Gigafactory Building Permits Reveal Tesla Has Much More Work To Do

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This is the year the Tesla Gigafactory was originally supposed to be producing enough batteries for 500,000 cars per year, so  how close to that level will Tesla reach by December? With all the delays in the Model 3 production ramp, it’s worth questioning just how the progress on constructing the facility is going, especially given the recent report that Model 3 batteries were being built partly by hand there. A look at all the Gigafactory building permits that were taken out in 2017 may offer a few clues.

While Gigafactory 1 has been churning out batteries for the Model 3 since last summer, only a fraction of the $5 billion originally earmarked for the project has been spent so far. According to data compiled by BuildZoom, Tesla took out more than $375 million worth of Gigafactory building permits in 2017. That brought the total value of construction past the $1.2 billion mark. There were 112 new permits issued in all of 2017, putting the total number of permits issued for the project at 221.

The newest set of Gigafactory building permits indicate that the newest development that’s going on at the facility seems to be inside the already-existing footprint. The permits also include addendums to permits that were issued previously. According to BuildZoom, the types of equipment being installed at the Gigafactory last year spans the gamut from typical apparatus such as multiple conveyor systems to equipment that’s “emblematic of a higher-tech, Tesla-worthy operation.”

Three particularly interesting building permits were listed in November 2017, and they were for a metrology lab (for the science of measurement), a bracing oven for automated metal joining and an addendum for a hazmat building. Other interesting Gigafactory building permits that were issued in 2017 include a $13.7 million job for hot oil skid systems, a $10.8 million permit for air separation yards, and a permit for chiller yards valued at $2.6 million.

BuildZoom found that 50 of the 112 Gigafactory building permits issued in 2017 were actually addendums to permits that were issued previously. The value of these addendums totaled $165.6 million. Addendum permits are those that basically make changes to a permit filed for the project in the past, and the value of them is the additional cost added to the original job.

Tesla is under the gun as the production ramp for the Model 3 is months past due, and management is no longer giving even the perception that they can set a real timeline for reaching the 5,000-per-week level. However, CEO Elon Musk says they’re still aiming to be cranking out 5,000 Model 3 cars per week by the end of Q2.

During the Q4 earnings call, he talked quite a lot about their plans to automate production at Gigafactory 1 in Nevada. According to transcripts of the call, the automated assembly lines will be moved from Germany, where they were working, to Gigafactory 1, where they will be reassembled and then placed in operation.

According to Musk, those automated lines are the key to Tesla’s ability to reach the point where it’s producing about 2,500 Model 3 cars per week. He admitted that constraints at Gigafactory 1 are the main problem when it comes to ramping Model 3 production. His comments came after a report from CNBC in late January in which employees claimed that some batteries were leaving Tesla’s Gigafactory with serious defects because of inexperienced quality control workers, although the automaker denied that claim. CNBC also said that workers claimed batteries were being assembled partly by hand at Gigafactory 1 as recently as mid-December.

The production lines will be arriving in March, so those building permits should be filed soon, if they haven’t been filed already.

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