Tesla, the largest automaker in the world by market capitalization, produced 305,840 Model S, Model X, Model 3, and Model Y vehicles in Q4 2021 and delivered a total of 308,600 vehicles. For the year, Tesla delivered 936,172 vehicles, nearly a third of which were delivered to customers in China. Tesla’s Gigafactory in Shanghai produced more than half of the cars it manufactured in 2021. Tesla stock is now worth over US$1 trillion, making it the fifth most valuable US company.
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Data Source: Tesla
Tesla’s Production Compared To Legacy Automakers
Unlike most of the auto industry, Tesla has navigated the global supply chain challenge and chip shortage with ease (see “‘Super Crazy’ Supply Chain Shortages,” Fourth Quarter 2021 ESG Review p. 2). The company plans to begin production at its new gigafactories in Berlin and Austin, Texas, this year, increasing its total production capacity to 2 million vehicles a year. For context, consider that Ford delivered 1.73 million vehicles from January to November 2021, GM delivered 1.78 million vehicles in the United States alone in the first nine months of 2021, and Toyota delivered a staggering 7.99 million vehicles from January to October 2021. It’s worth noting that Toyota, which has done a better job navigating the global chip shortage than GM, delivered 1.86 million vehicles in the United States in the first nine months of 2021 and is on track to dethrone GM as the largest automaker by sales in the United States for full-year 2021.
An ESG-Focused Company In The Gilded Age Of Greenwashing
The auto industry has perhaps the cleanest cut way to reduce emissions. Transitioning from the internal combustion engine to the electric motor has the potential to plummet pollutants and pole-vault profits. But here, arguably more than any other industry, we are seeing the most concentrated collection of greenwashing.
The best way to differentiate between empty promises and truly enduring commitments is to follow the money. Take Ford for example. In October 2021, Ford announced plans to build Blue Oval City, a 6-square-mile complex in west Tennessee that will underpin the company’s EV production. Additionally, Ford announced plans for three new BlueOvalSK battery plants — two in Kentucky and one in Tennessee. The plants will enable 129 GW/h a year of US production capacity. The Tennessee campus is estimated to cost US$5.6 billion and create approximately 6000 new jobs while the Kentucky-based battery complex is estimated to cost US$5.8 billion and create 5000 jobs.
Ford is spending US$30 billion on EVs and battery cells by 2025 so that it can generate 40% of sales from EVs by 2030. By 2025, it expects to have built a staggering 141 GW of battery production to support 1 million battery EVs per year. A new management team, real dollars going toward real projects, and the potential to define the electric truck market with the F-150 Lightning embody an example of what decarbonizing a legacy company can look like.