Musk is persistent in his Chinese dream. What impact will Tesla’s increase in production have?

The Ministry of Industry and Information Technology has announced the changes in the information of new vehicle manufacturers and approved enterprises to be released in the "Announcement on Road Motor Vehicle Manufacturers and Products". Tesla (Shanghai) Co., Ltd. has officially entered the preparatory state in terms of procedures. According to Tesla's plan, after the new factory in Shanghai is put into operation this year, the initial production capacity will be about 150,000 units per year, and after further investment, the production capacity can be expanded to 500,000 units per year.

From "Looking at Supply Chain Certainty from Tesla and LG Chem's Chinese Factories" p6

1) Prediction of sales
We can first look at the number of registrations. In 2018, the number of registrations was 14,000, showing a high-first-low-later state. In the first half of 2019, the sales benchmarks of Model S and Model X did not change much, 8,938 units in 2019 (8,369 units in the first half of 2018), so the increase was all Model 3.

In 2019, taking Model 3 alone, it has experienced a wave of growth. The number of registrations this year is 23,865 units. After entering the purchase tax exemption list in September, the sales volume has not changed much, mainly because consumers are waiting for the price of domestic production.

Therefore, based on historical data and the existing foundation, if the domestically produced Tesla Model 3 and subsequent Model Y enter China in the second half of 2020, we can fit a possible monthly curve, mainly considering Tesla's quarterly volume increase and order collection and delivery process, and then considering the waiting effect of Model Y, it is estimated that Tesla's domestically produced version will be around 110,000 next year.

The production capacity of Model Y will be increased in small batches starting from July.

2) The corresponding battery demand capacity is estimated to be
between 100,000 and 150,000 according to the above estimates, and the required battery capacity is between 7.5GWh and 15GWh.

There are three parts in LG's Nanjing factory, which were written in the previous report. There is a little doubt here. According to the breakdown in the Korean report, LG Chemical's cylindrical battery cell production capacity was previously built solely by itself or built later in 2018. According to current assessments, a large part of this US$2 billion construction is for Tesla, so there is a slight deviation in the blue and red parts in the figure below.

Note: According to a Korean report, LG Chem's cylindrical battery production capacity is expected to expand from 1 billion cells per year to 2 billion cells per year by the end of 2019. Model 3 requires 4,400 21700 cells. If we estimate the number of cells to be 440 million to 660 million,

It is unknown whether the bottleneck here will be on the module like the previous production capacity^_^

Summary: Tesla's initial volume growth will definitely have a big impact on the domestic electric vehicle market, just like the PHEV market this year, which will be further affected. When everyone gets used to Teslas on the streets, at least in first-tier cities, consumers will have a high conversion rate from fuel vehicles to pure electric vehicles.