Elon Musk provided intriguing details about Tesla’s highly anticipated next-generation vehicle, internally codenamed "Redwood." Musk emphasized this vehicle's impact, not just in its design but more significantly in its manufacturing process. The details came during the fourth quarter earnings call, and despite cautioning listeners that the call was not about future production, the CEO gave us a lot to talk about.
He stated, "This is a revolutionary manufacturing system significantly, far more advanced than any other automotive manufacturing system in the world by a significant margin." Musk continued, “I am confident that once it is going, it will be head and shoulders above any other manufacturing technology that exists anywhere in the world. It's next level.”
Production Timeline and Locations
Acknowledging his tendency for optimism, especially regarding timelines, Musk conveyed a realistic yet confident tone, “our current schedule shows that we will start production towards the end of 2025. So sometime in the second half. That's just what our current schedule says. But there's a lot of new technology like a tremendous amount of new revolutionary manufacturing technology here.”
The first manufacturing location for the "Redwood" will be Tesla's Gigafactory and headquarters in Austin, Texas. The new platform was originally set for Mexico. Musk explained that moving locations was strategic, “The reason I wanted to put this new revolutionary manufacturing line at Giga Texas was because we need the engineers to be living on the line. This is not sort of off the shelf, just works type of thing. And it's just a lot easier for Tesla engineering to live online if it's in Austin versus elsewhere.” Following Austin, the second production site is planned in Mexico, with a third location outside North America being considered for identification by late this year or early next.
Musk delved into the complexities of Tesla's manufacturing process for the upcoming next-generation vehicle, highlighting the challenges and innovations involved. Musk acknowledged the unpredictable nature of the manufacturing S-curve, noting, "So it's always difficult to predict what that S-curve of manufacturing looks like. So it always starts off real slow, and then it grows exponentially." He emphasized the difficulty in forecasting the intermediate stages of this curve and refrained from making specific predictions about unit volume for the upcoming year.
Tesla's Next Growth Wave
Musk further explained the uniqueness of the manufacturing equipment required for the next-gen vehicle, stating, "There's a lot of specialized machines that make the machine for a next-gen vehicle. So these are not machines you can just order from anyone. You have to design a machine that has never existed to build a car in a way that has never existed." This innovative approach underlines Tesla's commitment to redefining the manufacturing process. Musk emphasized the company's focus on ensuring the successful execution of its next growth wave, driven by the next-gen vehicle, energy storage, full self-driving, and other projects. This strategy is a testament to Tesla's dedication to pushing the boundaries of technology and manufacturing in the automotive industry.
Tesla's CFO, Vaibhav Taneja, added context to the company's growth trajectory. He indicated that Tesla is currently between two major growth waves: the first driven by the global expansion of Models 3 and Y, and the next anticipated to be initiated by the next-gen vehicle. Taneja highlighted that in 2024, volume growth will be lower as the team focuses on the launch of this new platform.
