elon Musk, during the Q1 2020 Earnings Call.
Increasing battery production capacity is necessary for Tesla's upcoming vehicles, specifically for the Model Y, Cybertruck, and Semi. The Model Y was made for mass production and Tesla will have to meet the vehicle's battery needs. The Cybertruck also has the potential for mass production considering how popular pickups are in the United States. Meanwhile, battery capacity, as well as battery density, are essential for Tesla to produce the Semi, its Class 8 truck.
Terafactories could be the solution to Tesla's battery production constraint. ARK Invest analysts believe that Tesla may outline how it plans to reach terawatt-hour capacity during Battery Day—slated to take place either later this month or early in June.
During his guest appearance in HyperChange, The Limiting Factor shared similar thoughts. “Tesla will reveal the machine that will allow them to scale to terawatt-hours, fulfilling the promise to accelerate the world’s transition to sustainable energy. We can’t do that unless you have factories that can crank out massive amounts of batteries. That’s why I’m excited about it,” he said.
ARK Invest also forecasted that Tesla Terafactories could solve management bandwidth and vehicle painting constraints. “Meanwhile, we believe concerns about the constraints associated with management bandwidth and vehicle painting could diminish significantly as Tesla announces its plans for capacity per factory and for ‘cyber’ electric vehicles,” the firm wrote in its newsletter.
ARK believes that Tesla could eventually eliminate the bottlenecks caused by painting if it transitions to producing “cyber” vehicles, referring to electric cars that have a similar exterior as the Cybertruck. Elon Musk’s all-electric pickup was met with mixed reviews, but as the public warmed to the truck, people started noticing its advantages. One of the advantages of the Cybertruck would be its lack of paint, especially for overlanding or outdoor activities.
Some have speculated that Tesla could make a "Cyber" line down the road, but neither the company nor Elon Musk have talked about plans for such vehicles as of ye. However, ARK said that a Cyber line could help Tesla grow its autonomous ride-hailing fleet because it would be easy to scale production up to one million units per year.
“Tesla’s stainless steel ‘Cyber’ EV will obviate the need for paint, making it an ideal candidate to proliferate on an autonomous ridesharing platform. Not only resistant to scratches and dents, the ‘cyber’ EV also could scale to millions of units produced in a single factory,” said ARK.
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