Aug 3, 2017 News of the Day: Tesla Averaging 1,800 Model 3 Orders Per Day, Toyota & Mazda Plan Joint Assembly Plant in U.S.

author: Eric Walz   

According to Tesla's second quarter report, the smooth launch of the Model 3 has resulted in an average of 1,800 new reservations per day. With Tesla claiming to have already had more than 450,000 reservations before the launch, it's safe to say the electric automaker will have its hands full for quite a while. Tesla's current goal is to ramp up production from 1,500 units a month in September to 20,000 units by December.

Tesla also claims that orders for both the Model S and X have been up, as well. In July, orders were reportedly 15 percent higher than normal for Q2. To meet demand, Tesla plans to increase deliveries of the S and the X while also scaling up production of the Model 3.

Assuming Tesla actually can pull off production increases for all three models, which Tesla CEO Elon Musk has called "production hell", the biggest challenge will be making sure quality remains high. Few things would be worse for Tesla than the Model 3 getting a reputation as a reliability nightmare.

Tesla also claims that revenue increased significantly last quarter. Compared to Q2 2016, revenue was up a whopping 93 percent, mostly thanks to a 53-percent increase in deliveries. Unfortunately for Tesla, revenue was flat compared to the previous quarter, and it still burned through nearly $1.2 billion in cash. Tesla reports having more than $3 billion cash on hand at the end of the quarter.

Toyota & Mazda Plan Joint Assembly Plant in U.S., Report Says

Toyota Motor Corp. and Mazda Motor Corp. are close to forming a capital partnership, paving the way for the possible formation of a joint-venture assembly plant in the U.S., and joint development of electric vehicle technology, the Nikkei Asian Review reported.

Under the negotiations, Toyota would acquire a roughly 5 percent stake in Mazda, which would then invest in Toyota as well, Nikkei said, citing an unnamed source.

Mazda declined to comment and Toyota said it was planning to seek board approval for additional collaboration with Mazda, but declined further comment.

"In May 2015, Toyota and Mazda signed a memorandum of understanding to explore various areas of collaboration," Toyota said in a statement. "We intend to submit a proposal to our board of directors today regarding the partnership with Mazda, however, we would like to refrain from providing further comment at this time."

The Japanese automakers are looking to build an assembly plant together in the southern U.S. through a joint venture, Nikkei reported. The companies would build SUVs jointly at the plant, which would have annual capacity of up to about 300,000 vehicles.

Mazda already builds two models for Toyota, the Toyota Yaris and Yaris iA at a plant in Salamanca, Guanajuato, Mexico.

The partnership would ease Toyota's and Mazda's investment outlays and allow them to share expertise in particular production technologies, the Nikkei said, adding that the automakers were also planning to develop electric vehicle technologies jointly.

Toyota, the world's second-largest automaker by vehicle sales in 2016 and Japan's dominant car company, has been forging alliances with smaller Japanese rivals for several years, effectively consolidating the Japanese auto sector.

If Toyota and Mazda agree to build an assembly plant in the United States, it would likely become the prize in a fierce competition among Midwestern and Southern states eager to expand manufacturing jobs.

President Donald Trump in January criticized Toyota for importing cars to the U.S. from Mexico, and has made it a top priority to increase the number of U.S. factory jobs.

Tesla's New Model Y SUV to be Built on Model 3 Platform

Leading up to the launch of the Model 3, it was highly unlikely that Tesla would post a profit. But at the same time, despite claiming to still have $3 billion in cash reserves, Musk's company will eventually have to start making money. A successful launch of the Model 3 shows it's headed in that direction, but as this latest report confirms, Tesla is not quite there just yet.

In Tesla's earnings call, in addition to learning more about Model 3 orders and cash burn, Tesla CEO Elon Musk gave a bit more information about the company's next electric vehicle, a compact SUV called the Model Y.

Previously, Musk teased the Model Y at a shareholders' meeting, but he had suggested it would not have much in common with the Model 3, saying it was a "mistake" to base the Model X on the Model S. In this week's call, though, Musk reversed himself: "Upon the counsel of my executive team ... who reeled me back from the cliffs of insanity ... the Model Y will in fact be using substantial carryover from Model 3 in order to bring it to market faster." Musk says it's important to deliver Model Y quicker because of the demand for SUVs.

Musk had earlier said the Model Y could tentatively show up in 2019, but he didn't mention a date on the latest call. It's not clear if this means the Model Y will come sooner, or just that production realities meant that putting it on a new platform would have delayed it beyond the original date.

Basing the Model Y ("or whatever the hell") on the Model 3 means it will have "relatively low technical and production risk as a result," Musk said. That doesn't mean Musk won't depart from the formula the next time around. "I still think we want to do the crazy thing in the future, but we will punt that until after the compact SUV."

Musk feels good about where Tesla stands today, despite the difficulty of the Model 3 launch. "Last week stressed the hell out of me," Musk said, "but I really think that this is probably the best I've ever felt about the company."

2017 Honda Clarity Hits Dealerships in California and Oregon

The 2017 Honda Clarity Electric arrived at dealerships this week as part of the automaker's latest push toward electrification.

The Clarity Electric is just one model in the Clarity family, which also includes the Clarity Plug-in Hybrid (set to launch later this year) and hydrogen-powered Clarity Fuel Cell. For now, Honda has limited the sale of the Clarity Electric to California and Oregon; the fuel cell is limited further to select dealerships in Southern California. The plug-in hybrid model will be on sale nationwide.

The Clarity Electric is only available as a lease costing $269/month with $1,730 down, excluding taxes, registration, and fees. The 36-month lease grants a lessee 20,000 miles per year and complimentary 24/7 roadside assistance.

The 2017 Honda Clarity Electric comes with a 25.5-kilowatt-hour battery and a 161-hp motor allowing it 89 miles of range, which is significantly less than most of its competitors. A Chevy Bolt EV and Tesla Model 3 will do well over 200 miles, the latter over 300 miles when equipped with the long-range battery.

In Honda's defense, the Clarity Electric is a full-size five-passenger sedan with features such as leather seats, Android Auto and Apple CarPlay compatibility, and a suite of safety and driver-assistance technologies. The electric motor's 221 lb-ft of torque, accessible at 0 rpm, could provide a few driving thrills. (We'll let you know as soon as we drive one.) According to Honda, the Clarity Electric's battery can be charged to 80 percent of its capacity in only 30 minutes when using DC fast charging via the SAE Combined Charging System.

The Clarity Electric paves the way for Honda to achieve its ambitious goal of selling 75,000 Clarity series vehicles within the next four years.

Massive New Gigafactory Coming to Germany

The battery supply chain to support the electric car revolution and energy storage industry is slowly becoming stronger. Tesla has been leading new battery production in America with its Gigafactory and Panasonic, Samsung, and LG have been leading production in Asia, but Europe has been lagging behind.

Now a new massive li-ion battery gigafactory has been announced in Germany.

Tesla has been calling its battery factory a "gigafactory" because it will have an annual production capacity of several gigawatt-hours (GWh) of energy storage.

The new facility announced by Terra E Holding GmbH today is deserving of the name with a planned capacity of 34 GWh at full production.

In comparison, Tesla plans for Gigafactory 1 in Nevada to have a capacity of 35 GWh (50 GWh of battery packs) in 2018 and a full capacity of 105 GWh (150 GWh of battery packs) in 2020.

While Terra E's project is one of the rare new announced battery factories comparable in production capacity with Tesla's, its timeline is much further down the road.

Gritzka also said that the company will at first focus on batteries for stationary storage applications, which have been increasingly popular in Germany over the last few years as the country's renewable energy production is soaring.

Tesla also plans to soon announce new battery factories by the end of the year. In a conference call with analysts yesterday, CEO Elon Musk hinted at new factories in the US, Europe, and Asia.

Things are certainly looking up for the battery supply chain. Current production for li-ion batteries is estimated at just over 100 GWh so any of those projects actually going forward could make a significant difference to the future output.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.