Tesla To Start Model Y Production at Austin Gigafactory This Week

Austin, TX, USA - September 14, 2020: Red Tesla Model Y in front of Telsa Building in the northwest Pond Springs Dealer Location for Tesla.
RoschetzkyIstockPhoto / Getty Images

Tesla is reportedly set to start production at its Giga Austin factory, in the next few days. Analysts say that this could alleviate the bottlenecks of production for Tesla globally and accelerate production.

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Wedbush analyst Daniel Ives said that  “based on our analysis of Giga Austin it appears paperwork is now clearing the way for Model Y production starting over the next 7-10 days,” according to a note sent to GOBankingRates.

Ives added that he believes the stamping machines for Model Y and testing are already in place and mostly completed, with paperwork now filed by Tesla to officially start key production in Austin over the next week.

“Launching the Austin production in early January is very important to Tesla expanding both domestic and global production of Model Y’s which are set to have a massive year in 2022,” Ives wrote. “We would expect a formal ribbon cutting ceremony over the coming weeks in Austin with Musk, which is becoming the centerpiece of Tesla’s broader supply ambitions as well as its formal HQ buildout.”

Wedbush maintained its “Outperform” opinion on the stock, with a $1,400 price target and a bull price target of $1,800.

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Ives wrote that the Giga factories in both Berlin and Austin openings and initial ramp are a focal point for Street, as Tesla has a “high-class problem of demand outstripping supply with this issue now translating into ~5-6 month delays for Model Ys, some Model 3s in different parts of the globe.”

The key to alleviating these issues is centered around the key Giga openings in Austin and Berlin, which will alleviate the bottlenecks of production for Tesla globally.

Ives says that by the end of 2022, Tesla will have the capacity for overall 2 million units annually from roughly 1 million today.

While supply chain issues were a drag on overall unit growth for Tesla in 2021, Wedbush analysts say that over the coming year this dynamic will significantly moderate with potentially 1.4 million to 1.5 million units now within reach annually for 2022.

“While China will be a key growth driver, we believe demand is building for Tesla’s Model Y in the U.S. and Europe with 2022 likely another “breakout year” for Tesla and the EV industry,” Ives said.

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While logistical hurdles will be a near-term cost burden, we importantly believe Tesla has the potential to further expand its auto GM and profitability profile over the next 12 to 18 months especially with more higher-margin cars being sold and produced in China which will be front and center on Tesla’s 4Q earnings call later this month.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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