Which is better, pulling the band-aid little by little or all at once? Everyone will have a different opinion on this important and vital issue, just as everyone will have a different opinion on many other issues. Tesla and Volkswagen have very different ways of doing things, and that is why their top managers clash on basic approaches. Herbert Diess himself has commented that Musk’s strategy of building and expanding three factories at once will weaken the company for months.. Who will be right?
If you remember, a few days ago we commented that Elon Musk wants to increase the rate of production in his factories. His Gigafactories are today the largest production centers in the world. With a manufacturing capacity never seen before, many rivals want to implement the Tesla industrial system. Huge presses that make up large castings seem to be the golden dream of many builders, including Volkswagen itself run by Herbert Diess.
Diess and Musk have made their admiration on more than one occasion, but that doesn’t stop either of them from commenting on outside plays. Volkswagen has assured that in just a few years it will be able to sell and manufacture more electric cars than Tesla itself, some voices affirm that in 2024 they will already be able to exceed that milestone, although the Germans hope it will be sooner given the risky factory expansion strategy that Tesla wants to carry out. Two newly opened Gigafactories and one that will grow in just a few months. Too?
The Austin and Berlin plants are located in diapers. While one has problems with supplies, the German has not yet managed to reach the initially expected manufacturing targets. In the midst of this situation, Tesla is going to expand the production capacity of the Shanghai Gigafactory. The Chinese center will soon begin expansion works that will theoretically allow it to produce one million cars per year. The works will barely take a few weeks and will not force the complete activity to be paralyzed, although it will reduce the volume of manufacturing.
In this environment, Herbert Diess has commented that this strategy may weaken Tesla. The supply of components continues to be a problem that affects the global market, although little by little the bottleneck is being released, the increase in the production of Tesla plants must be accompanied by a greater volume of parts that may not be produced at the rate that Elon Musk believes. At least that is what the CEO of Volkswagen thinks, who seems eager to surpass the figures of those from Austin.
Be that as it may, Volkswagen must also worry about the productive health of its electrics. In Europe, the production of the Volkswagen ID.3 and Volkswagen ID.4 is still well below expectations. The compact limits its range while the family arrives with a dropper on the market. Supply problems affect everyone, but Tesla has known better than anyone to negotiate the restrictions. The truth is that Diess’s words sound more like hope than reality. There is no doubt that in the future Volkswagen will be able to produce more electric cars than Tesla, but we do not believe that Musk’s factory expansion strategy can make a difference.